are supplemented by staples bought at the nearby Safeway during typical shopping trips. Frequently customers leave parcels with Eastern Market merchants for convenience and to prevent embarrassing incidents while rounding out purchases across the street before returning home.

Due to the specialized products featured and the accompanying personalized service, Eastern Market prices tend to be higher than those available for similar goods in Capitol Hill supermarkets. During our field surveys, market meat and seafood prices were from 10 to 25 percent higher than those found at local supermarkets. In large measure, differences in quality not readily measurable account for these price discrepancies. In addition, goods of similar quality such as eggs and dairy products offered as customer accommodations were priced higher than comparable items elsewhere in line with common practice at specialized retail outlets.

Planning considerations

Despite the large proportion of local trade, many neighborhood as well as citywide shoppers drive to Eastern Market. Conveniently located, the market is reached easily by car via major thoroughfares, Pennsylvania and North Carolina Avenues, thereby minimizing residential traffic hazards and disruptions. Immediate access is provided by Seventh and C Streets SE.

Parking available along the Seventh Street frontage and in the alley between the market and the fire department training site accommodates approximately 95 cars. This parking reserve is supplemented by a small parking lot for about 35 vehicles directly across from the market leased by the Cen-East Cooperative. Total market parking capacity, therefore, comes to approximately 130 cars. Additional curbside parking is also available when not tied up by long-term parkers.

On the basis of space currently in retail sales and anticipated additions under Eastern Market's proposed lease agreement, we find parking available to market customers on par with generally accepted standards. While the distribution of these parking spaces is not ideal, approximately one-third are separated from the market by a city street, the total number accommodated appears satisfactory relative to usual shopper demands. Market merchants, aware of the need for providing adequate parking, discourage noncustomer use of their limited parking

resources.

Note on market's community role

At

Apart from providing retail services to Capitol Hill and the city at large, Eastern Market has been active in many neighborhood cultural and charitable interests. The market provides space for weekly rummage sales conducted by various civic and religious groups designed to raise funds for worthy causes. the time of our field surveys, space into 1966 was already booked. Three years ago. market facilities were made available for an art festival featuring works of many local artists. Another intangible contribution to Capitol Hill is the visual charm and character of the market building itself. Neighborhood pride in these features and the unique shopping experience afforded at this facility was frequently evident in discussions held with shoppers during our field surveys.

ECONOMIC VIABILITY

As a group, Eastern Market merchants have done exceedingly well in recent years. While progressive declines resulted in a deficit market operation to the District prior to the March 1960 lease, current sales volumes have been high, reflecting changing local conditions and continued patronage from outside trade. Recent trends highlight these findings.

Table 2 below shows retail sales for Eastern Market operations for calendar years 1963 and 1964. As indicated, retail receipts were up about $182,200 (41 percent) during this period. Part of this gain is explained by Cen-East's partial year of operation, begun in March, in 1963. Nonetheless, the sharp increase noted is indicative of growing sales strength for cooperative members and the long established Union Meat and Southern Maryland Companies.

Retail gains due to neighborhood and metropolitan patronage are further emphasized in comparison to changes in wholesale sales. Wholesale receipts, keyed to a citywide trade area, were up only about 3 percent ($14,600) between 1963 and 1964, less than one-tenth of retail gains. Total retail and wholesale volumes at the market in 1964 were $1,155,700.

TABLE 2.-Retail and wholesale sales, Eastern Market, 1963–64

While no precise data are available showing sales volumes in the farmer's line. it would appear that these represent a marginal portion of total receipts for Eastern Market facilities. According to our field surveys, prices for goods in the line approximate those for similar food stuffs at the market itself. Interviews with merchants indicate that farmers faced with lagging sales on slow weekends are forced to transport their goods home or dispose of them at whole sale prices to some market merchants. Poultry and egg products appear particu larly suspectible to these transactions. Based on this evidence, we believe that marketing success for farmers is spotty at best and that as a group they have not enjoyed the overall sales increases noted for full-time market merchants. Financial analysis

As noted previously. Eastern Market Corp. has offered to enter a 10-year lease with the District for operation of the entire market, including the 4,500 square foot portion currently used by the District Highway Department, at a rental of $1,400 monthly. This sum would be free and clear to the District since all maintenance and upkeep would be assumed by the corporation as would be cer tain improvement costs. Eastern Market's proposal is more than double the rental of the previous lease which expired in March of this year and approxi mately $600 above the reappraised rental set forth for the interim lease period while disposition of the market is under consideration.

An interim rental for the Eastern Market was set up the District of Columbia Department of General Administration on the basis of in-use appraisal techniques. Using this method, a comparable rate for similar facilities, taken as first-class warehouse space, was established as the criteria for deriving an equivalent rental. Taking into account the leasee's obligation to assume all maintenance, tax, and upkeep costs, a final rent of $1 per square foot was set up, or $833 per month.

