× Expand The interior of Crossroads Collective, a food hall on Milwaukee's East Side

When Tony Janowiec’s commercial real estate firm, Interstate Development Partners LLC., purchased the Shops of Grand Avenue in 2015, he said they had “a million ideas” for what to do with the property. Over the following three-plus years, many of those plans changed, but there was one concept that remained intact throughout the entire process: a 35,000-square-foot food hall.

“I think the bottom line to it was that we knew the one thing, oddly enough, that was working in the mall was food,” Janowiec said about his decision to launch the food hall, which he chose to name 3rd Street Market Hall and is set to open by the end of the year. “The fast food court was doing really well despite the rest of the retail continuing to decline. We just knew that we wanted to elevate that experience.”

With its massive square footage and plans for 18 vendors, ping pong tables, giant Jenga, an indoor bocce ball court and arcade games, 3rd Street Market Hall will be the largest among a group of food halls that have opened in Milwaukee over the past year. It will join Sherman Phoenix, an entrepreneurial hub in Sherman Park that incorporates a food hall element on its first floor; and Crossroads Collective, a food hall located in the former Oriental Drugs building on the East Side that opened in December.

× Expand A video rendering of 3rd Street Market Hall

What is a Food Hall?

Food halls have existed in one form or another in the United States for decades. Grand Central Market in downtown Los Angeles, for example, has been open for more than a century. But the trend has really taken off over the last few years. There were 155 food halls throughout the United States in 2017, according to data from commercial real estate firm Cushman & Wakefield. The company expects that number to grow to 200 by the end of this year.

Modern food halls incorporate elements of the traditional shopping mall food court. Both feature a variety of scaled-down restaurants under one roof with communal seating. The biggest difference between the two is subtle: Food halls generally consists of local restaurants, while a food court is typically made up of national chains. Most food halls are also standalone spaces, not associated with a mall.

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But, even among food halls, there is no one clear-cut definition. “There are 50 different shades of color to what a food hall can actually be,” Janowiec said. “There’s a very wide spectrum of how it’s defined. Crossroads, Sherman Phoenix and 3rd Street Market Hall are going to have very different experiences and very different flavors just reflective of the neighborhoods that they exist in.”

Food halls also fit in with a larger trend in retail towards the experiential. Just as Amazon and other online retailers have decimated department stores, the rising popularity of delivery apps are eating away at restaurants’ profits. It is becoming more important than ever to give people a reason to dine in. Having multiple vendors under one roof is one way to do that.

“Anything with multiple layers of energy is exciting for people,” said Tim Gokhman, director of New Land Enterprises and owner of Crossroads Collective. “I think that to compete with the creature comforts that you can now get at home—the Netflix and the food delivery—you have to give people something more interesting than just a single concept.”

The arrangement can also benefit emerging chefs and budding restaurateurs with limited resources by giving them the ability to operate with a relatively small initial investment. “With how competitive the restaurant scene is, I think that it is getting tougher and tougher for restaurateurs to spend $1 million and hope that you can get your money back,” said Omar Shaikh, president of SURG Restaurant Group and a partner at 3rd Street Market Hall. “You can get in here for less than 10% of that.” He added that operating costs for space in a food hall are also much lower because the business needs far less staff than a typical restaurant.

The potential for food halls to become an incubator for the local restaurant scene may not be front of mind for food hall operators right now, but they seem to be open to the idea. “It’s not a stated goal, but it’s something we’ve thought about,” Gokhman said. “And if it happens, that’s awesome.”

Activating Underused Spaces

A common factor of Milwaukee’s three food halls is that each has, in its own way, helped revitalize an underused piece of real estate in the city. 3rd Street Market Hall is part of a plan to bring life to the long-neglected Shops of Grand Avenue (now named The Avenue). Crossroads Collective opened in the former Oriental Drugs space, which has cycled through a number of bars and restaurants over the years and sat vacant since May 2017. Sherman Phoenix redeveloped a former BMO Harris Bank branch that was burned during the Sherman Park uprising in 2016.

To Janowiec, this fits in with the community focused ideology practiced by some of Milwaukee’s most forward-thinking developers. “The role of a real estate developer has always been to try and contribute to the urban planning fabric in a way that advances a cohesive plan,” he said. “That’s really the modern thinking behind real estate development. You see more progressive developers thinking that way, where it’s really an outward facing, ‘What does the neighborhood need?’ versus ‘What can I put in my building to lease space?’ Developers are investing in neighborhoods and not necessarily in buildings anymore.”

In Sherman Park, the new development is contributing to a growing sense of community according to Joanna Brooks, entrepreneur program manager at Sherman Phoenix. “When I think about families coming together around a meal, I think in a lot of ways the Sherman Phoenix provides that opportunity in a community setting,” she said. “People can come in by themselves just to grab something to eat, and they end up seeing someone that they know, or they sit together and there’s great conversation in there and there’s laughter and connection. I’m really happy that the Phoenix is able to create that kind of energy and sustain it.”

As two food halls currently operate in the city, with a third on the way, it begs the question of whether more entrepreneurs and property developers in Milwaukee will continue to capitalize on the trend. “Once something is successful, there are always multiple iterations of it,” Gokhman said. “So yes, I would assume that other concepts would come up. We’ve already been asked multiple times to do a second one—both by vendors and interested parties—so we’re thinking about it.”