Urban food markets are having a moment. Following the August 2013 opening of The Source in River North, this year will see the opening of two new urban food markets – The Central Market at 2669 Larimer St., and Stanley Marketplace at 2501 Dallas St., in Aurora. Additionally, The Source’s marketplace is adding 20,000 square feet of space along with a 7,000-sf roof-deck beer garden and pool, as well as a 100-key connected hotel.
While everyone has a slightly different definition of the term food market, they all agree that it’s a destination where people can either dine in or buy ingredients to take home and cook. The key to making these new urban markets successful is that they offer a new experience for consumers.
“The typical retail format of people pulling their car up to a curb, engaging with the salesperson and jumping through all the hoops to buy something is moving online,” said Kyle Zeppelin with Zeppelin Development, the team behind The Source. “So the goal is to provide an experience that gets outside the one-dimensional to provide something that’s more compelling and more experiential.”
The rise of culinary popularity is evident across the city, and while it’s addressed with continual restaurants openings, there also is an opportunity to capitalize on the culinary retail aspect.
The shopping experience used to be a very personal thing, but over time society made it as impersonal as possible, said Nicolas Farrell, co-owner of Mondo Market. Farrell believes that consumers are looking to reintroduce that personal relationship and, as a tenant at The Source and Stanley Marketplace, believes food markets present an opportunity to do just that.
As consumers became unwilling to make multiple stops to purchase their meal’s ingredients, communities lost many of their local butchers, bakeries and specialized merchants, said John Imbergamo, restaurant consultant with Imbergamo Group Inc.
“Now that’s reversing a bit,” he said. “People are interested in local and sustainable ingredients, and they’re more willing to go out of their way to get them. These marketplaces allow people to buy multiple items in one fell swoop.”
In addition to offering personal experiences with local food artisans, the projects aim to create a new multidimensional retail experience for visitors.
“We wanted to create a place where you can eat and where you can play and where you can have a whole bunch of experiences all under one roof, which will be intriguing,” said Mark Shaker, partner of Flightline Ventures and developer of Stanley Marketplace. “And if we execute this correctly, we think this has the potential to be a real regional destination where you’ll think about traveling from Littleton or Highlands Ranch because of the experience.”
The goal for each tenant is that it attracts a broad base, which keeps adding to the critical mass for a positive flow of people in the space, said Zeppelin. “When you add it all up, it basically works better for everybody involved,” he said.
Cultivating the correct tenant mix is vital to these projects’ success. When tenants complement one another, a sense of community is created among the individual businesses.
“The space brings things together – it makes it a cooler shopping experience for my shoppers to come here than it would be to come to a strip mall,” said Mondo Market’s Farrell. “It’s a community. We share ideas and have a symbiotic relationship.”
A sense of community among tenants was mentioned by all three projects. Stanley Marketplace includes the project’s vision and mission statement, called the Stanifesto, in its lease papers, which states that it is a community-based project.
“We recruited businesses that believe in this sense of community and creating an ecosystem of businesses that support one another and community outreach,” said Shaker.
Some tenants are eagerly embracing the modern market hall and recognize the unique opportunities within each project. Mondo Market and Comida, two tenants at The Source, will open new spaces at Stanley Marketplace as well.
“The spaces will be different based on the tenant mix,” said Farrell. At The Source, his shop places a big emphasis on spices. However, there will be a spice shop in Stanley Marketplace, so the 2,000-sf Mondo Market will focus on prepared foods and ingredients.
“I really want to hone in on ingredients,” he said. “I think these customers will be more home cooks who embrace ingredients – they’ll want to stock their pantries and take advantage of their big, beautiful kitchens. I can guarantee the product mix will be varied, based on the clients.”
While all three of the marketplaces put an emphasis on local, Colorado businesses and appreciate the power of a well-known store, restaurant or chef, each project approaches its tenant mix differently.
Zeppelin said that while leasing the 13 independent retailers and four office groups at The Source, he focused specifically on a certain caliber of tenants. “It’s not just putting a real estate sign out front and signing up the first people that come along,” he said. “It’s more curated. It’s focused on the audience and the experience versus just trying to get spaces leased.”
Building on The Source’s success, Zeppelin Development will expand the complex to include a variety of complementary uses, he said. They plan to include 10 to 12 groups in the new space. New Belgium Brewing will be an anchor tenant and Western Daughters Butcher Shoppe will operate the whole-animal barbecue in addition to scaling up and relocating its butcher shop to the new market hall. Also, there will be two new restaurants that will be different concepts than already exist, Zeppelin said. The new restaurants will open to a landscaped courtyard that will be a connection from the door of the new market hall to the front door of The Source.
The space will focus more around retail goods – apparel boutiques, design goods and a large kitchen store, which will flow into the common area. Several of the retail tenants will offer basic services that consumers can’t get over the Internet, such as a tailor, shoe shiner and tattoo parlor. There will be a common-area bar associated with the anchor restaurant, which will allow visitors to shop with a drink in hand.
The Central Market has 12 vendors occupying the 14,000-sf warehouse. The project’s vision is described as a combination of a restaurant and gourmet grocery store, said Ken Wolf, the owner and developer of the project.
