The Department of General Services (DGS), the manager of the Eastern Market, hired the Marcus Asset Group (MAG) in May to do a certified appraisal of the fair market value of the South Hall merchants’ stalls. This was done as part of the process of issuing long term leases to the merchants.
Currently the South Hall merchants pay in the range of $25 to $35 per square foot. MAG report concluded that $44 to $91 represents a fair market rent.
The Eastern Market Community Advisory Committee (EMCAC) will respond at their next scheduled public meeting to be held on Sept. 19th in the North Hall.
EMCAC member Susan Oursler, who represents the Capitol Hill Restoration Society, points out that the 1999 Eastern Market legislation caps rent increases at 102 percent of the Consumer Price Index. The same legislation, Oursler states, restricts what the merchants are allowed to sell: “I thought the report was good. Robust. But ultimately there are no comparisons to the Eastern Market. Trying to set rents based on comparables is impossible,” she said.
According to EMCAC Chair Donna Scheeder, “The report was not changed one iota from the draft. One of the biggest problems with this report, is that it totally ignores any restriction in the legislation on rent increases. They are proceeding as though there were no previous leases.” In addition, she states, the report employs “a flawed methodology which serves to divide the merchants and vendors. The appraisal should apply to all of the market vendors and merchants.”
The recommended rates are in theory aligned with what is fair market value, stated an EMCAC member who preferred to remain anonymous. “The appraisals are not necessarily wrong. When you talk about stall space like that rents triple or quadruple. They should be selling a product that can pay for the square footage. It gives some legitimacy to the appraisal. Those numbers would demand that any number of vendors change their operational models.”
EMCAC met twice earlier this summer to consider a draft version of the MAG report. In the discussions, the rents proposed by the report were characterized by some as “extreme.” One participant pointed out that “10 of the 14 merchants faced increases of 44 to 88 percent.” Moreover, the report, some complained, barely touched on the controversial issue of lack of parking; or the historic nature of the Market.
