HomeMy WebLinkAboutCSD-08-022 - Market Options
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Community Services
Report To:
Date of Meeting:
Submitted By:
Prepared By:
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
Community Services Committee
March 3, 2008
Keith Baulk, Director of Enterprise
Market Options Project Team
Ward 2
February 14, 2008
CSD-08-022
MARKET OPTIONS
RECOMMENDATION:
That a public consultation process be undertaken to receive citizen and stakeholder
feedback regarding the "functional use" of the vacant portion of the upper level of the
Market based on three (3) potential solutions which includes arts and culture uses as an
interim strategy, original vision of small independent retailers, and retain the current
status while continuing attempts to recruit a mid-size grocer or larger non food retailer,
and;
That staff report back to Committee within 90 days with the results of the consultation
and recommendation for next steps and;
That staff also be directed to propose a review process for Council consideration to
address the future "form of governance"; said process to include vendor, stakeholder
and citizen reps and commence once the upper level use strategy is determined, and
further;
That the City take no further action with regard to both the private sector management
option and the sell option for the Market.
BACKGROUND:
In June staff circulated report CSD-07-063 recommending that staff investigate the concept of
an interim Arts and Culture Centre to immediately maximize use of the upper level of the
Market. The concept was based on the Arts Centre as a temporary use of the empty space on
the upper level to support the transition to a vibrant permanent urban market facility on that level
in approximately 3 to 5 years.
At that meeting, Council directed staff to investigate the option of an interim Arts and Culture
Centre but also directed staff to investigate other options. Two additional options were put
forward. Staff was directed to determine whether there would be interest by a private
management firm to operate the facility and also revisit the concept of a mid-scale grocer filling
the unused space.
Report No: CSD-08-022
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In September 2007, Council met to review the results of the 2008 budget public consultation.
During this meeting, it was recommended that staff investigate the potential of selling the Market
outright to the private sector.
The original vision of utilizing the upper level to support a collection of small independent
grocery vendors has also been retained as an option. While staff did report in June 2007 that a
request for proposals coordinated by the City's consultant, Cam Hawkins and Associates did not
produce enough viable, quality vendors to support moving in this direction at that time, it does
remain an option.
On November 5th, 2007, Community Services Committee approved another option at the
request of a collection of current Market vendors; a vendor based co-operative operating the
Market facility.
As a result, staff had a total of six (6) options to investigate. A summary of the options and
actions are as follows:
1. Develop a business case to determine the viability of the upper Market as an Arts and
Culture Centre.
2. Investigate the potential of private sector management of the Market business/facility.
3. Re-test the original concept of having a number of small independent retailers to fill the
space.
4. Investigate whether a mid-scale grocer or deli may be interested in leasing the space.
5. Determine the viability of the sale of the Market.
6. Permit a collection of Market vendors to submit a proposal for a vendor co-op.
A number of project teams were formed to investigate the potential of each option and develop
option specific reports. For example a project team was struck to work on the business case for
the Arts Centre concept, a stakeholder based task force was formed to develop the RFP
document for private sector management, and the Project Administration Division began work
on the Market "sell" investigation.
On September 24, 2007, Community Services Committee supported 4 key outcomes developed
by the Market RFP Task Force. The outcomes would be requirements to be delivered by a
private management firm if they were submitting an Expression of Interest to manage the
Market facility/business. In fact, Committee members indicated these four outcomes could be
used as measures in analyzing any of the options previously described. The 4 key outcomes
ratified are as follows:
1. Continue with the successful Saturday Market.
2. Provide a vibrant urban full time Market on the upper level that may include food or other
uses compatible with the viability of the downtown and service to its citizens.
3. Improve the financial position over time.
4. Create a destination that could continue to support re-urbanization of east end
downtown.
A significant amount of work has taken place and the detailed information on each of the 6
options is provided in this report.
Report No: CSD-08-022
3
REPORT:
A number of major success measures for the Market block have been achieved as originally
envisioned. The Market block as a major catalyst project is built out and the private sector retail
components are operational. The 68 unit Market loft development is approaching 900/0 sold. The
Saturday Market is operating at 1000/0 capacity with almost no vendor turnover and these
vendors are patronized by thousands of shoppers each week.
The major difficulty is that the full time Market has not advanced as expected and as a result it is
impacting the Market's financial performance. As a result council directed staff to investigate six
(6) options to improve its operational and financial performance.
