Pajama Factory

  • Raising $1.2 million   
  • Debt offering 40% total return on investment
  • Earn 8% annually with 4% deferred
  • 5 year target term
  • 300,000 s.f. of creative artist loft space
  • Economic development in central PA
  • Closes 4/30/24 at midnight EST

No pajamas here. Just 300,000 s.f. of diverse and creative space.

The perks
  • $1,000 + Pajama Factory merch + an Invitation to a private rooftop party
  • $2,500 + stay a night in one of our AirBNB lofts + all the perks above
  • $5,000 + a free workshop in the woodshop, clay studio, darkroom, or Bicycle recycle shop + all the perks above
  • $10,000 + stay two nights in one of our AirBNB lofts + take a 10% discount on the purchase price of a condominium unit + all the perks above
  • $25,000 + take an additional 5% discount on the purchase price of a condominium unit + all the perks above!
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About the pajama factory

The Pajama Factory, a complex of eight historic buildings that were once the largest pajama factory in the world, is being restored and repurposed into a mixed-use development that includes individual spaces for artist’s studio as well as retail, light manufacturing, living, and community facility spaces.

The Pajama Factory is located at 1307 Park Avenue, City of Williamsport, a small town in north central Pennsylvania. The historic eight building industrial complex is listed as a national landmark. It is situated in the middle of a residential neighborhood near the Pennsylvania College of Technology campus and is approximately 1.5 miles west of downtown Williamsport. The eight buildings were originally the home of the Lycoming Rubber Company, the creator of Keds Sneakers. Eventually they were transformed and grew into the world’s largest pajama factory. This building type is uncommon in north central Pennsylvania but is common in larger urban environments such as New York City’s Soho, Tribeca and Williamsburg neighborhoods.

The property sits on a 4-acre site. The eight interconnected masonry buildings have approximately 300,000 square feet of floor area. The buildings form a double L shaped footprint. Between the two “Ls” there is a private courtyard. The site also includes four parking lots, a smokestack and a greenhouse.

The Pajama Factory’s neighborhood has public bus transportation, a hardware store, convenience stores, a park, churches, restaurants, antique/thrift stores, and the UPMC Susquehanna Hospital. A short drive east or west in the city will avail grocery stores, big box stores, additional restaurants, the river walk, the Hiawatha paddle boat, baseball, softball and soccer fields, Lycoming College, public schools, a minor league baseball park, and most anything else you’d expect to find in a small city. The lush green hills that surround the area are perfect for hiking, trail running, and mountain bikes. The Susquehanna River and the Lycoming and Loyalsock Creeks are perfect for fishing, boating, kayaking, canoeing, and the locals will show you where all the best swimming holes are. If you’re inclined there’s a 72 mile rail trail, just 15 miles west of the Factory, that parallels Pine Creek and provides a beautiful scenic walk or easy bike adventure for all ages. Williamsport is known as the home of the Little League World Series; during the month of August the city embraces the world by welcoming 16 teams and 45,000 fans from a variety of countries all over the world; this is nearly double the current population of 27,403.

The size of the project has necessitated a phased approach to the development. And now, after 16 years of incremental workspace build outs, leasing and community building, the Pajama Factory has become a treasured institution in the City of Williamsport. With 100% of the approximately 150 subdivided spaces occupied with rent paying tenants and with a growing waiting list for those spaces as they become available, the project’s business plan is proving successful.

The slow development process has allowed for the building and training of a strong in-house design/build team, now numbering 10 full and part-time employees, that designs, builds, maintains, and rents the work and living spaces. We are committed to being environmentally responsible by controlling stormwater runoff with green roofs and our rain garden, installing only the most efficient lighting and HVAC equipment, recycling as much demolition material as possible (think steampunk), and obtaining all of the lumber we need from local mills.

A nonprofit 501-c3 arts and community building organization called Factory Works has been established in the Pajama Factory. The organization currently runs three teaching and working studio programs open to the public for ceramics, photography, and woodworking. The woodworking program has a fully equipped 6,000 square foot shop space. The organization also runs a Bicycle Recycle shop that accepts unused and discarded bicycles, then repairs them to working order and sells them at very affordable prices to neighborhood kids and adults. The growing business recycled nearly 300 bicycles last year.

