Food Hall Site Selection

Nur Asri is an Associate at Larisa Ortiz Associates

Earlier this month, Cushman & Wakefield released a report titled, “Food Halls of North America”. Since their first report on the trend in November 2016, food halls have grown exponentially all over the country, and especially in New York (see #5 of our 2018 trends list).

The report lists twenty five different food halls in New York City (we’ve left out Essex Street Market because it’s an institution we’re more familiar with as a public market, more on this in a previous blog) but guess where they’re mostly located? That’s right, Manhattan. 

80% of the city’s food halls are located in Manhattan.

Source: LOA

Drawing a 5-minute walking radius around each of the food halls, I took a closer look at the demographics and worker populations surrounding these food halls to figure out why Manhattan is continuing to draw this attraction.

Source: LOA

When compared with food halls located in Brooklyn and the Bronx, those in Manhattan were situated in neighborhoods with higher population density, higher median household incomes, higher educational attainments, and higher proportions of Millennials aged 25-40. These are unsurprising facts for anyone who lives in the city but if you’re elsewhere looking to attract a food hall operator; these are just some of the criteria your downtown or neighborhood may need to offer.

The psychographic tapestry segments that dominated the food hall neighborhoods in both Manhattan and Brooklyn were ‘Laptops and Lattes’, ‘Trendsetters’, and ‘Metro Renters’ . These groups, as you can imagine, are all made up of high-earning, well-educated young professionals who are socially and environmentally conscious, technologically savvy, and enjoy discovering local art and culture and dining out.

Given that food halls are highly-curated cultural hubs for new and old restaurateurs to test food concepts and set trends, having an educated audience that seeks this type of experience and is hyper aware of the nutritional value of their food would be highly beneficial and complementary to the mission of food halls. These are the same customers that will likely come in to a food hall and Instagram their meal and night out, driving greater marketing and sales.   

Speaking of dining out – I also found that residents living near food halls in Manhattan spend more eating out annually than those in the outer boroughs. The exception lies in DUMBO, Brooklyn where the upcoming Time Out Market is slated to open later this year. Within a 5-minute walk of the soon-to-be-opened food hall, households are spending an average of $6,091 annually on eating out. This is even higher than those residents living near Canal Street Market, American Market by Todd English, and Gotham West Market!

The high density of worker populations is another trait food halls seem to prefer. All the food halls located in Manhattan have between 20,000 to over 100,000 daytime workers within a five minute walking radius. In comparison, the food hall with the greatest day time worker density in an outer borough is Gotham West Market at the Ashland (Brooklyn) with only 16,353 workers within a five minute walk.

Photo: Lou Stejskal  (Flickr)

Meanwhile, in Manhattan, the top three food halls with highest worker population densities are all located in and around Grand Central Station (Urbanspace at 570 Lexington, Urbanspace Vanderbilt, and Great Northern Hall), where there is a strong cluster of banks and financial services offices and over 100,000 daytime workers. Furthermore, most of these workers earn more than $3,333 per month, indicating strong spending potential particularly during lunchtime and after work.

Even within New York City, there are nuances with where food halls are growing. Food halls in the west side of Manhattan– from Chelsea up to Midtown West – appear to be riding on the wave of high population growth rates. Populations around Gotham West Market and Hudson Yards Food Hall, for example, are expected to grow between 14-15% in the next five years (some of the highest rates in the city!). And the same can be said of the growth in food halls in the outer boroughs. Aside from Industry City, all the food halls in the Bronx and Brooklyn are located in neighborhoods with rates of population growth higher than their respective County levels.

So it appears that even if your downtown doesn’t quite have the traits that we’ve seen with the food halls in Manhattan (i.e. high population densities, high worker densities, etc.) but is undergoing a renaissance and seeing an impressive development pipeline of residential homes and offices, then maybe attracting a food hall operator is not completely out of order.

Like attracting all other tenants, however, it is crucial to first consider the types of residents and workers that will be entering these new developments, what their spending patterns are like, and if these align with the traits that food halls are craving.

Are their disposable incomes high?

Are they trend-seeking consumers?

Are they younger, digitally-apt customers that will continue to support and market the food hall?

After all, as we’ve seen, the food hall is not for everyone. And it’s certainly not for every neighborhood.

Mall-to-Mixed Use Tracker

Nur Asri is an Associate at Larisa Ortiz Associates.