This report provides detailed information with respect to 6 options that Council directed staff to
investigate as potential solutions to move the Market forward. It became clear during the review
that each of the original 6 options could be put into one of two categories. Three (3) of the
options focus on the "functional solutions" for use of the upper level of the Market and three (3)
options focus on the "form of governance" of the Market. A summary of the two categories is as
follows:
Market Options Categories
Sell Market
Private sector
Vendor co-o /Board
A significant amount of work has taken place on each of the options which has led to the
development of the report recommendation. The report recommends providing the opportunity
for public feedback on the 3 upper level "functional solution" options. The report also
recommends eliminating 2 of the "form of governance" options from further consideration
(private sector management and sell) and proposes development of a process; said process to
ultimately include vendor, stakeholder and citizen reps to further consider the benefits and
implications of other governance models (which could include a vendor managed co-op or
service board). In essence then, the report recommends that form follow function. In other
words "form of governance" dialogue will only take place after public input is complete and
Council directs staff to pursue one of the "functional solutions" for the upper Market.
A summary of the detailed findings for each of the six options council directed staff to review is
attached as Appendices 1 to 6 in the report. A high level overview of each option is provided in
the following text.
Arts and Culture Uses
The Arts and Culture Uses option is an interim strategy to assist in the transition to a more fully
functioning retail Market on the upper level in approximately 3 - 5 years. Since no mid-scale
grocery or deli retailer has expressed interest in the Market location at this time, this option was
proposed as a viable interim strategy based on the thought that it may take some time to have
Report No: CSD-08-022
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all the factors in place to support either a successful mid scale grocery operation or to support
the original vision of small independent full time vendors.
Council directed staff to complete the business case for the arts and culture incubator concept.
The business case is attached as Appendix # 7. The business case includes the "Summary
Report of the Needs Assessment" that was completed to test the demand and viability of arts
uses at the Market. The Waterloo Regional Arts Council (WRAC) completed the needs
assessment.
The business case supports arts and culture uses for the upper level of the Market as part of a
viable interim strategy to develop a vibrant urban Market over time. However the original
concept of creating tenanted space for working artist's production as a primary use was not
found to be an overwhelming desire at the Market. What is strongly suggested in the needs
assessment is that the space be used in adaptive, flexible and creative ways by multiple users.
What this means is that the space would serve the arts community well as programmable space
for one-off activity or programs as opposed to more permanent and expensive production space
that you would see at Globe Studios for example. The programs would be provided by
community arts and culture partners providing activities such as workshops, arts summer
camps, meetings, gallery exhibits, and performance or rehearsal space.
The Arts and Culture concept could be modeled much like the City's neighbourhood centres.
Community arts groups would develop the programming and utilize space on a rental basis the
same way the neigbourhood groups use community centres. Some of this space could continue
to be used for active selling by artisan or craft vendors on Saturdays.
This option requires some capital investment and would not improve the Market bottom line.
Retail Options
Staff undertook a process to test the viability of two retail options; a mid-scale grocer and
reverting back to the original vision of small independent full time vendors.
Work on the mid-scale grocery option produced an interested party but after initial dialogue the
proponent withdrew their proposal. All other mid-scale grocers who were contacted indicated
they were not interested in the Market at this time but at least one suggested they may be
interested in further dialogue in a couple of years. Attached as Appendix # 8 is a matrix showing
the results of the grocer/deli contacts.
The City could retain the mid-scale grocer as an option for future consideration either by
implementing Arts and Culture uses in the interim or leaving the upper level in its current
underutilized state while efforts continue to recruit a grocer. Although Council did not direct staff
to pursue other larger non-food retailers to fill the space, this could be considered in the future
because it improves the potential of finding a single tenant to lease the space. In any event, this
approach is risky because there are no guarantees that the space would be filled by one single
retailer even in 3 to 5 years.
The other retail option was to revisit the original concept of recruiting a number of small
independent full time vendors to fill the upper level Market. These vendors would be similar in
nature to the initial group of full time grocery-type vendors who started on the upper level of the
Market when it first opened. A number of potential full time vendors were approached and there
are a total of 8 food and produce vendors who have expressed interest, albeit most of the
interest is conditional. Appendix # 9 provides a summary of the findings relative to the re-testing
Report No: CSD-08-022
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of interest in the Market by these small independent vendors. It is clear that this approach, on its
own, will not produce enough critical mass to move in this direction without some risk.
The concept of small independent vendors as described in the above paragraph as a solution
would appear to be much more viable if the current lower level vendors are able to deliver a
mini-market throughout the week by "clustering" their goods. There has been some discussion
by the vendor representatives that this concept may be presented to committee as a solution for
the upper level Market. The concept of the lower level vendors clustering their products to sell
on the upper level though the week has merit either on its own, or in combination with the other
small vendors who have expressed an initial interest. This approach is certainly worthy of further
dialogue. This approach also has the potential of creating the critical mass of food products
necessary to generate ongoing consumer interest and traffic on a full time basis. However, if a
critical mass of vendors is not achieved, there is a risk of losing shopper interest, resulting in
vendor turnover.
