Mandan city officials may create a retail incubator program to spur the start-up of new businesses in its shopping district.

City business development director Ellen Huber said the program is new to North Dakota, but has been successful in other states.

She said the new program could use sales tax money to provide leases lower than market rates for business start-ups.

"It's for folks exploring a retail business. It would be a subsidized lease," she said. "It could also involve use of equipment, services and some mentoring."

Huber has proposed the retail incubator to the Mandan Budget Committee. She said its review is in the early stages as the committee considers other line-item requests.

The Mandan City Commission has directed her to examine costs for both city-owned property or leasing a building from a private company.

She said initial start-up costs of the project are expected to range between $40,000 and $60,000 for something like the former adult book store building.

"There will be up-front costs no matter what," Huber said. Annual leases for a privately owned building could be $20,000 per year. She said if the city were to lease a building from a private company, it would pay the market rate of the lease. The entrepreneurs within the retail incubator would rent at a lower rate.

She describes the incubator program as a method of fostering new business. "We call it 'entrepreneurial gardening.' It's an opportunity to test retail ventures with a low-risk environment."

Huber said multiple businesses could be housed within one location to help market their wares.

"Each would have some square footage for store space. … It would be different than a craft mall. There would be different types of products," Huber explained.

She said the retail incubators are operating in Michigan, Delaware, New Jersey and New York. "They can be a women's boutique store - any niche geared to a certain (shopper) - T-shirts, a wine shop, souvenirs, items not normally available in the cities."

Huber is studying models of similar programs across the country to determine criteria and how long the subsidized lease would last.

She said a business could be housed at the retail incubator for up to three years before moving out.

Huber expects the retail incubator could help new business owners test their success while they maintain regular employment.

One site considered for the retail incubator is Mandan's former adult book store at 116 E. Main. However, the lot is part of the remediated property received by a settlement of the railroad diesel contamination.

The Mandan City Commission recently extended the deadline for Western Edge Development to December to start a theme store front program that includes the book store building.

Western Edge Development also was given until late December to start its concept plan for a commercial and residential development using a Mandan Hotel theme for its facade.

(Reach reporter LeAnn Eckroth at 250-8264 or leann.eckroth@;bismarcktribune.com.)