by Joel Malkin. Mr. Malkin is an attorney in Chicago, a big fan of public markets, a past member of the board of the Maxwell Street Market Coalition, a market developer, and a member of Public Market Collaborative.
provided by OPENAIR-MARKET NET
OPEN PLENARY: PUBLIC PRIVATE PARTNERSHIPS FOR PROGRESS
MARKETS FOR PRIVATE DEVELOPMENT
START UP MARKETS: THREE CASE STUDIES
NEW DIRECTIONS IN EUROPEAN MARKETS
Opening Plenary: PUBLIC PRIVATE PARTNERSHIPS FOR PROGRESS (February 9,1996)
Speakers: Fred Kent, President Project for Public Spaces, Inc.; Ed Rendell, Mayor of Philadelphia; Arthur Burns, Program Manager, Wholesale & Alternative Market's Program, USDA; Lon Hatamiya, Administrator, Agricultural Marketing Service, USDA; Ellen Has, Under Secretary, Food and Consumer Services, USDA
Fred Kent introduced Arthur Burns, who he noted originated in Brooklyn, the Noah's Ark of America. Kent noted that Burns promoted farmer's markets earlier than many other public officials. Burns in turn introduced Lon Hatamiya.
Hatamiya, who is a farmer, said that although America has an abundant farm economy, there are few opportunities to provide farm-fresh products to consumers, in part due to current mass-marketing. Public markets allow farmers to sell directly to consumers. The USDA is currently directing standards for labeling of organic products, and is seeking to promote public markets. The USDA has funded public market origination studies in cities throughout the country. Although USDA' s funding for such efforts is relatively small, its return on investment is tremendous.
Kent spoke next. He related a statement by James Rouse, the renowned festival market developer, that festival markets attract tourists while public markets cater to the real needs of real people. Kent showed slides of modern American office complexes and vibrant street scenes to highlight the dichotomy of what people get vs. what they really need. He said we are moving away from impersonal public and private development. Kent then introduced Mayor Ed Rendell.
Rendell said that Pennsylvania has the third highest number of farmers of any state in the country. Public markets are big transit attractions, alongside, Philadelphia's restaurants, which have made Philadelphia America's #1 restaurant city. The city is now trying to encourage farmer's markets adjacent to public housing projects. Farmers markets have sprung up in neighborhoods throughout the city and now total $75 million in sales annually.
In a question-and-answer session, Hatamiya said that the current farm bill passed by the Senate will reduce USDA funding for public markets, but the USDA is seeking to partner with the private sector. In response to the question how to define a farmers market, three speakers highlighted the differing definitions attributed to markets by their operators. For example, some farmers markets' in Philadelphia have produce vendors who are not farmers.
Ellen Haas was the next speaker. She said that public markets strengthen the nations health in the face of our growing, technologically-driven distance. She said that USDA's programs are devoted primarily to children who unfortunately are still learning more about 'fast food'' than 'fresh food'. Americans spend $250 billion in medical care due to illnesses arising from poor diet. National food policy has three bases: education, nutrition and access. Public markets link farm and town. She challenged the audience to further these efforts to improve the lives of the nation's children. She highlighted USDA programs, including the 'Team Nutrition' program, to educate children in nutrition. She urged the audience to inquire whether their children's schools were part of those programs, and to insure that school children visited and learned about farmers markets.
MARKETS FOR PRIVATE DEVELOPMENT (February 9, 1996)
Speakers: J. Kenneth Kauffman, William Jackson Ewing Co., Inc. Baltimore; Samuel Neff, S. Clyde Weaver Co., Lancaster, PA
Kauffman's company operates small markets of 10,000 square feet or less. He advised that aisles be narrow to enlarge the crowded feel of the market. He also does not pay much attention to vendor features. He admires the West Side Market in Cleveland and the Grand Central Market in LA. He will operate a new market in New York's Grand Central terminal.
Neff operates a food market business started by his grandfather. His company also took over a defunct market in Wayne, Pennsylvania in 1952 to preserve operation of their stall, then in 1976 bought a supermarket building for a market. The company also has two conventional retail stores.
The Wayne Market operates on Wednesdays, Fridays and Saturdays. Neff manages the market to enhance his retail business.
Kauffman notes that the rents in central Pennsylvania are too low. He believes they are set so that the most unproductive merchant can pay them. He has problems with the unpredictability of farmers market tenants. He also disliked the policy of an unproductive, unenthusiastic vendor paying the same rate as anyone else.
Neff noted that an unpredictable vendor may still be an exciting vendor with good product. He said that public markets are slow to change because they are government-run.
A question from the audience questioned whether Reading Terminal Market could be termed a public market. Larry Lund, a retail consultant, replied that the term 'public market' originated in England, and meant only that the market is 'open to the public'.
