When the Delray Beach Market, Florida's largest food hall, opened last year, it seemed like a can't-miss venture.

Located in downtown Delray Beach, the food hall was expected to draw crowds of residents and vacationers to a space just steps from sizzling Atlantic Avenue.

The market's interior, featuring neon signs and a cheery tropical vibe, was designed to attract customers seeking a hip, new dining and bar experience. And in April 2021, as coronavirus vaccines rolled out and the pandemic eased, the public seemed ready for something fresh.

But a little more than a year after opening, the Delray Beach Market still is working to attract customers and make a success of all of its vendor spaces.

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About 20% of the market's food operators have left, some within just months of opening, a figure that is double the national average for food halls, according to one hospitality expert.

Restaurant industry analysts and former vendors say the Delray Beach Market is a hidden gem that just isn't well-marketed. Some passers-by strolling along Atlantic Avenue, less than half a block north of the market, don't even know it is there, according to vendors and local business leaders.

In addition, the food hall and market often are confused with a similarly named shopping center west of Delray Beach, called the Delray Beach Marketplace.

Add in lingering pandemic fallout, the soaring price of food and labor and a sky-high rent structure, and some vendors privately say high costs and limited foot traffic made operating difficult.

Craig Menin, the food hall's developer and owner, acknowledged the Delray Beach Market's ups and downs. But he said even with the market's challenges, it still was within 10% to 12% of its first-year financial projections. He declined to provide details.

Menin, a real estate investor who recently expanded into the hospitality business, said he plans to do more to boost business at the market.

Plans are afoot to fill vendor booths with new operators, add kiosks and carts with additional offerings, and make the market both a visitor destination and a city-centric hub of activity.

One planned improvement in the short-term: booking more special events at the upstairs mezzanine level to attract crowds.

Over the long term, Menin hopes to transform the Delray Beach Market into a neighborhood shopping space by offering to-go meals, fresh produce and other supermarket-style items.

"Over time, we want to become more of a market," Menin said.

Are food halls a fad or foodie heaven?

The Delray Beach Market, first conceived in 2018, is a $60 million project at 33 S.E. 3rd Ave., just south of Atlantic Ave.

The 150,000-square-foot facility features 60,000 square feet dedicated to the food hall, making it the largest in the state. Some 26 vendors operate in the market, 23 of which are either food or bar spaces.

The idea for the market came at a time when food halls were all the rage, especially in downtown districts. The market's concept also came about shortly after Palm Beach County welcomed its first food hall in 2018, the Grandview Public Market in West Palm Beach.

To plan the Delray Beach food hall, Menin said he visited more than two dozen markets around the country to assemble a roster of vendors that would be fresh and special to South Florida.

Menin said he decided that chain eateries were out, and unique vendors were in. His goal, he said, was to create something new and buzzy for this seaside city, which already is packed with restaurants and bars.

In April 2021, the Delray Beach Market opened with more than two dozen food stalls, offering fare that included barbecue, burgers, seafood, Indian and vegan food.

But the pandemic forced last-minute changes that undercut the typical bustling food hall experience, Menin said.

To limit close contact between guests, Menin said he had to space everything out, including seating. About eight food stalls also were removed to create even more room.

Once the market opened open, Menin said he had to confront another problem: a post-pandemic preference for outdoor dining, with people fearful "about being inside in general."

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Vendor 'Big T' at Delray Beach food hall says he has big plans

In the 13 months since he opened at the Delray Beach Market, Tony "Big T" Gervasi of Big T's Delicatessen said he has worked hard to build his customer base.

Gervasi, a seasoned restaurateur from the Northeast, said Big T's Deli makes every item from scratch, including the sauerkraut and the salads. The deli brines its corned beef and slow-cooks the brisket.

To expand sales, Gervasi also came up with a beach delivery service that drops off items such as sandwiches and salads to customers waiting at the Delray Beach public beach pavilion, at A1A and Atlantic Avenue.

Gervasi said he not only spends money monthly on marketing, but he also caters food to events held on the market's second-floor mezzanine, sometimes providing free fare to charities.

Operating at the Delray Beach Market "isn't a sprint," Gervasi said. Instead, he said it's a long-term commitment he is eager to honor by becoming part of the community.

"We will do what it takes to win you over," Gervasi said.

In addition to growing Big T's Deli business, Gervasi said he's expanding his market presence by creating Big T's market, a new stall opening in June. The deli market space will feature ready-to-cook prepared meals, meal kits, pre-made sandwiches and salads, plus a variety of fresh produce.

Another vendor, the owner of Cellar & Pantry gourmet shop, already expanded at the market this year.

Operator Matt Reilly opened Jamón Jamón, a tapas place featuring Spanish, Italian and Portuguese fare. "It's been great," Reilly said. "We have a unique concept, and we are bringing something special."

Reilly said Cellar & Pantry does a strong catering business, and Jamón Jamón has found a following among diners who relish a tapas bar experience.  "A lot of them had this experience in Spain, and when they see our concept, they get excited," Reilly said.

But other operators, such as the barbecue spot, Indian food and bowl vendor, haven't stayed at the Delray Beach Market.

