Testa Companies announced May 8 on Facebook that it is retaking ownership and management of Northside Marketplace after vendors started pulling out over money owed to them.
Joel Testa will now serve as executive director of the 10,000-square-foot small business incubator, which will soon transition to a nonprofit model, Testa wrote in a post on Northside’s Facebook page.
“Our immediate priorities are simple: Ensure vendors are paid; stabilize operations; rebuild trust,” Testa said in the post.
Entrepreneur Justin Lepley, who bought the operation in October 2022, did not immediately return a message.
But it appears Lepley will have no role in Northside moving forward.
Brent Wesley, who co-owns Akron Honey with his wife, Rebecca Wesley, said Northside vendors like him wouldn’t return if Lepley was involved because they do not trust him.
“There was no way for Northside to continue to operate or stay alive under Justin,” Wesley said. “He’s out, he’s done.”
Wesley is one of three longtime Northside vendors who will sit on a new board organized by Testa.
“Our goal is to create a vendor-led, community-controlled business, supported by a board of directors made up of Marketplace vendors and experienced outside advisors,” Testa’s post said.
How many vendors are owed money and how much is not clear.
During a recent interview, Lepley said he didn’t know offhand and declined to estimate.
He did say Northside experienced a revenue shortfall over about the past year, attributing the issue in part to “the economic downturn, in general.”
Lepley said he had used his own income and cash flow from other businesses to prop up Northside’s finances.
He didn’t specify how much he spent, but it wasn’t enough to pay all vendors what they were owed.
Northside Marketplace was founded to help entrepreneurs like Lepley, who first drew attention in 2020 when he set up a card table in his Goodyear Heights front yard and started selling houseplants during pandemic lockdowns.
After few months of buzz, he expanded and rented space at Northside and quickly had enough success to buy and renovate a former train depot in Massillon before purchasing Northside’s operation in 2022.
Northside’s market works like this: Vendors rent space there for as little as $25 per month for a 13-square-inch cube. Larger spaces cost more.
Vendors don’t have to be at the market or hire someone to sell their wares.
The market takes care of that. All vendor products, from T-shirts and earrings to cookies and honey, are purchased through a single checkout system that tracks each vendor’s sales.
Northside is supposed to reimburse vendors for products sold, minus 5% of their sales to cover Northside’s operating expenses.
The system is designed to help entrepreneurs launch and maintain sales so they concentrate on other work needed to grow their small businesses.
Wesley’s Akron Honey was among the very first businesses at Northside when it opened in 2017.
Even after his business took off – Akron Honey is now sold at local Meijer stores, Acme and Mustard Seed Market – Wesley remained at Northside until May, announcing he was leaving over money Northside owed him.
Earlier this year, Wesley said he discovered Northside owed Akron Honey about $22,000.
All but about $1,700 of that had been repaid by this week, he said, but other vendors say the market owes many much more than that.
Some wonder what happened to all the money owed to to them.
While Lepley blames their missed payments on the economy, some vendors have raised concerns about how Lepley handled their money.
They claim that revenue from their sales was deposited into a shared account, where vendor funds were mixed with other, potentially personal, company funds.
Court records, meanwhile, show Lepley and the businesses he started are facing significant challenges, including at least two lawsuits and dozens of tax liens.
When asked if police should investigate what happened to the money owed Northside vendors, Wesley asked a rhetorical question: “If for two years I was taking money from someone, do you think police would be called on me?”
Wesley said he did not know, however, if anyone has asked Akron police to investigate..
Regardless, seeking accountability may not be the first priority, Wesley said. Northside needs to steady its operation.
The first meeting of the new Northside board will likely happen this week, Wesley said.
“You have a community who is waiting and watching to support” Northside, Wesley said.
Joel Testa, who is taking over Northside, could not immediately be reached.
In a lengthy post on Northside’s Facebook page, Testa Companies said it had talked with Lepley “to fully understand the current state” of Northside.
“Through this process, it has become clear that the Marketplace has been operating at a significant loss for some time and despite his best efforts to keep it afloat, it is not sustainable in its current structure.” the post said.
Effective immediately, the post said, 100% of new sales will be paid to vendors weekly. At the same time, Testa will work with vendors to repay what they are owed “as quickly and transparently as possible.”
Joel Testa will also oversee a new, free mentorship program to all vendors that will focus on marketing, sales, financial management and other small business issues.
“This is a reset, but more importantly, it’s an opportunity to rebuild the Marketplace the right way, with transparency, accountability, and a structure that ensures vendors come first, their voices are heard, and their funds are protected,” Testa wrote.
Beacon Journal reporter Amanda Garrett can be reached at agarrett@thebeaconjournal.com.
This article originally appeared on Akron Beacon Journal: Joel Testa swoops in to save Northside Marketplace amid vendor revolt
Reporting by Amanda Garrett, Akron Beacon Journal / Akron Beacon Journal
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