The Food Pod Grows Up

Future of Food: The James Beard Public Market
Oregon’s first generation of food entrepreneurs created a brand based on quality and craftsmanship. Can the second generation sustain it?

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On a late summer afternoon, the Baggage and Carriage building in Portland’s Old Town neighborhood is a mess. Built in 1886 to house horse-drawn carriages just as the age of automobiles dawned, the building has been through many iterations: warehouse, storefront, restaurant and a series of nightclubs. Today hard-hatted construction workers scurry about, transforming the dark, noisy space yet again. Come late November it will reopen, this time as the Pine Street Market.

“This is not a place to learn how to run a restaurant.” 
— Mike Thelin

Named one of America’s “most anticipated” food hall by the national food publication, Eater, Pine Street Market will be Portland’s first foray into the “everything old is new” food hall trend, a model that brings a variety of high-end food choices together under one roof. Successful examples can be found in New York’s Gotham West Market, San Francisco’s The Hall, Seattle’s Market Hall and the granddaddy of them all, EATaly with 27 international locations.

Pine Street Market’s debut promises to further burnish Portland’s foodie reputation. More than that, Pine Street is part of a larger, second-generation Oregon food story revolving around the aggregation and curation of local food. Fueled by cheap rents and an abundance of quality ingredients, pioneering first-generation restaurateurs and food producers introduced concepts like local, organic and farm-to-table to the mainstream. Stressing a strong connection between the grower and the maker, the maker and the consumer, they built success in the form of celebrated restaurants and food carts, breweries and distilleries, bakeries and charcuteries.

Now a new generation is codifying and institutionalizing those connections and relationships. Food halls, from Pine Street to a revamp of a Beaverton mall, are only part of the mix. New public markets like the James Beard Public Market and the Redd on Salmon Street are creating food hubs, not just for consumer-oriented businesses but for producers including fishermen, farmers and ranchers. Meanwhile, food-cart operators are opening their first brick-and-mortar spaces. Critically acclaimed restaurants and craft brands are expanding into second, third and fourth outposts, often in national and international venues.

This activity has not only turned Portland into a recognized food hub, but the tentacles of that second-generation food trade — production, aggregation, processing and distribution systems — have also become an expected part of a successful real estate model and an essential player in the city’s economic growth.

Of course, there are less tangible, more complicated effects of commodifying the city’s iconic food culture. When hidden gems become ubiquitous and only proven players can afford rent, there’s the threat of diluting the brand — and preventing other players from gaining entry. The same could happen to other niche brands. Are second-generation food businesses stretching the city’s hard-won food cred too thin?

The transformative power of food is on full display in the area surrounding Pine Street Market. Filled with historic, beautifully boned buildings, the once sketchy blocks are morphing into expensive office space, high-end hotels and market-rate housing. It’s a mix that excites Mike Thelin, the self-described culinary curator of the Pine Street Market. He sees this activity as the ultimate vote of confidence for his project, set to open in late November.

“Other retailers are signing LOIs [Letters of Intent] because Pine Street is coming,” Thelin, 38, says from the relative quiet of the office trailer parked in front of the building. “We’re already having an effect on this part of town.”


Under construction: Pine Street Market in Old Town.

Pine Street will house nine different food and beverage providers including Trifecta, Barista, Hopworks and Olympia Provisions. A common thread runs through all of these restaurants. They are all proven players: Portland stalwarts and foodie darlings who know the business. “This is not a place to learn how to run a restaurant,” says Thelin.

With an average stall size of 500 square feet and shared amenities like seating, restrooms and dishwashing, Pine Street’s advantages are clear. Developers don’t have to gamble on the success of one big space. Restaurateurs extend their brands while minimizing financial risk. Diners get a cluster of trendy food choices close to their offices or hotel rooms, and the neighborhood gets a much-needed jolt of excitement.

Not bad for what is essentially a high-end, freestanding, mall food court — albeit one for people who would never set foot in a mall food court. That’s what makes the food-hall trend so hot. The idea itself isn’t new. Indeed, Faneuil Hall in Boston, one of the country’s first food halls, opened in 1742. It was renovated in the 1960s and ’70s and then given a complete overhaul in 2012. There are presently over 23 food halls set to open around the U.S., according to Eater, all catering to the evolving American palate in an approachable way. We want the affordable luxury of better food at every meal. We also want convenience and to support and celebrate our local food makers. Pine Street Market serves up the whole package.


A similar story is playing out in Portland’s suburbs. Typically filled with chain restaurants and fast food, the suburbs are not hotbeds of foodie culture. But at 8:00 p.m. on a Thursday, Bethany Village, a suburban shopping center 3 miles north of the Sunset Highway, hums with activity. No longer just a place to pick up milk and dry cleaning, the Village has become the hot neighborhood hangout. Families stream in and out. Cafe tables and bar seating are full. Locals line up to eat from one of the center’s six new micro restaurants.

Using food to foster community was not Roy Kim’s intent when he divided up retail space to create the micro restaurants. Instead, the owner of Bethany Village was looking to stem the flow of turnover that has dogged the center since its 1991 inception. “It’s a challenge to keep a suburban shopping center vibrant,” says the poised 56-year-old. He points to two causes: the buying power of big-box stores and the rise of online shopping. “People come in, take pictures on their phone and get the products cheaper online,” says Kim.

