Eastern Market Report – September 2017


EMCAC Says Keep Lower Seventh Street Closed
The Eastern Market Community Advisory Committee (EMCAC) issued its final report on the disposition of Lower Seventh Street (www.easternmarket-dc.org/emcac).

Among the highlights of this report as adopted are the following recommendations:

That the 200 and 300 blocks of Seventh Street remain closed on Saturday and Sunday.

That the Department of General Services (DGS) proceed to have the value of all of the public spaces assessed and that no rents or permits or contracts are to be done until that assessment is completed. This is to include the South Hall.

Establish a validated parking location and delivery service/pick up point for South Hall customers to alleviate issues due to parking accessibility.

DGS to determine a Strategic Plan for the Eastern Market Special Use District (EMSUD).

Lower Seventh Use: Uncertainty Remains
In the meantime with four of the 11 voting members absent at the Sept. 19 meeting, EMCAC failed to resolve differences over the future weekend use of the 300 block of Seventh Street SE which is currently closed on weekends to accommodate the two privately operated flea markets.

At a previous meeting EMCAC voted to support continuing the weekend closures of the 200 and 300 blocks of Seventh Street SE. EMCAC held two additional public meetings to gather feedback from the community on the closure. The committee received over one hundred emails on the subject. The closure was strongly opposed by the Eastern Market South Hall merchants, who remain concerned about the availability of weekend parking.

In the interim, EMCAC Chair Donna Scheeder tasked EMCAC Vice Chair Chuck Burger and Advisory Neighborhood Commission (ANC) 6B’s EMCAC representative, Commissioner Dianne Hoskins (6B02) to meet, frame a solution and report back to the full committee.

At the September 19 meeting, Hoskins stated that she and Burger were unable to reach an agreement on the street’s future use.

At issue according to Hoskins was the preservation of the “lively public market atmosphere” that she insisted was the “vision for the street and the community enjoyment” desired by Capitol Hill residents. Burger, on the other hand, struggled to find compromise language designed to keep the future use of lower Seventh Street SE firmly under the purview of DC Department of General Services (DGS) contingent on a plan approved by EMCAC.

Burger moved a substitute amendment; more amendments were offered. For over an hour, EMCAC remained at an impasse. Committee members disagreed fiercely over language.

Then Scheeder walked EMCAC members paragraph by paragraph through the Burger proposition. She secured agreements on all his language except the last paragraph about the future use of the block once the existing tenants, the private weekend flea markets, depart for space on C Street SE.

Hoskins dug in. She refused to accept any compromise on Burger’s language. She called for a vote to strike the last paragraph of Burger’s substitute amendment. Her motion prevailed.

Appraisal Moves Forward
DGS hired the Marcus Asset Group (MAG) to do an appraisal in order to determine fair market value of the South Hall merchants’ stalls. Current rents are in the range of $25-35 per square foot. This was done partly to move forward on giving the merchants long term leases. MAG has recommended significant rent increases, doubling and in some cases nearly tripling the rent. Recommended rents begin at $44 and soar to $91 per square foot.

However, under a process laid out by DGS the merchants may hire their own appraiser and under certain conditions and if there is no agreement, a third appraiser will be hired by DGS who will then make a determination of fair market rent. The merchants have asked for more time in order to make a decision on hiring a second and independent appraisal group.

Scheeder announced that there will be a special called meeting in the North Hall at 7 p.m. on October 4 to consider final recommendations and to vote on the appraisal report.

Market Manager’s Report
August revenues were $85,393.56. North Hall revenue was down at $7665.

Revenue and expenses for fiscal year 2016 which ended on September 30, 2016 were released showing a profit of $25,857.

Revenue for FY16 was $893,702. North Hall revenue was $229,678.  North Hall Event Space Coordinator expense was (.36) of total revenue. The industry standard is no more than (.30).

Overall administrative expenses were $320, 244. or (.35) of total revenue. The DGS portfolio is not public market oriented, but rather one that primarily functions as a property management entity.   Salaries are commensurate with those of DGS’s real estate division. DGS is the landlord and manager of the historic Eastern Market.

The Eastern Market’s revenue has virtually tripled since the fire of 2007 and the subsequent management of the Market by DGS. The geographic area and reach of food and non food vendors has substantially expanded as well, requiring direction and supervision.

There was a brief exchange between Market Manager Barry Margeson and EMCAC member Bill Glasgow about the Enterprise Fund, which is the Eastern Market operating fund..

Glasgow asked whether or not the Market was “still in the black and making money? ”

Margeson responded: “Yes. ” Margeson added: “This is all in the Enterprise Fund. The Enterprise Fund is the Eastern Market operating fund. This money goes into the Enterprise Fund and out to the Eastern Fund”. “

Asked by Glasgow what the current balance of the Enterprise Fund is, Margeson replied: “Right at about zero.”

Scheeder then stated that in the previous year the Market operated with a small surplus and asked what happened to the surplus.

Margeson continued: “ The surplus? That money will carry over to this year. So it will be fifty to seventy thousand. That money will carry over to this year. We cannot use it this year.”

Glasgow continued: “We cannot use it this year. Is it there? Is there a lot of money in there?”

Margeson replied: “Yes, but we cannot use it. “

The Enterprise Fund is the legal repository for all Market revenues and expenses.

Scheeder ended the exchange by asking Margeson to ”provide a balance sheet at the next meeting that shows us where that money is. “

Scheeder and Burger as well as Tom Kuchenberg and Monte Edwards were re-elected by acclamation as officers of EMCAC.