City Eyes Increasing Rents for Eastern Market Food Merchants/Vendors

City Eyes Increasing Rents for Eastern Market Food Merchants/Vendors

by Larry Janezich

Earlier this year, the Department of General Services (DGS) contracted with Marcus Asset Group to conduct an appraisal of the 14 stall spaces within Eastern Market’s South Hall.  The study grew out of the DC Code requirement that rents reflect fair market rents and practices.  To assist them, Marcus Asset Group engaged the services of Market Ventures, Inc., a specialty urban planning and economic development firm.

The resulting report was made public at the end of August.   The range of recommended rents per square foot for each of the South Hall merchants are shown below, with the low to high figures showing the range in dollars per square foot per year.

Product/Service                Business Name                  Sq. Ft.          Low + High Base Rent

(PSF Annually)

Flowers                                 Blue Iris Farms, Inc.              279           $46 to $49.50

Dairy Products                    Bowers Fancy Dairy              337           $60 to $64

Produce and Grocery        Calomiris & Sons                   643            $38.50 to $42

Delicatessen                       Canales Deli                            665           $81 to $90

Grocery/Prepared Food   Canales Inc.                            309            $38.50 to $42

Meat                                    Canales Quality Meats         367            $35 to $38.50

Poultry and Eggs               Capitol Hill Poultry                 335           $35 to $38.50

Fruits and Vegetables      Paik Produce                           308           $38.50 to $42

Pottery Studio                   Eastern Market Pottery    1,152           $15 to $18

Baked Goods                     Fine Sweet Shoppe                755           $47.25 to $50.50

Restaurant                         Market Lunch                         938           $70 to $90

Poultry and Eggs             Market Poultry                        418            $35 to $38.50

Fish                                    Southern MD Seafood           864          $33 to $36

Meat                                   Union Meat                        1,091         $35 to $38.50

Total Rentable Space                                                      8,461

According to Margeson, the current South Hall rents range from $26 – $40 per square foot per year (excluding the basement space occupied by Market Pottery).  In comparison, rents for stall or vendor space outside the market are as follows:

South Hall Merchants                          $26 – $40 per square foot annually (except basement pottery studio)

Farmer’s Line                                         $28 – $44 per day

North Plaza Arts/Crafts                         $28 per day

7th Street Arts/Crafts                              $44 per day

Prepared Food Natatorium Plaza         $35 per day

Flea Markets                                             $2000 per month each

In a letter to EMCAC accompanying the report, Market Manager Margeson states, “Our plan is to use the average of the upper and lower limits of each stand’s appraised value in the form lease.”  The letter states that the rental rate would increase incrementally over three years until it reaches the appraised rental value (adjusted for inflation).

If the recommended rent increases for the South Hall Merchants are calculated using the average of the upper and lower recommended limits, total annual revenue from merchants and vendors would be $383,125 – $146,119 over the 2016 rent total for the South Hall at $237,006, according to figures released earlier and reported by Capitol Hill Corner here:  http://bit.ly/2eExsh6

In addition, DGS has contracted to for an appraisal to determine what the rents should be for stall space on the 300 block of 7^th Street, between Pennsylvania Avenue and C Streets, SE.  Those spaces are currently occupied by the Saturday and Sunday flea markets which are scheduled to move their whole operations to the newly reopened C Street between 7^th and 8^th Streets at the end of October.  Once that happens, the monthly $2000 the flea market managers pay to DGS will accrue instead to the Hine developers – Stanton-Eastbanc – since under an agreement with the city, they will own that block of C Street.  What happens to the 300 block of 7^th Street remains to be seen.  There is substantial community support for keeping it closed to traffic on weekends, and the current thinking of ANC6B and the Eastern Market Community Advisory Committee is that until a final determination is made by a broad selection of community stakeholders, EMCAC and the Eastern Market Manager should jointly determine usage of the block on a temporary basis.

Also in the works is an appraisal for the vending spaces in and around Eastern Market, including the Farmers Line, the arts and crafts vendors on the 200 block of 7^th Street and the North Plaza, and the prepared food vendors in front of the Rumsey Aquatic Center on North Carolina Avenue.

A consensus seems to be building among stakeholders that rents for the merchants in the South Hall not be increased until the other appraisals are complete when any rent increases necessary to maintain and promote the market can be imposed taking all sources of revenue into account.  EMCAC will consider the appraisal and next steps regarding its implementation at their monthly meeting, Tuesday, September 19, at 7:00pm in the North Hall of Eastern Market.