Which food wholesaler will be Fulton Market's last?
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Photo by Manuel MartinezLouis Manis, center left, is vice president and Harry Katsiavelos is co-owner and president of Peoria Packing in Chicago's Fulton Market District.
Gentrification west of the Kennedy Expressway is taking the “market” out of Chicago's Fulton Market District, but a few longtime businesses are digging in to stay—at least for now.
Most of the area's meatpackers, wholesalers and food distributors have sold their properties and moved on or are in the process of selling, amid a development boom in the neighborhood that's tucked into the northwest corner of the West Loop.
The wave of building conversions and new construction has already begun to transform the main thoroughfares of Fulton Market and Randolph Street from gritty food processing to a growing mix of boutique hotels, restaurants, shops and offices—including Google's Midwest headquarters and McDonald's future global headquarters.
Real estate values have soared so high that many owners haven't been able to resist the temptation to sell. And an expected surge of car and foot traffic leaves the relatively small number of remaining businesses wondering how much longer their forklifts and delivery trucks can coexist with new neighbors.
“Years ago, you never saw a woman walking with a baby carriage, or someone jogging,” says Harry Katsiavelos, co-owner and president of hog processing business Peoria Packing. “You run the risk of a truck blindsiding someone. You can manage the business, but that's always in the back of your mind.”
Katsiavelos says his company's retail operation, a butcher shop at 1300 W. Lake St., expects to thrive long-term. The wholesale business across the street is likely to stay for at least a few more years, but Peoria Packing's owners are already evaluating options. “I think everybody in this area has given thought to where they'd relocate,” Katsiavelos says. “You'd be foolish not to. The city is expanding, and we can't stop that.”
'SET UP FOR HORSE AND BUGGY'
For now there appears to be one haven. A planned manufacturing district north of Fulton prohibits many types of competing real estate uses, and a few companies there have the benefit of dedicated parking and loading areas. Three such businesses, all just north of Google's offices at 1000 W. Fulton, are Fox De Luxe Foods, Cougle Commission and Pioneer Wholesale Meat. “We need to ride it as long as we can,” says Sam Samano, owner of poultry, pork, beef and seafood wholesaler Fox De Luxe. “Business is good here, and our customers like where we are.”
Fox De Luxe recently acquired Wheeling-based Bon Ton Food Service, where it could eventually consolidate operations if needed. But the PMD has helped keep Fox De Luxe's Morgan Street facility functional, Samano says.
“I understand why people on Fulton have to move,” he says. “Fulton Market was not set up for 2016. It was set up for horse and buggy, and it's tough trying to get semis in with the narrow roads. As long as we have the PMD zoning and the ability to bring in trucks, we're fine.”
If the last few companies were to pack up, it would mean the end of an era. It also would inconvenience many customers, such as restaurant owners, accustomed to driving to one area of town and bouncing among neighboring shops to load up on meats, cheeses, eggs and seafood.
NO SINGLE GO-TO AREA
Wholesalers that have already sold their buildings have clustered in a few areas, such as moving several blocks west or going south a few miles to be along the Stevenson Expressway. But no one go-to area has emerged.
“There are fewer places for people to go, so they'll come (to us),” says Lee Freidheim, CEO of poultry processor and distributor Cougle Commission. “On the other hand, if the supporting businesses have all left, there won't be that synergy in the neighborhood.”
Cougle has been around since 1873, but its current Aberdeen Street facility was built to its specifications just 30 years ago, Freidheim says.
“We like the neighborhood for the original reason we moved here: It's near expressways and the population downtown,” he says. “Our business is healthy, so we could easily stay here. If they change the zoning around us, that would change the dynamic and change the value of our property. Whatever happens in the future will be determined by the type of zoning we have here.”
Companies that have sold properties, or are in the process of selling in anticipation of a move, include Fulton Market Cold Storage, El Cubano Wholesale Meats, Pastorelli Food Products, Economy Packing, Nealey Foods, Bridgford Foods, Isaacson & Stein Fish and John R. Morreale Meat. Most of those businesses are moving from outdated buildings where loading docks are immediately alongside sidewalks now packed with pedestrians.
“I think it's fair to say all of Fulton and Randolph will be cleared out in this development cycle or the next cycle,” says Chicago-based property sales broker Gino Tabbi, a managing director at New York-based Newmark Grubb Knight Frank. “Pedestrian traffic is not going to permit these guys to operate anymore.”
Other companies have evolved in order to stick around. J.P. Graziano Grocery's fourth-generation owner, Jim Graziano, has transformed the Randolph business from wholesaling and distribution to a sandwich shop and neighborhood grocery. On Lake Street, wholesaler Crown Corned Beef & Foods acquired rival Ex-Cel Corned Beef and turned some of the new space into a retail shop called the Corned Beef Factory. It plans to open a second shop in the Loop by March.
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