An Implementation Plan for a Public

Market in Boston
May 2011

Submitted to:
Massachusetts Department of Agricultural Resources
Submitted by:
Project for Public Spaces
700 Broadway, 4th Floor
New York, NY 10003
May 2011

TABLE OF CONTENTS
Executive Summary

Consumer Demand

10

Vendor and Product Availability

16

Public Market Design, Merchandising and Access

24

Market Oversight and Management Structure

36

Operator Capabilities

42

Start Up Financial Requirements and Sources

46

Start Up Operation Requirement and Procedures

52

Ongoing Operational Costs

58

Conclusion

64

EXECUTIVE SUMMARY
Boston has a long history of public markets at one time the city boasted a series of
markets to serve its citizenry and visitors. As in most cities, Bostons indoor public
markets fell victim to modernization and they all closed, with the exception of the
revamped physical structures of Quincy Market and Faneuil Hall which were converted
to festival markets having little connection to Massachusettss producers, farms and
fisheries.
As the tradition of the public market makes a well-deserved reappearance into the
everyday life of American cities, Boston with its burgeoning popularity of outdoor
farmers markets - is well positioned to be the next great market success story.
Moreover, a new public market has the potential to strengthen Massachusettss
agricultural economic base by providing farmers, fisheries and producers of value
added products a new and significant outlet for their products. The proposed market
also has the potential to save small family farms from going out of business, thus
strengthening the communities from which these farms and businesses are based.
Public markets are also job creators, and the proposed market has the ability to create
new jobs for Massachusetts residents, both in the market and throughout the regional
food industry.
Project for Public Spaces (PPS) overall effort in this project was to provide the
Massachusetts Department of Agricultural Resources (MDAR) with a guide to
successfully implement the long-awaited public market in Boston. This implementation
guide was created utilizing our research on the markets potential consumer demand
and vendor/product availability, as well as our experience and knowledge in planning
and operating public markets. Meetings with the Task Force, interviews with local
stakeholders, and two public meetings also informed our work. Accompanying this
guide is a portfolio of resources (each chapter ends with a list of relevant resources)
including the results of our detailed research and sample documents provided by public
markets from around the United States.
Ultimately, the proposed public market is well positioned for success. It has a strong
sales potential, extensive interest from potential Massachusetts vendors, enthusiastic
support from the public, a great location and strong government commitment. We
believe that this implementation guide showcases the markets potential and will support
the Commonwealth in its effort to create a great, new destination with broad public
benefits.

Key Findings
1. Customers: Management needs to have laser focus on its core customers for
the public market -- nearby Boston residents who will use the public market as
their secondary food store and who will be looking for quality product, a unique
experience, and a personal connection to the vendors. Customers from the
immediate Boston metro area can also be expected to be attracted, albeit less
4

frequently than nearby residents: they too will be drawn by special products, one
of kind vendors, and the experience. Office workers and tourists will be attracted
to the market for lunch and eating food on the premises, but it is critical that the
market not devolve into a food court.
2. Connection to Haymarket and Market District: Consumers surveyed clearly
understand that Haymarket offers a different, low-price option. Because many
consumers currently frequent both Haymarket and farmers markets, there should
be a strong synergy between Haymarket and the public market. The principle of
agglomeration economics used in our study shows that both markets will have
higher sales when both are operating, in part because of the broader selection
and range of price-points that the two markets will offer. To encourage synergy
and coordination, market district interests and communication should be
coordinated by the public market operator to include the operators of Haymarket,
Parcel 9, and local independent businesses.
3. Focus on Quality, Freshness, and Value: The public markets primary
emphasis should be on a full range of high-quality, fresh products, including high
quality specialty foods. Shoppers must, in the least, be able to buy the fresh
product that they can buy at any competing supermarkets and more. The public
market cannot be viewed only as an expensive place to shop. A range of price
points should be available in the market, and product sold by weight, allowing
smaller purchases. The connection to Haymarket, as noted, increases supply for
the bargain and specialty food shoppers on Fridays and Saturdays.
4. Product Source: The public market can showcase a wide range of
Massachusetts products, especially during the growing season (June through
October) and strengthen the regions agriculture and fisheries economy, but it will
need to extend its product selection to meet consumer demand. Whenever
possible, product sold at permanent stalls and daystalls should be sourceidentified from Massachusetts, the New England region, nationally and
internationally. Permanent market vendors should be offered incentives, both
financial and promotional, whenever practical, to increase the amount of
Massachusetts product in their inventory and/or product ingredients used, as well
as setting guidelines on the amount of non- Massachusetts inventory that can be
carried on a year-round basis, so that consumer demand can also be
met. Daystalls can have more rigorous limits in terms of product sourcing, and
priority should be given first to products that are Massachusetts grown or
produced.
5. Buy Local Branding for the Market: While the market should strongly embrace
the buy local message, consumers from our surveys are not currently clear what
local means, and many consider New England as local. A branding
consultant should be retained by the market operator so consumers clearly
understand the mission and character of the public market, including how this
relates to Massachusettss Commonwealth Quality program.
5

6. Vendors and Businesses: All businesses should be locally owned and

operated. To provide customer choice, the market should have internal
competition within food categories, and no exclusives on products should be
granted. There is an ample pool of potential vendors interested in full time stalls
to recruit from for the market, especially given the limited amount (about 14,000
rentable square feet) of retail space that needs to be filled. There are a number
of existing aggregator and consolidator businesses poised to provide
Massachusetts and regional product to potential permanent stall vendors.
Because cooperatives organized by commodity groups to sell product at the
market either do not currently exist, take time and financial resources to establish
and/or have a high rate of instability and failure, the market needs to be open to
using third party retailers with strong business skills. The majority of farmers
surveyed are mainly interested in using daystalls and selling their fresh produce
on a seasonal basis. Management will have to be selective in achieving the right
mix, and utilize daystalls to keep the market fresh and changing.
7. Merchandise Mix: While primarily a fresh food market, the market can feature
limited prepared foods without becoming a food court. There is great opportunity
for some of the vendors to supplement their fresh product with prepared foods,
even if the market has limited venting potential for cooking. Public seating will
provide a place to eat, but outdoor caf seating and picnic tables on the
Greenway could seasonally expand seating. The market is not dependant on
having a full service restaurant, which would increase the construction budget
and be challenged by a lack of ventilation for cooking. Small cafes are possible,
however.
8. Market Character: The public wants the public market to be welcoming, not
fancy in appearance, and a real place. Display should not be too precious. All
shoppers should feel welcome. Finishes and design treatments assumed in the
cost estimate are basic: sealed concrete floors, painted ceilings, etc. with an
emphasis on lighting product and displays. Vendors will be responsible for their
own stall designs, but design guidelines should be clear about the character and
functionality of these stalls.
9. Layout and Facility: While accommodating a public market in many positive
ways, the Parcel 7 site will present ongoing challenges for management, due to
lack of onsite storage, non-universal plumbing access, limited venting for
cooking, and small loading areas. The layout of the market, to be more fully
developed during the design process, should emphasize ease of customer
circulation and flexible public spaces that can be used for seating,
demonstrations and daystalls.
10. Market Exterior: The exterior arcade for the building should extend the daystalls
along the perimeter of the market. The building should have an indoor outdoor
feeling, especially on the Blackstone-side of the building to create a connection
6

with Haymarket. Within the constraints of Haymarket utilization of the space on

Fridays and Saturdays, the outdoor space should be programmed as a multi-use
public space. The market building does not look currently like a market, but, its
height and architectural features such as the towers, offer great potential for
iconic signage that customers can see from the downtown area and the North
End.
11. Greenway Connection: The public has stated that they are looking forward to
the public market bringing activity to the Greenway, and there were extensive
ideas provided at the public community workshop about specific uses and
activities that are appropriate for the park space adjacent to the market. While
not necessary to implement the market, the public markets oversight committee
should develop a plan working with the community to retrofit the adjacent
Greenway to better accommodate the types of recreational uses identified at the
workshop and to develop ways to better program and manage this space in
concert with the public market and the market district.
12. Parking and Deliveries: Parking and deliveries will be a challenge and require
further investigation. Parking for vendors and delivery access were identified as
major obstacles. While there are 310 public parking spaces in the Parcel 7
garage, half are monthly parking spaces and data shows that the garage is often
heavily occupied midday weekdays and Saturdays. Validations for Haymarket
and local restaurants are provided, and the public market will need a similar
program. Additional parking in the Government Center garage should also be
arranged by the public markets oversight committee. For deliveries, access to
the current loading dock will not provide nearly enough space, and curb
deliveries will have to take place on Blackstone Street and Hanover, and
coordinated with Haymarket. A thorough assessment of parking should be
undertaken by the public markets oversight committee so that an accurate
picture of the volume, timing, and location of parking and deliveries can be better
planned.
13. Organization and Oversight: The Commonwealth, as owner of the building,
should organize a seven to nine member public market oversight committee
representing different state and city agencies and public interests to assist the
Commonwealth in establishing a lease of the market, set the mission for the
market, and establish broad guidelines for its development and operation. The
oversight committee will decide how the real estate development and
construction process should be organized as well. A non-profit market operator
should be selected through an RFP process.
14. Operator is Key: Establishing an effective operator is core to the successful
implementation of the public market. Responsibilities will include creating the
right tenant mix, atmosphere, and image; dealing on a daily basis with vendors;
promoting and marketing the market; and managing the mechanics of property
management on a complex site. For start-up, the report outlines an extensive list
7

of operator requirements, which includes real estate development experience

and establishing relationships within the market district with Haymarket and the
future operator of Parcel 9. The market will require extensive permitting. The
operator will also have significant fundraising responsibilities for the market.
15. Budget and Funding: The total cost of implementing the public market is
estimated to be at least $8.5million, including design, build-out, construction
contingency pre-opening expenses and a projected operating shortfall. The
construction budget is order-of-magnitude and will need to be recalculated during
the market design process. It is critical that the market operator have access to
sufficient working capital, including the ability to provide rent incentives and
tenant allowances for stall construction. In addition to funding from the
Commonwealth a fundraising campaign led by the operator should approach a
variety of Federal, State, local, and private sources and should commit to
opening the market debt-free.
16. Break Even Success: Sources of income for the operator include rents from
permanent stalls and daystalls. The operator will achieve break-even status at
an average of $75/sq ft for permanent tenants, using triple-net leases with
annual sales of $16 million. Vendor sales should be able to sustain higher rent
levels, however. Using the Huff Gravity Model, we estimated that the market has
the potential to capture $15.5 to $19.5 million in sales, so the break-even level is
well within the range of feasibility.

