Handcrafted tile shop Mercury Mosaics anchors bustling former factory in Northeast

Mercedes Austin began her entrepreneurial journey in 2002 in her studio apartment.

Austin, 42, an artist fascinated by ceramic tile, quit her day job to start Mosaics by Mercedes.

She soon quit waitressing as tile sales rose to cover the modest income she'd made at the shop and waiting tables.

Today, Austin is the owner of what has evolved into a 33-employee company now called Mercury Mosaics. Last year it topped $2.2 million in revenue, driven by sales to kitchen and bath designers and other commercial customers.

Mercury Mosaics has not been a pure moon-shot, Austin acknowledges. She sometimes had to learn the hard way how to manage the business and make payroll as she grew. Austin remembers selling her jazz-CD collection and cashing her tax refund one year to buy her first kiln.

Also, three years into the business, she got sober. She needed to focus her energy on hard-fought success.

"Building this business has been a sobering experience," Austin quipped.

Mercury Mosaics is growing smartly in an expanded, refurbished space in former northeast Minneapolis factory.

Austin boasts positive cash flow, technology investments that also enhances worker productivity and comfort, and a steadfast commitment to handmade ceramic art where each tile is painted by a skilled employee.

"We hand-brush the colors," Austin said. "We celebrate the perfection of the imperfection."

Moreover, Mercury Mosaic, is part of the recent wave of manufacturing that occupies once-vacant factories of northeast Minneapolis. The commercial-industrial portions of the neighborhood, which 50 years ago meant machine shops, lumberyards, mattress factories and steel fabrication today have companies rooted in art, ethnic restaurants and food, brewing and distilling, digital technology and design.

In fact, Mercury Mosaics, which has been in Northeast for a decade, two years ago moved from the Casket Arts building, where coffins once were manufactured, to triple its manufacturing space in the Thorp Building at 16th and Central Avenue NE.

Mercury's space housed a fireproof steel door manufacturer a century ago. During World War II, it was the production site of the top-secret Norden bombsight, complete with two manned machine guns in the guard towers.

Today, the Thorp is the center of the Northeast Arts District that USA Today in 2015 heralded as one of the best in the country.

The expansive Thorp complex, which has been renovated for Mercury Mosaics and dozens of tenants of various sizes, also is the birthplace of Northeast's annual Art-A-Whirl weekend.

"Mercury Mosaics is fabulous," said Jon Sander, president of Bohm Commercial Real Estate, which owns the Thorp. "Mercedes is a promoter of art and craftsmanship. Mercedes and her company have helped that building become a pillar of art and economic growth."

For example, Mercury Mosaics recently bought a kiln from another Thorp tenant, Master Kiln Builders.

All told, Mercury Mosaic and the landlord have invested more than $350,000 to improve the Mercury space, including converting a former spray booth into a conference room, improving lighting and installing an energy-efficient HVAC system.

"The space is a lot more efficient and safer," Sander said.

Mercury Mosaics broke out when Austin decided in 2010 to avoid distributors and work directly with customers, including designers, architects and a couple of retailers. The business was growing faster and with higher margins within a year.

"I needed to grow my business faster and feed the employees," Austin recalled. "It's just as much effort, selling directly, but I don't have to spend as much time educating wholesalers."

A key relationship is Room & Board. Mosaic makes custom-made table tops. Minnesota's Bell Manufacturing makes the steel frame.

As an employer, Austin offers a health plan that covers 75% of employee premiums, even though the law doesn't require health care for such a small shop. And she plans to get to a $15 minimum wage before the city requires it in a few years. Employees have some flexibility in scheduling and opportunity. The shop floor is spacious and lacks a mechanized feel. But everybody is doing their part to fill orders.

Austin did the company books for awhile, part of her development as a well-rounded CEO. But she was happy to hand that off in 2016 to Alex Wagner, a creative who also loves accounting and cash-flow analysis.

"I'm better in sales and projecting the future, not accounting for the past," Austin said.

Austin also is collaborative and part of a growing network of female CEOs in Northeast.

When she learned about Katie Stellar, a hair stylist who has overcome challenges to open her own shop last year at Broadway and Central, Austin met with Stellar. Stellar, known in the neighborhood for giving free haircuts to those in need, had blown most of her building-improvement money on the basics. Mercury Mosaics made a stunning piece for the shop. No charge.

"Throughout my career, there have been moments of challenge … that threatened my vision," Austin recalled. "I support Katie. Her passion to make the world a better place through small acts of kindness is what it's all about. She has moved me."

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. Contact him at nstanthony@startribune.com.