The small group begins its rum ball-making session with a meditative pose and a few deep breaths. Downstairs, shoppers and diners crowd the common space of the Lenexa Public Market at an early holiday shopping event. But upstairs, a Leawood yoga instructor is teaching the group to ignore the mild cacophony below and focus on the task at hand.

Rum balls. And serenity.

At just over a year old, the Lenexa Public Market is beginning to find its legs and its identity. It’s a food court, and yet not. It’s a small business incubator, but with well-established anchor stores. It’s an event space with cooking classes like the one on rum balls.

And it’s unique, its creators say. The city is involved in the market to a degree not found at other public markets. It’s located not in a private building but inside City Hall. The city is the landlord, advisor and manager. And, if sales fall short of operating expenses, the city pays the difference through its general fund.

As 2018 draws to a close, the city has yet to break even on the public market. But officials are optimistic about future prospects due to its location in the City Center development.

Vision for a gathering place at City Center

The public market probably wouldn’t exist – at least in its current form – without the City Center development near Interstate 435 and 87th Street Parkway. In a city with many strip shopping centers but no real town square, leaders envisioned a mixed-use, walkable development farther west, nearer the geographic center. To make that happen, they needed a gathering space for all the new apartment dwellers, as well as things for them to do.

About 2011, some city officials discovered the public market in Milwaukee. They were impressed enough with the artisan food and other offerings that they began to think about how to bring the idea home.

By the time they decided to build a new city hall and recreation center at City Center, a public market had become part of the plan.

“It’s incredibly unique that we would have something like that in the city hall building,” said community development director Beccy Yocham. “That’s an intentional decision on the part of the city to put our money where our mouth is as it relates to the mixed-use vision of the Lenexa City Center.”

The market would have the dual goals of helping small business start-ups and providing an attractive gathering spot, which was intended to drive future success of the whole development.

The market, with 11,125 square feet, is smaller than Milwaukee’s, but has the same vibe, Yocham said. “There’s an intentional curation of what you see here. We have a good mix of things that are changing and different so you have a reason to come back because the next time you come back it’s not going to look the same,” she said. “That is exactly what we’re going for in a city center.”

More than just a food hall

Yocham considers the market a food hall, but it has some differences from places like Parlor KC in the Kansas City Crossroads neighborhood.

First, it’s not all food. In fact somewhere in the neighborhood of 10 percent of the mix is non food, with vendors offering things like apparel, honey and flowers, said market manager Carmen Chopp. About 1,500 square feet is event classroom space located on the second level for things like cooking or crafts.

Then there are the anchors. Though a primary goal of public markets is to be a safe development space for small start-ups, about 75 percent of the leasable space at the Lenexa market is occupied by established food anchor stores including the Roasterie Cafe, Chewology, Topp’d Pizza and Salads and Mad Man’s KC BBQ.

The anchors are there because the city needed them to draw people into what is an unfamiliar concept for some, said Mike Nolan, assistant to the city administrator. While other vendors with unusual offerings may come and go, a well-known coffee shop gives customers a constant and gives smaller vendors exposure, he said.

The city is very careful about the mix of smaller sellers. Chopp, who also has a business selling flavored nuts to wholesalers and other outlets, said she tries to get foods and products that are trending and will create some excitement.

Hundreds have applied. But after weeding out the ones that obviously don’t fit (like insurance companies, for example), Chopp said she and her selection committee tend to favor businesses that have tested their product at some level.

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Public Market Success Story

Alejandra de La Fuente went from never having made a tamale two years ago to fulfilling order for thousands and thousands a month at the Public Market. Find out more about her story here.[/pullquote]

Of the applicants, “maybe 5 percent have established businesses already. The bulk are selling at artisan craft fairs.” One small vendor success story, Red Kitchen Tamales, started taking orders through Facebook before making a pitch at the market, she said.

If things go well, the vendor may start with a small cart or temporary space maybe once or twice a week, eventually moving to a larger stall.

Small vendors are then offered six-month leases with another six-month option, Nolan said. The lease payment is based on a percentage of sales, usually about 10 percent. Anchor tenants have more complicated leases which, if the payment were averaged out per square foot, would be equivalent to rates elsewhere in the area, he said.

Having payment based on sales is a gamble for the city because of the unpredictability. If the sellers have a bad January, the city will suffer right along with them. There’s no floor for how low that lease payment can go.

“That’s the city’s risk,” said Nolan. “It behooves us to keep the traffic coming in for them to make sure those sales don’t bottom out.”

A changing mix of vendors

Red Kitchen has been going strong since the market opened, but not every vendor has survived. Businesses selling bakery goods, ice cream and soaps have come and gone for a variety of reason, but the city tries to keep a good relationship with former vendors, often inviting them back to conduct classes or be pop-up sellers during special events, Nolan said.

Customer traffic varies at the market along the same lines as with other retail. Weekends are busy and special events like the recent holiday shopping mart are packed. But the place is predictably dead after the lunch rush and through late afternoon on weekdays, retailers said.

Visitors from the rec center next door and Park University classrooms, also within City Hall, keep a constant base. But the market got off to a slow start after its opening in September, 2017.

At that time, people were only beginning to come to the rec center with its open plaza next to City Hall. The post-Christmas slump lasted through March, with gross sales hovering around $90,000 before bouncing back in May and spiking at a high in August of $139,780. This year’s total sales are projected to be $1.3 million.

Nolan said some of the slow start can be chalked up to the newness and disruptions caused by all the construction nearby. The market is surrounded on three sides with major construction projects in full swing, and streets are sometimes closed off for the cranes and end loaders.

“Candidly speaking we opened the market in September of last year we probably hit the market a little early,” Nolan said. “But we’re glad to be here a little bit early to start the place-making and start getting people’s routines to get out her to the space.”

So far the market’s lease payments have not kept up with the city’s cost to run it. The city got about $140,000 in revenue this year through November, but it costs about $325,000 to operate, Nolan said.

The city council has committed to seeing the market through its first few years before evaluating its long-term viability. But there’s a lot of room for optimism, Nolan said.

Once construction is finished, there will be a new library right next door, for instance, with a potential for 75,000 visitors a year, he said. Across the street to the east The District office and retail will put in 175 residential units, and the new aquatics center being built to the north will host swim meets that could bring in more foot traffic. And the Kiewit Corp. will also bring 1,400 new employees just down the street.

All of that has Nolan and Chopp optimistic enough that they’re contemplating whether space can be arranged to provide more retail square footage. “It’s still really early, but I think we see that ultimately we will have a need for that,” Chopp said.

Nolan agrees. “There’s about a dozen active or getting-ready-to-start projects in city center that will start in the next couple of years. So the potential for the market and other retail spaces that are going to go in the city is great.”