Reno Public Market addresses tenant turnover over high costs

Reno Public Market called tenant turnover a “normal” and “healthy” part of business on Monday as it addressed questions about several retail businesses and restaurant operators closing their doors as well as claims about the high cost of doing business at the location.

Three retailers — Far Out by Coalition Snow, Wyld Market Collective and Wedges & Wide Legs Boutique — are closing at the Reno Public Market’s west hall after Memorial Day on May 27 when they plan to hold their final sale day.

Management of the renovated property at the former Shoppers Square site, meanwhile, noted that most of the turnover has occurred at its food hall.

“The reality of the retail, restaurant and hospitality business is that turnover in merchants is a normal, even healthy, part of the business cycle as consumers make it clear what they value,” Reno Public Market said in a statement.

“This is especially true for the Food Hall where merchants may be experimenting with a new concept or translating a food truck into a venue like Reno Public Market.”

The long road from Shoppers Square to Reno Public Market

First announced prior to the pandemic, work on Reno Public Market started in 2019 with demolition work at the old Shoppers Square site to make way for the remodel.

COVID-19 and supply chain issues led to multiple delays of the Reno Public Market project, which was initially scheduled to open in 2021.

A photo from the grand opening of Reno Public Market on Jan. 20, 2023.

Reno Public finally opened its doors officially in January 2023.

Reno Public Market’s food hall concept, which was primarily driven by existing food truck operators, was initially met with a strong response. The site held a soft opening in December 2022, which drew in 12,300 visitors.

Since then, Reno Public Market has attracted about 400,000 customers during its first year, according to management.

At the same time, restaurants and retail stores continue to be a challenging business. From rising food costs and wages to higher rents, staying afloat in a post-pandemic world can be a struggle for many small businesses.

Reno Public Market is no exception.

Coalition Snow CEO Jen Gurecki was initially excited after opening the company’s Far Out outdoor and lifestyle store at Reno Public Market. After opening the store, however, Gurecki realized that things just were not working out for Far Out at the location.

“It’s a combination of everything,” Gurecki said. 

“Certainly, the rent structure and just the general overhead and cost of running a retail store was difficult. But what made it even more difficult was it just wasn’t the right fit.”

While the food hall did well, the retail stores at Reno Public Market’s west hall did not get the same amount of traffic for some reason. At times, people even expressed surprise and did not realize there were stores at the west hall, according to Gurecki.

“Since opening, Reno Public Market has been primarily marketed as a food hall,” Gurecki said. “So it’s been quite difficult for the retail side of things.

Gurecki added she feels at peace with the decision to close Far Out and has no ill will against Reno Public Market management. Gurecki hopes that the departure of Far Out and the other west hall retailers will allow Reno Public Market to get tenants that are a better fit for the space.

Reno Public Market says it respects the decision of the retailers to leave.

“While a tenant choosing to leave is never our desired outcome, we understand that not every business is going to be a fit and we respect their decisions as business owners,” Reno Public Market said.

“We wish every vendor, past and current, the best success.”

What is the cost of doing business at Reno Public Market?

Reno Public Market declined to talk about the businesses who have left or are leaving the space.

“Out of respect for our merchants, we will not be commenting publicly on the specifics of any individual business,” Reno Public Market said.

A photo from the grand opening of Reno Public Market on Jan. 20, 2023.

Reno Public Market, however, addressed claims raised by some that the cost of doing business at the food hall was higher than normal. The high cost was cited as a key reason for the food hall departures.

Rent at Reno Public Market is typically calculated as a percentage of sales, according to Doug Wiele, president and founder of developer Foothill Partners.

“If an operator does well, it pays rent commensurate with that success,” Wiele said. “If it does not do well, it does not pay much rent.”

Reno Public Market confirmed with the Reno Gazette Journal that the rent it charges amounts to about 20% of a tenant’s gross sales. The rate is higher than the 10% typically seen in most food and beverage operations.

Wiele, however, says that the rent at Reno Public Market includes additional goods and services that tenants would otherwise have to pay out of pocket.

Some of the costs that Reno Public Market pays for include grease waste interceptors and lines, exhaust and grease fire protection systems, restrooms, tables and chairs, and cleaning staff.

In a typical retail shop lease, tenants would be required to shoulder such costs while making capital improvements to the space, according to Wiele. By assuming those costs, Reno Public Market makes it easier for small businesses and entrepreneurs to get into business, he added.

“We provide much more than an empty storefront,” Wiele said. 

“They pay us ‘rent’ for capital improvements and for services that they would ordinarily pay to their bank and their employees, and we’re cheaper than their bank.”

Owner of retail shop Junkee speaks up in support of Reno Public Market

In addition to food businesses, Reno Public Market also has retail merchants at the location, including Junkee Clothing Exchange, Habitat Home Design and Mandalynn Jewelry Designs.

Although the retail section of Reno Public Market has not been exempt from departures, at least one is happy about the location.

Junkee owner Jessica Schneider described her experience at Reno Public Market as a positive one. In a Facebook post that Schneider wrote on Monday afternoon, the business owner says that “Junkee has been doing better than ever” since moving to the Reno Public Market from its longtime Midtown location.

Owner Jessica Schneider poses for a portrait in her new location for Junkee Clothing Exchange in the Reno Public Market in Reno on Sept. 21, 2023.

“Since the move, being inside Reno Public Market has brought us more parking, a strong sense of community, and a safe place for my staff and customers,” Schneider wrote.

“Although I can’t speak for the business owners leaving RPM, I can only give my personal experience. I encourage other small business owners to join the community here.”

Reno Public Market management, meanwhile, pointed to recent additions to the food hall, including Pasta La Vista and Dopo Pizza. New restaurants coming to Reno Public Market also include Beloved’s Bread Bakery Café and FiftyFifty Brewing.

“What our customers, locals and visitors, want from a dining, shopping and entertainment experience continues to evolve and we are regularly evaluating what new experiences and offerings we can bring into RPM to meet those needs,” Reno Public Market said.

“We conduct robust and ongoing marketing efforts to support our merchants and drive traffic to the property.”

Originally Appeared Here

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About the Author: Rayne Chancer