Factory Works is providing a bridge/connection between the Pajama Factory community and the larger Williamsport / Lycoming County communities by offering creative/art classes and bringing in speakers and teachers from outside Williamsport for fresh ideas and practices. Factory Works also provides resources and teaching opportunities for tenants.

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The factory today
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About the Change

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About the project

We are looking for the Small Change crowdfunding offering to help kick off this exciting next phase by funding the rooftop Biergarten, a couple of model residential lofts, upgrades to the Community Room stage and event space, new company offices, a shared conference room, gallery and Factory store, and entry lobby — all designed to help showcase the Pajama Factory and its occupants (the “Project”).

With the help of an approved $2,000,000 grant to be provided by the PA Department of Community and Economic Development through their Redevelopment Assistance Capital Program (DCED RACP), we plan to address major infrastructure and maintenance issues. More specifically, the grant will pay for parking lot paving, new roofs, heating and air conditioning systems, and the roof top infrastructure required for future roof deck occupancy. This work has started.

We have also prepared condominium plot plans, By-laws, and the Declaration of Condominium with the understanding that individual ownership of both residential and commercial condominium units will preserve the Pajama Factory complex for posterity while allowing for the transition of ownership and management of the Pajama Factory to the occupants of the buildings. Occupants will be more incentivized to improve their spaces if they actually own them.

While a stable future is anticipated with the completion of the grant work and future conversion to condominium ownership, we still have the opportunity to do exciting work with the 40% of the building’s floor area that remains vacant and is yet to be developed! To that end, architectural plans have been developed for 45 lower cost artist’s live/work studios plus an additional 27 higher-end residential lofts on the top floor. Ground floor space has been reserved for a craft brewer and a farm-to-table restaurant that will both support the growing Pajama Factory community and highlight all the meat and produce from the surrounding farms. We expect the brewery and restaurant to help attract out-of-town visitors. We are also building a gallery and company store to showcase and sell things that are designed and/or actually made inside the Pajama Factory walls.

This work, which we call Phase III Construction (the “Project”), is expected to total around $6.7 million. You can download and review the project sources and uses here and a detailed onstruction budget here.

It is difficult to assign an appropriate ownership interest for investors in such a large ongoing and phased project. So Small Change investors will hold debt at an 8% interest rate. A 4% return will be paid on a yearly basis and 4% (simple interest) will be deferred until the time that the debt is retired in 3 to 5 years when condo sales start to close. In addition to the interest, In addition to the interest, Small Change lenders will be given the opportunity to use their principal and interest earned as credit towards condo ownership with a discount up to 15%. =

Condo pricing has not been established yet and lots of details need to be worked out but finished studio space is expected to start at about $75/ sq ft, raw residential space will start at about $100/ sq ft and finished units at about $200/ sq ft.

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Rooftop conceptual design
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Listen to the podcast
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About the developer

Growing up in a middle-class household in suburban New Jersey, Mark Winkelman decided at an early age, with the encouragement from his interior designer mother, to pursue architecture. To that end he attended and graduated from the Syracuse School of Architecture in 1978. Upon graduation he interned in Phillip Johnson’s highly acclaimed design firm in New York City. While in Johnson’s office he worked on a number of notable high rise office buildings including the gothic PPG Headquarters in Pittsburgh and the iconic postmodern AT&T headquarters in New York City.

After earning his New York State architectural license Mark and his then girlfriend (and now wife) traveled to and worked in Tokyo, Japan for two years. There he came to appreciate the refined visual aesthetic that is uniquely Japanese. The design lessons learned in Japan would deeply inform and influence Mark’s own design work. Perhaps the most important lesson was grasping the importance of putting new work in an historical context.

Upon returning to the States in 1984, Mark partnered with a Syracuse classmate and formed Downtown Design — a boutique architecture and interiors firm based in New York City. For the next 25 years Downtown Design grew and developed a number of specialties including the design of technical media facilities such as recording studios and video edit suites. The firm’s projects also included the restoration and adaptive reuse of historical loft buildings in the creative neighborhoods of Soho and Tribeca in Manhattan. Indeed, one of the loft projects was his family’s own home in a 1894 spice warehouse.

In 2007, Mark and Suzanne bought the complex of historic and vacant factory buildings in Williamsport, PA. According to Mark, the building and their potential was enough to bring him to Williamsport. The Winkelman’s have honored local history with the name “Pajama Factory” and the continuing restoration and preservation of the 100 (plus) year old buildings. According to local history, Weldon’s Pajama Factory was once the largest pajama factory in the world. The site was scouted and used as a model for the 1950’s Broadway play, later the movie, “The Pajama Game,” starring Doris Day and John Raitt. They pondered how to fill the 300,000 sq ft of floor area in a town that has been losing businesses and population for decades.

