Market Merchants Request Lease Appraisal Extension

Eastern Market Report Part I

743
Courtesy Eastern Market/DGS

In a move that seemed to catch Market Manager Barry Margeson by surprise, South Hall merchant Bill Glasgow of Union Meats introduced a motion asking for the support of the Eastern Market Community Advisory Committee (EMCAC) in an effort to extend the period that the South Hall merchants have been given by the Market landlord to produce an appraisal.

The meeting was held on Wednesday, July 24 at 7 p.m. in the North Hall of Eastern Market (corner Seventh Street and North Carolina Avenue SE).

Agreement on an appraisal which would determine Market rents appears to be the last step in what has been a decades long effort to resolve lease negotiations. The Department of General Services (DGS) is the Market landlord.

According to Margeson, the merchants have until September 2nd to respond with their own appraisal. The DGS-ordered appraisal has been met with resistance by both the merchants and by EMCAC, the latter which is a legally constituted advisory board under the 1999 Market legislation.

The DGS appraisal was produced by the Marcus Asset Group in 2017 and recommended not just the doubling but a near tripling of rents as currently paid by the merchants.

The difficulty in using the results of any appraisal to determine future rents is there are no comparable entities in the District, as the Eastern Market is a singular and historical structure and business.

A motion was supported unanimously by EMCAC to allow the merchants an additional 120 days from the proposed deadline of September 2nd.

Margeson said that DGS will move ‘forward with leases based on the rent rates determined by the appraiser contracted by DGS’.

The other option rejected as a “non-starter” by Glasgow was for the merchants to open their books to DGS and have the leases tied to a percentage of profits from their businesses.

Market revenues for the months of May and June were respectively $73,554.72 and $97,957.89 with weekend farmers revenue totaling $5098 for the month of June. The Market’s strongest month was October 2016, when revenues exceeded $103,000.