Public Feedback
Public feedback is being sought for two reasons. One, it can help form the Market analysis as
to the viability of the various options and two, consultation with citizens to both inform and solicit
input on key strategic decisions is a Corporate priority. If Council directs staff to undertake the
public consultation, staff would provide the results of the consultation within 90 days.
Functional Solution - Upper Level
Staff proposes it is important to receive direction on the preferred "functional use" of the upper
level as a first step. The following matrix shows the relationship between the 3 upper level
solution options as they could be presented for public feedback:
UPPER LEVEL "FUNCTIONAL SOLUTION" OPTIONS
1 . Small independent vendors
. Vendor cluster (mini-Market)
. Owner-operated vendor space (7 food/3 craft)
. Combination of both
2. Interim Arts & Culture uses
tt
. Mid-size grocer or larger non-food retailer
. Original vision - small vendors
3. "As is" until recruit mid-size grocer or larger non food
retailer
Form of Governance
It is recommended the "form of governance" for the Market not be dealt with at this time but
once a decision is made on the preferred functional solution for the upper level that council
should consider alternative management models. However it is also recommended that no
further action be taken with regard to selling the facility or Market business. Similarly, it is also
recommended that no further action be taken regarding private sector management of the
Market. A request for proposals for a private sector operator was sent to two short list
candidates but produced no detailed proposals.
Report No: CSD-08-022
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It is suggested that staff propose a process; said process to include vendor, stakeholder and
citizen reps that would ultimately lead to options for alternative management models for Council
consideration. The concept of considering an alternative management model after the new
Market was up and running for a period of time was advocated in a report by Coriolis Consulting
(attached as Appendix 10).
COMMUNICATION:
Staff is recommending that a broad based public consultation take place that would both inform
and allow citizens and stakeholders to input on the three (3) upper level solutions that remain.
The feedback would form part of the Market analysis regarding the viability of each of the upper
level solutions. The format would be similar to other recent major project consultations and
include open house(s), web surveys, shopper surveys, and dedicated telephone line feedback.
FINANCIAL IMPLICATIONS:
There are only minor financial implications relating to the costs of undertaking the public
consultation. The budget to undertake the consultation including the preparation of materials
would be less than $2,000.
CONCLUSION:
The results of the review of the six (6) options as directed by Council are provided in the report.
The report recommends providing the opportunity for public feedback on the 3 upper level
"functional solution" options. The report also recommends eliminating 2 of the "form of
governance" options from further consideration (private sector management and sell). In
addition, it is recommended that staff propose a process, with the proposed process to include
vendor reps, stakeholders and citizen reps to further consider the benefits and implications of
other "form of governance" models (which could include a vendor managed co-op or service
board). The report recommends that the governance review take place after the public input is
complete and Council directs staff to pursue one of the solutions for the upper Market.
Keith Baulk
Director of Enterprise
Appendix 1
CDticn #1 - Interim Arts and Culture Centre
Overview of Concept
In June of 2007 staff proposed the development of a business case to determine the viability of
using the under utilized space on the upper level of the Market as an arts and culture incubator
centre (CSD Report 08-022). The intent was to pursue this approach as an interim, transitional
strategy making good use of the space, generating traffic and assisting in the development of a
fully functional full time urban Market on the upper level in approximately 3 to 5 years.
The initial thought was to provide a full range of opportunities serving both working artists
production needs and arts and culture programming activity. It was suggested the space could
be used for tenanted artist studios, performance and rehearsal space, artist display space,
workshops and events.
Summary of Findinas
The business case supports arts and culture uses for the upper level of the Market as part of a
viable interim strategy to develop a vibrant urban Market over time. However the original
concept of creating tenanted space for working artist's production as the primary use in the
Market facility was not found to be an overwhelming desire in the Market facility. What is
suggested in the needs assessment is that the space be used in adaptive, flexible and creative
ways by multiple users. What this means is that the space would serve the arts community well
as programmable space for one-off activity or programs as opposed to more permanent and
expensive production space that you would see at Globe Studios for example. The programs
would be provided by community arts and culture partners providing activities such as
workshops, arts summer camps, meetings, gallery exhibits, and performance or rehearsal
space.