The Winkelmans opted for a plan much like the one highlighted in Richard Florida’s book “Rise of the Creative Class” that included a mixed-use complex with a 24/7 urban lifestyle which includes live / work lofts, work only studios, supporting retail shops, and community facility spaces. A haven for creative thinkers and incubator businesses was created. Performance and event spaces are available for music, political events, large meetings, tenant / community events. A community outreach, 501-c3, organization which has a well-equipped wood shop, clay studio, bicycle recycle shop, and photography dark room — all of which were brought into the mix by the Winkelmans and are open to the wider community.

Mark strives to maintain a high level of energy and optimism in order to build a Creative Community that will someday serve as a model for the Arts World and for energizing small cities and towns. The adaptive reuse of a building into a mixed-use facility is an established practice in big cities but it is not often seen in towns and smaller cities. The fact that the Pajama Factory located, as it is, in a small city, is beginning to have an outsized and positive effect on how the City of Williamsport perceives itself. Mark and Suzanne understand the importance of being a part of a community-based economy by providing spaces where locally owned small businesses can be developed and benefit from the “Buy Local” movement. The rents are kept incredibly affordable at about 1⁄2 the local rate and 1/10 the rate in New York City, for instance. 

In his spare time, Mark managed the restoration of his 1970 Triumph GT6 British sports car. He loves sailing, especially blue water cruising. Ceramics, primarily wheel work, is a passion. He also loves traveling with his family — as long as his daughter and son take care of all the arrangements.

For over four decades, Suzanne Winkelman has been in advertising working with clients to help build successful brands. She has focused her talent on creating integrated communications that range from traditional brand advertising to digital experiences that encourage deeper discovery, awareness, and brand advocacy. Six years ago, in 2016, she was named one of 15 recipients of the DTC (Direct to Consumer) Perspective’s Agency Vanguard Awards, in recognition of her contribution and service to patients as well as the DTC industry in general. Her clients have won many awards for the groundbreaking advertising that Suzanne has helped bring to market. For the last seven years, Suzanne has been leading the launches of two brands to market for Indivior- one to treat opioid addiction and another that treats schizophrenia.  She also launched an Ironshore brand to treat ADHD and, more recently, has been overseeing the launch of a UCB medication that treats dermatological/rheumatological diseases - touted as one of the most anticipated pharmaceutical launches of the year.

Prior to that, Suzanne focused her energy on leading the respiratory businesses at GlaxoSmithKline (GSK) spanning development of TV, print, in-office, online, social, and CRM across an extensive portfolio of brands. She is proud to have worked on GSK’s blockbuster drug, Advair, followed by the successful launches of five new respiratory brands. Prior to working on pharmaceutical brands, Suzanne worked to advertise well-known national brands such as Skippy, L’eggs, Hanes, Gillette, Tyson, Tylenol, Reynolds Wrap, Weaver, Paramount, Nickelodeon, MTV, Dr. Scholl’s, Blockbuster, Louis Kemp, and Philips Lighting. She was also thrilled with the opportunity to work in Japan for two years at Toyota, Toshiba, and Wendy’s with a focus on development of materials for international markets.

While Suzanne still works for Havas, one of the largest ad agency networks in the world, her true passion is her work to promote the Pajama Factory, a Pennsylvania-based artist community of 130+ tenants located in an old factory building she and her husband purchased 16 years ago.  Here she partners with her husband to market and continue to develop the facility as an important resource for the city of Williamsport. As part of this initiative, she helped to establish a nonprofit organization that brings arts into the underserved community.

Suzanne and Mark are proud parents of two grown children, one of whom has a loft at the factory. Suzanne’s favorite activities include travel, theater, attempting gardening in the Pajama Factory courtyard, sunsets on the factory roof, pottery, and hanging out with her boxer dog- Rosie.

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About the finances

Phase III of the Pajama Factory redevelopment (the “Project”) is expected to total around $6.7 million, with a $3 million in bank financing (closed in April 2023), $2 million in DCED RACP grant funds (secured), a $500,000 2nd mortgage from a local foundation (in application), and the remaining $1.2 million raised through this offering.

