Downtown Tampa has no shortage of places to eat.
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published:

Downtown Tampa has no shortage of places to eat. Residents, office workers and tourists — whether they’re from Wimauma or Wisconsin — can visit the brightly painted shipping containers at Sparkman Wharf and pick from a grilled octopus Greek salad at Edison’s Swigamajig or quesabirria tacos at Gallito Taqueria. But what if they want to shop? Bars and restaurants outnumber boutiques in downtown Tampa, where the culinary scene has flourished in recent years. Nonessential shopping, however, remains elusive. There's little in the way of browsable storefronts that tourists or corporate travelers might look forward to, whether it's Louis Vuitton or a local stationer. That's unlikely to change, even as the $3 billion-plus, mixed-use Water Street district delivers an onslaught of shiny new storefronts to Tampa's urban core at a pivotal time in the retail industry. Food-driven concepts, from coffee shops and wine bars to full-blown grocery stores, make up the vast majority of businesses looking for retail real estate — especially in the wake of the Covid-19 pandemic. The pandemic accelerated the growth of online shopping by five to 10 years, some experts estimate, and retail developers are left to figure out the perfect blend of food and beverage, convenience-driven and experiential concepts in a post-Covid world. A recent study by the Tampa Downtown Partnership shows a desire among office workers for more shopping opportunities in the urban core, but retail developers and brokers say restaurants are far more likely to lure someone out of their home than a traditional retailer. Of all the retail space in Hillsborough, Pinellas, Pasco and Hernando counties — a combined 171 million square feet — 4 percent or 6.8 million square feet is categorized as restaurant space, according to CoStar Group Inc. A similar proportion exists within Tampa's city limits: 2.2 million of 51.9 million square of retail space, or 4.2 percent, is restaurant space. (CoStar's retail classifications are diverse, and the total square footage includes everything from funeral homes and truck stops to movie theaters, day care centers and health clubs.) "This post-Covid world will be restaurant-centric. They’re the new anchors," said Scott Dobbins, founder and principal of Hybridge Commercial Real Estate in Tampa. "They’re going to bring the foot traffic." Street-level retail space has been a major focus at Water Street since the earliest plans for the district went public in late 2014. Developer Strategic Property Partners plans to use an engaging public realm and storefronts — think extra-wide sidewalks, pocket parks and sidewalk cafes — to create a walkable miniature city in one of the most car-dependent metros in the U.S. As the towers that comprise Water Street's first phase finish up their interior buildouts, those street-level storefronts are beginning to open. The first phase of Channelside Bay Plaza's rebirth has 185,000 square feet of retail space, which includes Sparkman Wharf, a dining garden, a biergarten, multiple sit-down restaurants and boutiques Joyful Notion and Modern Paws. GreenWise Market, the specialty banner from Publix Super Markets Inc., will open a 26,000-square-foot grocery store on the ground floor of Heron, an apartment tower at the intersection of Water Street and Channelside Drive. Water Street's retail strategy has never changed, even in a post-pandemic world, said Jess Anderson, retail leasing manager at SPP. SPP has always aimed to fill the storefronts with businesses that would serve Water Street's residents and office tenants on a day-to-day basis, as well as those who live in the Channel district and on Harbour Island. That includes service-oriented concepts like veterinary clinics and blow-dry salons. SPP is controlled by Tampa Bay Lightning owner Jeff Vinik and Cascade Investment LLC, the investment fund of Microsoft co-founder Bill Gates. Restaurant and foodservice concepts make up 60 percent of the tenants filling Water Street's storefronts. SPP does not count GreenWise among its mix of food and beverage tenants, though the grocer will offer pizzas, burrito bowls and gourmet sandwiches. It also has a bar called Pours, where coffee, beer and wine will be served. "We're very heavy on food and beverage service — we have some soft goods and traditional retail spaces, but there's not a ton," Anderson said. "It's not a shopping district." Water Street's shopping experiences will be very curated, Anderson said, and appeal equally to office workers and tourists. "It will be things you didn't realize you needed or wanted," she said. It's a delicate balance to assemble the right mix of retailers and restaurants, said Mark Masinter, founder of Dallas-based Open Realty Advisors, which specializes in unique retail concepts and properties. "I’m a humongous believer that really good food and beverage execution is essential to making a place," Masinter said. "But there is a balance between how much