In recent months, we've seen a slew of headlines announcing the redevelopment of dying malls as walkable, mixed-use neighborhoods. These complex undertakings (read our post on the challenges associated with redeveloping malls) are popping up across the country as more commercial developers seek to diversify their portfolios in this turbulent retail climate. Join us as we round up some of the latest mall-to-mixed use projects:

Source: LOA (2018)

There are a number of uses other than 'Retail/ Restaurants/ Entertainment' that have been introduced to dying shopping mall sites. This includes housing, office space and hotels. In fact a majority (35%) of the projects we tracked now feature the full suite of uses - retail, housing, office and hotels. Retail and housing is the second most popular use combination on these former shopping mall sites, comprising 26% of total projects tracked.

When we look at the geographic distribution of these projects, the state of California comes up as a clear leader in these mall transformations. 29% percent of the projects we tracked are located up and down the coast from San Diego to the Bay Area. The State of Virginia also fares well with a 20% share of tracked projects located between Tyson's Corner and Richmond, however, it is the Mid-Atlantic region as whole that leads this redevelopment trend with 40% of projects located in VA, PA, MD, NJ and NY.

Source: LOA (2018)

The traditional American mall will no doubt continue to reinvent itself as consumer preferences and lifestyles change so keep your eyes peeled for similar projects in your own city! Comment below if your town is seeing a new mall-to-mixed use conversion. Here's a full list of mall-to-mixed use projects we tracked:

Source: LOA (2018)

Technology in Retail

Nur Asri is an associate at Larisa Ortiz Associates.

As we continue to move forward in this digital age, consumers are expecting simpler and seamless processes at home, at work, and at the retail store. As a result, retailers are making significant investments in technology in- stores to meet these consumer demands for a connected and convenient shopping experience. Here are some ways that retailers and brands are using technology to enhance consumer experience but also personalize marketing, improve logistics and customer service in brick-and-mortar stores.

1. Data Integration: Understanding consumer preferences, personalized marketing

Connecting data from smart appliances, mobile phones and other portable devices to digital systems helps businesses understand how customers actually use products and services, and which ones are preferred. To take advantage of this data and metrics, retailers can begin using devices to facilitate a more seamless retail experience in the store, and at home, to integrate products and services.

Retailers can use “customer genomes” to create highly personalized offers, promotions and experiences.

Source: Let's Talk Payments.Com

Macy’s and Apple are using in-store beacons to provide personalized offers directly to customers via mobile devices. House of Fraser, another department store in the UK, inserted beacons into mannequins for a proximity marketing campaign. When shoppers download an app and browse in- store, they receive information about the clothes on display. In other bigger retail stores, in-store shopper tracking systems have been installed to pinpoint a customer’s location. Retailers can then send targeted messages to customers (via smartphones) about nearby items.

Hugo Boss Heat Sensor in Regent Street store.
Source: Bloomberg

In London UK, Hugo Boss uses heat sensors to track customer traffic in its clothing stores, which helps store managers organize priority merchandise in high-traffic areas.

Monsoon Accessorize uses multichannel data sources from in-store and online customers to deliver unique personalized offers via emailed receipts. Similarly, UK department store John Lewis is partnering with an omnichannel personalization company to customize product recommendations for each individual shopper.

Walmart Media Exchange is using data collected from store sales, social-media platforms and third parties to supplement data from its Savings Catcher loyalty program. From the data, Walmart plans to create customer segments, and eventually individual customer profiles, to make better offers, as well as to improve targeted marketing.

2. Building brand/ product awareness: Educating consumers on what’s available on offer, sharing products through social media

Photo: Fashion Network.Com

Sephora has installed display screens showing latest trends, make-up tutorials, and new Made in Sephora exclusive offerings updated by theme each month. The screen greets customers as they enter the store, much like a mall directory screen. In addition, Sephora also has Beauty Boards. These are physical social media platforms to like a look, tag products used and share with the Sephora beauty community. Finally, Sephora’s snapchat geofilters feature highlighted products in-store and are designed to engage everyone within a mile of a store.

3. Product Testing: Allowing consumers to test products digitally or via augmented reality

Again, at Sephora, the Beauty Hub is a virtual look book which provides a catalog of beauty inspiration while the Virtual Artist service enables customers to test looks on an iPad or connected mirror. Developed with Pantone, the Color Profile application helps choose the right foundation shade with almost scientific precision. Recommendations are then made from all the complexion products available at in-store.  

Marie Claire’s pop-up store in NYC SoHo, called “The Next Big Thing Concept Shop”  has dressing rooms with interactive mirrors from Oak Labs that recommend accessories for outfits being worn. Similarly, Clarins beauty stores now feature Sensor Mirror Pro virtual skincare mirrors developed by MemoMi to educate consumers about their skin types so they are able to select the most suitable skincare products.