Market rentals.-Monthly charges to Eastern Market retail establishments are based on a flat fee generally related to total space occupied. No meaningful rental differentials are discerned between various locations within the market itself. Charges are leveled to generate sufficient revenue to cover total expenses with some allowance, according to our understanding, for vacancy contingency as well.

Current rentals paid by market tenants are shown directly below in table 3. These rates reflect recent increases in light of interim rental adjustments dis cussed above. At the present time it is not clear as to whether additional rental jumps will be necessary under the lease terms offered by Eastern Market Corp. and currently under consideration by the District government. (The added space, 4,500 square feet, which would be included in a new lease would presum ably generate additional rental to cover increased costs under such an agree ment.) As shown in the table, the largest proportion of rent is covered by the Cen-East Cooperative ($800); with Southern Maryland Seafood Co. carrying the second largest share ($550). Other groups contributing to the total revenues generated through Eastern Market rentals include Union Meat Co. ($265) ; Boone's Bakery ($150); and Miller's, a small meat stand ($30).

TABLE 3. Current (November 1965) Eastern Market rent schedule

In order to evaluate alternative disposition schemes for the market economically, we have made independent calculations of revenue likely to be generated by two uses of the Eastern Market site. The first relates to townhouse development which, according to the District of Columbia General Services Administration, represents the likely alternative use in this site. The second considers continued use of the property for commercial purposes within the present market facility. While we recognize that various disposition schemes for the market, fire department property or both might be considered, the above alternatives are specific possibilities under present conditions and have been selected for comparative revenue analyses for this reason.

Each development alternative for the Eastern Market site is discussed in more detail in the paragraphs which follow.

Continuation of present market. Our estimates of annual income derived for continuation of the market function are based on the aforementioned Eastern Market Corp. offer, and corporate taxes and license fees obtained by the District from these retail activities. Other revenues, such as sales taxes, have not been included in this calculation since they would likely accrue to the city government at some other location, providing these establishments remained in business. Estimated annual revenues from the market we estimate, would be approximately $19,000, taking these factors into account.

Townhouse development.-Prospective revenues derived from townhouse development of the Eastern Market site have been imputed on the basis of two key factors. First, an equivalent savings in annual interest which could be obtained from principal received through sale of Eastern Market property has been calculated. Another source of District revenue would be property taxes based on a 55-percent assessment to true market value and the current tax rate of $2.76 per $100.

Land value.-Estimated revenue to the District which could be derived through sale of the Eastern Market property has been based on a liquidated land value ranging between $5 and $6 per square foot, invested at a 4-percent return. Total amount generated by disposing of the site would thus be from $157,000 to $188,400. Annual value to the District therefore, would fall in the $6.250-$7,500 range.

Precise land value of the Eastern Market site will be principally influenced by the number of units which can be potentially accommodated. Under conventional row house (R4 zoning) a minimum lot size of 1,800 square foot would apply, limiting the theoretical capacity of the property to about 17 housing units. This number could be increased under a C2 zone, the present classification for this site, to an estimated 26 units (resulting in average parcel sizes of 1,200 square feet) within the limit established by the elongated configuration of the site.

Recent sales for townhouse land in the District show wide variation. Land for the Town Square development in the Southwest urban renewal area was valued at about $2 per square foot in a transaction concluded in 1964. Lot sizes are from 1,500 to 1,800 square feet with homes priced, after 1-year's appreciation, between $45,000 and $50,000. Townhouse sites in Woodley Park in vicinity of the Sheration Park Hotel were sold at $5 per square foot with units offered at $85,000, according to our information. One transaction for vacant C2 land in Capital Hill suitable for extremely small lot sizes (about 1,000 square feet) commanded $8 per square foot.

Several factors support an effective land value ranging between $5 and $6 per square foot for the Eastern Market property, in our judgment. Site improvements would have to be cleared prior to townshouse development necessitating a cost to be incurred by the prospective buyer or by the District prior to disposition. Secondly, while providing a relatively large area of 31,400 square feet, the

shape of this parcel we find, will likely limit the number of units potentially available through C2 zoning to about 26 for an average lot size of 1,200 square feet as noted above. Finally the question of extending this zoning to future residential development or reverting to an R4 classification in harmony with surrounding neighborhood character would have to be resolved. Our estimates for annual revenue described in the foregoing paragraphs have been conservatively calculated based on applying C2 zoning to the prospective residential de velopment. Should R4 zoning apply, the District potential revenue under this alternatively accordingly would be reduced in our judgment.

Real estate taxes.-More intense development of the Eastern Market site for townhouses under C2 zoning will directly affect the width of uniit, likely to range between 15- and 161⁄2-foot frontages, and overall design layout. Market value of row houses anticipated in this scheme we believe, will fall in the $30,000-$35,000 bracket based on comparable offerings elsewhere in Capitol Hill. District real estate taxes generated from these properties (holding to an assessment ratio of 55 percent and rate of $2.76 per $100) would be from $11,850 to $13,800.

