Lower Seventh Street Saturday Flea to Resume April 6

Eastern Market Report

View from C Street SE of the flea market on the 300 block of Seventh Street SE in late September, 2017. DGS will begin management of a new market on the block as of April 6, 2019. Photo: Elizabeth O'Gorek

The Eastern Market Community Advisory Committee (EMCAC) met March 27th with a familiar list of items to deal with: South Hall leases, the unfolding of its newly proposed Strategic Plan, the proposed capital improvements in the DC budget and the never ending discussion about parking.

But the thrust of the crisp discussion that ensued had to do with the fleshing out of the Department of General Services’ (DGS) plans for the newly vacant and closed lower Seventh St and its future use for arts and craft vending. 

According to Eastern Market Manager Barry Margeson, the previous tenant, Carol Wright, the owner of the privately run Saturday arts and crafts flea market, “did not sign her renewal and because of that we put out a request for proposal application.”

That license agreement was for the 2018-2019 season.

The Department of General Services (DGS) is the landlord for Eastern Market and the Special Use Area. That includes lower Seventh Street. DGS sent out a request for proposal (RFP) in  February. 

The single applicant responded with a “zero rent” counter-proposal. That offer is in contrast to the previous rate of $3050.00 per month for 30 rental stalls each Saturday. DGS therefore decided to add this space to those that it currently manages in 200 block of Seventh Street as well as on the North Hall plaza and the Natatorium.

Margeson announced that lower Seventh Street will open for vending and other activity on April 6. A letter from newly appointed DGS Director Keith Anderson affirmed DGS management of the space, written in response to an inquiry from ANC6B Chair Chandar Jayaraman. 

Margeson was peppered with questions about the mix of vendors expected (antiques, ethno-centric materials and arts and  crafts) along with issues related to vendor set-up and the spacing of tents. The concern is that vending not interfere with brick and mortar businesses, including the new tenants of the 700 Penn (otherwise known as the Hine project).

Vendors Pay DGS Directly

In response to a questioned from a community member, Margeson pointed out that rather than collecting a fee from the previous privately owned flea market tenant who then leased the space to vendors, DGS will directly collect fees from the vendors.

He said that the rental rate cited for the space was based partly on the Marcus Asset Group’s  appraisal of market value and rentals submitted last year and would be $115 per tent or rental space. The current market rentals in the 200 block of Seventh Street spaces that are closer to the South Hall building range from $22 to $44 depending on location and stall size. 

The 300 block of Seventh Street SE, pictured from Pennsylvania Avenue SE, has been without a market manager since Dec. 2018. DGS rejected the lone applicant to an RFP seeking a new contract and will undertake management itself.

An Increase to Market Revenue

Under the previous arrangements, the lower Seventh Street  space had provided the DGS-managed Eastern Market with revenue of $36,600.00 annually under a licensing agreement.

With direct collection of fees, vendors contributions will likely quadruple Market revenue from the 300 block of Seventh Street, meaning direct management significantly improves revenue compared to licensing arrangements with the privately owned companies.

Market revenue is projected to increase to approximately  $150,000.00, about a 15% increase. This would easily boost Market revenue over the $1 million mark.

“The amount that we receive will be more than the current amount that we are receiving from the [privately owned] management companies,” Margeson said.

Market revenue has grown in the last decade as vendor space has expanded from a once-tidy twenty-five or thirty-space market to well over one hundred stalls. In addition, North Hall bookings have increased significantly under DGS management.

Market revenue pre-fire in 2007 was approximately $375,000. Today because of strong revenue growth (revenues of $990,000 in FYI 2018) the Market turns a profit. 

In response to a question about how the revenue will be directed,  Margeson reported that all payments will be deposited in the legislatively mandated Enterprise Fund and that all expenses are paid from this fund.