Photo: Connected-store.Com

Finally, fashion retailer Uniqlo has also piloted a “Magic Mirror” technology from Sharp that allows customers to virtually change the colors of clothing they’re trying on while standing in front of the mirror.

Photo: Ikea

Even when consumers aren’t physically in stores, they are now able to test products thanks to advanced technology. Ikea will soon enable shoppers to virtually test drive merchandise before making a purchase via an augmented reality app called Ikea Place. The app will allow customers to virtually place any Ikea furniture in any space and share the images with friends. The app will automatically scale furniture with 98% accuracy. This enables customers to experience how light and shadows will render on furniture within the space, and is intended to make buying decisions easier and inspire customers ahead of purchasing products. Other furniture retailers such as Wayfair and Ashley Furniture are similarly preparing to launch such initiatives with their products and brand.

Ashley Furniture will take technology a step further and feature in-store virtual reality tech bars that will combine a guided iPad-based space configuration experience with VR headset visualization, allowing shoppers to design and visualize their own homes.

4. Payment Processing: Easy and seamless payment methods

With a smartphone in every pocket and imaging technologies now available for scanning products, faster alternative checkout methods will continue to grow across the retail industry, predicts Tony Rodriguez, CTO of digital identification solutions provider Digimarc.

Self-service checkouts have gotten more sophisticated in grocery stores and moved into other retail sub-segments, such as home improvement, fashion and electronics stores. Tesco, a grocery store in the UK for example, is testing a high-speed checkout solution that automatically scans products placed on conveyor belts. The system can process up to three customers at a time.

Apple Pay at Whole Foods. Photo: Eric Risberg

Integrated mobile apps and “contactless” mobile payments now also enable visitors to make seamless cashless transactions, supported by MasterCard and Apple Pay, from anywhere within the store, including via fitting room mirrors. The Sephora store at Newbury Street, Boston, for example, has no cash registers because staff associates can process payments digitally, on their phones from anywhere on the floor of the store.

Since Apple’s launch of its Apple Pay solution, retailers including Staples and Whole Foods have announced plans to accept Apple Pay at their retail locations, adding to an impressive list of other major brands such as Bank of America, Disney and McDonald’s.

5. Customer service: Efficient appointment bookings, improve staff efficiency, deliveries

Many stores now enable customers to use an integrated mobile app to book one-on-one appointments with fashion stylists, and sign up for a variety of in-store events and activities. Neiman Marcus, for example, has already piloted this at their pop-up store in SoHo.

To free up store employees’ time, Lowe’s has also begun rolling out customer-helping robots into the aisles of 11 stores in the San Francisco Bay Area. Lowe’s Innovation Labs unit worked with Silicon Valley start-up Fellow Robots on the LoweBot. The robots allow store associates to devote their attention to customers that need more thoughtful advice and personalized service. Likewise, Safeway grocery store helps customers locate stock and obtain product information through its Just for U service app. The app also goes a step further by helping shoppers create and sort their shopping list by store aisles.

Wearables, or ‘smart glasses and other connected devices intended to be worn on the body’, are another productivity booster. Tesco distribution center workers wear armbands that track the goods they are gathering. The band also assigns tasks to the wearer, forecasts task completion time, and quantifies precise movements among the facility’s shelving and loading bays.

The advancement of such technology amongst retailers will serve to deliver a seamless shopping experience for customers. However, even with all of these gadgets, customers still walk into brick-and-mortar stores to get the personable experience of getting expert advice from a staff person who’s tried and tested products for themselves. From 2015 report on Navigating the New Digital Divide, Deloitte noted that “one in three customers still prefer to consult store associates for assistance when selecting and validating products.” Retailers must therefore adapt and learn to balance both the human experience and technological convenience in stores to attract consumers in the digital age. 

Mall to Mixed Use

Nur is an associate at Larisa Ortiz Associates

Over the last year we’ve heard story after story report on the closing of large anchor retailers such as Macy’s, Sears, and J.C. Penney and how the trend might result in another wave of regional mall closures. Analysts from across the board are predicting hundreds more shopping malls in the US to shut down as a result of being unable to find enough retailers to replace ones that have gone, leaving millions of square feet of developed but vacant commercial space.

At the same time, we have also seen story after story emerge of mall owners getting innovative and replacing traditional department stores with a slew of entertainment uses and non-conventional tenants such as offices and urgent healthcare clinics.