To compete, Kim is serving up what consumers can’t get in a big box or online: entertainment in the form of eating out. “We knew our users wanted more food options,” he says. The move looks like a good financial bet now that Americans, particularly younger Americans, spend more on dining out than on buying groceries for the first time, according to recent data from the U.S. Commerce department.

Of course, Bethany Village already had some food choices, but Taco Bell and Subway weren’t generating much excitement. So Kim grabbed a piece of Portland’s food cred. He created a suburban version of the food-cart pod by dividing traditional retail space into 380- to 450-square-foot microrestaurants. Bigger than a food cart for sure, but still smaller than a traditional restaurant, the micros work like the food hall, with shared tables and amenities. Kim sweetened the deal by offering gross rent instead of the typical triple net.

He then looked for appropriate vendors. Like Pine Street’s Thelin, Kim had strict criteria: It had to be typical food-cart fare, and the owners had to be business people interested in growth. “Most food-cart operators are content with just running the one,” he says.

The timing was perfect for David Beavers, owner of Maine Street Lobster. With 18 months experience under his belt running a cart in the Cartlandia pod on Southeast 82nd and Johnson Creek, the former general contractor saw this as the perfect opportunity to extend his brand and serve clients who “were already driving in from Hillsboro and Beaverton.”

“This model is an inexpensive proving ground,” says the tall 50-year-old. “It’s a safer bet than dropping $1 million on building out a restaurant.”

This “safer bet” is where the second generation of Portland’s food industry intersects with the region’s commitment to density in the face of growth. Micro restaurants and food halls celebrate small spaces. Their inherent informality appeals to diners who treat dining out as an everyday form of entertainment. The small, turnkey spaces make it easier for established local food businesses to expand. “It took only three months to get all nine Letters of Intent at Pine Street signed,” says project developer Jean Pierre Veillet, principal of Siteworks design-build firm. “There’s a hankering for small space in the city’s core.”

Projects like Pine Street and Bethany are the logical evolution of food carts — a codifying and commodifying of the once gritty first-generation food entrepreneurship. Done right, they will ensure that Portland’s food cred will continue to grow, one meal at a time. The statewide food system that fuels these restaurants, and other food-based industries, is also evolving. That is: The first generation of food business would never have taken off without the quality and diversity from Oregon’s small, family-owned farms. Will those conditions persist for the second?

“We let family farms survive, but there’s no mechanism for them to thrive,” says Ron Paul, founder and former director of the James Beard Public Market. He’s hoping the James Beard facility gives them that opportunity. (Paul stepped down in August due to illness. In September the market hired Fred Granum, former president and CEO of the Portland State University Foundation, as his replacement.)

After simmering in the planning stages for 15 years, it seems like the James Beard’s time has finally come. Slated to open in 2018 at the base of the Morrison Bridge, the market’s 60 permanent vendor stalls and 25 to 30 day tables, will “provide the ingredients for everyday life,” according to Paul. He envisions greengrocers, fish and cheese mongers, butchers and spice stalls, along with bakeries, cafes and restaurants drawing 1 million Portlanders and tourists a year.

Food will come from local farms but, as the James Beard will be open year-round, it’s not a prerequisite. What is required is transparency. So greengrocers will have to label grapefruit from Texas and blueberries from Chile. Paul hopes this labeling process will educate buyers and push local growers to more innovation. “We already see more hoop houses,” he says of the plastic structures that cover rows of crops and allow for early strawberries and tomatoes. “Local growers are finding ways to expand the season.”

Funded through a combination of city, county, state and federal funds, along with money from private foundations, corporate donors and individual philanthropists, the market is a public/private partnership “in the best tradition of Portland,” Paul says. “We are a nonprofit and are building the market as close to debt free as we can.”

This funding strategy will allow the James Beard to keep rents lower than typical for downtown retail space. But Paul’s vision reaches further than reasonable rent. He’s hoping underwriting from local health care corporations will augment the value of SNAP and WIC purchases. A strong educational component is also part of the vision.

Even though it’s three years away, the James Beard is already having a positive effect on the surrounding real estate market. “There’s a lot of energy and activity in this section of town, in part because of anticipation of the market,” says Paul.

The project may even nudge the needle to a more sustainable local food system. The James Beard aims to strengthen both family farms eking out a living selling at farmers’ markets and midsize operations trending towards mono-cropping.


Food hall for farmers: Ecotrust’s Redd on Salmon Street.

{pullquote}People come in, take pictures on their phone and get the products cheaper online.    {/pullquote}

This second group of food producers faces unique infrastructure challenges, according to a study by the environmental nonprofit Ecotrust. Too small to truly compete in commodity markets and too big to survive exclusively at farmers’ markets, these “Ag of the Middle” farmers, ranchers, growers and producers are squeezed. They have to produce, process and package their goods as well as market and distribute them.