In essence the operating model could be viewed in a similar way to the City's neighbourhood
based community centres; as an arts and culture community centre serving the broader arts
community. As with any community centre it would rely on partnerships to provide programming
in order to be successful.
The Strateaic Linkaaes
The need for Arts and Culture space in the Downtown has been well documented. The reason
why this option does serve a number of corporate objectives is as follows:
1. This concept responds to Culture Plan II recommendations #19 and #20 which identify
the value of arts and culture uses for underutilized space downtown along with the need
to develop partnerships to achieve this goal. The above recommendations also propose
that the City consider the development of a "culture corridor" comprised of arts and
culture venues.
2. This kind of approach was also supported by the results of the initial feasibility review in
2003 prior to construction of the new Market. There was strong support from the
community to include an arts and culture component in the new Market.
3. The 2006 Artscape Report provided a preliminary assessment of Kitchener's capacity for
supporting a creative community. "Re-purposing a portion of the Market " was a
suggested strategy for building arts and culture capacity in the downtown
1
4. Kitchener's Downtown Strategic Plan, Volume III recommends arts and culture growth
downtown through the use of underutilized spaces for multi-discipline arts activities, and
through the development of partnerships to enable this.
5. The City's Economic Development Strategy stated that Arts and Culture development in
the downtown is an important element in attracting and retaining talent workers.
In summary, the concept of interim arts and culture programming at the Market aligns extremely
well with the recommendations in these strategic reports. The programming creates animation
of underutilized space on the upper level to create vitality in the downtown while at the same
time generating positive traffic for the Market vendors.
Potential Process and Actions if this Option is Supported followina Consultation
The following are examples of processes and actions that may need to be undertaken if an
interim Arts and Culture use is the preferred option following the public consultation:
1. A facilitation approach and marketing program would need to be pursued in
conjunction with multiple community arts and culture organizations that would
support their identified programming needs.
2. Capital investment in the amount of $151 ,000 would be required (Class C estimate)
3. A transition plan would need to be developed that could lead to utilizing the space for
a vibrant full time retail use in approximately 3-5 years.
Potential Performance Taraets
If the Arts and Culture Uses option were to be supported it's expected the following performance
targets could be set:
a) The financial subsidy for the Market operation would continue at it current level.
b) 5 - 10 arts/culture events or activities to take place on a weekly basis.
2
Appendix 2
Ootion #2 - Private Sector Reauest for Prooosals (RFP)
Overview of the Concept
Council directed staff to investigate whether there may be interest by the private sector in
managing the Market operation.
The concept was based on having a private management firm assume full responsibility for the
Market including the following:
a) Operations - Oversee the day to day operation of the Market including customer service,
reception, building operation, vendor management and staffing.
b) Promotion and Marketing - plan and implement a complete marketing, promotion and
communication program.
c) Leasing and Contract Management - lease out the entire Market including the under-
utilized space on the upper level and manage the various vendor contracts and licenses.
d) Property Management - perform basic building maintenance and repairs and effect all
regular preventative maintenance and major repairs.
e) Financial Management - perform all financial accounting responsibilities including
accounts payable and receivable.
Summary of Findinas
An initial request for proposals (RFP) was developed to determine if there were any potential
candidates who had the interest and qualifications to manage the Market. The RFP resulted in
basic expressions of interest from two proponents. These proponents provided the City with
company profiles and experience. Based on the information provided both proponents were
deemed qualified to proceed to phase two of the process - "Development of a Detailed
Proposal to Manage the Market".
Council directed staff to enlist the services of various stakeholder volunteers in the form of a
task force to assist in the development of the expectations for the phase two detailed proposals
(CSD Report #07-085) The task force met on two occasions to prepare the deliverables for the
prospective proponents. The deliverables described how the proponents would ensure the
City's goals for the Market would be advanced as follows:
a) Continue with the successful Saturday Market
b) Create a fully leased out full time urban Market on the upper level.
c) Improve the financial position of the Market and demonstrate how the City's subsidy
could be lowered over time
d) Create a destination that would continue to support re-urbanization of the east end of
Downtown.
A high quality, thoughtful and detailed phase 2 request for proposals was developed by the task
force. The proposal was forwarded to the proponents and neither proponent submitted an
expression of interest.
3
Potential Processes~ Actions and Performance Taraets
Not applicable as the City received no response to the phase 2 request for proposals from the
private sector.
4
Appendix 3
Ootion #3 - Mid-Scale Grocer
Overview of the Concept
Council directed staff to investigate whether a mid-size grocer may be interested in leasing the
unused space on the upper level of the Market. The ultimate goal was to find a specialty
grocery store or deli willing to lease between 3000 - 9,000 square feet.