It is not surprising then that, now more than ever, shopping mall owners are also going to the extreme of complete overhaul of their properties to create mixed-use neighborhoods as another solution to save themselves. The mall-to-mixed use redevelopment movement started more than two decades ago with the conversion of the Boca Mall in Boca Raton, FL into a mixed-use neighborhood consisting of residential homes, office spaces, shops, and restaurants.  We first wrote about this transformative project in 2015, along with another early project Villa Italia in Lakewood, Colorado which was transformed into the neighborhood of Belmar in 2004. Since then, various other shopping mall owners have taken the same leap in redeveloping their properties into mixed-use communities. Today, we take a closer look at two more recent and still underway projects – City Centre, Houston, Texas and Promenade 2035, San Fernando Valley, California. We look at what it really takes to get a giant mall redevelopment to take off.

City Centre, a mixed use urban development with office buildings, multifamily residential homes, brownstones, hotels, restaurants and retail, and conference spaces, sits atop the former Town & Country mall on the edge of metropolitan Houston area. The regional shopping mall which opened in the early 1980s, closed following the departure of anchor department stores J.C.Penney (a story we’ve heard before).

Like any typical mixed-use development, City Centre is centered on a public square and features a grid-like street network and a pedestrian-friendly environment. Financing it, however, was not so typical. The project was developed by Midway, Cos. a real estate investment and development firm, in partnership with several other companies. Midway Cos had to finance the project by function, identifying separate partners for the various components of the project, seeing as capital partners were not comfortable with such a large and risky undertaking.

Financing and structuring such large mixed use developments continues to be difficult. Rules hindering financing such projects “had their genesis during the Great Depression or early post war era, and are based on the obsolete assumption that mixed-use developments are financially riskier than single-purpose residential developments.”, according to a 2016 Regional Planning Association report. However, with shifting demographics and market preferences leaning towards connectivity and walkability amongst both young Millennials and Baby Boomers, single-use projects may in fact become riskier than ones with higher shares of non-residential uses.

Although not yet expansive and popular yet, the Small Balance Loan program (SBL) by Freddie Mac, launched in 2014, may be a new and viable financing tool for mall owners hoping to transform their portfolio into mixed-use communities like CityCentre. The multifamily housing financial program is a “welcome liberalization in long-term financing” and is designed to provide fast approval of loans for projects with “40 percent of their income—or 40 percent of their space—related to commercial uses”. Thus far, the loans are easiest to get in densely populated metropolitan areas, however, the SBL program is growing fast and may, in the future, become an even more useful tool for forward-thinking mall owners.

With Promenade in San Fernando Valley, the challenges facing the redevelopment of a failed shopping mall were slightly different. Local community scrutiny has been a real impediment to the project still scheduled to be completed in 2035. Given that the 43-year old mall had become a huge “drag on the surrounding neighborhoods” over time, as it became a blighted site subject to “intense speculation over its future”, community support for such a radical transformation was not instantaneous and took a lot of grappling. Even retail tenants were blaming the owner for “allowing the mall to deteriorate to a mere shadow of its former self”.

In order to maintain the mixed use redevelopment project’s transparency, the developers, Westfield Corp, launched a website to seek local residents’ vision for and needs from the mixed use redevelopment, and also to better inform locals of site plans and the sustainability and economics of the project.

Next, to ensure that the mixed-use development remains viable thru 2035, the developers have also ensured that the design of commercial spaces are on trend with what’s occurring across the industry. With the market understanding that the way employees and businesses work will continue to evolve, approximately 150,000 SF of office space will be designed as creative workspaces that include a mix of indoor/outdoor office spaces, co-working spaces, traditional office suites, gallery spaces, and about 60,000SF will consist of work/live studios.

Indeed, mixed use mall transformations as described above may bring several advantages to the local community. From diversifying housing types for existing and future residents to built-in residential market demand for retailers and reduced car trips between work and amenities, the mixed use mall transformation could act as a catalyst for further reinvestment and development in the area. However, mall owners hoping to transform their properties with other partners need to ensure they’re not “dictating supply rather than responding to demand”. As demonstrated by Promenade 2035, market analysis is crucial early on in the planning process to determine what types and how much residential, office and retail space can be viably supported by the local market.

In addition, design experts in commercial spaces need to be engaged to ensure the mall transformations or new developments can accommodate the types of operators determined by a preceding market analysis.

Community engagement throughout the planning process is also key and although many mall developers today are not known for such outreach work, it is important they begin to take on this responsibility with the help of local non-profits because community needs are often nuanced. Conversations with local stakeholders may not only encourage public buy-in but also bring to light different kinds of needs that may not necessarily come up in strict market analyses, including social service, healthcare, public space needs, and architectural preferences. Sometimes, “communities may not be ready to embrace the densities and design standards required to accomplish successful mixed use neighborhoods”, according to Robert Gibbs a retail planning expert, so the open dialogue between mall owner/ developer and the local community can serve to build an understanding around such concerns and guide any concessions that need to be made.

