Facing a gap between revenues and expenses that ranges from $600,000 to $700,000 per year, the Nashville Farmers' Market is considering major changes to its operations at the indoor Market House. The plans were outlined earlier this week at a meeting of the market's board and its Market House tenants, my Nashville Post colleague Stephen Elliott reports.

At the meeting, market director Tasha Kennard said the board is considering adopting one of three plans to increase rental rates for businesses inside the Market House, which contains a food-court-like array of restaurants and retailers.

The market, located at 900 Rosa L. Parks Blvd. north of downtown, is owned and operated by the Metro government, meaning the city has been covering shortfalls between operating expenses and revenue. (The land on which the market stands is owned by the state of Tennessee.)

“If we’re constantly going to the city and asking them to bail us out every year, and we’re not demonstrating that we’re doing anything proactive about it, they’re going to continue to ask questions about the viability of the Nashville Farmers’ Market at its current location,” Kennard said at the meeting.

Addressing tenants, she said, “The likelihood that we’re going to do nothing is zero, so you need to get prepared.”

The new proposed changes come two years after the market's controversial move to "producer only" rules in the outdoor farm sheds. Resellers of produce are no longer permitted there, only farmers.

(Since it's a year-round market in a climate where crops don't grow year-round, the resellers previously provided a major source of the produce in the sheds, particularly in the winter. They were the reason you could formerly stroll into the sheds and buy out-of-season produce or a tropical banana.)

Without the resellers, the amount of produce in the sheds was immediately reduced, causing consternation among many shoppers. Back in 2015, Kennard defended those changes, citing "best practices" among markets around the country: "We've shortened the food chain a little bit, and we're creating a market that is more connected to the local and regional growers, which helps them in the long term and ensures the integrity and transparency of where your food comes from."

The changes discussed Monday affect only tenants of the Market House, which also has an application process, but with different rules and standards.

“We’ve always been a low-cost, affordable location for startup small restaurants and retail, and we want to keep that,” Kennard said after Monday's meeting. She said three-fifths of businesses in the Market House are owned and operated by immigrants, which enhances the diversity of the dining options.

The board is considering three possible formulas to increase lease rates:

Option A: Increase the base rate to $14 per square foot in the first year, $16 in the second year and $18 in the third year, followed by possible later increases in accordance with the Consumer Price Index. This option would increase earnings by $500,000 by the third year, according to the presentation.

Option B: Increase the base rate to $13 per square foot in the first year, $15 in the second year and $17 in the third year, followed by similar later increases in accordance with the Consumer Price Index. This option would increase earnings by $400,000 by Year 3.

Option C: Increase the base rate to $17 or $18 per square foot in the first year. This option would improve earnings by $350,000-$400,000 in the first year.

Some other proposed changes for Market House tenants:

Required to maintain Health Department score of 95 or above at all times

Required to post hours of operation

Required to demonstrate local and regional sourcing

Required to demonstrate and implement recycling and material and food waste reduction efforts

Required to demonstrate marketing plan

Use of Styrofoam prohibited

Required to close at 4 p.m. during special events, a maximum of 24 times per year.

All tenants would be required to remain open at minimum Tuesday-Sunday, with hours of 10 a.m.-6 p.m. on weekdays and 10 a.m.-8 p.m. on weekends

Individual tenants will meet with market officials next week to discuss the changes. The board plans a work session on the issue March 29, followed by a vote on April 26.

“I think it’s really important that people know we’re not increasing our rental rate because everyone else is and because the market demonstrates that we can," Kennard said. "We’re doing it because we need to cover our expenses. We’ve been relying on the city to cover our expenses for a very long time and this rate model proposal is an opportunity for us to demonstrate that we can do that.”

2016 was a turbulent year for the market. At a Metro budget meeting in May, African-American council members quizzed Kennard on whether changes at the market had created an unfair impact on minority merchants.

Kennard responded sharply, according to coverage in The Tennessean, which quoted her as saying: “There has been a culture of the Nashville Farmers’ Market for generations — not recently — that when a merchant is unhappy about their placement or about their opportunities, they have come to you and they told you that they are being discriminated against. It is not true under my watch,” she said.

“I will not stand up here and be told that I’m a racist,” she added.

A big blow to the market came later in May, as the state geared up construction of the new Tennessee State Museum (which will be next door to the market site, at 1000 Rosa L. Parks Blvd.) by razing the market's north farm shed — and consuming a chunk of the market's parking lot. Since then, the market has arranged for additional satellite parking, plus free weekend parking in all state lots.

Kennard was hired as executive director at the market in 2013 after the Metro General Services department had operated the market for more than year. General Services stepped in after the resignation of the previous director, Jeff Themm. He left following a review by Metro's finance department that was critical of the market's finances and management.

Throughout all the turmoil, the market has continued to be a pretty dynamic place (and an excellent lunch destination), with festivals celebrating seasonal crops, and a monthly Night Market party, along with chef demonstrations and pop-ups in the Grow Local Kitchen inside the Market House. In addition to housing the farm shed vendors, the market is also a pickup spot for local produce from various CSA options during peak growing season.