The successful recruitment of this type of anchor tenant would be an excellent traffic generator.
It was felt a tenant of this size and scope could enhance the recruitment of additional smaller
retail tenants at market rents, creating a fully leased out operation and an improved bottom line.
Summary of Findinas
Contact has been made with the two major grocery corporations which have urban retail grocery
store concepts that would fit into the space available at the Market. Both Loblaws and Sobeys
were contacted by the City. Staff has followed-up and at this point neither of these major
operators has been willing to commit. Sobey's did indicate they were testing 10,000 square foot
downtown grocery operations in Toronto under the banner of Sobey's Express but will not
consider rolling these out to mid-sized cities for at least 2 years.
A local independent grocer, Central Fresh Meats was previously at the Market but only selling
meat products. They withdrew after a few months. They were contacted again to see if they
would be interested in being involved at the Market as a full product line grocer. They indicated
they were not.
Contact has also been made with major convenience store operators, especially those who
have a small grocery component. Rabba's Fine Foods and Farah Foods/Hasty Market are not
interested in the Market at this time. Ailimentation Couch Tard Inc. which operates Mac's and
Beckers indicated they primarily franchise these operations so further dialogue was not
pursued.
A number of specialty delis have also been contacted. Some of these were approached during
the initial vendor recruitment phase prior to the opening of the new Market but were contacted
again in the event their situation had changed. Contact was made with Brunos Fine Foods,
Denningers, Vincenzo's, Angelo's, and Papa Soly's. None of the deli owner/operators
expressed interest at this time.
During the grocery store recruitment process the City was contacted by a real estate agent who
had a client interested in a mid-sized 5000 (approximate) sq. ft. deli/grocery with a Middle
Eastern theme. While initial discussions took place the potential tenant withdrew due to
personal issues.
Strateaic Linkaaes
The requirement for a grocery operation in the Downtown has been identified in a number of
ways:
5
1. The Downtown Strategic Plan Volume III states that proximity to services and amenities
such as shopping is essential in creating a desire to live nearby, thereby strengthening
the potential of residential development which is a key objective in the future
development of the Downtown.
2. The Downtown Strategic Plan also proposes that action-oriented recruitment initiatives
take place targeting new businesses to support downtown employees, education
facilities, the Market and Downtown residents.
3. Initial Public Consultations for the development of the new Market clearly indicated there
was strong desire by the residential community for grocery shopping in the core.
4. The Plan for a Healthy Kitchener (P4HK) identifies a dynamic downtown and quality of
life as key indicators of a healthy community.
The recruitment of a mid-sized grocer as a strategy aligns extremely well with both the initial
objectives of the new Market and current Corporate and Community objectives for the
Downtown. However no mid-sized grocer is currently interested in leasing space at the Market.
Potential Processes and/or Actions if this Option is Supported followina Public Consultation
If a mid -scale grocery is a preferred option following the public consultation the following
processes and acknowledgements would likely be proposed:
1. Acknowledgment that there is no guarantee of recruiting a mid-scale and at best it
appears to be a longer term initiative.
2. As an option, consider a larger non food single source retailer or service provider as a
potential tenant.
3. This option may be viable as a longer term initiative if it was preceded by the interim
Arts & Culture uses for approximately 3-5 years.
Potential Performance Taraets
Establishing performance targets is difficult in the absence of a business case. However if the
mid-scale grocer option were supported, the following are potential performance targets:
a) Sign an anchor retail tenant to a multi-year agreement.
b) A reduction in the total Market subsidy over time.
c) Increase attendance.
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Appendix 4
Ootion # 4 - Retestina the Oriainal Vision - Smalllndeoendent Vendors
Overview of the Concept
The original vision for the new Market was to lease the upper level to a number of small
independent vendors who would provide market like food retail services 5 - 6 days per week.
This concept created some initial success when the Market opened. Full time vendors opened
in the following categories - meat, flowers, produce, baked goods, cheese and dairy, seafood,
candy and specialty hot sauces. However for various reasons, within 3 to 15 months all these
vendors closed their shops.
Approximately 12 months ago the City began an exercise to determine if there may be renewed
interest from full time small independent retail vendors to fill the space. A request for proposals
and recruitment exercise coordinated by the City's consultant, Cam Hawkins and Associates did
not produce enough viable, quality vendors to support moving in this direction at that time.
It was felt that one further attempt should be made to re-test this concept in light of some of the
advancements in the Downtown during the past year. As a result staff began to call on a
number of potential candidates to determine if there was interest.