Although the mall to mixed use trend is becoming popular amongst commercial real estate developers, it certainly is no mean feat. But it is one of the solutions that may help us transform the failed suburban landscape across the country and with stronger partnerships, such projects may be easier to accomplish in many more places. 

The Growth of Food Trucks

Food Truck Fest in Troy, NY (Photo: Townsquare Media)

Here at LOA we are paying close attention to food trends as this category continues to grow its share of overall consumer spending. Consumer dining habits are rapidly shifting as more and more spending is happening on meals outside the home than on buying groceries and eating in, according to the most recent expenditure data (Bureau of Economic Analysis, Q1 2016). In recent months, we’ve covered the new categorization of food services, and delved deeper into food hubs and food halls, but now it’s time to take a closer look at food trucks.

Food trucks are establishments primarily engaged in preparing and serving meals from a mobile truck. Food is normally prepared, stored and cooked on the truck and the truck may or may not use the same location every day. Today, there are over 4,000 food trucks across the nation. According to IBISWorld, a market research firm, from 2011 to 2016 industry revenue grew at an annual rate of 7.9% and in 2016 reached over $1.2 billion – and that’s why we’re paying attention to this industry.

NYC Food Truck (Photo: Sacha Fernandez)

Like full service restaurants and other eating places, food trucks can primarily be found in densely populated cities and regions. According to a Zagat survey from 2012, the most concentrated cities include New York (11.1% of industry establishments), Boston, Washington, DC, Miami, Houston, Austin, TX, Cleveland, Chicago, Portland, OR, and Los Angeles. The West and Mid-Atlantic are the most important regions for this industry, accounting for an estimated 25.2% and 23.3% of food trucks in 2016, respectively. As its popularity grows in Florida, the Southeast is also anticipated to account for a greater substantial share of food truck establishments.

Food trucks, however, were never this popular in the past. Early on in its inception, food trucks predominantly existed to serve the budget-strapped working class citizen searching for a cheap lunch deal. Trucks would be parked by construction sites and a hefty meal would cost no more than $6-8. Food trucks were also widely acknowledged by entrepreneurs as the quickest and most affordable way to break into the food business with low set-up, operating and licensing costs.

Today, the tables have turned. Food trucks are increasingly being used as promotional and marketing tools for established chefs, hotels, and restaurant brands. Bigger companies and national chains are using food trucks to service private events and music festivals just to get their name out there. Brian Pekarcik and Rick Stern, co-owners of Spoon and BRGR restaurants in Pittsburgh, launched a BRGR truck for that very reason. “As brand recognition, it's a great advertising piece,” they explained. “And we expect that it will drive customers to our restaurants.”

Food Trucks on parking lot in San Francisco, CA (Photo: Quinn Dombrowski)

And meals are not as cheap anymore because the trendy, young professional seeking new and gourmet food has now become a major customer segment in densely populated cities.  These changes are also reflected in successful sales locations for food trucks. In 2015, only 15% of food truck sales were made at industrial/ construction work sites versus 18% at venues and events, according to Mobile-Cuisine.Com.

Cities, however, are still trying to navigate this burgeoning industry. Some are implementing programs and policies in support of these small food businesses, while others are taking a protectionist approach by heavily regulating and hindering the growth of food truck operators for fear that they may take away sales of brick-and mortar restaurants and eateries. Others also blame mobile food trucks for congesting sidewalks and streets and diminishing the urban quality of life.

Food trucks outside restaurant in Cleveland, OH (Photo:E Little)

In Chicago, IL, for example, food trucks are being held back by regulations that prohibit them from setting up shop within 200 feet of a bricks and mortar restaurant or from parking in any one location for more than two hours. Bricks and mortar restaurants are often, if not always, located near the retail core of downtowns and near entertainment and leisure destinations where a considerable amount of foot traffic is already established. By disallowing food trucks from setting up in those areas, they may be pushed to peripheries of downtowns or less attractive streets where there isn’t a sufficient threshold of customers to break even. Also, in Chicago, where parking ratios are lower, food trucks would be hard pressed to find desirable parking spots quickly – resulting in lost critical sales hours. These restrictions and more have stifled the industry’s growth in Chicago at a 1:100 ratio of food truck to restaurants.

