DC Govt Just Initiated A Hostile Take Over Of Beloved Eastern Market

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WASHINGTON — Earlier this month officials with the Washington, D.C., government informed the manager of the historic Eastern Market flea market that it would be taking over the operation, and his business was no longer in charge of managing the popular and successful weekend destination.

Mike Berman has been operating a flea market in a D.C. school yard for nearly 20 years, but two years ago, the school began plans to be demolished for new construction, and he was forced to move operations elsewhere.

At the time, the city, under the administration of Democratic Mayor Vince Gray, struck an agreement with Berman’s Diverse Markets Management and another market operation, the Washington Arts, Antiques, Crafts and Collectible Associates Inc., that would allow the two markets to continue operation during construction on a closed section of the city street alongside Eastern Market.

The original agreement with the city allowing the markets to operate expired July 31, 2015, at which point Berman asked the D.C. Department of General Services (DGS) for a two-year extension.

Berman told The Daily Caller News Foundation that DGS promised him that two-year extension, only there would be some changes.

Berman found out later he was the change.

“They essentially stole the operation from the vendors and took it for themselves,” Berman told TheDCNF.

According to Berman, on July 29 with just two days left on his contract, Barry Margeson, an employee of DGS and the manager of Eastern Market, offered up a two-month contract extension. If he didn’t sign it, Berman said, he would not have been able to set up his flea market that weekend.

The only thing Berman could do was sign the two-month extension and try to settle things with the city in the following weeks.

“They’ll take our vendors and our 20-year investment and say, ‘Thank you very much, we’ll take it for ourselves now,'” Berman said.

Berman sent letters to the mayor’s office, city council members and to DGS to try and figure out what was going on, but it didn’t help.

According to Berman, when he asked what would happen after the contract expired Sept. 30, the response he got was simply that he could do nothing. It was over.

According to a letter sent from DGS to the vendors, any lease entered into by the city with a private entity that lasts for more than a year needs to be reviewed by the city’s chief financial officer.

Upon review by the CFO, it learned that the street the flea market was operating on was financed by municipal bonds, which can only be used for government functions.

“Using them for any other purposes can impact the bond rating,” the letter read.

David Umansky, a spokesman for the CFO, was confused as to exactly how the closure of 300 feet of a city street for a few hours, two day a week, would affect the city’s municipal bond rating.

“They have to explain it to me also,” he said.

Under city law, infrastructure paid for with government bonds can’t be used for private purposes because it could affect the tax-free status of the bonds, Umansky explained, but “it’s not going to lower the bond rating, that I can tell you that,” he said.

It was also unclear how, if the flea market’s operation could affect the status of city bonds, it was allowed to operate on the street in the first place.

Umansky didn’t know and repeated requests for comment from a DGS spokesman were not returned.

Berman said he didn’t buy the city’s municipal bond issue, and said it amounted to nothing more than a “hostile takeover” of a business he has worked for two decades to build.

“It seems absurd that our tiny little operation would affect the municipal bond rating,” Berman said. “Not only am I concerned about losing my business, but how does that affect every other event that happens on a city street every day?”

Each weekend, dozens of farmers markets set up on city streets throughout the city. Berman questioned why the municipal bond issue hasn’t come up in the past and if it could affect these markets now that the city apparently has precedent to take over businesses.

Berman’s company operates several other markets across the city, including a very successful Christmas market that sets up downtown each winter, and he said he was fearful that he might lose those as well.

“We lose this market, we lose this company, which is our main stay,” he said. “We fear for the rest of our markets, that they will go after them next.”

Diverse Markets Management has 15 full-time employees, eight of which work exclusively at the Eastern Market flea market on Sundays. Berman said if the city takes over his operation, all of these people will lose their jobs.

In the letter Margeson sent to vendors, he said he expects that customers and current vendors won’t notice much difference after the city takes over and that all of the vendors can continue selling, if they wish.

“We figure that the majority of them will decide to do so,” the letter reads.

Berman was less optimistic, however, saying all of the vendors he has talked to are opposed to the city taking over. He said the city has been running Eastern Market for about six years and has done little in the way of marketing or support for current vendors.

“Not only does the city not want the market to grow bigger, but there is a big fear on the street that they’ve said, ‘We’re going to take care of these vendors,’ and they’re not doing that,” Berman said.

Berman said he plans to respond to the city legally, but he would rather settle the matter outside of the courts.

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