you should have and how much you shouldn’t. You’ve gotta read the market and study how other people are currently performing and figure out how deep the market is. "There’s not an algorithm that spits it out. It’s more of a feel." However the shopping experience takes shape in post-pandemic downtown Tampa, one thing is clear: Downtown denizens want more of it, according to the Tampa Downtown Partnership's 2020 survey, the results of which were released in April. Of downtown workers who responded to the partnership's survey, 23 percent called the existing retail in the urban core "insufficient." More than 50 percent of residents who responded said they wanted to see a big-box retailer downtown — and the majority of both employee and resident respondents want to see a Target Corp. store. (Whole Foods Market and Trader Joe's were a distant second, named by only 5 percent of respondents.) Target is hardly a unique retailer, but it could have its place in downtown Tampa. Masinter said Target's urban format stores are "magnets" for residents, workers and tourists. But that doesn't change the fact that the economics of physical retail were forever altered by the pandemic. "Food and beverage are essential, but obviously when you’re creating a district, you need and want thoughtful shopping opportunities," he said. "The challenge today with retailers and opening physical stores is that there’s not a single brand that has to open a store ever again." • • • SPP is far from the only developer to rely on restaurants to fill retail space. Restaurants were a go-to anchor for retail developers long before the Covid-19 pandemic; Tampa Bay's biggest mall, International Plaza, has an entire wing dedicated to sit-down dining. At The Heights, a mixed-use district on the northern end of downtown Tampa, market-style food hall Heights Public Market and full-service restaurants Oak & Ola and Steelbach are major draws for visitors and residents. The Pearl, an apartment building with street-level retail within the Heights, includes restaurants Rocca, Xochitl Cocina Mexican and Strandhill Public, an Irish pub. Hyde Park Village, an urban shopping district in one of Tampa's toniest neighborhoods, has undergone a multimillion-dollar redevelopment that's similarly heavy on restaurants. The Westshore Marina District is largely residential, but the two largest tenants in its retail village are food-based: local grocer Duckweed Urban Market and restaurant Cru Cellars. Two more restaurant spaces — 4,000 and 1,200 square feet — are available, and a boat-up restaurant on the district's waterfront is also in the works. Midtown Tampa, a newly built mixed-use district at Interstate 275 and North Dale Mabry Highway, has two big traditional retail anchors: Whole Foods Market and outdoors store REI. Its restaurant lineup includes Shake Shack, an 8,000-square-foot food hall and Ponte Tampa, a new restaurant from chef Chris Ponte. Bromley Cos., the developer of Midtown, wants to establish the property as a "preeminent food and beverage district in Tampa," said Nicholas Haines, CEO of Bromley. Midtown's tenant roster includes nine full-service restaurants as well as smaller food concepts like a Ben & Jerry's scoop shop. Those nine restaurants total 43,806 of Midtown's 240,000 square feet of retail space. When Ben & Jerry's and a few other smaller food concepts are added in, the total becomes 48,053 square feet or 20 percent of Midtown's total retail space. Like SPP, Bromley doesn't count its grocer as a food and beverage concept. (Midtown is anchored by a 48,000-square-foot Whole Foods Market with 125 cafe seats for its hot and salad bars.) "At some point, there is a saturation point," Haines said, "but I also think we’ve seen in other markets where if you create a critical mass of restaurants, it becomes a part of your identity." A thriving restaurant scene is becoming part of Tampa's identity, said Dobbins, the Hybridge founder and principal. While independent restaurateurs have flourished here for the better part of a decade, he thinks the surge in demand post-Covid is ushering in a whole new era. Tampa is uniquely positioned to eat up a bonanza of new restaurants. A population boom is underway, driven by a post-Covid exodus of residents from the Northeast and Midwest. But even with unprecedented demand, success isn't guaranteed. "We’ve seen, for the first time, really strong operators in virtually every category and ethnicity really hitting our market," he said, "and it will be the strong who survive. A marginal operator, whether there’s demand or not, will lose and someone else will take their place." It was only a year ago that retail property owners were staring down a Covid doomsday, and lenders and investors were preparing for waves of bankruptcies and foreclosures. Those largely haven't materialized, and retail landlords have the upper hand in the current market. "There's only so much landlord patience in this market," Dobbins said. "There was certainly some pain endured during Covid, but that runway is shortening every month."