Food truck on Leather Lane, London UK (Photo: duncan c)

This defensive position, however, may be unfounded because the Bureau of Labour Statistics has found that counties that have experienced higher growth in mobile-food services have also had quicker growth in their restaurant and catering businesses. For example, in Seattle, the number of restaurants and surrounding King County has grown by 16% since 2010 in spite of a thriving food-truck scene. In Travis County, Texas, which includes Austin, the restaurant count has jumped 18% even as food trucks have increased more than six-fold. In fact, in Houston TX, restaurants have experienced increased business generated by food trucks parking nearby and drawing more people to the restaurants’ neighborhoods. Restaurant owners themselves have reportedly asked the Houston City Council to ease existing laws that make it difficult for food trucks to operate.

In other cities, parking laws and other ordinances are evolving to catch up with the industry’s transformation and although there is no one-size-fits-all solution, here are some best practices from around the country if you’re looking to take a supportive approach leaned towards fair ordinances that allow food truck vendors to flourish.

BEST PRACTICE: Austin, TX – Simple and non-prescriptive Food Truck Ordinance

In the City’s Zoning Ordinance, mobile food establishments, or food trucks, are permitted in all commercial and industrial zoning districts and are minimally restricted from operating between the hours of 3:00 am and 6:00 am. The distance restriction on operating a food truck near a restaurant is also very minimal at 20 feet, versus the 200 feet in Chicago.  In more residential neighborhoods, the City allows for neighborhood association areas to reasonably request further restrictions on the operations of food trucks to avoid noise and litter nuisances in predominantly more residential areas.  And that really is the end of the restrictions on food truck operations in the City.

BEST PRACTICE: Cincinnati, OH – Streamlined permitting process

Austin , TX and Cincinnati, OH are two cities that have streamlined and centralized their food truck permitting processes. This strategy lowers time and cost on the part of small business owners hoping to license their food trucks and start operating. Austin’s permitting web page has detachable forms and blank spots for the necessary signatures, with instructions regarding who to contact to obtain those signatures. On the same page, it also specifies the actual schematics of the truck components required for food preparation and handling safety, and best of all, nowhere does it suggest to refer to a subsection of the zoning code or statute not included in the document. Simplifying and making the process clear is crucial to encouraging food truck vendors.  Meanwhile in Ohio, the Cincinnati Department of Health is the only agency responsible for the city’s permitting process, application process, and payments associated with the city’s mobile food vending. Half the time, food truck vendors are required to submit applications to four or five different agencies and this process can become confusing for applicants.

Food Truck Thursday in Washington DC (Photo: Ted Eytan)

BEST PRACTICE: Washington DC – Mobile Roadway Vending Zones

Farragut Square, Washington DC, is now a vibrant outdoor food court since the city implemented Mobile Roadway Vending zones, or MRVs, in 2013 allowing trucks to vend for four continuous hours without breaking parking laws. The city rolled out eight MRVs that year, including ones at Farragut Square, Franklin Square, L’Enfant Plaza and Metro Center. 95 parking spots were made available in the MRVs and are handed out via a monthly lottery. These food trucks sell food at lunch hour to the thousands of workers in each district.

Food truck on private lot in Brooklyn NY (Photo: Jason Lam)

BEST PRACTICE: Portland, Oregon – Vacant Lots for food truck clusters

After a study in 2008 by researchers at Portland State University that concluded food carts benefited residents, the city began encouraging the use of vacant land for food-truck clusters or “pods”. The No-Vacancy guide explores temporary use of vacant space (including food truck vending!) and its applicability in the Central Eastside Industrial District. The guide shows property owners and food truck vendors how to navigate permitting and zoning processes in these scenarios.

Establish a pilot program!

If your downtown is still getting its feet wet in the food truck business, try implementing a pilot program to make informed decisions on what regulations to adopt in the future. Pilot programs are meant to test the waters and can very easily bring to light the issues that are unique to your community.  A small pilot program will also minimize any unintended impacts while still gleaning insight on what works and what doesn’t locally.

The City of Cambridge, whom we are currently consulting with on a citywide retail market strategy, launched a pilot program in 2011 that allowed permitted mobile food trucks to park in spots adjacent to riverfront parks. An initiative of the Community Development Department, the program was used to determine whether a future, permanent program should be implemented.  In the pilot, food truck vendors had to apply to participate in the program and spaces were leased on a week-by-week basis for a per-day fee.

