300 block of 7th Street, 7:00am, August 12, 2017
City Extends Weekend Eastern Market Flea Market Use of 7th Street for 7 Months. But….
by Larry Janezich
On October 12, the Department of General Services offered to extend the license agreements with the two weekend flea market managers, to allow them to continue to operate on the 300 block of 7th Street, SE, from November until the end of May, 2018. During the period, DGS will develop an official Request for Proposals (RFP) process for any and all potential managers of the Saturday and Sunday flea markets on the 300 block of 7th Street, SE. Attached to the offer was a substantial increase in rent for the space.
Currently, the total rent the two managers pay the city for use of the street is $4000 a month. The new rate based on the findings of an MAI Certified Appraiser will be $6100 a month. Currently the two operators pay a total of $48,000 per year. Under the higher rent, the operators would pay $73,200, a difference of $25,200, roughly an additional $1000 a month increase for each flea market manager.
Barry Margeson, Eastern Market Manager for DGS, says that the Market pays DDOT $56,000 a year for the loss in weekend parking revenues for the 300 block of 7th Street.
The current licenses for operating on the 300 block expire at the end of October, upon which the flea markets are scheduled to re-locate to the newly reopened C Street between 7th and 8th Streets. The re-opening is now projected to be the first weekend in November.
The community strongly supports continued closure of 7th Street between Pennsylvania Avenue and North Carolina Avenue, but there is uncertainty how the 300 block will be used, with much depending on the voices of the future retail merchants who will occupy the first floor of the Hine project.
Saturday flea market manager Carole Wright is cautiously optimistic and intends to use both C Street and the 300 block of 7th Street during the 7 month extension. She says, “We intend to have a wraparound market ….however, we are still not able to lock in the date of completion for C Street”. Regarding the use of the 300 block after the seven months, Wright says, “We do not know if those new stores will even want vending in that block.”
Sunday flea market manager Michael Berman says he strongly objects to the increased rent and that the extension should be at the current rent, given the lack of notice and due process. He says, “We are not able to pass cost increases on to vendors in form of rent increase to them.” Berman called the appraisal flawed as the result of faulty input involving a disparity in size, rent and amenities of the spaces which were used as comparables.
Berman says, that the Sunday flea market will continue on the 300 block of 7th through Sunday, October 29 – “The continuation after that is uncertain.” Berman would like the Eastern Market Community Advisory Committee (EMCAC) to give the flea markets the same deal they gave the South Hall Merchants in delaying any increase in rent until a strategic plan for all outdoor vending areas under Market control is developed.
EMCAC chair Donna Scheeder held out little hope that would happen. She told CHC “I don’t have a problem with increased rent for public space when the goal is to make Eastern Market self-sustaining and I think most members of EMCAC would agree. I think the 300 block on 7th Street has been underpriced and I’d like to see some of the increased revenue go into an increased safety and security plan.”
That position seemed to be at odds with EMCAC’s response to DGS’s request for comment on the 300 block of 7th Street. On September 19, EMCAC voted 4 – 3 for language supporting “DGS proceeding to have the value of this public spaces (sic) assessed and no rents, permits or contracts for occupying that space should be done until the assessment is completed. The appraisal of space used for market activities should be looked at as a whole and not in 3 individual pieces.”
The proposed rent increase did not sit well with ANC6B Commissioner Diane Hoskins, unhappy at the lack of community consultation regarding the rent increase. Hoskins said, “This is really disappointing. This completely contradicts the will of the community to maintain the weekend flea market. The September 12 letter from ANC6B to DGS asked that DGS take no actions that would change the current use and operations. A dramatic increase in rent certainly would be a major change”.
EMCAC will consider the 300 block appraisal report at its next meeting at 7:00pm on Wednesday, October 25, in the North Hall of Eastern Market.
CAPITOL HILL CORNER 
I am a market art vendor, and I really cannot say whether or not the appraisal process for the South Hall Merchants and for the 300 block flea market is truly sound. What I can say is that the primary objective of EMCAC since the fire has been to institute a de facto subsidy of the South Hall rents, to the laudable end of securing continuity of South Hall Merchants and protecting them from outside competition . The primary means to secure revenue has come from the outside market, beginning with unified management in 2009. It is now well documented that the outside market – operating primary only two days a week, outside on bare pavement – contributes about $100,000 dollars more to the annual budget than the interior market -operating 6 days a week in heated/air-conditioned space.
The beginning of Hine construction brought a small windfall to the effort to balance the budget while keeping South Hall Merchant rents well below market rate, because the revenue from the flea markets – who had been located on the Hine playground – was redirected from the school system to Eastern Market. Despite the low rents, the South Hall seems to continue to lose market share. The South Hall Merchants blame the slow decline on weekend pedestrian streets and parking limitations, and consider the proposed rent increases as a near fatal blow.
I think that the continued presence of multigenerational family businesses is very important to the market. I also think that years of de facto subsidy has hampered the incentive to compete and created a culture of entitlement that EMCAC is more than willing to support. We have seen a market that has grown less in touch with a new generation of the community it serves and survives on nostalgic boosterism that has inherent limitations. The prevailing strategy is to attempt to recreate the circumstances of decades ago when the market was the only show in town.
The real challenge facing DGS and EMCAC is forming a rent structure and leases that encourage a mix of longtime merchants and new food entrepreneurs who are wide awake and fully engaged in the community as it is presently, as it is becoming, as well as its history. Making the market better does not mean making it something else.
“We have seen a market that has grown less in touch with a new generation of the community it serves and survives on nostalgic boosterism that has inherent limitations.”
As a customer and longtime resident in the community, i coulnd’t agree with this more. The indoor vendors have not little to nothing to adapt, evolve, or grow their inventory over the years, going back before the fire. You could walk in there tomorrow or 8 years ago and would be limited to buy the same food items. Much of which is either from a grocery store or similar quality marketed as something more fresh. I go to EM much less during the week these days because there is no reason to. I will go most weekends for fresh produce.
I sit on EMCAC and can’t speak for others. In response to Joe Snyder’s comment, I would term it differently. It is not EMCAC that seeks to “subsidize the rents for South Hall,” it is the way that the 1997 law governing Eastern Market has been set up, which grandfathers in all vendors operative at that time. It’s a form of lifetime tenure.
Plus, EMCAC is merely an advisory body. DGS/The DC Government ultimately controls and manages the property, sets rents (bounded by the provisions of the law), etc. Just because DCG is advised by EMCAC doesn’t mean they do what is recommended. (Like the arguments I have with my wife, when she says I don’t listen. I respond: “sure I listen, I’m just not doing what you say.” Note too that this is a problem wrt ANC-DCG relations. The same thing goes: ANCs aren’t being heard. That’s not the case. They’re heard, it’s just that the bodies “hearing them” choose a different course.)
As my friend Richard points out, the influence of EMCAC has ebbed and flowed over the years. The very fundamental approach to the market has been as a politically driven preservation project, perhaps with the best of intentions, by the immovable core of EMCAC, who’s strongest suit may not be the commercial realities that surround the market. This is the approach that has generally held sway in market affairs.
The ‘lifetime tenure’ widely associated with the right of first refusal in Title 37 Law, has never really been tested. I can only say that there are those who understand the right of first refusal as an event rather perpetual state.
“I can only say that there are those who understand the right of first refusal as an event rather perpetual state.”
I wish someone would expound on this. Interesting, but not sure what it means…