CONSUMER DEMAND
Introduction
Farmers Markets have been growing rapidly throughout America as consumers are
looking for fresher, natural, and organic products as well as supporting local
businesses. Following the success of farmers markets, interest is expanding in
continuing the farmers market experience beyond the traditional harvest seasons and
making it a year-round experience in the form of what some may call a public market.
However, public markets are different from farmers markets. These public markets
require a different business model, which requires more capital and a management
structure to operate the stalls. Many of the vendors at public markets are no longer
seasonal sellers, but year-round vendors. As a result, one of the draws of farmers
markets their ephemeral nature - has changed. In addition, the public markets
strength is in fresh foods and not in selling frozen foods, grocery items, national
branded products, or sundries. To compete for the consumers time, the public market
must provide in-depth variety offered through internal competition. Vendors selling
similar products distinguish themselves through price, service, and unique offerings. In
essence, a public market is a cluster of specialty food stores taking advantage of
agglomeration principles for the common benefit of the public and the vendors.
Developing public markets is complicated and there is a paucity of reliable information
on existing pubic markets. This primary research is designed to help provide
information about the customers that will help management make better decisions about
the markets design and mix.

Goals
The objectives of the research are to gain an understanding of consumer beliefs,
opinions, attitudes, and behavior in order to establish a niche for the public market in
Boston. Another major objective is to estimate potential sales for the market to help
establish an appropriate tenant mix. The overall goal of these objectives is to provide a
comfort level that the public market can be economically sustainable.

Methodology
To achieve the goal, three avenues of market research were conducted. First, there
was a focus group among 12 local citizens; next, was the completion of an online
survey with 400 Boston area residents. The analysis concluded with using an economic
model used by the supermarket industry, known as a Huff Gravity Model, to estimate
market shares among the trade areas competition.

10

Key Findings
Competitive Analysis
The marketplace is very competitive with shoppers fulfilling their food needs
through multiple delivery channels. Every place where food is sold is competition
for the public market and food purchases today are spread among many different
channels and within each channel has its own set of competitors. The public
market will likely compete more intensely with Whole Foods and will mostly
complement Trader Joes and Haymarket each of these are specialty niche
channels providing a different offering than the public market. (Resource Portfolio
A, p. 50-51)
The public market will feature Massachusetts grown and produced products as a
way to help differentiate it from its competitors; however, there is no indication
that a public market exclusively selling Commonwealth grown and produced
products can be economically sustainable. (Ibid. 24)
Consumers are generally satisfied with the current offerings especially in the
areas that they consider important. (ibid. 54-59)
High quality fresh produce is the most important reason in selecting where to
shop and it is essential for this market. (ibid. 58)
While the public markets emphasis is on locally grown and produced products, it
is also essential that the market carry other produce that is not indigenous to
New England, such as citrus fruits and bananas. The lack of these types of items
will diminish the attractiveness of the market and lower overall sales potential
because these are products that consumers buy regularly. If such products are
not available, the consumer will reduce their frequency of visiting the public
market and will shop at the public market only for special occasions. (ibid. 17-18,
55)
Haymarket
Customers understand the difference between Haymarket, farmers markets, and
the concept of a public market. (ibid. 24, 44-48)
About three of 10 Boston area residents now shop at the Haymarket at least
annually and this will provide excellent exposure to the market as well as
providing new customers for the Haymarket. (ibid. 45)
Haymarket customers frequently shop at farmers markets and should by
inference shop at the public market. (ibid. 44)
Local Food
Emphasis on locally grown and produced foods will be very important to the
success of the public market and it will serve to help differentiate the public
market from conventional supermarkets and Haymarket.
Customers perceive local as being from New England/100-miles from Boston.
Defining the Commonwealth as local did not register highly with customers.
(ibid. 33)
Customers buy local if they think it helps the local economy, but more
importantly, they also want to buy the freshest products. (ibid. 34-35)
11

Sales Potential
The Huff Gravity Model, which measures the interaction between convenience
and selection estimates the market could have the potential to capture
approximately $19.5 million of Bostons $548 million in fresh food expenditures.
(As a conservative approach, we recommend providing a range which starts at
20% less than the model suggests, that is, $15.5 million to $19.5 million in
estimated sales potential.) The models proxy for selection is the size of the
market; it is self-evident that the larger the size of the public market the more
products it can offer. However, while the public market will not have the same
overall variety as supermarkets; ideally it should exceed supermarkets in the
depth of offering in fresh and specialty food items. The sales potential includes
the expenditures for all produce items. The model assumes that the public
market will offer customary fresh products found in local supermarkets. (ibid. 1016)
If items such as citrus are not available and other fresh fruits and vegetables are
only available seasonally the estimated produce sales could drop by more than
half. Likewise, if seafood and meats, such as lamb, are also seasonally limited,
further erosion of sales will occur. These limiting affects become cumulative
because customers seldom are aware of the seasonality of food and when they
find that products are not available they look elsewhere to fulfill their needs. (ibid.
14-16)
Not included in the potential capture of fresh food sales is the approximately $25
million in lunchtime prepared food expenditures by the estimated 56,668 office
workers within a quarter-mile. (ibid. 19-20)
In addition to the office workers, tourism, which brings an estimated 19 million
people annually to Boston, was not considered. The Freedom Trail, which runs
adjacent to the market site, is estimated to bring more than a quarter-million
visitors to this site annually. The office workers and tourist were not considered
because their primary purchases are in prepared foods and consumable food
products. (ibid. 21)
Survey results show that the Congress/Hanover location is a convenient place to
shop for food for 46% of the respondents. (ibid. 19)

Challenges
The market conditions for this public market are sufficient to it. However, market
conditions alone are insufficient to ensure a successful public market. Any introduction
of new channels of food distribution, like the public market, need to earn a place among
the many choices their customers have in shopping for food.
The ability for this public market to be successful depends upon it capturing sufficient
market share from other food channel venues. The public market captures market share
by doing a better job than its competitors do in meeting the needs and wants of its
customers. This can be accomplished by being more convenient to the customer or by
12

offering more selection (this is what the Huff Gravity Model measures). Increased
market shares can also be accomplished through a combination of meeting other
factors important to customers in choosing where to shop, like product freshness, better
pricing, or a host of other factors --including local Massachusetts products.
This public market will feature local food products and a challenge is to create a
stronger desire to purchase Massachusetts products than our research now shows.
(ibid. 24, 33)
The plan for this public market is to tap into what our research shows is the customers
desire for very fresh local foods at an affordable price point. Another part of the plan is
to provide the customer with a wide variety of locally grown and produced specialty
foods that are not widely available at other food venues in the area and in providing a
continuous stream of innovative food ideas that will regularly bring the customer back to
shop.
The public market needs to provide customers an experience of both place and
shopping. It does this through appropriate atmospherics in the design of the public
market and in keeping the offering fresh by bringing in daystall vendors with a
combination of the freshest produce or unique product offerings that provide the public
market with "affordable exclusivity."

Recommendations

Provide a non-exclusive focus on Massachusetts fresh products.

The public market should lead the process of building the Massachusetts brand
by showcasing local items and providing demonstrations showing how
consumers can incorporate Commonwealth grown and produced products into
their meal planning.
Remain flexible if execution of the plan does not achieve sales objective by
expanding the offering to include more prepared foods. This location can serve a
very large office market population and with its location on the Freedom Trail, it
can serve tourists.
In addition to providing the staple fresh food products like produce, meat and
fish, provide a wide selection of high quality, specialty, fresh foods products.
The public market must look and feel different from local supermarkets and
especially from Whole Foods, Trader Joes, and Haymarket. The design of
vendor stalls should allow for individual character and identity, but together the
public market should have an underlying design theme that creates a sense of
place. The public market also needs to deliver a different shopper experience
the public market has the ability to engage its customers more directly and
interactively with its individual vendors in a way that other channels cannot.
Emphasis should be on high-quality, fresh products, but the display should not be
too precious and pricing of the products should allow everyday shoppers feel
welcomed at this market.
13

Conclusion
This location provides the public market with many attributes for success. Adjacent to
the Haymarket this location is an established regional center for buying fresh food
products. The public market is well served by public transportation and also offers very
convenient parking. The primary trade area (ibid. 7) provides an immediate residential
base of high-income households and the office population within walking distance (ibid.
10) offers more than 56,000 workers. While this public market is not targeted to
tourists, its location on the Freedom Trail and proximity to the historic Quincy Market,
Bostons major tourist attraction, provides additional potential support.
The success of the public market relies upon it becoming a destination for fresh food
products. The public market should offer very high quality fresh foods, feature locally
grown and produced products, and a wide assortment of products that are only sold at
the public market. Careful attention is needed for developing appropriate atmospherics
that create a shopping experience. Finally, product pricing must be competitive to create
value.

Resource
A_Consumer Research PowerPoint

14

15

VENDOR AND PRODUCT AVAILABILITY

Introduction
The creation of a public market in Boston offers the opportunity to strengthen the
regions farm and fisheries economy through direct sales at the market, and offers a
powerful tool for creating more awareness of, and demand for, Massachusetts farm and
fisheries products. Vegetable and fruit producers, livestock farmers, the horticulture
industry, fisheries and seafood industry, and specialty food producers have expressed
an overwhelmingly positive response to selling year round and seasonally at this
market. Even with this positive response, it is important to understand the impact that
seasonal production and producer capacity will have on product supply and diversity, as
well as consumer demand for products grown outside of this region and climate.
Despite some of the seasonal barriers to product availability, there are strategies
identified in this report that allow the focus to remain on family farms, sustainability of
production and product source identification, all of which are growing trends in
agriculture in Massachusetts and across the United States.

Methodology
To assess vendor and product availability and to collect the broadest base of
information, a combination of methods were used to gauge the following:
Models of selling: permanent stalls, daystalls, selling to independent retailer at
market
Product Mix: supply, seasonality, advice on product selection based on
Massachusetts production
Vendor Interest: vendor availability and barriers to participation
Information was gathered through:
Interviews with: (Resource Portfolio B)
o MDAR project and department coordinators and managers
o Commodity group leaders
o Buy-local project managers
o Distributors
o Consolidators
o Farmers
o Specialty food producers
o Food business owners
o Local food consolidation, distribution and retail businesses
Vendor Interest Survey: paper and online surveys were submitted by 138
potential vendors, with approximately 128 surveys fully completed. (Resource
Portfolio C)
Informational Meetings:

16

o Vendor Information Meeting and Market Site Tour, February 24, 2011at
the Massachusetts State House. Over 125 potential vendors were in
attendance. (Resource Portfolio D)
o Harvest New England Conference Trade Show, March 2-3, 2011. Photo
display, information and education provided to potential vendors; survey
dissemination; interviews with potential vendors and industry
professionals.

Key Findings and Challenges

1. There is more potential interest for vending space than there will be space available.
(Resource Portfolio C, p 3, Question 7)
2. Potential vendors would like to sell products as follows: (Ibid. 3, Q9)
a.
Permanent stall, selling year round - 46%
b. Daystall, similar to a temporary farmers market model, especially when
seasonal product is available - 44%
c.
Sell product to an independent retailer at the market or hire staff to sell
product at the market: This model includes producers clustering their product in
one space, for example meat and cheese, and having staff to manage it or
collectively selling to someone who will retail it at the market
approximately10%.
3. Core agriculture, seafood and horticulture products meat, dairy, fish, shellfish,
cheese, plants and flowers are available year round in Massachusetts, with an
interested pool of vendors poised to establish permanent stalls with these products,
especially for fish and seafood where producer groups appear to have the necessary
infrastructure to move forward as soon as possible. (ibid.1, Q2)
Challenges:
o Producers are more interested in having someone sell their product rather
than being present to sell it, in most cases, and recognize the need to
cluster products from other farms. For example, a meat counter may
feature a number of farms products because one farm may raise beef
while another raises pork. (Producer and Distributor Interviews)
o There are few commodity or producer cooperatives that have already
formed or have the necessary infrastructure to meet the demands of
maintaining a permanent stall at a market and the long term survival rate
of commodity or producer cooperatives has been relatively low. The
lobster and fishery industries may be the only exception at this time.
(Interviews with DAR staff, commodity group leaders, farmers, fish and
seafood industry members)
o Product supply and variety will be an issue with some commodities and
outside of the growing season (June through October).

