While it might take more than one or two startup companies moving to South Front Street to call the area a tech corridor in Wilmington, some say the seeds have been planted.

“I’d love to see it happen,” said James Goodnight, the real estate investor who turned the second and third floors of the 1930s building at 21 S. Front St. into headquarters for Wilmington startup Next Glass. “The startup community is already here; I’m just trying to help foster the ecosystem downtown, kind of create the collaborative, urban environment that’s been so successful everywhere else.”

With investors like Goodnight and companies like Next Glass and others calling downtown home, some say that ecosystem is poised for growth.

Goodnight started his career as a real estate investor and developer by working with historic buildings in Raleigh before turning his attention to downtown Wilmington, a city he had visited throughout his life. His father, SAS CEO and billionaire Jim Goodnight, graduated from New Hanover High School, and his grandfather owned a hardware store here. 

Now the owner of four downtown Wilmington properties, including the buildings at 1, 9 and 21 S. Front St. and a smaller space at 222 Princess St., the younger Goodnight said he continues to see potential in some of the vacant, unused space in the upper floors of downtown’s buildings. 

“Those could be offices that are bringing people in during the day,” he said.

In recent years, more tech companies have been drawn to downtown offices across the country.

“They tend to have a very specific style in mind for their work setting,” said Ed Wolverton, president and CEO of Wilmington Downtown Inc. “They’re not so interested in what we may call a traditional office. They may want much more of an open concept, few walled-off offices. They love the aesthetic of the brick walls, open ceilings, open duct work, or they tend to want something, stylistically, that’s a little more urban in its aesthetic.”

When Jimmy Honsinger started his web design company, which has an office in the Murchison Building at 201 N. Front St., he worked out of his house before moving downtown about 12 years ago.

“We were trying to find a spot that would be kind of centrally located. Some of our customers were in Brunswick County, some were in Pender, the majority of them were in Wilmington … and so it made a lot of sense to be right in this spot, and the price was really good,” said Honsinger (pictured at right), CEO of BlueTone Media. 

Working downtown, or developing new office space there, has its benefits and challenges. 

Honsinger said the atmosphere of downtown, with its historic architecture, views of the Cape Fear River and multiple places like coffee shops and the New Hanover County Public Library in which to hold meetings, can foster the kind of creativity tech companies need.

He said it would help companies if downtown had more open, public Wi-Fi access.

WDI worked with the city on a request for proposals to expand Wi-Fi service in the area about 18 months ago, Wolverton said. 

“The responses that came back were really expensive with significant upfront costs for equipment and installation and then a monthly fee on top of that. The funding was not available,” Wolverton said.  

In terms of real estate, finding potential office properties can be problematic for investors, when buildings are broken up into condominiums with several different owners.

“It’s just really frustrating with historic buildings because you can’t really do a unified vision with anything if you’ve got six owners in one building,” Goodnight said. 

Even with the real estate in place, building a tech corridor takes patience and a strong support system, said Adam Klein, chief strategist for American Underground in Durham, which launched in 2010 in the basement of the Strickland Building on the American Tobacco Campus. 

“I think being patient and taking a 10- to 15-year view of it will help a community see what’s needed,” Klein said.

Part of AU’s growth has come from bringing entrepreneurs together.

“I think in cities like Durham and Wilmington, it’s really important that there is a concentrated center core of startup companies in one location or at least one block,” Klein said. “A lot of the research shows that companies that are in close proximity do better.”

Signs of success could also help, especially when it comes to attracting investments.

“When one of our companies has a big exit, when they sell for $50 million, $100 million or more, that’s going to prove that the city can take someone from an idea to an exit, and that’s really what all the investors are looking for … you can’t just keep piling money into companies, into startups … there has to be a return,” said Jim Roberts, founder of Network for Entrepreneurs in Wilmington and angel funding organization Wilmington Angels for Local Entrepreneurs. “That has yet to happen really in Wilmington, but that’s what our companies are working toward.” 

Goodnight, who purchased his Front Street assemblage of three buildings for nearly $4 million, said he’s noticed the conversation changing among downtown Wilmington advocates from one that mainly involved tourism.

“To hear people talk about jobs downtown is pretty refreshing,” he said.
 

Starting from somewhere

American Underground, a space devoted to entrepreneurs, launched in 2010 in the Strickland Building on the American Tobacco Campus, a mixed-use redevelopment that includes commercial and office space in former tobacco warehouses near Durham’s baseball stadium. American Underground (right, photo c/o American Underground) has grown to include three locations in Durham and one in Raleigh. 

In the past two years, AU companies have raised more than $50 million in venture funding and created 800 new jobs, said chief strategist Adam Klein. Currently, AU includes 250 startups.