Summary of Findinas
It is clear that while there is some interest there is still not a critical mass of small vendors
interested at this time to move in this direction without some risk. There are 8 potential food and
produce vendors who have interest, albeit most of the interest is conditional. Some of the
interest could wane if their conditions were not achieved. (There are also 4 craft type vendors
who have expressed interest.)
The concept of small independent vendors as a solution would appear to be much more viable if
the current lower level vendors are able to deliver a mini-market through the week by
"clustering" their goods. There has been some discussion by the vendor representatives that
this concept may be presented to committee as a solution for the upper level Market. This
concept on its own or in combination with the other small vendors who have expressed an initial
interest is worthy of further dialogue.
Using the upper level of the Market as originally intended is likely the best use as it relates to
the original goals and use of the Market. The Market is a purpose-built facility that is more
geared to this type of use. As well there have been significant advancements in the downtown
since the initial attempts to recruit small independent vendors 3 plus years ago including the
development and sale of most of the adjacent lofts, lease-out of a number of nearby commercial
buildings and more confidence in the downtown in general.
Strateaic Linkaaes
This concept would achieve similar outcomes to the mid-scale grocer as outlined in Appendix 3
as a number of the interested vendors do provide food products. Hence the strategic linkages
are the same and outlined as follows:
7
1. The Downtown Strategic Plan Volume III states that proximity to services and amenities
such as shopping is essential in creating a desire to live nearby, thereby strengthening
the potential of residential development which is a key objective in the future
development of the Downtown.
2. The Downtown Strategic Plan also proposes that action-oriented recruitment initiatives
take place targeting new businesses to support, downtown employees, education
facilities, the Market and Downtown residents.
3. Initial Public Consultations for the development of the new Market clearly indicated there
was strong desire by the residential community for grocery shopping in the core
throughout the week.
4. The Plan for a Healthy Kitchener (P4HK) identifies a dynamic downtown and quality of
life as key indicators of a healthy community.
Providing a market-like experience on a more regular basis through small independent full-time
vendors is exactly what was proposed as the original objectives for the new Market.
Potential Processes and/or Actions if this Option is Supported followina Public Consultation
The following process and actions would likely be proposed if the recruitment of small
independent vendors is a preferred option following the public consultation:
1. Begin negotiations with those vendors who have expressed interest and continue to
recruit small independent full time vendors with a goal to fill the balance of the
underutilized area of the upper Market.
2. Consider any proposal by the current lower level vendor group that would result in a
mini-market for all or part of the upper level.
3. That it be acknowledged that it could take some time before this plan is fully
implemented and if implemented full-time vendor turnover could result until the right
combination and types of vendors are realized.
Potential Performance Taraets
The performance objectives for the Market under this scenario would be as follows:
a) Increased attendance.
b) An improvement in the Market subsidy.
8
Appendix 5
Ootion #5 - Vendor Co-oo/Board
Overview of the Concept
When the private sector RFP was initiated, some Market vendors met, formed an alliance and
expressed interest in being more involved in the operation of the Market. There are some
situations where Markets are operated by a vendor co-op and many where they are operated by
an arms length board.
The vendors submitted a brief initial expression of interest that was shared with members of
Council in December.
Staff have been advised the vendor group and their representatives are preparing a proposal
that will be presented to CSC on March 3rd.
Summary of Findinas
It is staffs understanding the vendors will speak to the potential of the creation of a mini-market
as a pilot project throughout the week and to wanting to be involved in any governance dialogue
that would take place in the future. As indicated previously in this report the concept of a mini-
market on its own or in combination with the other small independent vendors has merit.
The concept of an independent Market Board model was advocated in a Review of Alternative
Management Structures for the New Market, a report by Coriolis Consulting in November 2002
(attached as Appendix # 10). The report stated the City should retain the present management
structure at least until the new Market was operating for some time but that the City should
consider eventually moving toward an independent Market Board model. The aim would be to
give the Board autonomy over the Market operations under goals and polices defined by the
City. The report indicated Directors should be chosen so that the board has an appropriate mix
of skills, knowledge and interests. This further supports the report recommendation that other
governance models should be considered.
Strateaic Linkaaes
The operation of the Market by an arms-length entity involving stakeholders and community
representatives is supported through a number of strategic documents as follows:
1. The Community Services Department Leisure Facilities Master Plan (LFMP) indicates
programs and services can be provided directly, in partnership or through facilitation
support. The LFMP advocates that the facilitation approach is preferred followed by
partnering which aligns well with the Vendor co-op and/or a service board proposal.
2. The City's Corporate Plan has 5 strategic areas of focus. One of the areas of strategic
focus is Corporate and Business Relations. Active, involved neighbourhoods and
partnerships are two elements that are supported.
