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Experienced New York Restaurateurs Join Forces to Revive Midtown’s Zombie Food Halls

Vaseline 2 months ago

There’s new life for Midtown’s zombie food halls.

New York restaurant legend Stephen Hanson and international hospitality operator Alex Gaudelet are relaunching five major Midtown halls previously run by UrbanSpace, which fell behind on rent after the pandemic wiped out business.

Hanson and Gaudelet’s newly formed HF Food Halls signed a lease last week for Vanderbilt Hall, the 11,000-square-foot location at RXR Realty’s 230 Park Ave. HF is also close to a lease for the Feil Organization’s 570 Lexington Ave. and is in negotiations for the troubled food halls at 787 Seventh Ave., One Irvine at Union Square and Urban Hawker at 135 W. 55e St.

“We are acquiring each of the halls separately and renaming them,” Gaudelet told Realty Check.

Hanson and Gaudelet will run their Manhattan locations with a different business model than most food halls, where operators typically lease floors and then sublease them to individual vendors who may or may not know how to manage them.

UrbanSpace fell behind on rent after the pandemic wiped out the James Messerschmidt firmUrbanSpace fell behind on rent after the pandemic wiped out the James Messerschmidt firm

UrbanSpace fell behind on rent after the pandemic wiped out the James Messerschmidt firm

Instead, HF will run the majority of the food stalls itself, drawing on Hanson’s experience as the founder of the former BR Guest eatery empire, which included names such as Ruby Foo’s, Atlantic Grill and Dos Caminos.

That company had reported annual revenues of $200 million before Hanson sold it in 2007.

At Vanderbilt, they ousted three underperforming stands — reducing the number of vendors from 20 to 17 — and replaced them with three brands that Hanson and Gaudelet own: Chicken Spot ICC, Bash Burger and Brett’s Deli.

They’ve proven so popular that they’ve increased the entire venue’s sales by 60%, Hanson said.

A vegan burger joint that made just $400 a day gave way to Brett’s Deli, which makes between $6,000 and $8,000 a day.

Hanson and Gaudelet replaced the underperforming stands with their own brands, such as Bash Burger.  James MesserschmidtHanson and Gaudelet replaced the underperforming stands with their own brands, such as Bash Burger.  James Messerschmidt

Hanson and Gaudelet replaced the underperforming stands with their own brands, such as Bash Burger. James Messerschmidt

“Alex and I owned 40 restaurants together and we bring that quality experience to quick service,” Hanson said.

Hanson boasted that the quality of his Vanderbilt stands is superior because of his company’s expertise in all aspects of the business.

“At ICC everything is made to order. They don’t bake it at 9 a.m. and serve it at noon,” Hanson said.

Hanson boasted that the quality of his Vanderbilt stands is superior because of his company's expertise in all aspects of the business.  James MesserschmidtHanson boasted that the quality of his Vanderbilt stands is superior because of his company's expertise in all aspects of the business.  James Messerschmidt

Hanson boasted that the quality of his Vanderbilt stands is superior because of his company’s expertise in all aspects of the business. James Messerschmidt

He also raved about the cupcakes at the new coffee and bakery stand called Moka Matcha, reminding us that Realty Check liked it better than Magnolia Bakery.

“We spent almost nine months getting it that way,” he said.

Not all existing suppliers will be displaced.

“Some are doing great work, like Pita Yeero,” Hanson said. “They are in all the halls and we like to keep them.”

Brett's Deli brings in between $6,000 and $8,000 a day, Hanson said.  James MesserschmidtBrett's Deli brings in between $6,000 and $8,000 a day, Hanson said.  James Messerschmidt

Brett’s Deli brings in between $6,000 and $8,000 a day, Hanson said. James Messerschmidt

The pair’s re-emergence comes at a crucial time for the city’s food hall business. Market Line at Essex Crossing recently closed and crowds were sparse at many others.

Even the best restaurants are plagued by inconsistent dishes, unpredictable hours and long wait times for customers for what should be ‘fast’ food.

HF closed an UrbanSpace at 100 Pearl St. downtown and a half-dozen UrbanSpace locations in Washington, D.C., Chicago, Los Angeles and Boston.

Although Hanson and Gaudelet reportedly “took over” the locations last summer, they only worked with UrbanSpace to help the company restructure and better manage the locations.

Now UrbanSpace is completely out of the picture.

One of the new booths in Vanderbilt Hall is a coffee and bakery shop called Moka Matcha.  James MesserschmidtOne of the new booths in Vanderbilt Hall is a coffee and bakery shop called Moka Matcha.  James Messerschmidt

One of the new booths in Vanderbilt Hall is a coffee and bakery shop called Moka Matcha. James Messerschmidt

Hanson noted that the partners have had previous relationships with all new landlords. For example, Feil was a minority partner in Hanson’s Strip House.

He would not discuss the terms of their Vanderbilt deal, other than to say the lease would “increase over time.”

Real estate agents said that before the pandemic, a food hall could pay between $100 and $300 per square foot, depending on size and neighborhood density.

“But today is a different world,” said one.