17

o Some agriculture producers have said they will not participate in the
market unless they receive exclusive rights to sell their commodity
product.
4. Fresh produce will be abundantly available from Massachusetts farmers during the
typical growing season (June through October). In addition, more farmers are
growing greater quantities of winter storage crops and extending their season by
producing leafy and salad greens during the winter months. However, quantities
and varieties of fresh Massachusetts produce outside of the typical growing season
will always be limited. At the same time, warm weather produce and produce not
typically grown in the Northeast, such as bananas, avocados, and citrus fruits, will
always be in high demand by consumers. (Resource Portfolio E, p. 1)
Challenges:
o Of the 46 produce farmers who completed the survey, only 12 are
interested in having a permanent stall, and of those only five want to sell
year-round; the remaining produce farmers are interested in daystalls, but
only six of these want to sell year-round.
o Farmers interested in daystalls want guarantees that they will be able to
have the same space in order build up their customer base.
o Most of the produce farmers plan to hire someone to represent their farm
at the market rather than be present to sell all the time, but are willing to
be present on occasion.
o A considerable number of farmers and farmers market managers who
were interviewed want this site to be most like a year round indoor
producer-only farmers market at which there should be absolutely no reselling of any type despite consumer demand.
o Market organizers will have to grapple with the issue of selling out of
season and non-native produce in order to meet consumer demand and
ensure economic sustainability. (Ibid. 1)
5. Over 60% of survey respondents (Resource C, p. 1, Q2 & 3) - the largest group in
attendance at the Vendor Interest Meeting on February 24 - were non-agricultural,
food-based businesses from the Boston area who expressed strong interest in
selling at permanent stalls. Many of these potential vendors want to sell specialty
foods (nuts, coffee, tea, spices, oils, vinegars, etc.), value-added products, baked
goods, and prepared foods. Competition for space will be highest among these
businesses.
Challenges:
o The majority of the product ingredients are not from locally sourced
materials, but the final product is mostly, but not always, made in
Massachusetts. For example coffee beans grown in Mexico are roasted
by local independent roasters. (Vendor interviews)
o Most of these businesses are not yet interacting with or supporting the
farms and fisheries of Massachusetts; however, they are independent,
18

local businesses. (Vendor and sustainable business network personnel

interviews)
6. Barriers to Participation: The following are the most commonly identified barriers to
participation by all potential vendors: (Resource Portfolio D, vendor, consolidator,
distributor and Buy Local program personnel interviews)
The cost of participationrent, utilities, etc.
The availability of stall storage (both day and permanent) and remote dry
storage
Availability of refrigeration
Size of stall
Loading and unloading conditions
Location, availability and cost of parking
Travel expenses (tolls, etc.)
The success of the market and the vendors ability to get a good return on
investment
In summary, there is a strong supply of potential vendors:
There is a wide variety of products that are grown, raised and caught in
Massachusetts that could be sold at the market, both on a permanent and
daily basis, allowing for the variety of product sold at daystalls to be constantly
changing.
Fresh Massachusetts grown produce will be abundant during the growing
season (June through October) but will be very limited during other times of
year while the demand for a year round supply of fresh fruits and vegetables
will remain high. (Resource E, p. 1)
There is an abundance of non-agricultural food businesses that would like to
sell at the market.
However, there are limits to vendor participation at the market. Despite a
strong desire to have farmers and fishermen/women selling at the market on
both a full and part time basis, the reality for these professionals is that they
have their businesses to run and will be available on occasion, but more likely
will hire staff to be present at the market or have one person sell clustered
products from a number of businesses, such as meat, cheese, dairy and fish.

Recommendations
The opening of the public market is only the beginning of an opportunity to support
Massachusetts producers and we believe that opportunity will increase as producers
become confident in the market as a viable outlet for their goods. We think the best
strategies to ensure availability of the maximum amount of Massachusetts product are
to provide incentives (rent reduction, added promotions, linkages between the markets
food businesses and producers of local ingredients) for participation and to promote
Massachusetts producers through a comprehensive branding message that identifies
the market as a trusted source for Massachusetts grown and produced products. The
following are specific recommendations on how to address the key challenges while
19

focusing on strengthening the regions farm and fisheries economy through direct sales
at the market while also maintaining an economically sustainable, vibrant market.

All vendors should be locally owned and operated businesses.

In the absence of producer or commodity group cooperatives that are poised to

be vendors, the market needs to have independently owned, third-party
businesses with strong business and marketing skills to sell agriculture,
horticultural and fish/seafood products.

Product Mix: In order to provide a year-round product mix , while supporting

Massachusetts producers in a major way, market management can employ a
variety of strategies including:
o Heavily promote Massachusetts products grown seasonally and year
round, especially Commonwealth Quality program vendors, through the
markets branding message and ongoing marketing strategies, for
example hosting Massachusetts Apple Month and Maple Breakfasts at
the market.
o Work to expand linkages between Massachusetts producers and
permanent stall specialty and value added food vendors (bakery, prepared
foods, etc,) as part of the role and responsibility of the daystall manager.
o In light of the demand for a year round supply of fresh produce, limit the
number and square footage of year-round fresh produce resellers at the
market and offer incentives (rent reduction stall location, added
promotions, etc.) for buying and source-identifying local produce, and for
using local consolidators/distributors.
o For year round, permanent-stall produce vendors, establish guidelines that
encourage inventory to include an annual cumulative minimum percentage
of Massachusetts grown produce (selling maximum amounts of
Massachusetts grown produce in season but also offering out-of-region
produce throughout the year to meet demand). This would take into
consideration seasonal availability while making a wide variety of produce
available year-round.
o Daystall participation should be limited to producers only, and first
prioritize Massachusetts producers and secondly New England producers,
in order to replicate a typical farmers market environment.
o Retailers selling only fresh Massachusetts produce could receive financial
incentives or priority space assignments, especially during the nongrowing season.
o In order to benefit from the markets branding message, food businesses,
especially those selling prepared foods and value added products, should
be strongly encouraged, if not required, to identify product ingredients that
are sourced in Massachusetts. And, businesses using local ingredients
should receive additional promotional attention with signage, media
attention, etc., to spotlight the producer/business linkages.
20

Source Identification: When it is not possible to provide product from

Massachusetts, initiate a system to identify the source of fresh food products,
especially that which supports family farms from the region and beyond:
o Develop a strategy for selling products from other regions, especially in
the off season, which is source identified. (ibid.1)
o When practical, utilize consolidators/distributors that only source local
products or from source identified producers. (ibid. 3)
o Encourage market participation by source identified product retailers. (ibid.
2)

Producer Participation: In order to encourage producers to sell their product

directly at the market, either full time or at daystalls:
o Provide incentives for farmers/fishermen/women and/or their family
members to attend the market. These incentives could include a reduction
in rent or a priority stall placement.
o Develop a schedule of promotional activities that bring producers to
market for special events and allow producers or commodity groups to
participate, educate and promote themselves, for example, Meet Your
Farmer Day or Massachusetts Livestock Farmers Day.

Non-agriculture food businesses, vendors selling specialty foods, value added

products or prepared foods: Vendors that are not growing their own ingredients
or who dont yet sell source-identified products/ingredients but are locally owned
businesses.
o Actively support and promote all local businesses at the market even if not
yet sourcing local ingredients because they are Massachusetts-based and
independent.
o Non-agriculture food businesses could have a higher rent for their stall
spaces that offsets lower rent for producers spaces. It could be a
temporary start up program or could be a permanent part of a rent
structure.
o Develop guidelines for specialty food and value added product vendors
that encourage them to use Massachusetts sourced ingredients in the
creation of their products.
o Heavily promote businesses that are working in partnership with
Massachusetts agriculture and fisheries, so that there will be an incentive
for other businesses/vendors to follow suit.

Institute an inspections program that will ensure the integrity of the markets rules
and regulations.

21

Resources
B_Interview List for Vendor Study
C_Vendor Interest Survey Results Aggregate
D_Vendor Meeting Notes Feb 24, 2011
E_Case Studies of Local Food Businesses
F_Vendor Feasibility Studies

22

23

PUBLIC MARKET DESIGN,

MERCHANDISING AND ACCESS
Introduction
Parcel 7 is a building that was largely planned as a way to disguise the ventilation shafts
for the Central Artery, and as a transportation hub, including a 318-car parking garage
and new entrance to the Haymarket T Station. The existing retail configuration,
approximately 27,500 square feet in size, was not laid out as a public market and
therefore some specific planning parameters that would normally be included in a
design process (venting, plumbing, service, storage, etc.) for a public market were not
integrated into the design.
As part of preparing the implementation plan for the market, PPS prepared a conceptual
layout of how the space could be configured. The purpose of this plan was to identify
overall operating constraints and opportunities for the public market, while developing a
preliminary number of leasable square footage and an order-of-magnitude cost
estimate. While the plan shows that a market can be successfully accommodated on
Parcel 7, the building does present some constraints which will present on-going
operational challenges for the market.
The building can accommodate a broad merchandising mix of food products. The
location of plumbing and storage facilities, however, will constrain the location of
vendors that require these facilities to certain locations. A draft merchandising plan and
layout presented below will provide general guidance to management to guide their
leasing efforts. Leasing, by necessity, involves working with specific tenants to
accommodate their specific needs so the merchandising plan must remain flexible and
responsive to changing conditions, now and over time.
Because markets function as strong social spaces, flexible indoor and outdoor spaces
need to be built into the market design. On the interior, these spaces can
accommodate public seating, events and demonstrations, and daystalls. On the
exterior, the layout of the market includes a public plaza space adjacent to Blackstone
Street and there is additional public space available on the Greenway.
Finally, parking and deliveries will be a challenge for Parcel 7. Potential vendors have
already indicated these as major concerns. Because many customers for the market
will come from the immediate downtown area, access needs to be viewed as multi
modal walking, biking, and taking advantage of the connection of the market to the
Haymarket T station; nonetheless affordable parking will still be required.