3. As indicated above Coriolis Consulting recommended that a Board management model
should be considered once the new Market was up and running for a period of time.
9
Potential Processes and Actions if this Option is Supported followina Public Consultation
The following processes and actions would likely be necessary if the Vendor Co-op/board is
approved as a viable option following the public consultation:
1. Establishment of a working group to report to Council on options for "form of
governance" structure to oversee the Market.
2. Consideration should be given to have appropriate representation from Council, Market
vendor reps, community stakeholders, business representatives and members of City's
professional departments.
Potential Performance Taraets
The revised performance targets for the Market under this option would likely be as follows:
a) Development of board based governance model options.
b) Implementation of a viable full time Market on the upper level.
c) An improvement in the total Market subsidy over time.
10
Appendix 6
Ootion #6 - Sell the Market
City staff reviewed the Market building, business and parking garage and staff was directed to
take no further action on this option.
11
Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
Executive Summary
Recommendations
This proposal by a volunteer group named the "Kitchener Market Collaborative" contains two
recommendations for the Kitchener Market:
1. A mini grocery market that is a combination of a vendor co-operative and a full time
grocery market in the upstairs portion of the market. This is an opportunity for all existing
vendors including both food and crafts as well as for a variety of potential new vendors.
2. The creation of an advisory group that would include market vendors, the City of
Kitchener and committed citizens
Once this advisory group is established we will prepare a more comprehensive plan related to
both of these recommendations.
We ask the City of Kitchener Community Services Committee to endorse these recommendations
at their meeting on March 3, 2008, since this plan not only has the support of the majority of
vendors, and downtown neighbourhoods, but also fulfils the intention and purpose of the market.
Rationale
We are pleased to make these recommendations for the long-term success of the Kitchener
Market based on the following rationale. These recommendations take the concept of a Farmers'
Market a step further to create a viable option for vendors and the City to operate a full time mini
grocery market for downtown Kitchener while being consistent with the original vision. This would
be flexible and include expanded opportunities for new and existing vendors and activities that
would be responsive to changing community needs.
These recommendations include a model to engage the vendors and the larger community, as
partners with the City in governance of the Kitchener Market; the goal being a stronger consensus
around decisions relevant to all parties.
Of the 56 vendors that voted on the governance recommendation, 46 are in favour, 7 are
undecided and 3 are not in favour. With respect to the mini grocery market recommendation, 19
voted, 12 are in favour, 3 are undecided and 4 are not in favour. We have unequivocal support
from both the Full Time vendors and from the Saturday Market vendors.
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
We have also consulted with a number of relevant organizations including Foodlink, Foodshare,
Farmers' Markets Ontario, Region of Waterloo Public Health, and the Toronto Food Policies
Council. They have all offered their support for the direction contained in these
recommendations.
The Kitchener Market Collaborative recommendations are consistent with the objectives of the
City of Kitchener in that they will:
~ Envision and plan for a successful Kitchener Market
~ Build on the success of the Saturday market
~ Create a vibrant urban full time market in Kitchener
~ Provide financial sustainability and improve financial position over time
~ Enhance the vitality of the east end of downtown
In addition, the KCM has also set out the goal of ensuring that the process is as important as the
outcome. In order to be successful we have included these goals as we move forward the
recommendations:
0' Continue to develop partnerships through consultation with all market key stakeholders
0' Continue consultation and review of similar farmers' markets and models
0' Gain consensus of market vendors and key stakeholders for all future plans
0' To be visionary leaders in promoting the value of local products and
producers/merchants
0' To continue to engage the broader community
Full Reoort
Market Operations Model
We will outline a dynamic new model to expand the function and usage of the market, which
combines a full time grocery store with a vendor co-operative in the concept of a mini grocery
market. This mini grocery market would be held in the upstairs portion of the market and would
be representative of the key types of food available at the full Saturday market. This model would
allow vendors to sell their products without the need for their own staff to be present. We
anticipate that this would encourage more vendors to participate and that this is a more
sustainable model that vendors may support for the long-term.
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
The eventual goal is a full time upstairs mini grocery market operation. This could be introduced
in conjunction with the Wednesday market for the spring of 2008. Once established the mini
grocery market would be expanded, incrementally, to operate full time. This would also serve as
an opportunity to expand weekday participation to crafters, potential new vendors as well as
activities that would engage and respond to the local community. We are proposing to build on
existing successful mid-week programs.
