Subsidies for markets in jeopardy City merchants say rent may double

Moving to cut its subsidy of the six municipal markets, the city is proposing to increase rents and have merchants share more of the costs of running the facilities.

Monthly rents would increase 5 cents to $12 a square foot plus a merchant's share of a market's operational costs under the Municipal Market Administration proposal.


But some merchants said yesterday the proposal would virtually double their rents and force them out of business because they would be unable to pass on added costs to their customers, who are mostly poor.

Robert Gilliam, who runs a produce stand in Hollins Market, said the rent for his market stall would go from $519 a month to about $1,000 a month next July, if the proposal is approved by the Board of Estimates. No date has been set for board consideration of the matter.


"The city, they don't want to work with you. They are trying to kill you," said Mr. Gilliam.

"No business in the market can afford to absorb the rent increase, and there are poor people who live around here," said Sophia Tsamouras, who runs a bakery that offers 25 cent doughnuts and a luncheonette boasting $1 chili dogs in Hollins Market. "Do you know what it is to sell a doughnut, a doughnut, a doughnut, and have your rent doubled?"

The markets affected by the proposed changes are Belair, Northeast, Cross Street, Hollins, Broadway and Lafayette.

Lexington Market is run by its own board and is not affected by the proposed changes.

The size of the proposed increase surprised the chairwoman of the Municipal Markets Advisory Council who said she wants the proposal altered before it goes to the Board of Estimates for consideration.

"I have some problems with this. I think it needs to be looked at again before it goes to the Board of Estimates," said Councilwoman Paula Johnson Branch, D-2nd, chairwoman of the advisory board. "This is too much of an increase to put on vendors up front."

The Municipal Market Administration will spend about $1.625 million this year to operate the markets but only $1 million of that is revenue from rents. The rest is municipal funds.

Currently, rents at the six markets are $11.95 per square foot. But merchants are also subject to a complicated series of fees and surcharges that hinge on a number of factors, including what they sell and where in a market their businesses are located. Those added charges would be eliminated under the new rent proposal.


Under the administration proposal, a merchant's rent would be $12 per square foot plus their share of their market's operational cost. The share would be determined by the size of a vendor's stall.

Among the costs to be shared by merchants under the proposal are utilities, supplies, custodians and trash removal. The city now subsidizes much of those costs.

In a letter sent to merchants earlier this month, Harry T. Woods Sr., the interim director of the market administration, said the rents would more closely reflect what it costs to run each market.

Administrative costs for the markets, which account for 9.1 percent of the $1.625 million, and the cost of physical improvements to the markets would not be included in the charges, the letter said.

"This process will enable the merchants to exercise control over those items for which they are being directly assessed," Mr. Woods said in the letter.

He added that rents for merchants would go down as the amount of space rented increases, creating an incentive for merchants to "promote the markets to attract new business."


"With all of the budget cuts to the city, we had to view the markets more in a business light," Mr. Woods said. "It's difficult. There is no easy solution. But the city's subsidy has to be decreased. The city just doesn't have the money."

Ms. Branch said the new system would make each of the markets "accountable for themselves." Currently, she said, there is a perception among merchants that some markets subsidize others.

The city markets are the oldest active agency in city government, offering stall space from which merchants sell an array of produce, meats, fish, prepared foods and novelties.

The first city market was established in 1751, and while that one is out of business, six have continued in operation for more than a century.

Most of the markets are almost fully rented with the exception of Upton's Lafayette Market, where about 18 percent of the space is vacant.

All of the markets are in old sections of the city and most abut poor communities.


Thus, some merchants said, they would be hard-pressed to pass the proposed rent increases along to customers in the form of higher prices.

Some merchants said the proposed increases would force them to reduce the amount of stall space they rent.

Myung Shin has run a variety store business in Hollins Market for 14 years. But already she is planning to halve the amount of stall space she uses to peddle her wares, which include toys, hats and costume jewelry.

"If they double the rent, I give up the other stall," Ms. Shin said. "I had my son make a letter to the mayor to complain. I understand a little increase. But 80 percent is too much."

Ms. Tsamouras added that a large rent increase would be short-sighted.

"The markets are landmarks of the city," Mrs. Tsamouras said. "Just think what happens 10 years from now if they disappear. You'll have empty, abandoned buildings and it will cost the city more to create something else in their place."