24

This section contains the following main sections:

Design and Layout
Merchandising Plan
Parking and Deliveries

DESIGN AND LAYOUT

Goals
The goals of the design component are:
To identify the potential amount of leasable square footage and public, flexible
space
Maximize customer circulation throughout the market
To develop a preliminary cost estimate for development and construction
To identify key design opportunities that need to be carried through in a future
architectural design process

Methodology
To achieve these goals we conducted multiple site visits to Parcel 7, reviewed existing
construction drawings and MassDOT provided a detailed memo about the constraints of
the site, along with detailed information about the operational practices and usage
patterns of the parking garage. (Resource Portfolio G) Based on this information, we
prepared two optional concepts and order of magnitude cost estimates, reviewed with
the project Task Force. These two concepts were consolidated into a preferred plan and
revised cost estimate presented in this report.
On February 23, during our second site visit, we also facilitated a Community Workshop
in which over 100 members of the greater Boston community weighed in on the types of
products they would like to buy and activities they would like to see at the proposed
market. Workshop participants also shared their thoughts about how the market should
look and feel. (Resource Portfolio H)

Key Findings
1. Parcel 7 can accommodate a public market of approximately 27,500 square feet
with approximately 14,000 square feet of indoor leasable space for permanent
retail stalls and daystalls, plus storage and service areas. However, there are
several challenges, as outlined below that will need to be addressed in detail
design and in market operations.
2. Relatively few modifications to the existing building will be necessary to
accommodate the market. These include new entrances and storefronts with
flexibility facing Blackstone and the installation of interior ramps to accommodate
level changes. The total estimated construction cost is $7.6 million or $280 per
25

square foot (not including additional start-up costs presented Start Up Financial
Requirements and Sources). This cost estimate is based on specific exclusions
which are identified on the first page of the estimate. (Resource Portfolio I)
3. Attendees at the February Community Workshop would like the see the following
activities and design elements in the proposed market:
o Indoor Activities Attendees would like the market to host a range of
educational opportunities including cooking classes, activities related to
the seasonality of local food and kids activities.
o Outdoor Activities Attendees would like the outside of the market to
feature live music/entertainment, outdoor public seating, a variety of
agricultural/food demonstrations, and food trucks.
o Design Elements: Attendees would like to see the market be built in a
sustainable and green manner; have a lot of natural light; reflect Boston
and the New England tradition ; feel comfortable, inclusive, and rustic.

Challenges
The key challenges for the design of the market deal mainly with servicing, support, and
HVAC/plumbing issues:
Lack of basement /storage area: there is no storage on the lower levels and
there is no freight elevator to the upper floors. All storage will have to be
accommodated in vendor stalls or in limited storage areas on the ground floor or
on a small mezzanine.
Plumbing: existing plumbing service can be provided only to stalls where there
can also be a drainage system set up. About 25% of the permanent stall square
footage shown on the conceptual plan does not have direct access to water.
Tenants in dry areas could have access to water across the aisle, or in other
non-contiguous spaces.
Kitchen Venting: because of the parking garage and office space on the upper
level, there is currently only one location where kitchen exhaust can be located.
This will restrict the amount of on-site premises cooking that can take place in the
market. A restaurant, under this circumstance, is not feasible for the market.
Loading: because of the limited size of the loading dock on New Sudbury Street,
along with general traffic flows on this street, additional loading in and out of the
market will have to take place from Blackstone and Hanover Streets, though
loading docks will not be required on these streets. Curb cuts for hand carts
would be helpful.
Restrooms: because of limited space and plumbing issues, the size of restrooms
is 15-18 stalls, depending on configuration.
Identity: Parcel 7 does not look currently like a market, because of the function
the building serves as a ventilation system for the Central Artery. However, it is a
very visible structure, both from the downtown area and the North End.

26

Recommendations

Design Character: The public wants the public market to be welcoming, not fancy
in appearance, and a real place. Display should not be too precious. All
shoppers should feel welcome. Finishes and design treatments assumed in the
cost estimate are basic: sealed concrete floors, painted ceilings, etc. with an
emphasis on lighting product and displays. Vendors will be responsible for their
own stall designs, but design guidelines should be clear about the character and
functionality of these stalls.

Layout Principles: The public market layout (See Figure 1) includes the following
characteristics:
o Provides multiple entrances from all surrounding streets, adding additional
doors on Blackstone and Hanover to increase connectivity to Haymarket.
A diagonal aisle from the Congress Street corners will bring people
towards the center of the market. An additional direct entrance into the
Haymarket T Station is also recommended.
o Race track circulation with generally eight foot aisles that allow
customers to flow through the market without encountering dead-ends.
Multiple cross aisles also allow customers to shop between vendors.
o Approximately 14, 000 sq ft of permanent stall space. Actual stall spaces
will range from 100 600 [or more] sq ft and will feature an overhead
structural frame for signage and lighting, and stubbed in utilities. Tenants
will responsible for their own equipment, subject to design guidelines
which should be developed for the market during the design process.
o Approximately 2000 square feet of interior flexible program space. This
space can be used for seating, daystall rentals, and special events, such
as cooking demonstrations.
o Exterior daystall vending spaces, located beneath the arcade of the
building, including an extended canopy structure facing Blackstone Street.
Additional multi-use programming as well as a wide range of community
activities, as suggested at the public workshop meeting could take place
around the exterior of the market.
o Storage space to be incorporated into vendor stall. Limited storage space
is shown at the Blackstone entrance and under the parking garage ramp,
or possibly in mezzanine space. There will be little or no overnight storage
for daystalls.
o Mezzanine space for market management office. Alternatively, offices
could be located on an upper floor of Parcel 7, although the finishing of
this space may not coincide with the market development schedule.
o Separate restrooms for vendors and customers.
o The existing loading dock will be used to locate the markets trash and
recycling facilities.
o Many of these suggested community activities for the public market are
more appropriate to be accommodated on the Greenway itself, and this
will necessitate more active programming along with some design
27

modifications to the park. Activities mentioned at the workshop that could

be featured on the Greenway include agricultural demonstrations such as
milking and temporary cranberry bogs, a bocce court, public seating and
an urban vegetable garden.
o Not shown on the plan, but included in the cost estimate, is the need to
create an iconic signage system that takes advantage of the buildings
height and architectural features, such as the towers, and its visibility to
the North End and downtown.

28

Figure 1: Public Market Conceptual Layout (Resource Portfolio J)

29

MERCHANDISING PLAN
Goals
The overall goal of the merchandising plan is to pull together the results of many
different aspects of the study: the demand analysis assessed what would draw
customers to the market; the public workshop identified specific products people wanted
and the vendor availability study identified the issues and opportunities specifically for
Massachusetts producers. The merchandising plan is intended to be a guide for the
leasing effort, during which specific space needs and requirements of recruited tenants
can be identified. The location of specific tenants in the market will drive circulation
patterns, and create synergies and competition important for overall customer interest
and satisfaction.

Methodology
The merchandise plan guidelines were prepared after all of the other research
(consumer, vendor, and community) was completed.

Key Findings
1. With the 14,000 square feet of indoor leasable, there is space for 20-30
permanent retail stalls plus 40-60 interior and exterior daystalls, totaling close to
100 individual vendors during peak season. There will be sufficient space to
create competition in major food categories (meat, fish, poultry, produce, dairy
and baked items) as well as considerable product variety.
2. Daystalls seem to be in high demand by farmers and small scale producers and
will allow management to vary the merchandise mix on different days of the week
and seasonally. There is room for 40-60 smaller interior and exterior daystalls
which can be rented by the day, week or month. With flexible areas, in fact,
management can increase daystalls by removing seating if so desired.
3. Potential customers are looking for a wide variety of fresh, specialty and
prepared food products, as demonstrated in the list generated at the public
meeting. Attendees at the February Community Workshop would like the see the
following products in the market: cheese, affordable fish and seafood, produce,
bread, meat and poultry, locally grown or made products, wine and beer, eggs,
and coffee/tea, etc.
4. Because of limited access to venting, there will be limited cooking in the market.
However, foods can be prepared off site or cooking not requiring hood vents
could take place in the market.
5. Cost estimates showed a restaurant tenant allowance would increase the
construction budget by as much as $1 million.

30

Challenges
The key challenges for the merchandising of the market deal mainly with servicing,
support, and HVAC/plumbing issues that have been identified in the design section,
above. Specifically, a restaurant is challenging because of the lack of kitchen venting
potential in the corner space at Congress and Sudbury, the only location where a large
restaurant would be suitable. Finally, recruiting and leasing to specific tenants will be a
challenging task perhaps the most important taskof market management. The
complexity of the real estate development and construction components of the market
cannot be allowed to distract from this task.

Recommendations

Fresh Food Product Mix: The market should provide the following fresh food
products, with more than one vendor carrying each product:
o Fish and Seafood, 10%
o Produce Fruit and Vegetables, 12%
o Cheese and Dairy, 6%
o Bread and Baked Goods, 10%
o Meat, Poultry and Eggs, 12%
o Deli/Charcuterie, 8%
o Daystalls, which will feature a variety of fresh and specialty food, 8% (can
be increased, based on actual demand)

Specialty Food Product Mix: The following types of products should be provided
to augment the fresh food products:
o Locally Roasted Coffee/Tea, 3%
o Herbs and Spices, 3%
o Pasta - fresh and dry, 3%
o Maple and Honey products, 1%
o Nuts and Dried Fruit, 1%
o Candy and Chocolates, 3%
o Vinegars and Oils, 1%
o Preserves - Jams, Jellies, Salsas, 1%
o Wine, Beer and Spirits, 7%
o Bakery/Caf, 5%
o Flowers, 5%
o Miscellaneous 1%

Prepared Foods: While primarily a fresh food market, the market can feature
limited prepared foods without becoming a food court. Prepared food offerings
can be part of a fresh food tenants offerings, rather than renting space to an
exclusively prepared food tenant. There is great opportunity for some of the
vendors to supplement their fresh product with prepared foods, even if the
market has limited venting potential for cooking, but this needs to be managed so
31

it does not take over. Public seating will provide a place to eat, but outdoor caf
seating and picnic tables on the Greenway could seasonally expand seating.

Non-food products: Generally, there should minimal non-food products at the

market, although there should be one or more flower vendors and cooking
related uses (i.e., a cookbook stall) would reinforce the mission of the market.

Restaurant: The market is not dependant on having a full service restaurant,

which would increase the construction budget and be challenged by a lack of
ventilation for cooking. Small cafes are possible, however.

The merchandising diagram (Figure 2) shows a layout of permanent market stalls

and temporary daystalls in the market, with an overlay of the following criteria for
locating specific types of vendors - these factors will also have to be taken into
consideration in producing a Tenant Design Criteria: (Resource Portfolio K)
o Wet Stalls: stalls with direct access to water; appropriate for meat, fish,
etc.
o Dry Stalls: stalls without direct access to water
o Locations for vendors who create maximum visual impact on customers
(flowers, produce, etc)
o Location for vendors who require a venting system in order to bake or
cook on site (prepared food, bakery, etc.)
o Key locations for anchor vendors that will be viewed by customers as
major destinations (to be determined during the leasing process)

32

Figure 2: Merchandising Diagram (Resource Portfolio L)

33

PARKING AND DELIVERIES

Goals
Developing a complete plan for vendor parking and deliveries, and customer parking
was not part of this implementation planning process. During the study however, some
limited analysis was conducted in order better understand the key challenges with
parking and deliveries.

