City Moves to Seize Eastern Market Weekend Flea Markets from Private Operators

by Larry Janezich

Last Wednesday, August 12, the Department of General Services informed the two Eastern Market flea market managers, Mike Berman of Diverse Markets Management, LLC, and Carole Wright of Washington Arts, Antiques, Crafts & Collectible Associates Inc., that it would take over the management of the longtime independent markets starting October 1.

Both markets, currently managed separately by the two operators, recently moved from the Hine playground to the 300 block of 7th Street, SE, owing to the demolition of the Hine Jr. High School in preparation for Stanton-Eastbanc’s mixed-use development project on that site. The two weekend flea markets are separate and distinct from the Arts and Crafts Market of Eastern Market, which sets up weekends on the area around Eastern Market including the 200 block of 7th Street, SE, and on the plaza in front of the Capitol Hill Swimming Pool. The Arts and Crafts Market is currently overseen by Barry Margeson, DGS employee and Eastern Market Manager.

Written notice to flea market operators Berman and Wright, and to Eastern Market and flea market vendors, came from Barry Margeson, who sent an email, a portion of which reads as follows:

“At the end of July, the Department of General Services (DGS) extended the Licenses to Operate for the two [managers of the weekend flea markets]…until September 30th, 2015. After that date, the Eastern Market staff, which manages the rest of the market, will begin managing the 300 block as well.

We expect that there will be questions about how this will change things for customers and for the vendors who sell on the 300 block. The truth is that customers won’t notice much change. And there won’t be much change for the vendors either: All of the vendors who sell there now will be given the opportunity to keep selling, if they wish. We figure that the majority of them will decide to do so.”

Two years ago, under the administration of Mayor Gray, the two operators and the office of the Deputy Mayor for Economic Development (DMPED) negotiated the terms for the continuation of the weekend flea markets during the construction phase of the Hine project. The final agreement entailed a Mayoral order to close the 300 block of 7th Street on weekends during flea market hours, and licensing the two operators to set up their respective markets on 7th Street.

The original contract with the city to operate the flea market on the Hine playground and then on 7th Street, expired July 31, 2015, some three months after the flea markets made their move to 7th Street.

According Carol Wright, when the operators recently asked DGS through Barry Margeson for a contract renewal, Margeson told her on July 9 that a two year renewal was forthcoming, but with changes. Wright says that on July 29, with two days left before the contract expired, Margeson instead sent a two month extension of the contract. The next day, Wright said she was told that if she didn’t sign the two month extension by 3:00pm on July 31, she would not be able to set up the Saturday flea market the next day. Wright says that a request for a 24 hour delay was denied, and further, that the action violated an agreement the operators had with the city that any early termination of the contract would be done only after 90 days’ notice.

Wright signed the two-month extension, she said, “under duress,” and followed up with a letter to the Mayor’s office requesting a meeting to discuss the sequence of events as outlined above. Mike Berman confirmed that DGS had told him the terms of the contract were going to change and that two days before the expiration of the contract, he was told the contract would be extended only two months, until September 30. When he asked what would happen after September 30, Berman said Margeson told him, “Nothing. Fiscal issues prevent us from renewing. It’s over.” Berman said that one hour before a conference call with Margeson and DMPED to discuss the issue, Margeson sent the email to the vendors.

The “fiscal issues” Margeson had referred to were addressed in an email Wright received from DGS on responding to her email to the Mayor. The DGS email states, in part:

“[t]he recent actions were taken in order to resolve an issue that the District was facing regarding that particular public space on Seventh Street. All leases and Licenses to Occupy that extend beyond a year require a review by the Chief Financial Officer of the District. Upon review, the CFO highlighted the fact that the street was financed with municipal bonds. Using bonds in this way could affect the District’s bond rating, which requires that we address this issue. Taking all considerations into account, the best solution was to extend the expired agreement for two more months and then request that the DGS on-the-ground management team begin managing the 300 block vendors in addition to their current responsibilities.” (Ed. Note: It is unclear why a one year contract could not be implemented.)

Wright says that the municipal bond issue is “bogus” and when she followed up with the Chief Financial Officer’s office was told that “use of 300 feet of the street by an operation as small as ours could have no effect on the city’s bond rating.”

Berman called the move a “power grab – theft. It’s like a third world regime taking people’s business over for the government.” He questioned why the municipal bond issue is coming up now and not two years ago, before Berman and Wright entered into protracted negotiations with the city over how to preserve the markets in the face of the Hine Development, and wondered whether the 300 block is the only street in the city where vendors operate under contract. He vowed to “get to the bottom of this with whatever it takes,” saying he is exploring legal options, including a FOIA. He went on, “This is how DC government treats business. No notice, no due process, no compensation, no consideration, no communication…. Pretty ugly.”

Artist Joe Snyder, one of the vendors in the Arts and Crafts Market at Eastern Market expressed his concerns regarding Eastern Market taking over the management of the weekend flea markets, saying that the legal integration of the flea market into the Eastern Market operation is problematic. “How is it possible for Eastern Market to take over a private business,” he asks. He also worries, “Though the market complex stands to gain considerable revenue by this bold and morally questionable move, they really are unaware of the potential chaos resulting from a forced merger.” He questions whether the Eastern Market staff and security is prepared to deal with the management, collection of revenues, security, and logistics of a market twice the size of the current one.

Barry Margeson did not respond to a request for comment.