Food Halls Make Their Way onto the California Foodie Scene

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REBusinessOnline

There were food courts, then there were food trucks. Now, the latest trend to fill the needs of today’s fast-paced culinary crowd is the food hall. Though the Todd English Food Hall at The Plaza hotel in Manhattan is generally credited with starting this latest development trend, the idea of creating a large space with multiple vendors offering fresh, locally sourced fare, is nothing new to California. Pair that with a little natural sunlight and communal seating, and you have the recipe for success in the sun-worshiping state.

“California has long suffered a dearth of quality fast-casual dining,” says Anthony Deen, creative director of branded environments for CBX, a New York-based creative marketing service that specializes in food halls, among other things. “Pretty much every neighborhood in California has one great cheap place to eat, but to get variety, customers have to follow food trucks around. Food halls will solve these problems.”

Though the food hall scene has not yet penetrated every region of California, its presence is definitely felt up and down the coast. It started with classics like the Ferry Building Marketplace in San Francisco, Grand Central Market in Downtown Los Angeles and the Original Farmer’s Market, which sits adjacent to the Grove in Los Angeles’ Mid-Wilshire district. These pioneers’ successful proofs of concept paved the way for a second wave of food halls, including Oxbow Public Market in Napa, Taste Food Hall at Fig at 7th in Los Angeles, Anaheim Packing House in Anaheim, The Market in San Francisco and 4th Street Market in Santa Ana.

The food hall development trend has been refined even further with the third round of projects. This includes the recently opened 25,000-square-foot Liberty Public Market at Liberty Station in San Diego and the 4,000-square-foot Myriad, which occupies the ground-floor retail space of a mixed-use residential complex at 2175 Market Street in San Francisco’s Castro district.

Something Old, Something New

Food halls will also be incorporated into two major Southern California shopping center redevelopments. The Beverly Center’s $500 million makeover will include The Street, a collaboration between Taubman Centers and celebrity chef Michael Mina. The Street will feature up to 10 dining destinations and 15 to 18 unique concepts. The entire renovation is scheduled for completion before the 2018 holiday season.

William Taubman, COO of Taubman Centers, believes the new dining concept will bring the right amount of intrigue, yet familiarity, to the Beverly Center’s food options.

“Michael Mina’s first culinary job was at the Hotel Bel Air, so he understands the lifestyles of those who live there,” he says. “He has grown his brand significantly over the years, and his restaurants appeal to both California consumers and tourists. Together, we’re creating new-to-market experiences that will increase excitement and demand at Beverly Center, ultimately creating a signature urban shopping and dining experience.”

Philip Otto, founder, principal and design leader at Los Angeles-based Otto Design Group, asserts it’s essential for new food halls to strike the right balance between dining staples that will ease guests into the fresh space and novel entries that will intrigue them.

“We all have so many choices these days and see major brands everywhere, so something local and upcoming has great appeal,” Otto says. “This needs to happen in a balanced way with some things that are more familiar as well.”

Christophe Farber, vice president and director of business development for Grand Central Market and founder of Liminal RE Consulting, follows this formula when examining opportunities to add new vendors.

“You create your tenant mix carefully,” he says. “You look to provide the staples of the more traditional quick-dining-out experience, tacos, burgers, sandwiches, salads — always of the best quality and execution — and then you look to provide offerings that are more specific, more unique.”

A mix of the new and familiar was also on the mind of Westfield when it unveiled its $800 million facelift plans for Westfield Century City. The plans include a 50,000-square-foot outpost of Mario Batali’s wildly successful Eataly food hall. It will be the gourmet Italian food market’s inaugural introduction to the West Coast when it debuts in early 2017.

“The Eataly concept fit perfectly for us,” Westfield says in a statement submitted toCalifornia Centers. “What’s so amazing about Eataly is how it maintains its rigorous preservation and application of classic Italian recipes and techniques alongside an embrace of fresh and locally sourced ingredients. We saw an opportunity not just to share authentic Italian flavors and culture, but to remake LA dining as a thoroughly social event that celebrates the art of fine food preparation, presentation and the joy of eating well.”

Authentic Cuisine

Celebrity chefs mixed with old-world dishes in a new dining setting is great, but experts agree there is a lot more to this recipe for success than what meets the eye. This is especially true as shopping center owners like Westfield and Taubman bet big on service-oriented experiences like restaurants to offer guests a higher level of experience.

The goal of providing an experience, Farber believes, has made the social aspects of food halls nearly as important as the food.

“I think the trend toward food halls has a lot more to do with a desire for interaction with other people in a kinetic, elbow-rubbing, ‘you don’t know what will come along next’ space that a lot of communities like Los Angeles lack,” he says. “At Grand Central Market — and at any space we would design or operate — the people watching, the immersion, the sense of community, the plain, old fun, would be as, if not more integral, than any one specific food trend. It’s about the experience.”

As any retail investor who has studied millennials knows, the key to crafting an enjoyable experience that will keep the masses coming back for more is authenticity.