Methodology
Vendor surveys and outreach identified concerns for parking and deliveries, and during
the conceptual design and layout process, the need for additional service and delivery
areas was evaluated and provided. MassDOT provided information about the current
utilization of the Parcel 7 garage for two, one month periods (November 2010 and
January 2011).

Key Findings
1. Parcel 7 Garage is a heavily used facility:
o There are 310 public parking spaces, including 154 monthly parking
spaces, although management uses many of these spaces during the
day when monthly parkers are not using their spaces.
o January 2011 data showed that garage is often heavily occupied midday
weekdays, Saturday (day and evening) and Friday evenings (patterns
change).
o The garage is used extensively for short term parking: The majority of
non-monthly customers (56%) park for less than one hour. Less than 10%
park for more than two hours. Cars are entering the facility throughout the
day, almost equally.
o Validations for Haymarket and North End businesses are provided. Most
of the validations are for North End businesses: in November, 2010, there
were 13,459 validations with 2/3 being for less than $2, compared with
2,104 validations for Haymarket with 93% being for less than $2.
(Validation for Haymarket is available only on Friday and Saturday).
2. Additional parking in the Government Center garage is available but this was not
investigated during the study.
3. For deliveries, we found the following:
o Access to the current loading dock will not provide nearly enough space.
MassDOT has stated that they need 24 hour access for a vehicle to enter
the loading dock area and service the ventilation system. This reduces the
loading area in half, with space for only a few trucks at one time.
34

o While many public markets load from all sides (which is part of the market
experience) it will not be possible to load from Congress Street due to
vehicle volumes. Blackstone and Hanover will have restrictions on
Thursday afternoons, Fridays, and Saturdays because of Haymarket
vendors.

Challenges
The limitations on parking and delivery will require creative management strategies.

Recommendations

The public markets oversight committee should hire a transportation consulting

firm to thoroughly analyze the parking demand so that an accurate picture of the
current utilization of parking can be assessed and parking plan developed,
including validation procedures for the Parcel 7 garage for public market
shoppers. This study should include a more thorough utilization study of the
Parcel 7 garage as well as the Government Center garage.

Given the parking challenges, transit, pedestrian and bike options should be
encouraged, The location of the Haymarket T Station with direct access into
the market presents important marketing opportunities, and the proposed market
design adds an additional entrance as well as circulation which allows
commuters to short-cut through the market.

Deliveries will need to take place on Hanover and Blackstone Street, in addition
to the loading dock on Sudbury. The loading dock will need to be managed to
assure that access by MassDOT is possible 24 hours a day. The loading dock
will also be where the markets trash and recycling facilities should be located.
Loading from Hanover and Blackstone will require further study in terms of
current utilization of these streets for traffic, parking, and loading, including for
Haymarket, and how to manage loading from these streets for the public market.

Resources
G_MassDOT Parcel 7 Memo
H_Community Meeting Notes Feb. 23, 2011
I_Conceptual Cost Estimate
J_Public Market Conceptual Layout
K_Sample Tenant Design Criteria
L_Merchandising Diagram

35

MARKET OVERSIGHT AND

MANAGEMENT STRUCTURE
Introduction
The best public markets are governed by and for the public.
Everyone thinks of a successful market as theirs and this will certainly be true in
Boston where many will lay claim to this right including the Commonwealth, City, food
community, customers, taxpayers, and the Haymarket vendors.
Based on our knowledge and experience working with other public markets we are
recommending a structure for the oversight, development and management of the
market to provide the people, the Commonwealth and the City the security that they are
proceeding in a manner based on proven, best practices of successful public markets.

Goals
The following goals address the needs of the Commonwealth, City, vendors and
customers.
Oversight Objectives
Fiscal solvency of market
Maintain integrity of the building
Maintain the mission of the market
Operate with public goals
Operational Objectives
Operate at a high standard of maintenance, cleanliness and security
Have centralized control over all aspects of the market
Solicit and attract owner operators with an emphasis on local products
Operate primarily as a fresh food shopping destination
Reduce waste operate in as green a way as possible
Fundraising and Economic Objectives
Maximize ability to raise public and private funds
Leverage Commonwealth funds
Open the market debt-free
Build the local food economy
Operate self-sufficiently in terms of annual budget
Public Goals
Preserve the integrity of the market
Provide affordable business opportunities for local vendors
36

Offer healthy, reasonably priced products

Educate market shoppers about the importance of buying local food and
community health
Make the market a welcoming gathering place

Market District Goals

Build the market district as a destination
Work collaboratively with vendors from Haymarket, the Blackstone Block and
the North End
Work collaboratively with diverse community and business interests
Help with the evolution and planning for Parcel 9

Methodology
PPS researched and presented to the Task Force a broad spectrum of management
structures that are in use today at public markets. (Resource Portfolio M) Based on the
particular needs and resources available in Boston, three markets were looked at in
more detail: (Resource Section N)
Eastern Market, Detroit
Reading Terminal Market, Philadelphia
City Market, Kansas City
Each of these markets has developed its own approach that works and they are all
different. In each case, the owner of the market is either the City or the State and
each wanted to preserve some oversight because they are ultimately responsible for the
project
The unique nature of the public market scenario property ownership by MassDOT;
available State bond bill funding for the project designated for the MDAR; the Boston
Redevelopment Authoritys plans for the district; the publics enthusiasm for the market;
the operating history of Haymarket vendors and a growing pool of local vendors must
all be considered when crafting a management and oversight structure that is right for
the interim period of development and the long term operations.

Key Findings
1. MassDOT, landlord of the property, needs to have a strong ability to oversee the
development and operation of the market project in a way that does no harm to
the extensive exhaust and control systems operating within the premises, nor to
inhibit its ability to lease the upper floors and operate the Parcel 7 building for the
best interests of all its tenants.
2. The Commonwealth, working with MDAR, intends to apply millions of dollars of
public funding into the market project and needs to ensure the project is
developed and operated responsibly in accordance with a publicly stated
mission.
37

3. It is imperative to institute an authoritative oversight entity to give this project

focus, impetus and guidance. The oversight entity can manage the development
and interim phases of the project until an operator is selected and full funding is
in place.
4. There is broad public interest in the market which needs to be formally included
in the process.

Challenges

Maintaining positive momentum and opening the market by 2012.

Building consensus through openness and public participation.
Completing the fundraising.
Having enough faith in the project to proceed without knowing every detail first.
Allocating time and commitment from key people to make this happen.

Overall Recommendations

The Commonwealth as Landlord and Chief Funder is the primary force to create
the market. As such, the Commonwealth has the responsibility of assembling a
group of stakeholders that will become the principal public overseers in the
project as recommended herein.
The support of the Governor in conjunction with the Mayor of Boston is
imperative.

Market Oversight Recommendations

PPS recommends a tiered system of oversight as follows:

Create a Public Market Oversight Committee (seven to nine members from the
Commonwealth, the City of Boston and public) with the responsibility to guide the
mission, development and operations of the public market, without getting
bogged down in the day to day management of the market.
Recommended members of the oversight committee are such that no single
interest group is in control and the market is operated for the best interests of the
public.

Initial Roles and Responsibility

Set mission and broad guidelines for development and operations of the market.
(Resource Portfolio P)
Assist in the development and pre-opening phases of the market.
Issue an RFP and select the market operator. (Resource Portfolio O)
Assist the Commonwealth in the establishment of a lease to an operator.
(Resource Portfolios R and S)
Act as a liaison for future development in the market district.
38

Future Roles and Responsibilities

Ongoing overseer of the markets operator and mission. (Resource Portfolio P)

Ongoing fundraising assistance.

Management Structure Recommendations

The Task Force was presented with a thorough overview of management structures
currently used in the United States. (Resource Portfolio M) Historically, most markets
were publicly operated by the municipalities in which they were located. Over the last
few decades during which there has been a strong revival of public markets, we have
witnessed a major shift away from publicly operated markets with many cities getting
out of the market management business.
The three forms of management structures are as follows:
Public
This form, once common, is when the city owns and operates the market. The few cities
that still manage markets have, for the most part, assigned the responsibility to a city
department, such as parks and recreation, with additional help provided from other city
agencies such as sanitation. At one time it was common for a city to have a department
of markets because many cities had more than one market - sometimes as many as two
dozen. Baltimore is the last city in the United States with any vestige of this type of
system but even they have set up a non-profit corporation to assist in the management
of their historic municipal market system.
It is also our experience that cities are not effective at keeping markets competitive in an
increasingly fierce battle for the consumers time and money. As cities continue to
experience fiscal challenges, their markets are often shortchanged with limited labor,
maintenance, promotions and other tools to operate competitively and effectively.
More and more cities have transferred operations of their markets to non-profit entities,
which unburdens the city from coming up with ongoing capital and operating funds. In
every case, this transfer has proven to be a good move for the market and the city.
Private
Some cities have transferred operations of their public market to a private operator,
generally a commercial real estate management company. In each case, the transfer
has been with a historic market (Resource Portfolio M), not a new undertaking such as
the proposed market in Boston. In this instance the city enters into a management
contract after soliciting competitive bids for an operator through an RFP or RFQ
process. The city maintains oversight to periodically review the performance of the
private management entity.
39

In other cases, such as the new Ferry Building Marketplace in San Francisco, the new
indoor market is operated by a private real estate development company. Products at
this market are extremely high end, with a lot of prepared foods and tourist oriented
merchandising. This type of arrangement would not be appropriate in Boston, where
the proposed public market is intended to sell primarily local products to local people.
The need to constantly increase revenues would put undue strain on the mission of the
market.
Non-Profit
The most successful and prevalent way to organize and operate a publicly owned
market is through a non-profit management structure. This type of structure can be
organized to suit the particular needs of the public whether it is a city or state.
Under this system, the city or state retains ownership and control over the facility, and a
establishes a long-term lease with an independent, 501 c(3) corporation to operate the
market. The lease spells out the terms of the agreement, and varies according to each
city or state. The structure of most of the non-profits includes a broad-based board of
directors, including citizens, vendors, nearby businesses, and usually one or more
representatives of the city or state government.
Most of the historic publicly owned markets in the United States have within the last
three decades been transferred to non-profit operators. In each case, the operator must
work within guidelines set forth and approved by a public body whether it is in a lease
document or formal operating guidelines.
Non-profits are also tapping into new sources of funding (foundations, corporations,
grants) that public entities were not able to access. The results are in many cases
dramatic such as in Detroit where the city-owned Eastern Market, recently transferred
to non-profit operation, and has raised millions of dollars. (Resource Portfolio X)
Recommendation for the Public Market in Boston Non-Profit Operator
We believe a non-profit management structure is the best way to proceed in Boston
because a non-profit market operator can access wide sources of funding, easily
establish partnerships, be held publically accountable to the mission of the market and
unburden the government from managing and operating the public market. This will
require a strong commitment by the Commonwealth (with help from the City) to set in
place the appropriate oversight and control mechanisms and then, most importantly,
move to the side and let the non-profit operator run the market without political
interference.