In response to a question, Kauffman insisted that produce is the most important category, and the easiest. He noted that the renowned LA Farmers Markets is ninety percent prepared food vendors. He said that fresh food and fast food vendors attract different customers and are busy at separate hours. In fact, in Reston, Virginia, Kauffman separated fresh and fast food vendors.
Both Kauffman and Neff noted that Reading Terminal Market is close to losing the balance between fresh and prepared food. Even the Amish vendors sell prepared food. Kauffman noted that the most fresh food vendors shop on Saturdays. Fast food is often more profitable, he noted, and fast food vendors should be changed more.
A good source of fresh food vendors, Kauffman said, are immigrants. He acknowledged that butchers are hard to find. He said that certain vendors may have to be supported upfront. Neff added that some vendors may need essential business advice.
Kauffman said one could never charge percentage rent. Insure that the merchants survive, then increase rent. The Andmore market is highly profitable.
Kauffman will charge percentage rent at Grand Central. Elsewhere he charges by the front square footage. Neff said that in ten markets, rents have pass through for electric; in Lancaster the rent is $3 per square foot; in Allentown $10-$11 a front foot. Neff advised that if one can rent 50% of gross area, one is doing well. Kauffman said that in fresh food sales, 3-4% of gross sales for fresh food is reasonable; 8-10% for prepared food may be reasonable.
Neff advised offering incentives to get the right produce people; have the prepared food people carry them. He also noted that the thinner the aisles, the more rentable space. He suggested 8-10 foot wide aisles.
In response to a question, Kauffman acknowledged that market merchants panic when supermarkets open close by. He is unpleased, however. Neff welcomes the challenge. Business may be hurt for awhile, but invariably recovers. The quality-conscious customer is always loyal.
Neff charges common area rent for seating areas. Kauffman tries to keep rents simple. If there is no pass-though, use frequent escalating clauses. A net deal would be terrific if possible.
In response to a question regarding sale of business, Neff said he would require 40% of the sales price. He said the percentage drops based on how long the tenant has been there. Kauffman is easier.
Regarding truck traffic, Neff said that in Lancaster, trucks load and unload between 4 a.m. and 7 a.m. He believed that in major urban areas, customers will carry their goods by public transit.
Kauffman believes it is easier to start markets in upscale neighborhoods. Neff noted that in Latino neighborhoods, people shop every day. Kauffman added that markets in poor neighborhoods may do better volume; people may cook more. But upfront costs may be more difficult to recover.
START UP MARKETS: THREE CASE STUDIES (February 9, 1996)
Speakers: Frances Hartnell and Apii Rago-Rivera, Pacific Island Business Development Trust, Auckland, New Zealand; Gail McEacher, Trust Advocacy Project, Ontario, Canada; Kent Schuette, Professor, Purdue University, Lafayette, Indiana.
Frances Hartnell spoke first. She acknowledged the assistance of several American market consultants, including Project for Public Spaces and David O'Neill, formerly the manager of Philadelphia's Reading Terminal Market.
She said that she conceived of the Manikau Pacific Market as a place where various Polynesian peoples could exhibit their wares and feel at home at the same time. The Trust formed a strategic planning group in March, 1992, consisting of a cross-section of the Polynesian community. In September, 1992, a development plan was formulated. In 1994 a development corporation was established.
Land was purchased after several meetings with the local community council. Designs were drawn up. Finally a 'vaka ou', or 'may forward' - a vehicle for economic development- was formed in which funding partners with a similar passion for the subject were located. In addition, in order to address Maori concerns, permission had to be obtained to alter the environment. Construction management, landscaping, brand and logo development, selection of a general manager, and an operating manager were or are being selected. Opening is set for October, 1997.
Gail McEacher then spoke. She started an upstate rural market in the Catskills in upstate New York in 1992. She was then a community economic developer. Her idea to start the market was inspired by a presentation given by an Ontario, Canada community developer of the last public market conference in New Orleans in 1992. The Ontario official had helped start up to 40 farmers markets in Ontario and at McEacher's request, offered to give a market set-up seminar. She set up a workshop at a local resort. The Ontario official brought enthusiasm and samples from Ontario farmers markets.
The seminar occurred in early 1992. By January 25, 1992, a steering committee was established. By February 8, 1992 market sales and regulations were established. The market would occupy a vacant, 6,000 square foot building the community owned. In early March, 1992 the committee decided on market advertising, vendor recruitment and insurance. A lawsuit was threatened by two local merchants. The committee invited the merchants to view and even, gratuitously, participate in the market, but the offer was refused.
Undeterred, the committee developed a logo and t-shirts for the market. However, the merchants sued the committee to enjoin the use of the community building, which had been constructed in part with U.S. Department of HUD financing. The committee then decided to open the market in a shed on the village green. The market opened in May, 1992, operates on Saturdays during summer months, and is very successful. The local merchants report increased sales on market days but one still opposes the market.
Kent Schuette spoke next of markets in general and the Savannah Georgia market in particular. He believes markets must reflect the ethnicity of their communities and that farmers market, will not thrive unless they have 12 vendors.
