TWIN FALLS – In another Opportunity Zone development here, the tax break is being used to develop a building from the 1920s into a food hall, 2nd South Market.
“We learned about food halls by accident when visiting Denver two years ago,” said Lisa Buddecke, co-owner with her husband, Dave, of Kelsar Properties, which is developing the project. ”We kept thinking, ‘Wouldn’t this be great to have in Twin Falls?’”
Initial vendors in the 13,000-square-foot indoor area include Smokey Bone BBQ, Wild Sage Baking Co. featuring Cloverleaf Creamery Ice Cream, and The Tap Room — a bar built with repurposed original wood from the building — with plans to feature Idaho craft beer and wine, Buddecke said. In addition, they are in talks with two other vendors, she said. Altogether, the food hall should be able to hold seven vendors, she said.
Kelsar Properties hopes to open 2nd South Market by the summer. The building also includes a 14,700-square-foot outdoor fenced space that will be open during summer and fall for additional outdoor seating, private events, open air markets, corn hole games, a stage for live music and other amenities.
“There’s a huge outdoor area, and we plan to have popup vendors on Saturdays,” Buddecke said. “We want to take advantage of the good weather.”
What’s a food hall?
A food hall is a single location housing several eating and drinking establishments. Boise Spectrum opened one in 2018. While it might sound superficially like a food court at the mall, a food hall is different, Buddecke said. “A food court in a mall has high walls that separate one vendor from another,” Buddecke said. “In a food hall, it’s an open environment. There aren’t really walls separating vendors from each other.”
There’s also common lighting and common seating where people can sit in large groups, she said.
The businesses also tend to be different, Buddecke said.
“Food courts tend to be on the fast food side,” she said. “These are upscale and culinary. You won’t find a fast food place in a food hall.”
Typically they are small or home-based businesses that are ready to expand, she said. Buddecke cited a Cushman & Wakefield study indicating that food halls are popping up around the United States. When it first began tracking this phenomenon in 2016, there were roughly 120 projects across the country. That number is on track to nearly quadruple, with 450 food halls expected to be operational throughout the United States by the end of 2020, she said in a statement.
Where does the Opportunity Zone come in?
Without the Opportunity Zone tax benefit, Kelsar Properties might not have been able to do the project, Buddecke said.
“While we were waiting back for our offer on the building, we found out it was in an Opportunity Zone,” Buddecke said. “That ended up being very beneficial to us from a tax standpoint.” While Dave wouldn’t say exactly how much the tax benefit amounted to, it was in five figures.
Although Twin Falls has been leading the charge on Opportunity Zone development, with the first announced project in Idaho in 2019, the Buddeckes had some trouble learning about the program, noting that their accountant had to spend some time researching it before ascertaining it was applicable to their situation.
The food hall will be housed in a former Salvation Army building that dates from 1926. The remodel includes removing a number of renovations added over the years, such as a drop ceiling that concealed a soaring vaulted ceiling and concrete block and stucco that covered the original windows.
The Buddeckes also discovered a hole that had been used to cache whiskey during Prohibition.
The architect for the project is Colby Ricks of Laughlin Ricks Architecture in Twin Falls, and the contractor is Creative Carpentry Inc., also of Twin Falls. The cost of the project wasn’t revealed.