Food Halls on the Rise

By Lynn Dehlinger, Sr. Economic Development Manager/ICSC P3 Florida Co-Chair and Allison Justice, Sr. Project Manager

The food hall phenomenon has officially transcended trendiness. These sprawling markets showcasing a variety of mini-restaurants and retail food vendors under one roof have spread like wildfire in recent years, and don’t expect it to slow down anytime soon. By 2020, the U.S. will be home to 200 food halls, about double the number currently in the United States, according to Cushman & Wakefield’s 2016 Food Halls of America report (1).

And while diners certainly appreciate the array of options and the typically affordable prices food halls offer, they are also filling huge blocks of formerly vacant retail space.  Unlike their food-court antecedents, these foods halls tend to offer a mix of chef-driven concepts and independent operators selling locally produced artisanal foods in a market setting.

The food hall is a modern translation of a concept that originated in Europe and Asia well over a century ago.  A food hall established in Harrods department store, in London, in the 1800s, is widely credited as being the world’s first, and the Mercado de San Miguel, in Madrid, came along in 1916. Both are still open today.

Triggering the expansion of food halls in the US today are the Millennial foodie culture, the reality-TV cooking shows, celebrity chefs like Anthony Bourdain, with his Parts Unknown and No Reservations shows, and a growing demand for responsibly sourced and multicultural foods.

Halls also have cachet, including an element of theater. Food halls offer more-affordable options and broad experiences, for as long as the consumer wishes.

Food halls can work in a variety of venues, from mixed-use complexes to malls to downtown office buildings — anywhere there is pedestrian density. They are a solution for time-strapped workers and shoppers, particularly for groups with diverse tastes. Immigrant populations are also fueling the growth of food halls today and contribute to the community gathering feeling that food halls provide.

The Clematis Street Case

The Clematis Street in West Palm Beach (Florida), recognized nationally as one of the “Great Streets in America” with its popularity and vigor, is facing challenges similar to those of other main streets and downtowns. The hot real estate market, high property values and rents and the changing face of retail are some of the reasons why this popular street has been suffering from higher than average vacancy rates.

Currently, the Community Redevelopment Agency (CRA), the Downtown Development Authority (DDA) and the City are working closely together to address those challenges to attract business through a number of initiatives, and one of the most unique and aggressive is through a project titled “12 for 12”, located in a former nightclub space that will soon be called “The Thoroughfare.”

The Thoroughfare is in the heart of Clematis. The 14,000SF space, formerly a Woolworth’s Department Store, was most recently a Hookah Bar that had been riddled with code violations and late night issues.  In 2016, the historic building changed ownership and the nightclub closed. The owner began working with the City/CRA/DDA to locate a tenant for this vast space, however, the owner soon realized the challenge many buildings on Clematis Street face: large first floor spaces that are not only wide but very deep. Buildings fronting Clematis Street are all 150′ deep, which can limit the pool of retail tenants. Without an additional significant investment, the owner of 314 needed to attract a restaurant or nightclub for this space. Restaurants weren’t interested due to the high rent and large space and neither the owner, nor the City, were interested in another nightclub.

The Redevelopment Management Associates (RMA) team at the CRA used a “food hall like” approach and ideas from the Shore to Core competition to creatively address the challenges of the street in regards to this particular space. The Shore to Core design competition in 2017, led by the CRA, included ideas to activate the alleyways and brought the winning design team of Ecosistema Urbano on board. Through support from the CRA and a grant received from the Knight Foundation, Ecosistema Urbano is designing the interior of the space that will house multiple small businesses, similar to Chelsea Market in New York City, while at the same time, addressing the connection to Clematis Street and the Alleyway.  The building will be open to form a new pedestrian connection from Clematis Street to the renovated alleyway.

The competition for 12 for 12 opened January 28, 2018 and applications are due April 30, 2018. Businesses are to submit a video application and business plan. Each concept will be reviewed and twelve (12) winners will be selected to locate within The Thoroughfare. These businesses could range from a small office space, to a bakery or retail shop and modular areas will be provided in three (3) different sizes from which to choose. The Thoroughfare will be anchored by an Italian and Belgium themed restaurant to include a butcher and seafood bar, fresh bread and olive oils, brats, frites and homemade waffle stations. The restaurant integrates into the space as small stations and will also include a bar. Demolition of the building has begun, and construction is scheduled to begin in the Summer of 2018. The project will be completed by Winter 2019, which will coincide with streetscape improvements along the 300 block of Clematis Street.

(1)   http://www.restaurantbusinessonline.com/emerging-brands/7-food-halls-watch-2017