Responding to these issues, Ecotrust has created a food campus called the Redd on Salmon Street. Located in two reclaimed buildings in the industrial Eastside, the Redd on Salmon (a redd is a spawning nest) aims to nurture these regional food producers and position them for growth by becoming an urban terminal node. “It’s the last mile,” says Nathan Kadish, Ecotrust’s director of investment strategy. “A place for food to land when it hits the city, before it’s distributed to institutional buyers.”

Amanda Oborne, Ecotrust’s vice president for food and farms, identifies this last mile warehousing and logistics as a particular pain point for both rural and urban mid-sized producers. The warehouse space, known as the Marble as it once was a marble showroom, will handle deliveries of proteins, produce and value-added foods. Organically Grown Company, Iliamna Fish Co., Flying Fish Company and Carmen Ranch are already signed on to make deliveries to the Marble. B-Line, a sustainable urban delivery company will manage the warehouse operations.

The second building, the Foundry, will be a maker space. Formally an industrial ironworks, this structure will house industrial food processors; picklers, bakers, and sausage-makers, who will operate kitchens behind glass walls. The public will be invited into this space to watch, purchase a loaf of bread, slice of pizza or pound of pastrami and learn about food systems. A mezzanine level will house ancillary services, insurers, lawyers, marketers, who specialize in food and are mission-aligned with Ecotrust.

With a planned 2017 opening, Ecotrust’s main goal is to unite Ag of the Middle suppliers with institutional buyers from public schools, hospitals, corporate cafeterias and corrections facilities. These institutions often serve vulnerable population, yet “they have the purchasing power to change the systems that are marginalizing populations in the first place,” Oborne says.

She reports growing interest. “We just hosted 20 to 25 dedicated industrial buyers that are responsible for 125,000 meals a day,” she says. “Even if we just get a fraction of those meals, we can make an impact.” Beyond that, Ecotrust has metrics in place to measure the Redd’s effect on soil, water, public health and rural economies.

Clearly more about food systems, Ecotrust hopes that The Redd will touch the food scene, too. “It’s just assumed today that everything in a restaurant is locally sourced, but the barrier to do that is still very high,” says Kadish. “We want to break down those barriers and drive the whole system toward resilience.”

But will it go? Growth looks inevitable for the second generation of Oregon’s food industry. Beloved local brands like Dave’s Killer Bread, Little Big Burger and 10 Barrel Brewing have been snapped up by large outside companies. In 2013 California-based Jackson Family Wines bought 13,000 acres of Oregon vineyards. “Our industries are moving from niche to mainstream,” says Tom Gillpatrick, executive director of the food industry leadership center, PSU School of Business Administration, noting the rest of the country’s hunger for first-generation principles of authenticity and craft.

But with growth comes rising land values and increasing rents. Already, the ground soldiers in Portland’s creative cuisine world — the food cart pod — are feeling the effects. “We lost three pods last year to development,” says Beavers. He notes that a few new ones have popped up in other parts of town but feels that they exist at the whim of property values. “All it would take is a developer offering enough money to make them disappear,” he says.


Bethany Village rethinks the food court.

{pullquote}We let family farms survive, but there’s no mechanism for them to thrive.     {/pullquote}

Pine Street’s Thelin is aware of the issue but doesn’t see it as a problem. “I love food carts,” says the Portland native. “They are great incubators. But in a city that values density, a food-cart pod is not the best use of centrally located real estate.”

Sam Tannahill, founder of A to Z Wineworks and vice chair of the Oregon Business Association, has another perspective on growth and outside investment. He sees it as validation of the first and second generation’s success. Hoping to build on that momentum, he and other food entrepreneurs are working to create a state-wide food cluster that would strengthen Oregon’s brand. The project had limited success in the last legislative session, but Tannahill has his hopes on 2017.

He also recognizes the temptation to grow too fast, push distribution too hard and lose our identity along the way. Yet he remains optimistic. “Authenticity is a buzzword, but Oregon really has it,” he says. “Our owners care and the world knows it.”

Founded in 1976, Eugene’s Fifth Street Public Market has also jumped on the food hall trend. Longtime tenant Provisions Market Hall renovated its space this summer to include outlets for local purveyors such as Long’s Meat Market and Newman’s Fish Company. The grand reopening was held in September. 

Gillpatrick agrees and points to Bob’s Red Mill as an example of an Oregon company that maintained its values through growth. Thelin hopes that his project will follow a similar trajectory. “We are working with authentic operators,” he says. “Yes they are big and successful and making money and no one is mad at that. But they will be here running the place.”

And the food will keep flowing. Moving from rural farms to urban centers, it will land at the Redd and be biked over to the James Beard and Pine Street, or trucked out to Bethany. It will be enjoyed as much for its entertainment value as it will be for its nourishment.

Oregon’s contemporary food entrepreneurs are no longer pioneers. They are influential players in the economy providing recession-proof jobs. They revitalize neighborhoods through self-aware real estate partnerships. They may even have the power to move the region to a more sustainable food system.

Most importantly, they are holders of a legacy. Portland and Oregon’s first generation of food entrepreneurs created a brand based on quality and craftsmanship that’s recognized worldwide. Can the second generation sustain it?