40

Recommended Management Structure Next Steps

Solicit Responses for a Market Operator

Based on the recommended mission and guidelines from the oversight

committee, a public RFP should be issued to solicit bids from those qualified to
operate the market. (Resource Portfolio O)
An open RFP process stipulating the goals and characteristics of the public
market in Boston as defined by the market oversight committee will be the best
process to find the most effective operator.

Note: For a more complete description of the roles and responsibilities of a market
operator, see Operator Capabilities.

Selection Criteria for Market Operator

Ability to:
Adhere to the mission of the market
Fundraise now and in the future
Balance and satisfy the many constituents of the market
Attract the right tenants and merchandise mix
Strong management and organizational capabilities
Strong retail and promotional skills
Financial strength to get through the opening years
Understand and appreciate the burgeoning local food movement

Create a Lease between the Commonwealth and the Operator

Once an operator is chosen, the lease agreement would be written as the final
agreement between the Commonwealth and the operator.
Key lease terms:
o Reporting methods to the Commonwealth and the oversight committee
o Operating and Maintenance Standards
o Clear definition of roles of Landlord and Operator (i.e. capital costs and
which party is responsible)
o Role of operator in the pre-opening and development phases

Resources
M_Public Market Organizational Options
N_Public Market Management Structures
O_Sample RFQ for Market Operator
P_Pike Place Market By Laws
Q_Eastern Market By Laws
R_ Lease Agreement between the City of Detroit and Eastern Market operator
S_Lease Agreement between the City of Kansas City and the City Market operator

41

OPERATOR CAPABILITIES
Introduction
Operating a public market is considered one of the most demanding jobs in real estate
management for you are not only dealing with the basics of property management, but
with an emotionally charged background where peoples livelihoods are on the line
every day.
The mechanics of property management are a given the facility must be well run for
the benefit of the tenants, customers and the landlord. Bills must be paid, staff hired
and reports written these are all expected as a minimum from a market operator.
Creating the right tenant mix, atmosphere and image of the market are the truly critical
skills to ensure the success of the market.
A skillful market operator must be able to juggle many responsibilities without losing
sense of the priorities and without getting overwhelmed with demands that are often just
ventings from frustrated tenants.
Markets are inherently competitive and while vendors needs are relentless, the market
ought to be operated first and foremost for the customer, as they are the arbiters of the
markets success.
For all the surveying we have done at markets, the atmosphere is what customers like
most, a culmination of management decisions that create the overall experience.
Leasing (the merchandising) and promotions are the two most important parts of
managing a market. Weak market managers are those who spend too much time on
the computer in the office worrying about the paperwork (which is important too!) and
not enough time managing the merchandising and experience for the customers.

Goals
See Market Oversight and Management Structures.

Challenges

Getting the market opened on time and on budget.

Managing the diverse needs of vendors and customers.
Making the market an affordable place to shop for all income levels.
Constructive coexistence with the Haymarket Pushcart Association.
Establishing and maintaining the market as a regular, fresh food shopping
destination.
42

Recommendations
Ten Capabilities for the Operator of the Public Market:
1) Property Management:
Physical Plant keeping the building and building systems in good
condition
Maintenance cleanliness, safety and durability
Improvements constantly making things better
Janitorial day to day cleaning of all public spaces
2) Tenant Management:
Leasing getting the right tenants, bolstering the mission
Lease Maintenance rent collection and billing, lease renewals
Relations spending time with each tenant, troubleshooting, coaching
Enforcement rules and regulations (Resource Portfolio T); abiding by
the lease terms (Resource Portfolio U)
3) Financial Management:
Accounting Systems tracking all income and expenses
Reports to Board and oversight committee regular and transparent
reporting
Goal Setting break even operationally and establish a capital reserve
Long Range Capital Planning capital improvements and long term
maintenance
4) Fundraising:
Fundraising campaign initial development and ongoing
5) Promotions and Communications Management:
Customer Relations keeping the customer informed and happy
Media Relations keeping the market in the public eye
Events, Promotions, Advertising reinforce the mission and build sales
Education promote awareness of how the market builds community
health
Outreach to Partners stretch limited advertising dollars through
partnerships
6) Staff Management:
Hire interview and hire all staff
Fire monitor performance and if necessary replace employees
Direct motivate good conduct, teamwork and efficiency
Oversee evaluate needs and redirect staff as needed
7) Board Management: If a non-profit is chosen to be the market operator, it will
have its own board of directors, which is a separate entity from the markets
oversight committee and the board will establish its own reporting requirements
from the market operator.
Reports present regular operating and financial statements
43

 Meetings schedule and plan

Committees work with subcommittees as needed
Fundraising assist with planning and execution of fundraising
8) Manage the Mission:
Education make it obvious why the market is in business
Leasing recruit tenants whose products fulfill the mission
Outreach/Partners work with like-minded partners whose missions
overlap
9) Manage the Merchandise Mix:
Use Clause in the leases prevent merchandise creep and unfair
competition
Inspections regularly inspect farms/food businesses to ensure
product integrity and compliance with markets rules and regulations
Balance of product categories manage the overall percentages of
products sold
Internal Competition builds quality, keeps prices fair and attracts
customers
10) Community Engagement:
Outreach to all sectors of the food buying public
Encourage community participation in educational and promotional
events
Intangible Capabilities

The Importance of Satisfying the Customer:

All of the above responsibilities need to be orchestrated and executed to suit the
boss the customer. No market can succeed, if it does not first and foremost
satisfy the needs of the customer. The market should not be a special occasion
shopping venue, or too expensive both will result in negative word of mouth
that can douse the highest and most noble ambitions. Management must spend
quality time on the floor of the market every day, engaging and observing
customers.
There needs to be a wide range of product choices to satisfy the ethically highminded as well as the cost-conscious.

Creating a Welcoming, Inclusive and Enjoyable Atmosphere:

The market should not be intimidating it should be comfortable and informal putting people at ease to spend time and money in the market. Some of this can
be controlled through design, but much of it is an attitude of caring and courtesy
(not forced or unnatural) that gives the market a good feeling. Many markets rely
heavily on repeat customers, and a positive word of mouth about the market
experience is one of the most important outcomes that must be created.

44

Market Staff and Responsibilities

Manager/Director overall responsibility for market including operations, staff

oversight, financials, reports, planning and development (Resource Portfolio V)

Assistant Manager assists Manager and takes lead with promotions, events,
education, outreach

Facilities Manager oversees market maintenance, security and physical

property

Daystall and Outdoor Manager manage schedule of daystalls and outdoor

market, manage inspections program and connect Massachusetts producers to
permanent vendors

Clerical Office administration, phones, correspondence, billings, records and

lease maintenance

Maintenance daily cleaning and upkeep of market and surrounding sidewalks

and plaza

Inspectors Ensures compliance with the markets rules and regulations,

including sourcing and quality

Security Uniformed presence during limited market hours can be eliminated

or increased based upon actual need

Potential Additional Staff

Loading and Traffic Management based on the suitability of the loading dock
and other doors for vendors and deliveries, additional personnel may be required
to police and coordinate activity.

Daytime cleaning based on actual customer traffic volumes, additional

daytime help may be required to keep the market floor, bathrooms, entrances,
etc. clean and presentable.

Resources
T_Sample Rules and Regulations
U_Sample Landlord and Tenant Lease
V_Sample Manager/Director Job Description

45

START UP FINANICAL REQUIREMENTS AND

SOURCES
Cost Estimate
The following figures represent all costs to design and build-out the market, pre-opening
expenses and projected operating shortfalls. (Resource Portfolio I) These financial
estimates do not include the important capital improvements that must be made before
any tenant may occupy the building, including the design and repair of the expansion
joints and elevator shafts, which the Commonwealth will make but were outside the
scope of this project.
DIRECT COSTS (INCLUDING GENERAL CONDITIONS)
Overhead and Profit (7.5%)
Contingency (15%)
Escalation (3%)
Architectural, engineering and sub consultant fees (7%)
SUBTOTAL
COST PER SQUARE FOOT
$ 219.18
ALTERNATES
Mezzanine Allowance
Tenant Interior Allowance - Inclusive of Equipment and Lighting
Caf(s) Allowance - Inclusive of Equipment and Lighting
Day Stall Allowance
Office Allowance
SUBTOTAL

$ 4,391,710
$ 329,378
$ 708,163
$ 162,878
$ 391,449
$ 5,983,579

$ 160,048
$ 1,085,175
$ 125,108
$ 213,840
$ 69,615
$ 1,653,786

SUBTOTAL DIRECT COSTS AND ALTERNATES

COST PER SQUARE FOOT
$ 279.76

$ 7,637,365

START UP AND PRE-OPENING COSTS (see details below)

$ 667,000

OPERATING LOSS PROJECTIONS (see details below)

$ 265,000

FUNDRAISING EXPENSES

TBD

TOTAL

$8,569,365

46

Start Up Budget and Pre-Opening Costs

Labor
Manager - 1 year prior to
opening
Assistant Manager - 4
months
Facilities Manager - 2
months
Maintenance Staff - 2 weeks
Subtotal
Benefits 30%

$5,000
$125,000
$37,000

Labor Total

$162,000

$20,000
$10,000

$25,000
$75,000
$100,000

Leasing Expenses
Tenant Coordination
Development
Coordination
Graphics and
Communication
Office Set-up
Legal leases, forms,
documents
Accounting set up
systems
PR and Opening
Campaign

Fundraising Campaign

$90,000

$25,000
$30,000
$15,000
$10,000
$25,000
Subtotal

$305,000

Total with Labor

$467,000
(5% - 10% of total
campaign costs)

Operating Loss
Projections (see
proforma)
Start-Up Capital Reserve

$265,000

$200,000

TOTAL START UP COSTS

$932,000

47

Funding Guide
In spite of the economic challenges we are facing, public markets are proving to be
excellent investments which spur local job creation and provide venues for small scaled
businesses that are priced out of traditional retail projects built to suit larger tenants.
More money is being raised as a result of decades of continued growth in public
markets and foundations and government agencies see the evidence that markets help
people and communities to sustain themselves.
While there are no specifically designated capital funds for public markets, many market
projects have received Federal (capital and/or operating) funding from sources listed in
this section. (Resource Portfolio X)
The timing for the public market could not be better in terms of interest and credibility for
the project.

Federal Funding Sources

United States Department of Agriculture
USDA Rural Cooperative Development Grants
http://www.rurdev.usda.gov/RD_Grants.html
Grants are made to non-profit organizations for establishing and operating centers for
cooperative development for the primary purpose of improving the economic condition
of rural areas through the development of new cooperatives and improving operations
of existing cooperatives.
USDA - Farmers Market Promotion Program (FMPP)
www.ams.usda.gov/fmpp
This grant program was designed to increase domestic consumption of agricultural
commodities by improving and expanding, or assisting in the improvement and
expansion of, domestic farmers markets, roadside stands, community-supported
agriculture programs, and other direct producer-to-consumer market opportunities; and
develop, or aid in the development of, new farmers markets, roadside stands,
community-supported agriculture programs, and other direct producer-to-consumer
infrastructures.
For a full list of Federal sources of funding for public markets visit the USDAs Know
Your Farmer, Know Your Food website at http://www.usda.gov/knowyourfarmer
United States Department of Commerce
Economic Development Administration
Apply directly to the appropriate EDA regional office to discuss proposals and obtain
additional information.
48

For contacts specific to Boston and New England go to:

http://www.eda.gov/PDF/DevDirectory/EDA_Dir_Sec3(MA).pdf
Federal Appropriations
Some markets have been successful getting significant direct appropriations (earmarks)
from their United States Senator or Congressional Representative (i.e. Toledo Farmers
Market, OH; River Market, Little Rock, AR).

