Vendors Want EDC to Relinquish Direct Management of Essex Street Market (Updated 2/25)

We have more today on the difficulties being experienced by merchants at the historic Essex Street Market. As previously reported, three vendors – Brooklyn Taco, Heritage Meat Market and Essex Flowers – have either closed or are on their way out due to declining business. Two other stalls have been vacant for several months. Now the vendor association has come to the conclusion that significant changes must be made in the management of the Essex Street Market if the remaining businesses are to survive.

Currently, the city-owned facility is managed by the Economic Development Corp. (EDC) Next month, the association will go to Community Board 3’s land use committee with a plea to switch to a new, more nimble non-profit organization better equipped to deal with the market’s unique operational and marketing challenges. While CB3 has no authority over the market, its support could help focus new attention on the plight of the small operators inside the 75-year-old building at the intersection of Essex and Delancey streets.

An expanded public market is being built as part of the Essex Crossing mixed-use development project. All of the current vendors have been invited to make the move to the new building when the time comes. In the past year or two, city officials have been weighing whether to hire an outside entity to run the new facility when it opens in 2018. But the vendors say they’re worried about hanging on until then and want immediate change.

“The market is going through a time of transition,” said Anne Saxelby of Saxelby Cheesemongers. In her role as head of the vendor association, she added, “It’s in a tenuous position. While the EDC played an important role in reviving the market (in the past decade), I think they are not the right entity to manage the market now. We need a new way to go forward, a new strategy.”

In recent interviews, the owners of the three businesses leaving the market, have expressed similar frustrations about the EDC’s management of the building. Little has been done, they argue, to combat a false perception that the old facility has already shut down. Jesse Kramer of Brooklyn Taco acknowledged that the reasons for shuttering his business were complicated (Kramer and his business partner did not see eye-to-eye). But he added that unresponsiveness from the EDC when it came to putting marketing plans in place, making the market a more comfortable place to dine and extending the facility’s hours doomed Brooklyn Taco. “It takes months to get anything done,” Kramer said, adding that there was an urgent need to “tell the world the market was still open for business.”

Patrick Martins, founder of the company that opened the Heritage Meat Shop in 2011, said, “The market is continually empty. There are very few customers.” Martins, owner of Heritage Foods USA, wrote a letter to local elected officials, explaining his reasons for closing. “In my years (running several successful businesses),” he said, “I have never worked with a group less responsive to adjusting to the requests of its constituents than the EDC.” Martins, who’s married to Saxelby, gave back some of the space he originally rented but was still paying $3500/month. The high rent, he said, was clearly out of step with the reality inside the market. “I would just ask that you spend a couple of weekdays at the market,” he encouraged the elected officials. “Hours will pass without a single customer walking down the aisles — consistently. That, in the end, is the biggest evidence of all that what the newer stalls signed onto was not what they got.”

Bill Frazer of Essex Flowers (a long-established LES business) opened a small shop in the market less than a year ago. He did not expect to make a lot of money — only to break even and to stick around long enough to transfer operations over to the new facility in three or four years. But Fraser said business was nearly non-existent. A very good day meant collecting $100. “It feels like a dying market,” he said. “My employees were bored to tears. I know the EDC has been trying harder but it’s a little too late.”

It should be noted that the vendors who most frequently complain about sagging sales are the newer operators, meaning businesses that opened post-2001. Also, stalls offering prepared foods seem to struggle more than grocers. As we reported last summer, merchants such as Luis Meat Market, Vida Fruit Market and New Star Fish Market have actually experienced an upswing in business and are more optimistic about their fortunes than they have been in quite a long time.

But it’s the delicate balance between new and old — a unique mixture of ethnic and artisanal offerings under one roof  –that makes the Essex Street Market a special place. When plans for the former Seward Park urban renewal site were being made several years ago, the community board pressed the city to protect all of the existing merchants. As a result, there was an agreement to keep their new rents “commensurate” with rates being paid in the existing building and to pay moving expenses. Those measures were meant to ensure that at least some of the flavor of the Essex Street Market is reflected in the gleaming new facility. This is why there’s concern now about the prospect of multiple empty stalls even before Essex Crossing breaks ground.

