38.8 F
Saturday, February 24, 2024
Home​NewsEastern Market Rent Appraisal Comes Due

Eastern Market Rent Appraisal Comes Due

Speaking at the Nov. 22 meeting of astern Market Community Advisory Committee (EMCAC) Eastern Market Manager Barry Margeson said the deadline for the South Hall merchants to submit an independent appraisal separate from the proposed rental rates recommended by the Marcus Asset Group, hired two years ago by the Department of General Services (DGS) to make an assessment of market rates for proposed South Hall leases, is November 26th.

The South Hall merchants have asked for another extension until December 30th.

The South Hall merchants did not meet the original deadline of August 21, end the EEMCAC supported two extensions, both of which were granted by DGS.

According to Margeson, if an independent appraisal is not received, DGS is going to move forward with new leases and the new rental rates that in many cases will lead to a doubling- or nearly tripling of the South Hall merchants’ current rent.

One market community member said that If these rental rates are enacted, ‘we are seeing the end of the merchants of the South Hall’.

Former EMCAC member Richard Laymen, now a consultant to Architrave, summed up the reasons for that the South Hall merchants are currently struggling. “Nine new full line grocery stores and three specialty grocery stores have opened in the Capitol Hill retail trade area,” he said, “plus the internet, plus food delivery, plus the rising percentage of restaurants as a proportion of the consumer dollar spent on food, plus Costco.”

Layman added that lots of places have as much competition but few have it all located within a five-mile radius. All of these challenges have arisen in the past decade, he added.

Kick Off for Market Strategic Plan

The unfolding of the strategic plan process began in earnest at the Nov. 22 EMCAC meeting as Scott Betz gave a short and concise presentation of its various stages, its grand finale a set of recommendations for how the Eastern Market will address the economic headwinds of this twenty first century.

According to Betz, an architect and the project manager, Architrave has hit the “ground running, mobilizing, opening up communications, researching and designing the process.”

Architrave was the recipient of the grant being administered by the Deputy Mayor for Planning and Economic Development (DMPED), which has a shelf-life of one year.  Architrave is a local firm headed by Robert Weinstein and located on Capitol Hill.

Councilmember Charles Allen secured $300,000 in funding from the City Council for the formulation of a strategic plan for the Eastern Market’s multiple challenges.

Part of Betz’s presentation was a timeline which outlines three stages: the gathering of information and outreach (taking place November to January); recommendations from the various stakeholders (February to April); and the presentation of a draft document to the community. After community comments and revisions, a final recommendation for action is expected beginning in early Summer 2020.

Market Manager’s Report  

Eastern Market revenues for August and September were respectively $80,599 and $73,704. North Hall revenue continues to disappoint at $14,954 and $15,675 and is down 18% for FY 19.

Market Manager Barry Margeson offered as an explanation for this sharp decline in North Hall revenue, which represents a $53,513 less in rent so far this year, saying such losses are ‘widespread throughout the District’ but offering no details.

Eastern Market’s overall revenues were down 81,182 from a record high of $975,000 in FY 19. These numbers make the likelihood of a FY 19 Market profit dubious at best.

Margeson said that overall Market revenues were down because of the expectation of the anticipated new rental rates of the South Hall merchants.

However, a closer look at current revenues reveals that South Hall rent collections were down more than $20,000 from FY18. More importantly there was no growth, but rather a $15,000 loss in the combined flea market revenue.

One problem in conducting an analysis with the financial information provided by the Market landlord and management at DGS provided by Margeson is that year-end data is often incomplete, making it difficult to gauge what aspects of operations need the attention of EMCAC.

Among the incomplete data sets under discussion by EMCAC for analysis and budgetary exploration are a wholesale lack of any FY19 expenses.  EMCAC said that data about income is provided but no information in regard to expenses, making oversight difficult.



Related Articles