Table 4 below summarizes our estimates of District revenues resulting from the development alternatives analyzed above. As shown, District funds for townhouses under extension of present C2 zoning would range from a low of $18,100 to a high of $21,300 averaging about $19,700. Continuation of the present market facility would result in annual revenue of approximately $19,000.

On the basis of our calculations it would appear that District gains under either alternative are almost equivalent. While subject to additional review regarding zoning resolution for townhouse development, relatively minor differ ences seem to economically separate the two land uses under consideration. Since both choices would relieve the District of administrative responsibility along with attendant personnel and financial commitments, it appears that express fiscal implications should not have meaningful impact on final disposition policy determinations for the market based on these calculations.

TABLE 4.-Estimated District of Columbia annual revenues based on 2 disposi tion alternatives for Eastern Market

Relevant findings of our Eastern Market analysis pertaining to other District of Columbia public markets are set forth in the section which follows. Merchandising and distribution patterns

In common with other small businesses, many tenants in public markets have generally faced sales declines in recent years. Mass distribution and merchandising techniques developed by major food chains have severely cut into markets available to individual grocery, produce, dairy, meat, and seafood merchants. While various neighborhood establishments throughout the city have been able to withstand increasing supermarket competition, downward trends continue for the small food enterpriser.

Public markets in Washington and other major cities in the country provide one of the few remaining outlets for both individual and small food merchants. Collectively presenting a wide selection of food lines ranging across a broad spectrum, these market facilities frequently generate large numbers of shoppers particularly on traditional weekend shopping days. Although most foods may be found in these markets, along with apparel and other soft goods at times, the largest proportion fall in the meat, seafood, fruit, and vegetable lines.

Typical public market price scales cannot be assessed as evidence in the Eastern Market case example. While many public markets feature less expensive, lower grade foods, many specialize in higher priced quality lines. Unlike supermarket trade which carries on throughout the week, the variety and specializations of these public markets are their life blood, appealing to large numbers of customers during the concentrated shopping days between Thursday and Saturday.

Two distinguishing features indicated in the case of our Eastern Market analysis appear to apply to public markets. As noted above, market specializations and the absence of prepackaging set these facilities off from the familiar supermarkets present in all neighborhoods. In addition, the tributary area for public markets extend beyond the immediate neighborhood, attracting patrons throughout the city by virtue of their specialization and personal services. The economic viability of each public market, therefore, is a direct outgrowth of its success in projecting an image for a wide selection of foodstuffs and high service levels, and attracting persons over an extensive area.

The ultimate survival of public markets as a unique retail function in the District's merchandising patterns will hinge on the ability of a collective group of merchants in any given facility to successfully project this image. In the Eastern Market case, a broad variety of quality and choice meat cuts; gourmet specialities; custom orders; and personalized service has resulted in demonstrated public acceptance. Other public markets, Boston's North End for instance, featuring a wide variety of fruits and vegetables not obtainable in any one supermarket have succeeded in penetrating and retaining a large consumer following. To the degree that District public markets can follow this pattern, marketing success and economic viability for both merchants and market management will be assured.

Planning and economic considerations

In that public markets usually take on broader area as well as neighborhood orientation, it becomes necessary to provide adequate facilities for the retail establishments and their customers. At a minimum, adequate customer parking is required. In addition, traffic generated by market activities should be channeled along major thoroughfares to prevent traffic hazards for residential areas. Finally, loading facilities, storage and selling space in the market should be adequate to maintain efficient functioning retail activities.

Although management of public market facilities frequently is a full-time administrative operation requiring substantial commitments of personnel and finances, direct District involvement could be minimized in our judgment. Policies aimed at leasing these facilities where entrepreneurial interest is available could remove financial and operational burdens for the District. In addition, fair and reasonable rentals for the facility are obtainable, in situations like the Eastern Market case, producing no net cost to the District.

While mass merchandising and distribution functions will likely expand in response to marketing needs of District residents, a significant portion of the citizenry retains a high regard for public market facilities. Both high- and lowincome consumer segments appear to share this view. The former group seeks out primary relationships and the overall atmosphere of open markets as an integral part of a shopping experience and frequently regards it as important as the food purchased. The latter group, following well-established patterns, prefers, to some degree, the small businessman with his personalized services to the faceless supermarket. Extensions of credit in some instances, no doubt further strengthen this feeling.

These intangible reasons and basic economic supports described earlier set public markets apart from more common, standard supermarket outlets. Economic potentials are available for retaining similar District facilities in the future, should it be consistent with other policies and objectives of the District of Columbia government. In our judgment however, each public market facility would have to be assessed individually on its own economic merits before any final conclusions regarding disposition can be made.