There will be no separate restaurants within the venue, but an open common area will seat over 100 people. Each vendor will offer prepared meals as well as bulk products. For example, consumers can buy a fresh-made sandwich and/or buy several type of cheese to take home, or get an ice cream cone to eat there or pick up a pint of ice cream to take home.
The departments include a coffee/tea section, bakery, fish market, meat market, produce section, a rotisserie and prepared food section, a wood-burning pizza section, a fresh pasta and sauces department, a bulk cheeses, meats and sandwiches section, a dry goods section, an ice cream shop, a high-end chocolate shop and a full-service bar.
Meanwhile, Stanley Marketplace – by far the largest with a 140,000-sf building on 22 acres of land – has 50 local, independent businesses. The venue will feature several larger food-oriented users, including Comida, Denver Biscuit Co., Rosenberg’s Bagels, Logan House Coffee and Sweet Cow Ice Cream, as well as Kevin Taylor’s Stanley Beer Hall, a German-style beer-hall concept, said Shaker.
The property will have about 10 other smaller food-related businesses, as well a daycare facility, three different fitness entities, eight boutiques – ranging from women’s to men’s to an independent shoe shop. In addition, there will be office space, a wine and cheese-making concept, a hair salon and barber shop.
“It’s fairly diverse,” Shaker said. “We looked at who were great operators in the various fields – people that will drive traffic and interest to the project – and how do they complement each other. So, having a dentist office – they see lots of people in a day and it makes it palatable to go to the dentist when you can finish that and go to a brewery or get something to eat close by.”
While all three marketplaces are attempting to create experiences worth the drive to visit, the neighborhood of each location will affect its success.
The Source, located in a 1880s former iron foundry in the RiNo neighborhood, saw the potential for Brighton Boulevard before many others.
“It’s interesting that The Source is where it is,” said Imbergamo. “The fact was, when it opened that was considered the edge of the earth. It certainly wasn’t a prime location for anything. Now apartments surround it.”
A big base for the marketplace is Cherry Creek, the southeast suburbs and northwest suburbs, Zeppelin said. “The demographics are kind of interesting,” he said. “It is a lot of people who want to come to the core of the city. It’s got the urban grit to it, but also it’s friendly and inviting.”
The Central Market is located in another beautiful, old building, the HH Tammen Building at 26th and Larimer streets. The landmark building in the Ballpark District has a colorful past, beginning as a manufacturing warehouse of Rocky Mountain souvenirs in 1928. The neighborhood area is gaining popularity at a rapid pace.
“I’ve owned this space for a while and I just thought with how this area is developing that it would be great to have a gourmet market to service the neighborhood,” said Wolf. He contacted several small gourmet markets, both locally and regionally, but couldn’t get any to commit. So he decided to do it himself, he said.
Stanley Marketplace in Aurora is housed in another historic landmark, an old aviation building where the ejection seat was invented, said Shaker. The location, which aims to act as a bridge between Stapleton and Aurora, is the biggest gamble of the three.
“Stanley is in a tough, tough spot,” said Imbergamo. “It’s not hard to get there, but there are barriers to get there. There is an argument to be made that if you create enough critical mass – and The Source is the proof of this – that people will seek it out if it’s unique and interesting and has the buzz. So they’re doing a good job and got some quality tenants.”
The need was a local need, said Shaker. “People out in East Denver and Aurora spend their time driving to the Highlands or Wash Park or RiNo for different activities,” he said. “I think there’s a real opportunity to bring something interesting, a foundation of culture and independent businesses under one roof. It was an opportunity for this kind of concept in a place that doesn’t have anything similar.”
Also, Stanley Marketplace is 1.2 miles away from a medical campus that sees 30,000 daily workers from the VA hospital, Children’s Hospital, the University of Colorado hospital and a biotech center, Shaker said. Aurora has 345,000 people and Stapleton is growing to 30,000, he said.
“Stapleton is perfect in so many ways and beautiful, but it’s like a damn food desert,” said Farrell. “People pay good money for these beautiful houses; we want them to be able to get great food.”
The idea of a market as a gathering spot for the exchange of goods and to congregate has been around for centuries. “I see it as something that will continue to grow and expand as we move away from the big-box store into supporting local initiatives,” said Shaker.
Zeppelin agrees. If a developer can do more in one space and has a project to support it, it will do better than a single-purpose strip mall experience, he said. Creating an experiential environment with a curated mix of businesses that successfully encourages a positive flow of people has driven The Source’s success, boasting retail sales of $1,000-plus per sf, he said.
“These aren’t original ideas, but by the time you combine them with the unique concept of Denver, the neighborhood that they’re in and the unique mix that the project attracts, you’re ending up with something that’s original; but it’s really drawing on some kind of traditional proven models,” he said.
“I think that the success of these food markets is probably going to be related to the economy to some extent,” said Imbergamo. When money gets tights, people tend to pay more attention to the price of nonessentials, he said.
And while urban food markets may be meeting the retail needs of a more culinary-educated consumer, some wonder how many could be too many.
“I hope that these things calm down,” said Farrell. “We should keep good quality, but we don’t need masses. Frankly, I think it’ll be less cool and the originality will be deluded the more there are.”
“I think anybody in any business will tell you that one food hall is great, two food halls is eh, and then you get to 10 and, at some point, they’re going to be eating each other’s lunch,” said Imbergamo.
Featured in the February 2016 issue of Retail Properties Quarterly.