Creating the recipe for Public Market 2.0

Real Estate Spotlight

Milwaukee Public Market executive director Paul Schwartz.

In February 2016, Chuck Biller, one of the owners of the Shops of Grand Avenue, sat down with BizTimes to discuss the vision he and his business partners had for the struggling downtown Milwaukee mall they had purchased two months before.

One of the ideas was to create a “Public Market 2.0.”

Milwaukee Public Market executive director Paul Schwartz.

Fast forward two-and-a-half years, and sources indicate the Grand Avenue owners have tapped Milwaukee restaurateur Omar Shaikh to run a food hall at the mall.

If the plans come to fruition, the Grand Avenue food hall will join several others planned for the area, including New Land Enterprises LLP’s Crossroads Collective food hall, which is expected to open this fall in the former Rosati’s space on North Farwell Avenue on the East Side; the food hall that will be part of the Sherman Phoenix project in Sherman Park; and the Mequon Public Market.

But before Public Market 2.0 could even be imagined, the original Milwaukee Public Market in the Historic Third Ward had to be created, and become a proven success.

Wendy Baumann, president of the Wisconsin Women’s Business Initiative Corp., first presented the idea of a European-style market to former Milwaukee Mayor John Norquist after visiting Pike Place Market in Seattle.

For the next eight years, Baumann led the fundraising efforts with retired Northwestern Mutual executive Dick Wright and Einar Tangen, former president of the Historic Third Ward Association, for the $11.5 million project.

The cost was split between private donations and grants, including a $2.5 million grant from the U.S. Department of Commerce, said Ron San Felippo, chairman of the Historic Third Ward Business Improvement District.

The market opened at 400 N. Water St. in October 2005, with a focus on fresh ingredients.  But within 18 months, the market was floundering.

“We were a little bit ahead of the game of public markets in the United States and with Milwaukee at the time,” Baumann said. “Whole Foods was not even on the scene yet. People knew food courts, not public markets. And we were probably too aggressive in the sense of cash flow and onboarding.”

The BID had always owned the Public Market, but suddenly found itself as its operator.

“When we took it over, it was three weeks from closing,” San Felippo said. “We were plenty scared. The first year was the hairiest. We had just taken a place that no one wanted to buy anything from.”

The BID started having events, and changed its offerings from fresh food to prepared food.

Today, seven of the 17 vendors, including C. Adam’s Bakery, West Allis Cheese & Sausage Shoppe and St. Paul Fish Co., are original to the market.

“The early group had a concept that didn’t work,” San Felippo said. “On the other hand, we wouldn’t be here if they didn’t have the vision.”

The Milwaukee Public Market is 28,000 square feet, with 13,000 square feet of rentable space. Since the day it opened, no public dollars have been spent to operate it.

The market reported $16.5 million in sales in 2017, up 5 percent from $15.8 million in 2016. Customer visits increased nearly 6 percent in 2017 over the previous year, to 1.6 million people.

The market runs as a business and vendors pay downtown real estate prices to be there, San Felippo said.

“(The tenants) would say they pay too much,” San Felippo said. “We are a for-profit business. No one would suggest we subsidize them. But the difference with the BID operating the business is we keep an eye on the bottom line, but our bottom line goes back into the community.”

The market’s success has led developers from across the country to seek out advice from Milwaukee, particularly after travel guide publisher Frommer’s listed it as one of “America’s Best Public Markets,” in 2011.

Paul Schwartz, the market’s executive director, is happy to help, as long as the developers give a donation to a local charity.

“We feel that imitation is the sincerest form of flattery,” Schwartz said.

As far as the other food halls planned in the Milwaukee area, Schwartz believes they will serve different audiences.

“Competition elevates everyone’s game,” Schwartz said. “We are very happy with what we have accomplished here and we are not worried about our business being taken away.”

San Felippo said as a developer, he believes everyone is entitled to try; however, he doesn’t foresee all of the food halls/public markets succeeding.

“What is it? Two out of 10 restaurants make it,” San Felippo said. “But I’m happy 10 try. In the end, the two that make it end up providing really good food and service.”

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