Aug 9, 2012: Save The Flea Market: Update 3

MARKET UPDATE
The third in a series of updates on a campaign to save The Flea Market at Eastern Market from redevelopment, this report will be the second summarizing testimony of consultants, hired by flea market owner Diverse Markets Management, LLC (DMM), before the D.C. Zoning Commission recently.

The testimony was in support of opposition to the developers' "planned unit development," which would cut "by two-thirds the space for vendors and customers, eliminating 38,000 square feet of market space from the current configuration," of the Flea Market at the Hine Junior High School site at 7th and C Streets, SE, where it has operated for 20 years, according to DMM President Michael Berman in introductory remarks.

"Overall Economic Activity, Visitation and Businesses Incubated at The Flea Market at Eastern Market," was the title of testimony delivered by Tom Moriarity, Principal, The Eisen Group LLC, a D.C. real estate design and analysis firm.

"The Flea Market at Eastern Market has grown over thirty years to generate total sales of $5 to $6 million per year, on average; to provide a low cost of entry into consumer sales for hundreds of exhibitors over the years; and to incubate over sixty businesses ... into well over sixty stores," Moriarity reported, and to support "dozens of working artists establishing their careers.

Flea market exhibitors have expanded into multi-store operations, have painted Presidential portraits on commission, and have created jobs and economic opportunity for area residents, immigrants and entrepreneurs."

These findings, Moriarity said, were supported by an on-line survey of current vendor/exhibitors "prepared by the Eisen Group and distributed to over a hundred twenty exhibitors. Of those who received the confidential survey, fifty-one responded, and forty-six provided sales information. This response rate (approximately 38%) is considered a high penetration rate for a survey of this nature and indicates the findings are statistically valid."

"In addition to the exhibitor survey, visitation at the flea market was also measured" by counters on Sundays in May, Moriarity wrote. "The 'click count' methodology is widely used by museums and other attractions that do not charge an entry fee (such as the Smithsonian Institution)."

The entrance counts totaled approximately an 11,000 person average, described as "Peak Peak" attendance, which was adjusted downward to "the average number of visitors per Sunday is 8,164 persons." Using both the exhibitor survey and click counts, combined with a commissioned customer survey, reported on in part two of this series; Moriarity concluded "sales in 2012 estimated at about $5.99 million for the Flea Market."

BUSINESS INCUBATION AT THE FLEA MARKET AT EASTERN MARKET
Moriarity also analyzed a survey of business incubations conducted by the Flea Market. From the early years through mid-2012, "at least 62 businesses have started at the Flea Market and grown into permanent retail locations, almost all as independent retailers, and several as successful suppliers whose products are now commissioned or sold at major retail stores such as Barney's New York, Betsy Fisher, Nordstrom Department Stores or other retailers.

"Twelve of the 'incubated' businesses have grown into  multiple store operations, with branches in DC, MD, VA, PA, NY, FL and CA." Of the 62 businesses, 40 remained in D.C. where the impact "is strongest." And "the average number of operating years per business after opening is 8.8 years...This suggests that the growth and sustainability of incubated business is stronger than typical retail operations," Moriarity wrote in concluding his testimony.

"Somebody should commission a study of the cost effectiveness to cities of this type of incubation--the sales taxes, store rents and real estate taxes subsequently paid into jurisdictions," said Berman, commenting on the Moriarity testimony. "And the incubation factor occurs with very little subsidy by the City; in fact we pay it rent for the use of its public space."

Our next newsletter will focus on "place-making" and how The Flea Market works as a great public space.

You can view this report here:  Business Activity & Incubation Report
and all of them at Market History page