State and Local Foundations

Many markets have raised a majority of their capital costs from local foundations. For
instance, the Milwaukee Public Market raised $5.4 million out of a total of $10.5 million
from local foundations. In Boston, this will likely prove to be a valuable source of funds
as well. (Resource Portfolio W)

National Foundations
The following national foundations have also provided grants to market projects, in
certain cases the impetus for doing so is because they are based near the market.
Ford Foundation
Kresge Foundation
C S Mott Foundation
McKnight Foundation
Kellogg Foundation
Catholic Campaign for Human Development
Bank of America Foundation
Local Initiatives Support Corporation
Robert W. Johnson Foundation

Recommendation
Capital campaigns can be time consuming and costly and the public market operator
must allocate a majority of its time to developing and implementing the project for a
2012 opening. Fundraising for the project is best done by hiring (at a cost) an outside,
professional fundraiser, or working with volunteers to take the pressure off the limited,
pre-opening market staff.
With a total need of $8.5 million, in addition to the other necessary capital improvements
to the building, PPS recommends that Boston have a modest, online public fundraising
campaign for small donors and seek the good majority of funds from large donors.
Other public markets have raised several millions of dollars from two or three
foundations.

49

Resources
W_List of State and Local Foundations
X_Funding Sources from Sample Public Markets

50

51

START UP OPERATION REQUIREMENTS AND

PROCEDURES
The operator, once selected, will have a long list of duties to accomplish before the
market opens, including hiring a market manager one year out and adding staff as
needed up until opening day.

Steps for Opening the Market

Pre-Opening Requirements
1. Formation of oversight committee
Establish mission, guidelines and oversight (Resource Portfolios P and Q)
2. Oversight committee issues guidelines for market development, operation and
oversight
3. The Commonwealth issues RFP and selects the operator
4. MassDOT executes lease with the market operator
Key terms:
o Oversight and development roles
o Access, safety and operational issues
o Building Interface Issues
o Parking
o Maintenance vs. Capital Costs
5. Operator hires manager (Resource Portfolio V)
Up to one year before opening
Begin leasing and outreach
Coordinate operations
Set up office
Set up systems
Hire staff
Open the market for business
6. Oversight committee and operator establish development team
Point persons for development phase
Design/Architecture/Engineering
Financial coordination
Tenant coordination
Construction management
Permitting
Role of manager/operator
7. Operator establishes policies and documents, approved by oversight committee
Rules and Regulations (Resource Portfolio T)
Lease applications
Tenant leases (Resource Portfolio U)
Tenant Design Criteria (Resource Portfolio K)
52

 Tenant allowance
Establish hours of operation
8. Establish District Relationships
City Departments (health, safety, fire)
Haymarket Pushcart Association
MBTA Station
North End
Rose Kennedy Greenway

On-Going Operating Requirements

1. Tenants
Lease maintenance
Billing
Relations
Enforcement and inspections
2. Facilities
Maintenance systems
3. Financials
Accounting systems
Reports to operators board of directors and the markets oversight
committee
Goal setting
Long range capital planning
Fundraising
4. Communications
Customer relations
Media Relations
Events, promotions and advertising
Education
Outreach to partners
5. Staff
Hire
Train
Manage
6. Reports
Operators board of directors
Oversight committee

53

Required Permits to Open and Operate the Market and Individual

Tenant Spaces
There are a series of permits and regulations governing the following:
1. Public Market Building
2. Permanent Tenant Spaces
3. Temporary Daystall Spaces
NOTE: The Health Division of the Boston Inspectional Services Department
administers the Massachusetts State Sanitary Code in Boston. The Massachusetts Sate
Sanitary Code regulates food service practices and restaurant management - City of
Boston website

Public Market Building

Parcel 7W is the official site designation which lies within the Central Artery Special
District (Boston Zoning Code, Article 49) and is also governed by the adjacent
Government Center/Market Districts (Boston Zoning Code, Article 45).
Due to Parcel 7s highly sensitive functions market plans will need to be reviewed by the
following agencies:
MassDOT
Federal Highway Administration
Construction of the Public Market would be categorized under the Small Project
Review and requires the following:
Exterior Changes - Boston Landmarks Commission, Massachusetts Historic
Commission
Interface with MBTA - MBTA
Design
- Boston Redevelopment Authority (BRA)
Site Plan - BRA
Sign design/location - BRA
Zoning Compliance - BRA
Once the above are given preliminary approval from the BRA the project then moves
to the Inspectional Services Department (ISD) for the following:
Construction drawings - ISD
Floor plans - ISD
Water and Sewer Plans - ISD
Electric plans - ISD
Fire Protection- Boston Fire Department
Cooking and Exhaust Systems - Boston Fire Department
Place of Assembly Permit - Boston Fire Department

54

Once construction plans are approved the following permits are needed:
Building Permit ISD
Electrical Permit - ISD
Plumbing Permit - ISD
Gas Permit - ISD
Sidewalk Caf Permit- Public Improvement Commission, City of Boston
Certificate of Occupancy - ISD
Site Cleanliness ISD
Also required:
Signed affidavits of architects and engineers
Performance Bond
Name of Contractor

Permanent Tenant Spaces

Permanent stall spaces will be built-out by the tenant and fully equipped for display and
various levels of food production depending on what is being sold. Tenant is
responsible for putting together a comprehensive plan for its leased premises showing
all proposed improvements including display fixtures, counters, materials, equipment,
plumbing, electrical, signage and lighting. Market management will create a Tenant
Design Criteria to help guide the tenant in terms of permitted equipment, materials,
uses, heights, setbacks and submission requirements.
The following is a synopsis of the permit process from the Boston Health Divisions
website: http://www.cityofboston.gov/isd/pdfs/fsapp.pdf

Plan Review Procedures (for a new establishment without a current permit)

1. Fill out a Health Division Application
2. Pay appropriate fees
3. Have three (3) copies of plans for review
4. Submit one (1) copy of all new equipment specification forms from
manufacturer with NSF/UL approval. NSF standard #7 for refrigeration
5. Submit one (l) copy of menu w/consumer advisory if appropriate
After Health Division Approval
1. Submit stamped plans to Building Division w/ Building Permit applications and
appropriate fees
2. Building permit has to be signed off by appropriate inspectors
3. Apply/obtain the appropriate Certificate of Occupancy and/or Certificate of
Inspection from Building Division
4. Bring copy of CO/CI to Health Division
5. Request a "Pre-Opening" inspection from the Health Division
6. Submit a copy of the Food Manager Certification & Worker's Compensation
Insurance to the Health Division
55

Tenants must also show proof of the following to the Health Division:
Signed Permission from Landlord (the lease document will also suffice)
Proof of Workers Compensation Insurance
Federal Tax ID Number (or social security number)
For additional details and information regarding Food Safety and Processing Regulating
Documents:
US Food and Drug Administration Food Code http://www.fda.gov/food/foodsafety/retailfoodprotection/foodcode/default.htm
Massachusetts Sanitary Code
http://www.mass.gov/?pageID=eohhs2modulechunk&L=5&L0=Home&L1=Provid
er&L2=Guidance+for+Businesses&L3=Food+Safety&L4=Retail+Food&sid=Eeoh
hs2&b=terminalcontent&f=dph_environmental_foodsafety_p_food_reg_fact_shee
t&csid=Eeohhs2
Note: Fish and Seafood tenants will undergo additional compliance requirements from:
National Shellfish Sanitation Program (part of the FDA)
And will need to obtain additional permits:
Retail Seafood Dealer Permit from the MA Department and Division of Marine
Fisheries
(Wholesale Seafood Dealers are permitted to open one retail seafood outlet)

Temporary Daystall Spaces

Daystall spaces will be located in open areas for farmers and others to set up on a daily
basis, using tables, pop-up tents and other simple forms of display that would be
removed at the end of the day. Daystall spaces will be located inside the market and
outside of the building under the market canopy.
The MA Food Protection Program for farmers markets provides some guidelines and
permitting requirements:
http://www.mass.gov/Eeohhs2/docs/dph/environmental/foodsafety/farmer_market_guid
elines.pdf
Permits required for the City of Boston, in addition to State and Federal requirements for
producers where applicable (i.e. meat, dairy):
All vendors - Farmers Market Retail Permit
Value-added and prepared foods - Boston Health Division Permit
Farmers selling uncut fruits and vegetables - No Boston Health Division Permit
required
Shellfish - Retail Dealers Seafood Permit pilot program at markets
Wine, Beer and Spirits
Selling alcohol has its own unique permitting procedures. Permits for alcohol are
required from the Commonwealth and local licensing authorities. Depending on the
beverage, vendor and type of operation (caf, retail, etc), specific permits will be
56

required. The following introduction to the process is taken from the ABCC website
http://www.mass.gov/abcc/licensing.htm):
In Massachusetts there are retail level and state level alcoholic
beverages licenses. Retail license applications as well as any license
changes require the prior approval of both the local licensing authorities
(the "LLA") and the Alcoholic Beverages Control Commission ("ABCC").
All general on premises, restaurants, taverns, clubs, veterans clubs,
hotels, package, stores, conveniences stores, and supermarkets require a
license that has been granted by the LLA and approved by the ABCC. The
ABCC approves approximately 13,000 such transactions a year.
However, the ABCC is the sole agency responsible for approving and
issuing state licenses. All manufacturers, wholesalers and importers, outof-state suppliers, brokers, salespeople, warehouses, planes, trains,
ships, ship chandlers and every motor vehicle commercially transporting
alcoholic beverages in Massachusetts require an ABCC issued license or
permit. The ABCC issues approximately 10,000 such licenses and permits
each year.

57

ONGOING OPERATIONAL COSTS

Goals
The market opens debt free, covers all operating expenses and builds a fund for major
repairs and improvements.