Schuette is an historic preservationist in addition to being a market proponent. In the late 1960's, the historic market structure was demolished and replaced with a parking garage. Schmette was asked what Savannah should demolish the garage and rebuild a market structure.
Markets must incorporate design, organization, economic development, and promotion. To succeed, markets must succeed in each category.
Design:
1) Chances of success are greater if the market can be accessed from many directions.
2) There should be 3 parking spaces for each vendor.
3) The market must be centrally located.
4) The market should be surrounded by two-way streets for easier access.
Organization:
1) Must be a balance of viewpoints, not be dominated by any age group.
2) The further away from government, the better.
Economic Development:
1) The vendors must be there primarily to earn a living.
2) The vendors must be specialized.
3) The market must be focused-
a. Is it a lunch spot?
b. A fresh food market?
c. An arts and crafts market?
Promotion:
1) Must be perceived as durable - it is part of a district. If it is a new structure, make it look like it fits in.
2) The market must meet community expectations.
In Savannah, a site was chosen to place a visible structure at the end of a street to maximize visibility. Schuette believes the market must be unique to the city and its region. Since Savannah is not in a farming region, the market may not succeed as a farmers market. Schuette closed by affirming the need for a national membership organization to openly communicate on urban market issues.
In a question-and-answer session, Schuette described Seattle's Pike Place Market as several clustered markets in successive order. He acknowledged the challenge Reading Terminal Market faces in maintaining a significant market operation when the '500-pound canary' that is the convention center situated above it.
Frances Hartnell said her group started with funds for design development, and hopes to raise 70% of its operating capital, borrowing the remaining 30%.
NEW DIRECTIONS IN EUROPEAN MARKETS (February 10, 1996)
Speakers: Sebastian Persidan, The Persidan Group, Saint-Maur, France; Chislaine de Golbery, Bureau of Public Market, City of Paris, France; Christina Nordin, CIRCCA, Romarantin, France
Christina Nordin spoke first of markets in Paris' suburbs. She said that certain vendors have for generations sold in two or more markets a week. They do not seek, nor are given, regular stalls. In Paris' suburbs, the percentage of food sales drops as the market becomes larger.
Chislaine de Golbery spoke next. She is in charge of all city markets in Paris. Paris has 73 fresh food markets and 3 flower markets, a stamp collection market, 1 bird market, 3 flea markets and 1 clothes market. At covered markets, vendors have 9-year leases. 13 markets are covered containing a total of 300 vendors. Public markets are regulated by city government. Merchant management has not been successful, though it has been tried. She believes Philadelphia's covered markets are run better than those of Paris; Parisians prefer to shop in open-air markets. Covered markets operate 7 days a week from 7:00 a.m. - 2:30 p.m.
Paris allows concessionaires to anchor poles in the concrete for canopies. Between 1979-83, Paris installed electric outlets near the open air markets so vendors could dispense with noisy generators. Meat, fish and poultry may be sold outdoors. Open air stalls may be inherited. Casual vendors obtain stalls when available and may sell only non-food items.
Paris issued 1800 regular licenses and 295 casual licenses. Demand exceeds supply. Inspections are frequent; ineligible vendors hide during inspections. Market areas vary from 1/2-mile long to 10 stalls. Vendor shouting is prohibited. Vendor wars differ depending on the neighborhood. Parisians spend $1.5 billion of total food expenditures of $8.5 billion on markets. Over 90% of Parisians surveyed shop at markets over 57% shop at markets. Paris has over 200 supermarkets; hypomarkets are situated just outside Paris' borders. 84% weekly of the customers walk to the market. 97% buy produce; smaller percentages buy fish, poultry, and meat. Most products are sold by resellers. In response to demand, the city has established 2 organic markets.
Paris recently delegated its open air markets to 3 concessionaires, who collect stall fees and assign spaces. The concessionaires pay operating and maintenance costs. Cleaning costs are excessive. 14 million metric waste, costing $5 million, are removed annually. A 25 square foot space costs $400 a month, utilities included.
Persidan then spoke. 15% of France's 5,000 markets are managed by concessionaires. The Persidan Group manages markets in 20 cities. It manufactures market equipment, hauls rubbish, and cleans the locations. Rubbish removal costs have increased 25% in the last few years. He said the French prefer general as opposed to specialized markets.
In response to questions, Nordin said market stall rates are set by the local city councils. Paris subsidizes open air markets to the tune of $4 million a year.
Nordin next addressed European market trends. She said that in 1850, covered wholesale markets modelled after Les Halles in Paris and the department store revolutionized consumer sales. Increasingly impersonal forms of retail have proliferated. Seasonal, unregistered markets have increased 14% in the last few years. 45% of all English markets are run by private operators. 10% of all retail trade employees work in markets and fairs. Only in England are market operators or employees trained.
She concluded that the future is bright for European markets and fairs. The field should be further studied.
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