At the request of the merchants, an Essex Street Market “working group” began meeting in the past year to address pressing concerns. The vendors are represented, as well as staff from the EDC, representatives of local elected officials, members of Community Board 3 and staff from the LES Business Improvement District (BID).

The working group and the EDC are receiving advice from Ted Spitzer of Market Ventures, a consulting firm that specializes in operating successful public markets nationwide. In a presentation, he outlined various management models for the new market. Rhonda Kave of Roni-Sue Chocolates was one of those present for the briefing. She told us,  “His suggestion was to follow the successful and proven public market structure where the EDC would assume the overarching role of ‘sponsoring agency’ but step back from day-to-day management operations in favor of a small not-for-profit agency that could be more nimble and responsive to the needs of vendors and the community.”

[PLEASE SEE CLARIFICATION AT THE BOTTOM OF THIS STORY IN REGARDS TO THE ABOVE QUOTE]

The vendor association’s proposal has not yet been made public, but it is expected to call for moving up the timetable — and shifting to a new management structure right away.

In recent months, the Lower East Side BID has taken an interest in the market, sponsoring evening tasting events with Time Out Magazine, installing new promotional signage on the outside of the building and partnering with the EDC for a marketing push around the upcoming 75th anniversary of the market. Asked about the market’s recent troubles, BID Executive Director Tim Laughlin said, “It is clear that we must find new and innovative ways to (bolster the market) so that a negative trend of vendor closures can be reversed.” He added, “A vibrant, thriving and active market is an important part of our local economy and we look forward to expanding our collective efforts to achieve this shared goal.”

Contacted by The Lo-Down, EDC officials said they could not comment on the vendor association’s bid for alternative management because they have not yet seen the proposal that will go before CB3. In a statement, spokesperson Christopher Carroll said:

It is our goal at Essex Street Market to cultivate a vibrant, inclusive and balanced market environment for every member of the market community. The Market has been a cornerstone of the Lower East Side for decades, and we look forward to continuing to work closely with the local community and all the vendors to help them grow and thrive.

In a separate background briefing, an EDC official defended the agency’s management of the market. Intensive efforts have been made, we were told, to work directly with each vendor to address his/her unique needs. The market, the official said, is “mission driven,” meaning that the goal is to offer low-cost retail spaces to a diverse group of small businesses. While some vendors have requested evening hours (the market closes at 7 p.m.), the majority want the hours to stay as they are, he said, and it’s not possible to keep portions of the market open due to security concerns. All merchants are advised of the market’s hours and other operating guidelines before they sign permits, we were told.

While there is no direct evidence to suggest business at the market has slumped, the official said, stepped up marketing efforts are underway. A new branding campaign and a new website are in the works. There’s also a plan to convert a stall on the northern end of the market to a visitor center, with market brochures and neighborhood information.

Local elected officials, including City Council member Margaret Chin and State Sen. Daniel Squadron, said they would wait to see how the community board responds before weighing in on the vendor association’s proposal. CB3 Chairperson Gigi Li also indicated that the full membership would need to weigh in, but she added, “The board is committed to helping the vendors in any way possible. A vibrant Essex Street Market is a huge part of retaining the Lower East Side’s distinctive character.”

UPDATE 2/25  Clarification today on a point made in this story by Rhonda Kave of Roni-Sue Chocolates. According to her, Market Ventures’ Ted Spitzer suggested handing over daily management of the market to a small not-for-profit organization. We were contacted by an EDC spokesperson, who noted that Spitzer has not yet made his recommendations for the management structure at the new Essex Market. While Kave acknowledges this point, she told us today that he did extoll the virtues of the non-profit model during a question and answer period following the presentation. Spitzer, Kave said, pointed out that non-profit groups have taken charge of a number of markets around the country and have demonstrated an ability to cut through red tape and achieve results. The EDC spokesperson said Spitzer had actually discussed the advantages and disadvantages of several management scenarios and did not speak in favor of any single approach.