Partake Collective Helps Community, Economy with Next-Generation Food Concept
Partake Collective opened its Long Beach doors in late 2022, as the COVID-19 pandemic finally began winding down.
It was the culmination of two years of work, and a year of concept development before that. Partake was John Shen’s answer to the damage restaurateurs had suffered, first from food delivery firms, then from the pandemic itself.
Shen was a member of the Long Beach Economic Development Commission at the time. The economic “problem of the month” before the panel was the suffering restaurant industry. Up to 40% of the city’s restaurants were in danger of closing, he said.
“A decade ago, cell phone apps changed everything,” Shen said. “The third-party delivery companies like GrubHub were pushing more and more people to try ordering food online.
“The key to the restaurant storefront is dining traffic,” he added. “When the traffic leaves, the storefront leaves.”
Make Room For Startups
That problem is multiplied for people just starting out. The cost and time to set up a storefront restaurant often is prohibitive.
“I saw what I thought was a unique opportunity,” Shen said. “I researched ghost kitchens, and even the second generation of cloud kitchens. And we came up with Partake.”
Partake Collective is a “third generation” ghost kitchen. Like older ghost kitchens, it leases or rents kitchens to chefs to prepare food for pickup or delivery. But at Partake there are three different types of kitchens – prep kitchens, communal short-term kitchens and fully equipped commercial kitchens. There’s also a Chef’s Kitchen, a dining hall, a retail space and meeting rooms.
The first Partake Collective opened in downtown Long Beach in 2022. It boasts nine commercial kitchens, a five-suite, fully equipped communal kitchen including one suite for bulk production, 10 prep kitchens and a fully outfitted chef’s test kitchen in full view of guests and including a guest counter seating six. An adjacent conference room can act as a private dining room.
An Opportunity Zone
The site at Fifth Street and Elm Avenue was chosen because it is in an opportunity zone and a Targeted Employment Area (TEA), making it eligible for both Opportunity Zone funds and EB-5 financing – the latter is a true specialty of Shen’s American Lending Center.
“I knew how to structure the construction financing even when there was no bank money available,” Shen said. “We (ALC) took 60 percent. Now (that we’re open), it’s time to change and bring in private equity to take on part of the debt.
“The property was a good fit. It’s in the East Village (an art-centric commercial zone), and there are a number of residential projects going up. Given the nature of Partake, it was a good fit.”
Sustainable, Socially Supportive
Construction was a restoration and adaptation of a historic building; it now meets Gold LEED (Leadership in Energy and Environmental Design) sustainability standards. In addition to the construction jobs the work created, Partake now is creating new jobs on its own and through the startup food businesses using its kitchens.
And, according to Partake Collective CEO Adam Carrillo, all the business owners leasing or renting the spaces are representative of the diversity and culture that is Long Beach.
“How to support and create job access to under-represented communities is foundational for us,” Carrillo said. “We don’t just check the boxes of ESG (Environmental, Social, Governance) factors, we live them.”
Construction is underway at the second Partake Collective in the Glassell Park area of Los Angeles, a few miles east of Dodger Stadium, and other sites are being scouted in Southern California, with a target of five Partake Collectives in the area.
A Startup Helping Startups
“We’re giving starting food entrepreneurs an opportunity to test out their product,” John Shen said. “If they don’t have the resources to make a long-term commitment (on a storefront), we offer a way to build their business… I have developed a strong passion for supporting startups, mainly because I’m one of them.
“In a way this is a real estate development – it needs strong funding and we brought that. At a certain point it will be time to work hard to bring in traditional investors. At some point, we may even go public. It is a good model doing good things.”
About American Lending Center: A Financial Times (FT) Americas’ Fastest Growing Company
American Lending Center (ALC) is a private nonbank lending institution and nationally recognized leader in small business lending. By the end of 2022, ALC has fully financed senior loan products to 83 qualified EB-5 projects in 19 states, contributing to a combined construction and business expansion budget of over 1.2 billion dollars. ALC’s lending practice has successfully created more than 13,000 new jobs nationwide since 2009. In 2022, ALC launched its new rural construction and development fund with capital available for construction of fixed assets of all types in rural areas including manufacturing, energy, infrastructure, hospitality, specialty use, multi-use and other project types.