Avenue Market merchants get cut in rents Agreement settles lawsuit filed in June alleging misrepresentation

September 17, 1997|By Marilyn McCraven | Marilyn McCraven,SUN STAFF

Merchants at the beleaguered Avenue Market in West Baltimore are paying reduced rents under an agreement signed recently with the market's management.

The pact settles a lawsuit filed by the merchants in June, claiming the market's nonprofit owner and private management intentionally misrepresented the market's prospects in an effort to get businesses to open there.

"The merchants are happy we don't have those high rents over our heads right now, and we're looking forward to seeing more advertisements to let people know we're here," Stephanie Kidwell, president of the market's merchants association, said yesterday.

City Housing Commissioner Daniel P. Henson III, who was instrumental in the development of the market in the 1700 block of Pennsylvania Ave., said, "We think that clearly the tenants had a point. The market needed time to build back clientele."

Henson said he believes that the market will be successful, noting that the city plans a face lift for the 1500 to 1800 blocks of Pennsylvania Ave., including landscaping, period lighting and new sidewalks -- all expected to boost retail trade in the area. Also, merchants may apply for loans and grants to create uniform store fronts, "so they won't have that cluttered look," Henson said.

Hoping the market would spur economic development in the Upton area, city and state government contributed $3 million of the $4 million cost of renovating what had been the historic, city-owned Lafayette Market and set up a nonprofit organization to operate the Afrocentric market.

But since opening Dec. 14, the Avenue Market has been beset by poor sales and inadequate foot traffic.

The merchants association had sought $500,000 in compensatory damages against the nonprofit Avenue Market Corp. and Urban Asset Management, the market's private manager.

The lawsuit claimed that Zed Smith, the private manager, misrepresented the market in several ways, including claiming that developer Metroventures/USA Inc. was a subsidiary of the Rouse Co. and would be involved in managing the market. Smith worked for Metroventures, then formed his company and was hired by the market's nonprofit board to run the market. He has denied saying that the developer was affiliated with the Rouse Co. Metroventures was founded by former Rouse Co. employees.

Lena Boone, head of the nonprofit group, declined to comment on the settlement. Efforts to reach Smith were unsuccessful.

Under the settlement, food-stall merchants are to pay 12 percent of their monthly gross receipts in rent and produce stand owners are to pay 7 percent, said Kidwell, co-owner with her husband, Clifford, of Shuckers, a branch of her family's Inner Harbor-based seafood restaurant.

Original rents were based on square footage, not sales, Henson said.

The change amounts to a tremendous savings on rent for most tenants, Kidwell said. For example, the settlement reduced the Kidwells' rent from $1,400 to $500 per month for August, she said. However, they still owe $3,600 in back rent, she said.

Lower rents won't imperil the market's future because the city is subsidizing operating costs at up to $200,000 a year for five years, Henson said.

"Any money we lose now, we expect to make back eventually," Henson said.

Smith had said in June that the opening of several stalls selling hot food would bring in more foot traffic, boosting sales. However, several merchants said only a slight increase in customers has occurred.

New System Bakery proprietor David L. Knox said he discounted his pastries in response to complaints by customers about high prices, but has seen only a modest increase in business over the summer.

"I was hoping they'd let us pay no rent for awhile to let us build up a cushion," Knox said.

"I'm optimistic," he said of the market's prospects. "But I'm trusting in God, not man, to work things out at Avenue Market."

Pub Date: 9/17/97

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