And in just the past four months, the operators of Dad's Favorite Burgers & Pies, Shi-chang Chinese food, Bona Bona Ice Cream and Tip to Tail seafood also left.

Menin's in-house hospitality staff took over the spaces, some of which retained the same names, while others just feature signs saying "burgers" or "Chinese."

Menin said he's working to find new operators for these businesses.

The decision to avoid chain eateries gave the food hall a unique flair, Menin acknowledged, but it also meant a tough time for operators who were new restaurateurs.

"It was the worst year to try to set up an independent operation. It's been challenging for a lot of vendors," he said.

Other vendors say Delray Beach Market takes too much off the top

Peter Camacho is a Delray Beach accountant who works with some of the vendors at the market.

Profit margins are hard enough to manage in a restaurant, Camacho said, but Menin's financial arrangement makes it more difficult, especially with rising food prices.

At the Delray Beach Market, Menin charges vendors 30% of their revenues, leaving them to meet payroll and food costs with the other 70%. "It's very expensive," Camacho said of Menin's terms.

But restaurant experts said the arrangement takes away up-front cost and is a boon to new vendors. The 30% figure covers items such as the space's build-out, utilities and other expenses that a typical operator in a bricks-and-mortar location would have to carry.

Still, the Delray Beach Market is more costly than other food halls around the country that charge 22.5% to 25% of revenues, said Trip Schneck, of Colicchio Consulting in Bethesda, Maryland.

"Those five points are impactful," Schneck said.

And Schenck said the Delray Beach Market's turnover is double the typical 10% expected for a standard food hall.

With 30% of revenues from vendors committed to Menin, that leaves 70% to cover commodities and labor costs.

But with eggs, milk, chicken and other supplies rising 30% or more in recent months, how much can vendors pass along to the customer? Not much, if at all, said vendors and restaurant industry analysts.

Food hall explosion: 280 already exist in US with another 140 on the way

Both Menin and Schneck said vendor turnover at the Delray Beach Market isn't necessarily a problem.

"You almost need turnover and for some people to not work out," Menin said. "It's the newness that keeps people coming back. It's not the same old, same old."

Schenck concurred: "A lot of these are first-time business owners, and so there's going to be turnover, which is not always a bad thing if it brings in new concepts and a new cuisine type."

That's cold comfort to vendors who say they have done everything to overcome sky-high food costs, sluggish foot traffic and uneven marketing.

One restaurant broker privately said he believes food halls are a fad that will wash out over the next year.

But Schneck disagreed, noting that 140 new food halls are planned across the country, adding to the 280 already in existence.

Delray Beach Market owner considering these fixes, adjustments

Today, weekends at the Delray Beach Market can get moderately busy with couples and families looking for an air-conditioned space for food, drink or music.

But on any given weekday, visitor counts drop, even during the lunch hour.

Menin acknowledged the sluggish weekday foot traffic, which he said is partly due to workers continuing to work from home instead of returning to nearby offices. He is optimistic the office market will improve over time, especially with financial firms continuing to move to South Florida.

But for some customers already working downtown, eating at the market is too costly to make it a regular affair.

Bill Bathurst is a former Delray Beach city commissioner whose real estate office is around the corner from the Delray Beach Market.

Bathurst said he supports the market, which he called a "cool addition to the downtown," but he said some of the market's lunchtime fare can be too pricey to make it a regular hotspot.

In addition, for a few dollars more per item, Bathurst said diners can get table service at nearby restaurants on Atlantic Avenue.

The issue isn't lost on Menin, who said his team is considering providing wait service to customers. "Our clients like to be catered to," he said.

Menin said he's also looking at other ways to boost service.

For example, bar customers wanting food now have to leave their seat, go to a food stall, order, and then pick up their food. But Menin said he's aware customers worry about losing their coveted bar spots while buying or picking up their meals, so he's working on a plan to improve food service to bar patrons.

As for marketing efforts, Menin said he's aware of the market's brand confusion with the Delray Beach Marketplace west of Florida's Turnpike on Atlantic Avenue, but he's said the issue isn't top of mind.

Nor does Menin plan to change the Delray Beach Market's signs to include the words "food hall." Menin said he's committed to his long-term plan to add more retail products to the market, and he doesn't want to limit the space to a food-hall identity.

Instead, Menin said he is working to boost the market's profile by promoting it more to the city's hotels. In addition, Menin said he's collaborating with Delivery Dudes, a food delivery service, to let customers compile a a single group order from a variety of market vendors.

As the season shifts into the slow summer months, Menin said his team is working on plans to attract visitors by hosting more special events on the second-level mezzanine.

And although the Delray Beach Market already features live music, Menin said he's also looking into booking regional bands, or bands with a fan base willing to travel to see them play.

Establishing a food hall's presence is a two-to-three year effort, Menin said, and patience is needed.

But after one year of operation, "we're in a good spot as we go forward," he added. "We'll keep tweaking it."

Alexandra Clough is a business writer at the Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at aclough@pbpost.com. Twitter: @acloughpbp. Help support our journalism. Subscribe today.

This article originally appeared on Palm Beach Post: One year after opening, Delray Beach Market food hall plans changes