Tech growth spurs Bitwise expansion in downtown Fresno

The Fresno BeeJune 25, 2014 

Bitwise Industries, the self-described "mother ship" for a growing community of small technology companies in downtown Fresno, will add a second location in early 2015 with much more space for tenants.

Bitwise CEO Jake Soberal said the company closed escrow late last week on a 52,000-square-foot building at the northeast corner of Mono Street and Van Ness Avenue. The building, built in 1914 as the James Phelan garage and automobile dealership, is on Fresno's Local Register of Historic Resources. It has been vacant, however, since its last tenants moved out years ago.

"We're taking one of the most historic buildings in downtown Fresno that was built for an entirely different purpose, and we're doing with it something that we think all of Fresno will be very excited about," Soberal said.

Since Bitwise was established just last summer, it and its technology tenants have been shoehorned into an 8,400-square-foot building at San Joaquin and L streets, in the "Mural District" at the northern fringe of downtown Fresno. The new site, a couple of stones' throws from the Chukchansi Park stadium and the Fresno Convention Center, will be branded as Bitwise South Stadium.

The new building will afford about six times the space of the Mural District building. Soberal said once it is remodeled and opens in early 2015, it will provide office spaces ranging upward from 500 square feet for about 18 to 20 technology companies.

Soberal said the expansion is needed because of the exponential growth of businesses now in the Bitwise Mural District location and a rapidly growing waiting list for space. Available space in the South Stadium building is expected to be fully leased when the building opens next year.

Soberal said tenants at Bitwise South Stadium will generate about 200 new jobs in the downtown area.

One of those tenants will be Edit LLC, a fledgling company that created a drag-and-drop software program for people to design their own websites. When the company was launched about a year ago, it had about five employees, said Derek Payton, Edit's chief technology officer. Now, it has 13 people, including seven who work primarily out of cramped space at Bitwise Mural District.

Payton said he's eager for the larger building to provide not only more space, but also more of the collaborative atmosphere for which Bitwise has become known. "It's really great to have all of this talent in a central location," he said. "Many times if I'm struggling with a program or with a design idea, I can just walk down the hall and find someone who I know is skilled in an area that I need help with. It really is wonderful."

In the new South Stadium building, "we're getting 2,800 square feet," Payton said. "That should be able to fit everybody comfortably in there and last us for a little while, and allow us to expand."

Soberal said that even the larger space won't be enough to keep up with the needs of Fresno's technology industry. "As soon as it opens, we'll have the very same problem we do today," he said. "We won't have nearly enough space and we'll still have a waiting list. It's really the growth of the industry here, and this is a symptom of it."

Soberal said Bitwise will relocate its own offices to the South Stadium location, including its Shift 3 Technologies which provides technical and software services to local businesses and its Geekwise Academy computer-code training program. Those moves will free up smaller office spaces in the Bitwise Mural District building.

Also, Bitwise will host a Hashtag Fresno innovation center in the South Stadium building. Soberal said no decision has been made on the future of Hashtag's Tower District location.

The South Stadium building will have amenities including a 2,400-square-foot gymnasium in the basement and a small coffee shop on the ground floor run by P• De• Q, a Fresno bakery that specializes in a tapioca-based cheese bread. The coffee shop will be open to the public.

The building also has a mezzanine and a top floor. Concrete ramps that allowed cars to be driven from one floor to another take up precious space inside, but one of those will be used to create a 200-seat theater with sloped seating for presentations of interest to Fresno's technology community.

Renovation plans include removing a building entrance facade that was added long after the original construction.

The purchase price was not disclosed, but between the purchase and renovations, Soberal said Bitwise's ownership group expects to invest between $4 million and $5 million in the building.

The Mono/Van Ness building had been on the market for years and the asking price had been lowered several times, said Victoria Gonzalez, the listing broker and owner of DTN Commercial Properties. Earlier this year, the Mono/Van Ness building had an asking price of $900,000.

Fresno County property tax records show that the building and land were assessed last year at $202,345 for tax purposes.

Craig Scharton, interim chief of the Downtown Fresno Partnership and owner of Peeve's Public House on the Fulton Mall, said Bitwise's growth and the success of its tenants can put Fresno on a trajectory to develop the same kind of thriving technology community that has taken hold in Portland, Ore.

"What it's doing is combining downtown, the urban energy, with entrepreneurship and business startups," Scharton said. "That's the basis of what's made Portland's success, and it's fun to see it happening in real time in Fresno."

Scharton added that he believes Bitwise will complement a community of art studios already housed in neighboring buildings in the South Stadium area. "And the beauty of it is that it's a hub for the technology community and tech education in downtown," he said. "It's a huge step forward ... to attracting people downtown who are willing to use their disposable income on fun, food and night life."

Soberal said he hopes Bitwise can inspire other technology companies to make their own investments in downtown. "The last thing I want to do is be a developer," he said. "My ambition is that after this, technology companies in Fresno will say, 'We want our space to be downtown, we want our space to have that sort of culture.' So they start doing it on their own and there's no longer a need for Bitwise to keep developing buildings."

"If it takes us doing three more buildings to do that, we'll do that," he added. "If we do this one, and suddenly there's this mass gravitational pull downtown, fantastic."

Gonzales, the real estate broker, said she and other brokers are fielding a growing number of inquiries about property investment in downtown Fresno. "A lot of it seems to be due to reopening the Fulton Mall to traffic" and to plans for a downtown station for California's proposed high-speed train system, Gonzales said, and the Bitwise expansion will likely add fuel to that interest.

"They're not necessarily making offers," Gonzales added, "but at least they're expressing interest now."

The reporter can be reached at (559) 441-6319, or @TimSheehanNews on Twitter.

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