The mini grocery market would be marketed as destination place and a unique and friendly
downtown Kitchener shopping experience that is better for the environment (lower food miles),
with fresh goods and regional specialties from local vendors and artists/crafters at great prices. It
will meet the mid-week grocery shopping needs of downtown residents.
Market Governance Model
The Kitchener Market Collaborative supports the principle that all key stakeholders be engaged in
the direction of the market. This is an accepted principle of successful farmers' market
management. To this end, we propose a collaborative partnership with representatives of the City
of Kitchener, all market vendors and committed citizens.
FinanciallmoUcations
One of the key goals of this proposal is to support the long-term financial sustainability of the
Kitchener Market. We are confident that these recommendations will continue the positive trend
of decreasing municipal subsidies to the Market.
Opportunities to decrease this subsidy over time include:
. More full time upstairs vendors
. A grocery market concept that would increase weekday traffic
It must be acknowledged that there will be an initial investment required to establish the mini
grocery market and related initiatives. These costs will be detailed in the comprehensive plan.
Background
The vendors involved in The Kitchener Market Collaborative have previously presented a proposal
to City Council on November 5, 2007. This proposal is an expansion of the principles in their
original proposal.
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
This group represents a partnership of Saturday market and upstairs market vendors as well as
representatives from a number of downtown neighbourhood associations and "I Believe In
Kitchener", all who are working for the success of the market.
This grassroots volunteer group was created in response to a request by representatives of a
group of market vendors for help to become organized with the intent of submitting to the City of
Kitchener a well reasoned proposal to expand the market and give vendors a voice in market
management.
The response to the initial call to action for this group has been impressive. The core group is
approximately 20 people strong, representing downtown businesses, the majority of downtown
neighbourhoods plus "I Believe In Kitchener". The committee continues to attract people
interested in supporting an expanded market, even though it is not actively recruiting.
This group started meeting on January 15, 2008. Many of the members of this group have been
involved with previous consultations around the market as far back as 1998.
Consultation Process
The Kitchener Market Collaborative has consulted three times with groups of upstairs vendors,
Saturday and craft vendors regarding these proposals since January 25, 2008.
This includes one meeting for upstairs vendors on January 25/08 and two open meetings for all
vendors on Jan. 26/08 and Feb. 2/08. These sessions were attended by approximately 80
vendors in total. In addition, we have provided all vendors with four communication handouts
regarding the proposal to ensure it was fully understood before voting on it.
The outcome was a consensus to support this proposal with forty six vendors voting in favour,
three voting against and seven undecided.
We also met with Karen Killeen, Market Manager, on Feb. 12, 2008 to review the goals and
focus of the meetings with the Community Services Committee and with City Council in March
2008.
Ms Killeen was very helpful at stressing the establishment of a successful upstairs market as the
primary goal, with the goal of an improved market management model being an ongoing concern.
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
Conclusion
The Kitchener Market Collaborative is confident that there is strong support for the two
recommendations contained in this report
The two recommendations are:
1. A full time mini grocery market, introducing this concept on Wednesdays starting in spring
2008
2. The creation of an advisory group that would include market vendors, the City of
Kitchener and committed citizens
These recommendations are consistent with goals of the City of Kitchener, they have the support
of a vast majority of the existing Market vendors and they have been developed in conjunction
with community members who are most interested in the success of our market. We are confident
that these recommendations will improve the financial position of the market as it evolved to meet
the needs of our community.
This concept takes the idea of a Farmer's fresh food market to the next step and provides all
market vendors with a realistic and sustainable method of selling their goods. It benefits the local
community who will have access to a full time downtown market. It reduces the food miles
needed to supply local produce that is field fresh. It supports the current permanent vendors in
and around the market who will realize greater traffic and customers. It injects positive life and
energy into the east end of Kitchener in general and provides a unique shopping experience that
will also showcase regional specialties, local craft vendors and artists.
Therefore, based on the above submission, we respectfully request the approval from the
Community Services Committee and Kitchener City Council for this proposal. This support would
provide a successful and sustainable model in both function and form that do justice to the
heritage and true potential of the Kitchener Market.
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
APPENDIX A - Vendor Support Tabulation
Upstairs Vendors
Downstairs Vendors
20ib
1 OOib
00/0
D Not voted
Yes
No
D Undecided
Declined
D Not voted
Yes
No
D Undecided
Declined
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Kitchener Market Proposal
Kitchener Market Collaborative, February 27, 2008
APPENDIX A - Vendor Support Tabulation
Craft Vendors
70/0
40/0 00/0
450/0
All Vendors Combined
3010
7%
00/0
D Not voted
Yes
No
D Undecided
Declined
D Not voted
Yes
No
D Undecided
Declined
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