By the end of the pilot, the City learned that the designated vending spots did not work for trucks. The City has selected low pedestrian traffic areas or times because it had wanted to activate these spaces, however it backfired on vendors who found they could not make their businesses financially viable in those areas. The City also learned quickly that a cluster of trucks needed to be marketed versus just one at each spot. Marketing and communicating to the customers that there were more than a single food option was found to be more effective.

With all the lessons learned, the City of Cambridge hopes to re-launch a new food truck program with policy improvements that were suggested by food truck operators.

Let us know if your city has an effective food truck program too!

For more examples, read NLC’s Food On Wheels Report: www.nlc.org/sites/default/files/RI_FoodTruckReport2013_final.pdfhttp:/www.nlc.org/sites/default/files/RI_FoodTruckReport2013_final.pdf

Institute for Justice’s Food-Truck Freedom Report:

http://ij.org/report/food-truck-freedom/

http://ij.org/wp-content/uploads/2015/03/7-myths-and-realities.pdf

Urban Vitality Group and City of Portland’s Food Cartology Report:

www.portlandoregon.gov/bps/article/200738

A Response to APA17: The dangers of calling it a Modern Food Hall

One of the more popular sessions at the National Planning Conference last week was one titled “Modern Food Halls: Redevelopment Aid or Trend?” The panel discussion was led by Nicolia Robinson of Cooper Carry, an architecture, design and planning firm based in Atlanta, Georgia. Joined by her colleagues Sarah Jane Bonn and Daniel Sweeney, Nicolia led the discussion around one of the most talked-about trends in cities across the country. She opened the floor with a brief presentation on what the drivers of food halls were and attempted to distinguish them from what many of us recognize as food courts and markets.

Food Trends

In 2015, there were only 70 food halls across the nation. Last year, the panel cited that that number had risen quickly to 130, and by the end of 2017, we are expected to see more than 200 food halls across America.

This rapid growth in food halls, like restaurants, can be attributed to the rising trend of eating out amongst consumers. In an earlier post, we wrote about the fundamental and cross-generational shifts that have led to restaurant industry sales surpassing grocery sales for the first time in history. For food halls, the large proportion of millennials eating out more frequently is particularly driving its rapid growth and popularity.

On top of this, the panel claims that food halls are also meeting the needs of consumers who are seeking more “sophisticated and authentic flavors and experiences while dining out”. This has been echoed in recent media reports that claim consumers are “demanding more variety, better quality food while also seeming fatigued with the conventions and time investment of a multi-course, full-service meal” at traditional restaurants.

Defining Modern Food Halls

So what exactly is this food hall we’re all talking about? While the panel from Cooper Carry attempted to distinguish food halls from the traditional food court and market by delineating specific traits for each of these places, the lines began to blurry as they continued to dive deeper into case studies and examples. Before we begin to dissect the discussion around the definition of food halls, here are the characteristics the panelists attached to Food Courts, Markets and the newest hybrid, Food Halls:

Food Court	Market	Food Hall - Marries best of both food court and markets
Mostly national brands	Mostly local brands; mom and pop stalls	Both local and national brands (mostly local)
Fast food to fast casual	Ingredient-focused, produce-heavy stalls	Curated mix of tenants
Convenience		Plenty of gathering space (communal aspect)
Few retail options	Mostly Retail	Balanced retail and food

And here are the different ‘Scales and Types of Food Halls’ that have been observed by the panel:

Micro	Neighborhood	Destination
<10,000sf	10,000-30,000sf	30,000sf
Located in mixed use development, usually in difficult spaces to lease out to other operators

Food Halls

According to the panel, there are some key elements that make a food hall a food hall. First, there is often a heavily curated experience. The trouble with the ‘curated experience’ however has been that it is often targeted toward younger consumers that are more educated and have higher disposable incomes. After all, this is the demographic group choosing to live in urban, dense areas or in transit-oriented neighborhoods where these food halls are often located – key element number two.

Although this was not directly addressed by the panelists, several planners present in the room were rightfully wary of the implications of the food hall’s curated experience. Prices of meals at food halls, as one audience member noted, are often high compared to other available dining options. The noisiness and bustle of food halls also largely appeal to younger adults without children or elderly companions.

Panelists also noted that another key element is the detailed attention often paid to branding food halls as modern amenities and advertising them on social media. This seems troubling as it necessarily excludes certain groups of users from food halls, for example traditional older customers or non- English-speaking customers.

Finally, food halls are supposed to have a variety of authentic tenants. Although this was not clearly explained in the session, I would hazard a guess that this was in reference to locally-owned businesses with new food concepts.