Along with the redevelopment work planned, bank funds refinanced approximately $2.7 million in existing debt. See the chart below for anticipated Phase III sources and uses of funds:

Sources of funds (anticpated) Description Amount
Susquehanna Community Bank financing $6.2M as-is value 1st mortgage @ 50% LTV. $3,000,000
Lycoming Economic Development Foundation 2nd mortgage $500,000
DCED RACP Grant Secured $2,000,000
Small Change Investors   $1,200,000
Total sources of funds   $6,700,000
Use of funds    
Construction costs    
Construction permits 0.5% of construction costs $14,197
Construction   $3,079,184
Construction contingency 15% of construction costs $461,878
General conditions 5% of construction costs $177,053
Construction management fee 0% - in house $0
Predevelopment costs    
Architecture + Engineering 0% - in house $0
Architecture + Engineering contingency 0% - in house $0
Current debt refinancing    
BB&T first mortgage Completed $902,080
Wells Fargo line of credit Completed $90,000
City of Williamsport second mortgage Completed $274,721
Private loans Completed $1,435,000
Construction financing    
First mortgage fees   $24,220
Second mortgage fees 1.5% $7,500
Small change fee   $60,000
RACP complliance administrator 0% - in house $0
Loan documentation and legal fees   $15,000
Environmental assessments Completed $0
Title insurance   $10,590
Mortgage tax 1% of second mortgage $5,000
Total uses of funds   $6,559,923


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How will this work for you?

It is difficult to assign an appropriate ownership interest for investors in such a large ongoing and phased project. Instead, the Company will issue promissory notes for all investments made, promising to pay to each investor their investment, plus 8% interest paid as follows:

  1. Ongoing cash return of 4% interest to be paid annually.  This is a total return of 20% over a 5-year period; plus
  2. An additional return of 4% interest annually to be paid in a lump sum (or another 20% total), when the debt is retired in 5 years’ time; plus
  3. The Initial investment (principal) is returned when the debt is retired as well.

The 4% annual interest payments will be covered by cash flow from ongoing operating activities. The interest obligations, should the full $1,200,000 be raised, will total $48,000 per year. The combined statements of cash flow in the INDEPENDENT ACCOUNTANTS' REVIEW REPORT shows ”Net cash provided by operating activities” of $126,846 in 2022 and $67,222 in 2021 with both sufficient to cover the added interest obligations.

Accrued interest earned and repayment of outstanding principle is expected to be covered by refinancing the first mortgage and/or condo sales proceeds. 

Disbursements are expected to begin the first January after the Offering is closed and will be made annually, by January 15 for the previous year’s interest due. Please review the Promissory Note and Note Indenture for further detail.

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The Community
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About the offering

The Company is engaged in a Regulation Crowdfunding (Reg CF) offering (the “Offering”) to raise money for the next phase of construction at the Pajama Factory in Williamsport, PA.

This phase is expected to include funding the rooftop Biergarten, a couple of model residential lofts, upgrades to the Community Room stage and event space, new company offices, a shared conference room, gallery and Factory store, and entry lobby.

We are trying to raise a maximum of $1,200,000, but we will move forward with the Project and use investor funds if we are able to raise at least $150,000 (the “Target Amount”). If we have not raised at least the Target Amount by 11:59 pm April 30, 2024, EST (the “Target Date”), we will terminate the Offering and return 100% of their money to anyone who has subscribed.

The minimum you can invest in the Offering is $1,000. Investments above $1,000 may be made in $500 increments (e.g., $1,000 or $1,500, but not $1,136). An investor may cancel his or her commitment up until 11:59 pm on April 28, 2024, EST (i.e., two days before the Target Date). If we have raised at least the Target Amount, we might decide to accept the funds and admit investors to the Company before the Target Date; in that case we will notify you and give you the right to cancel.

Please review Form C and the entire disclosure packet here or as filed on the website here.

Investments under Reg CF are offered by NSSC Funding Portal, LLC, a licensed funding portal.

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About the risk

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.

In making an investment decision, Investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.

The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.

These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

There are numerous risks to consider when making an investment such as this one and financial projections are just that - projections. Returns are not guaranteed. Conditions that may affect your investment include unforeseen construction costs, changes in market conditions, and potential disasters that are not covered by insurance. Please review Risks of Investing for a more expansive list of potential risks associated with an investment in this Company.

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