“The best approach always starts with culture,” Otto says. “Audience and lifestyle should be the anchor for all activities involved in creating a meaningful space. In this way, consensus building during the planning phases will center on what connects with real people, not just personal preference among the development team and design professionals.”

Culture and authenticity extend far beyond the actual fare served at these food halls. Instead, they encompass every element, from spatial design to the tenant roster, beverage selection and even the way the seats are arranged. Capturing the culture through both lifestyle and food choices was high on the list of priorities at Liberty Public Market, according to David Spatafore, a principal at Blue Bridge Hospitality, which developed the new Liberty Station project.

“We have life happening at our market, and we cater to San Diego’s emphasis on certain things: dog-friendly patios, craft beer, global wines,” he says. “Our market is a cultural deep-end dive into all the things that make San Diego great.”

With this in mind, Spatafore made sure to seek out, among other things, tenants with a local, healthy and unique flare. This included Baker + Olive, Scooped by MooTime, Local Greens, Cecilia’s Taqueria and Howlistic. While Liberty Public Market’s purveyors may share an overlapping appreciation for certain types of ingredients, styles of food or even food sources, Spatafore was careful to ensure the tenant mix was exactly that, a mix of what makes San Diego great.

“Due to the size of the market, I wanted to be careful not to create too much internal competition,” he notes. “I wanted all the tenants to complement each other’s offerings knowing, ultimately, this would translate to an amazing customer experience.”

One of the biggest challenges food hall investors and designers must overcome is the notion that authenticity, once achieved, can somehow be duplicated. Food halls, by and large, are not plug-and-play assets whose vendors can be reproduced all across the state.

“Food halls have become a new popular form of draw to retail centers and districts,” says Carlos Lopez, senior vice president at Hanley Investment Group in Corona del Mar. “Each is a unique mix of food vendors that are carefully curated by the operator for each specific marketplace. An individual food hall takes on the personality of the district where it is located. The Ferry Building in San Francisco is unique to the community it exists in and to whom it serves. The Packing House in Anaheim is unique to the community it exists in and to whom it serves. Trying to duplicate or substitute one for the other is not a guaranteed success.”

Nor is, Lopez asserts, developing a food hall to act as a band aid for bigger problems within a shopping center.

“Having a food hall is not a solution to troubled space,” he continues.

Betting Dollars to Donuts

One of the reasons a food hall is not a fix-all to every poor dining program or vacant big box space is the amount of investment, faith and time they ultimately require.

“The majority of the feedback I have heard from some of the landlords who have looked into these type of operations is how extremely management-intensive they are,” Lopez says. “The management requires the oversight of, for example, 20 small food vendors. Individual developers have to allocate time and resources toward the management of the facility’s common area and the management of the vendors at each facility.”

Lease terms, including rent, tenant improvement allowances, design parameters and duration, can also vary from tenant to tenant. As with menu offerings, many food hall operators find that a mix of short- and long-term tenants strikes the right balance, especially when it comes to redesigning space.

“There are spaces that have been [at Grand Central Market] for 99 years and there are spaces we have rebuilt from scratch for a specific tenant,” Farber says. “You make sure the function is there, and then you are either satisfied with the form, or you need to adapt. Form follows function.”

Many of the smaller, artisanal concepts also lack two other elements shopping center developers typically require from traditional, well-known fast-casual concepts: stellar credit and a massive loyal following. Farber, however, believes these obstacles can be overcome — as long as a few other facets are in play.

“There’s a heck of a lot more to faith in a tenant than their credit rating,” he says. “You want to understand the ins and outs of how they execute their specific concepts. A lot of chefs have good ideas, but the idea loses its luster when you get into the specifics of margins, sourcing, marketing and how to deliver a consistent product. You also trust your gut, both metaphorically and literally.”

Spatafore agrees, noting credit can change and assistance can be issued. But other things? Well, there’s just no accounting for good taste.

“Credit rating was not as important as passion,” he says. “Our on-site, hands-on management and support team could make up for deficits in business knowledge or operations from these new vendors. The people who sourced or produced the products were important, first and foremost.  There had to be ‘people’ behind the product. A story to tell. We didn’t want any stall to be just a product on its own.”

When mixed together, people and passion tend to create an authentic product. This seems to be true both of the tenant mix rounding out these food halls, and of the consumers looking to experience what they know they love, while simultaneously interacting with concepts they have yet to encounter. When diners able to share this type of setting with their family and friends — both the ones on their mobiles as well as the ones sitting next to them — a rising food destination might just have been born.

“I’m fond of the statement ‘in an age of robots, the human hand is king,’” Otto says. “Ultimately, we all have so much technology in our lives that people intuitively desire to have more visceral experiences. One need only look to the rise of craft and artisan approaches to everything from food to apparel and furnishings to see this truth. The implications of this — which is of the utmost importance for developers and designers alike — is to offer a truly noteworthy experience that speaks to the five senses.”

We’ll toast to that.

— Nellie Day

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