There appear to be a number of problems or inconsistencies with the food hall as defined at the session. In fact, when the floor opened for discussion, many in the audience jumped at the opportunity to ask about the foreseeable economic and social impacts of food halls that was not addressed in the presentation. Issues raised by audience members included insufficient parking and seating space for large crowds, and finally, the elephant in the room – who are food halls for?

In response to crowded spaces, Daniel Sweeney quipped that while seating can be hard to find in these popular food halls, this can in fact be beneficial to vendors. The busyness of the food hall creates a vibrant atmosphere for visitors and makes the food hall appear to thrive.

 

However, when must the line be drawn before the crowds begin to cause discomfort for regular patrons, forcing them to find alternative options and potentially resulting in drop of sales for vendors?

In fact, Chelsea Market here in New York City already suffers this shortfall. As soon as the food hall began to primarily serve tourists and attracted crowds of out-of-towners (over 6 million national and international visitors annually), locals no longer found the shopping environment conducive for daily  needs. Today, many locals intentionally avoid this former neighborhood jaunt. It appears as though food halls run the risk of becoming a visitor attraction rather than a local neighborhood amenity. This very issue raised red flags for me when the panelists started to use Essex Street Market as a case study of a neighborhood food hall.

The Problem with the Food Hall Label

In the past few months, LOA has been working with the New York City Economic Development Corporation (NYCEDC) to create a tenanting and marketing strategy for Essex Street Market as it prepares to relocate to a new facility across Delancey Street. LOA developed a strategic market positioning statement for Essex Market that defined key customer segments before recommending strategies for attracting new tenants and vendors.

Essex Market is, by definition, a public market owned and managed by NYC EDC. It is not a food hall, nor does it aspire to be one. The market is New York City’s oldest public market following Mayor La Guardia’s efforts in the 1930s to clear the city’s streets of pushcarts and build a network of modern indoor public markets. For more than 75 years, Essex Market has been a fixture in Manhattan’s Lower East Side and an important source of affordable products for local shoppers, from Latino and Asian immigrants, to the new millennials who have recently began moving into the neighborhood.

The mission of the market remains to serve the needs of low and moderate income residents in the neighborhood and this can be observed by the mix of tenants at the market. Vendors such as Saxelby Cheese Mongers and Essex Farm Fruits and Vegetable for example accept EBT and offer products at low price points. Even as the market expands in size at its new facility, prepared foods vendors will remain a small percentage of the overall market tenant mix. Ingredients-based purveyors will continue to make up over 70% of the market, including specialty ingredients such as fresh coffee beans, American cheeses and traditional spices.

In addition, NYCEDC and the Essex Market management team, will continue to remain committed to scouting hyper local vendors to fill the remaining spaces at the new facility with preference given to vendor applicants offering farm-related or ingredients-based products. These tenanting strategies are intended to maintain Essex Market’s position as a public market with retail that contributes to the local community’s wellness through fresh, affordable food.

Although the panel had intended on showing the audience a positive example of a publicly-managed neighborhood food hall, they may have taken a leap altogether in labeling Essex Market a food hall. Let’s take a look at the criteria set by the panel for food halls and how Essex Market doesn’t quite meet them:

Food Hall	Essex Market
Both local and national brands (mostly local)	No national brands
Curated mix of tenants	Curated to the extent that EDC is maintaining 70% ingredients-focused, produce-heavy purveyors
Plenty of gathering space (communal aspect)	Yes in the new facility
Balanced retail and food	No - 70% ingredients-based retail

Given that there are already some implications associated with food halls, we need to be careful with the way we use the label. In a previous post on food-based developments, we began to explore some of these negative impacts.

“…when food-based developments do not serve the wider community, it stands to run into accusations of causing gentrification and rising property values. In Anaheim, California, where a former fruit packing and distribution center was transformed into a food hall dedicated to local vendors, it has quickly evolved into  a selling feature for new residential developments in the neighborhood. Broookfield Residential for example is hoping to “attract young buyers with units priced between $300,000 and $400,000” in a neighborhood that was once a sleepy town known only for Disneyland. Whether intended or not, the Packing House food hall in Anaheim has led to huge inflow of development into the neighborhood, raising prices of property in the area.

Furthermore, food halls that only serve ready-made meals or chef-made meals are often too upscale for the average customer. While they may help fill gaps in a food desert, prices often prevent lower income bracket groups from accessing these freshly-made and locally-grown foods since most prepared foods are not even eligible for SNAP benefits.”

For all of the benefits food halls claim to have as incubators for small, local businesses and chefs, there are plenty of other players in the industry that are simply abusing the trendy name for profit’s sake. Let's not call it a food hall, if it’s really a market or a food court.