Methodology
Annual operating expenses were calculated and based on leasable square footage of
14,000 square feet.
Rent levels are recommended as follows:
Daystalls: range of $30 - $50 per space, per day, average $40. Rents will vary based
on season and day of the week.
Permanent stalls: range of $65 - $125/sq ft, per year.
The lowest base rent of $65/sq ft is for fresh food tenants with no value added
products, for example a butcher or a produce seller.
Base rents increase as the proportion of merchandise a tenant sells consists of
value-added components such as cooking, smoking, baking, curing and other
processes that add value and increase the profitability of a raw or fresh product,
for example a baker or cheese maker would pay a higher base rent
(recommended $75/sq ft) than a produce seller, or butcher.
The highest rents would be paid by tenants selling prepared, ready to eat foods.
As we are not suggesting that any tenant should be permitted to only sell
prepared foods, the highest rent of $125/sq ft would be averaged into a base
rent, depending on how much space is devoted by a fresh food tenant for selling
prepared foods. For example, if the fishmonger had 20% of his or her space
devoted to selling chowder or fish sandwiches, the rent would reflect a blended
$65/sq ft for the 80% of space used for fresh fish, and $125/sq ft for the 20% of
space devoted to selling prepared foods resulting in a base rent of $77/sq ft.
No tenant should be permitted to sell only prepared, ready to eat foods so, in
fact no tenant will be charged $125/sq ft.
Rent Differentiation:
There are other factors than product to consider when determining base rents such as:
Location certain areas of the market will have higher traffic and be worth more
Size small spaces are generally rented for a higher base rent than larger
spaces
Investment a tenant making a large investment may be given an incentive of
lower rent to help them get started
Disincentive for non-local tenants selling a high percentage of non-local
products should pay a higher rent than those selling the same local products.
58

Corners corner spaces have more frontage and are worth more
Volume - rents increase as volume increases this is an option that can be
considered, but will require monitoring with percentage rents.

Comparing Market Rents to Storefront Rents:

In a public market tenants only pay for the space they use, and as a result tenants can
operate in spaces that are much smaller than a storefront where you pay for entrances,
public spaces, seating, bathrooms, loading areas, and aisles, etc. Public market
tenants typically operate in about half the space that would be used in a storefront.
Therefore, market rents, which seem higher on a square foot comparison to storefronts,
are in truth very competitive and often less expensive when you look at the base rent
numbers. As a way of reinforcing this point, the proposed market is 27,000 square feet,
yet only 14,000 square feet (almost half) is rentable to tenants.
Typical Monthly Base Rent Profiles:
Scenario 1 Fish monger - fresh fish only, no prepared foods
Stall Size - 400 square feet
Base Rent - $65/sq ft, per year
Monthly Base Rent - $2,166
Utilities separately metered, you pay for what you use
Scenario 2 - Fish monger - fresh fish 80%, prepared fish 20%
Stall size 400 square feet
Base rent - $65/sq ft for 320 square feet, $125 for 80 square feet
Monthly Base Rent - $2,566
Utilities separately metered, you pay for what you use
Scenario 3 Baker
Stall size 300 square feet
Base Rent - $75 per square foot
Monthly Base Rent - $1875
Utilities separately metered, you pay for what you use
Note: In addition to Base Rent, tenants will pay for their utilities and increases in annual
operating expenses over the Base Year (the first year of operating the market).
Based on potential sales of between $15.5million - $19.5million (and this is only for
fresh foods, the totals do not include any sales of prepared foods so the actual total
will be higher, based on the merchandise mix) from the Huff Gravity Model and
knowledge of other markets in comparable locations, public market tenants will be able
to afford, on average $75/sq ft and higher.
As a way of measuring fair rents on average, a tenant can afford to pay 6.5% of
sales, i.e.:
59

Base Rent of $65/sq ft represents 6.5% of $1000in sales per square foot =
$14million annual sales
Base Rent of $70/sq ft represents 6.5% of $1076 in sales per square foot =
$15million annual sales still below the market potential of $19.5 for fresh food
sales alone.
Using the same 6.5% as an affordable percentage of sales as rent - the projected
potential of $19.5million in annual market sales indicates achievable rents of
$90/sq ft.
If the average market customer spends $20 per visit, annual sales of $15 million
amounts to less than 750,000 shoppers per year or roughly 14,500 per week.
The market is (predictably) going to attract well in excess of that.

Key Findings
Based on consumer demand projections and knowledge of other markets, we are
confident the market can comfortably support on average $75/sq ft rent levels
and cover all operating expenses within three years possibly sooner.

Challenges

As noted in the Design chapter, the loading dock is very tight and without
alternative loading/unloading options, the market may need additional labor to
keep things running smoothly.
Getting accurate tenant financial information is notoriously difficult in markets,
making it hard to establish fair rent levels.
Since prepared food tenants operate with a higher profit margin, they can pay
more than the $65 base rent. It is always a dangerous temptation, though, to
lease space to those who can pay a higher rent.
Rent levels should be differentiated based on size, product, location, investment,
experience, importance to the markets mission and popularity.
The building itself presents some challenges with water and exhaust. Conditions
may push some fit-out costs higher for some tenants depending on their product
line and location.

Recommendations
Rent

Initially, we recommend that base rents start at $65/sq ft with increases based on
actual sales and costs to operate the market at its most auspicious level.
Higher base rents should be charged for vendors with higher profit margin items,
for example prepared foods and value added items.
Rents should also be differentiated based on investment, location, size, product
relevance to the markets mission, educational component and length of lease.

60

Rent is a tool for operating the market Any surplus operating funds from the
market should be used for capital replacement and/or educational programs with
wide reaching benefit to Massachusetts farmers and consumers.
Triple Net Rents for indoor permanent tenants - each will pay a base rent, utility
usage (metered), marketing fee and a share of increases in operating expenses
over the Base Year As operating expenses increase, tenants should pay a
proportional share of those increases. (Resource Portfolio Y)
As sales increase, base rents should rise to enable management to provide the
necessary services to operate the market with efficiency and keep it clean, safe
and comfortable for all.
Percentage rents are a transparent method of setting fair rents, and this is an
option that can be considered. However, many tenants will prefer a higher base
rent instead.
It is recommended to keep rents lower in the beginning and let tenants get a
good start.
Outdoor, temporary tenants pay an average daily rent of $40 slower days could
be less, and busier days could be higher.

Note: Additional income from indoor storage and the mezzanine may be possible
once the final layout is complete.

Expenses

The market will need a full-time staff to oversee all aspects of the market.
As needed, the market should increase labor expenses, particularly with regards
to cleaning and maintenance as warranted by the traffic flow.
Market staff could also be paid an incentive bonus if the market performs well.
Year 1 of the Operating Budget should be considered the Base Year and all
increases in operating expenses should be rebilled proportionately to the tenants.
(Resource Portfolio Y)
It is recommended that the market establish a capital reserve fund once it breaks
even.

61

Operating Pro Forma

The operating pro forma shows the market breaking even in Year 3 at an average base rent of
$75/ sq ft.
KEY ASSUMPTIONS
Operating Months per Year

12

VACANCY
RATES
Year 1

Operating Days per Month

30

Year 2

15%

Fringe Benefits (%)

20%

30%

Year 3

5%

Inflation Rate

2%

Year 4

5%

Rent Growth over Inflation

2%

Year 5

5%

Rentable SF

14,000 SF

Base Rent

$75/sq ft
(average)

INCOME

YEAR 1

Indoor Rents

$ 1,050,000

$ 1,092,000

$ 1,135,680

$ 1,181,107

$ 1,204,729

Outdoor Rents

127,500

Common Area Charges CAM

YEAR 2

100,000

YEAR 4

130,050

YEAR 5

132,651

135,303

22,610

45,672

69,195

93,188

$ (209,999)

$ (163,799)

(56,783)

(59,054)

(60,235)

940,001

$ 1,078,311

$ 1,254,619

Manager

90,000

91,800

93,636

95,509

97,419

Assistant Manager

65,000

66,300

67,626

68,979

70,358

Clerical

40,000

40,800

41,616

42,448

43,297

Facilities Manager

55,000

56,100

57,222

58,366

59,533

Daystall Manager

50,000

51,000

52,020

53,060

54,121

Maintenance 4 f/t 4 p/t

$ 220,000

224,400

228,888

233,466

238,135

Farm & Fish

15,000

15,300

15,606

15,918

16,236

Vacancy Lost
Total Income

YEAR 3

$ 1,323,899

$ 1,372,985

EXPENSES
Personnel

Inspectors

Security 2 p/t

50,000

51,000

52,020

53,060

54,122

Fringe Benefits

175,500

179,010

182,590

186,242

189,967

Advertising/Events

80,000

81,600

83,232

84,897

86,595

Office

10,000

10,200

10,404

10,612

10,824

Legal/Professional

5,000

5,100

5,202

5,306

5,412

Insurance

20,000

20,400

20,808

21,224

21,649

Fees/Permits

3,000

3,060

3,121

3,184

3,247

Net Utilities

120,000

122,400

124,848

127,345

129,892

Garbage

60,000

61,200

62,424

63,672

64,946

Maintenance and Repair

30,000

30,600

31,212

31,836

32,473

Pest Control

12,000

12,240

12,485

12,734

12,989

HVAC Maintenance

10,000

10,200

10,404

10,612

10,824

Alarm

8,000

8,160

8,323

8,490

8,659

RE Taxes - pass thru to

tenants
Supplies

12,240

12,485

12,734

12,989

Total Expenses
Net Operating Income (NOI)

12,000
$1,130,500

$ (190,499)

$1,153,110
$ (74,799)

$1,176,172
$

78,447

$1,199,695
$

124,204

$1,223,688
$

149,296

62

Resources
Y_Sample Common Area Maintenance Costs

63

CONCLUSION
Based on our research and experience we believe that a public market in Boston will be
a wonderful addition to the City and a wise use of public and private funds. As
previously mentioned, the public market has the potential to capture between $15.5 and
$19.5 million in fresh food sales. There are over 100 local farmers, fishermen/women
and specialty food producers interested in selling at the market on both a permanent
and seasonal basis. The public market will also create jobs for residents of
Massachusetts. In addition to the jobs that will be created to staff the market, permanent
vendors will be employed and will employ full and part-time staff and farmers and local
food producers will hire full and seasonal employees to work at daystalls. The potential
increased demand for market products will also most likely create jobs in the states
agriculture, seafood and value-added industries.
The publics enthusiasm is high for this project and many see this market as both an
opportunity to showcase the regions bounty and create a major community gathering
space along the Greenway. Customers will be looking for high-quality, well priced items
that are unique to the public market and if the market operator is successful in creating
and maintaining this standard of excellence the market is poised to become a major
community destination that is currently missing from the Boston landscape.
One of the markets proposed goals is to highlight and support the regions agriculture
and fisheries economy. With this goal in mind, the Commonwealth and the City of
Boston have an opportunity to invest in a project that will be a model for rest of the
country. The public market in Boston could greatly strengthen the region economically
and raise the publics awareness of the importance of buying local. As such, the public
market will be a major commitment to this regions historic agriculture and fishing
industry.
There are considerable bureaucratic challenges facing the public markets development.
Three distinct governments Federal, State and City will need to be involved and
coordinated as planning moves forward. There is a lot to do establish an oversight
committee, create a lease, solicit an operator, begin construction, attract tenants, etc and opening the market will take time. Maintaining momentum and moving the project
forward is vital, and while construction and behind the scenes development progresses,
the public must be kept engaged in the process. The publics appetite is ravenous for
this market, as seen in the success of the public workshop, and community involvement
and communication to the public, including special events focusing on the future market,
should be planned until the market opens.
Strong supply, demand, a great location and massive public and government support
puts this project at a great starting point. Implementing the market will take time,
resources and commitment, but our hope is that on opening day and beyond, the
investment in the public market will reap benefits many times over, not just for Boston
but for all of Massachusetts.
64