Farmers market seeks rent relief

OLYMPIA — The Olympia Farmers Market is a beehive of activity, a vital cog in the local food network and a major South Sound tourism attraction.

But the first impression of economic vitality and health belies the fact that the market, despite its popularity, is struggling financially.

As market sales have grown, so has the rent the nonprofit market pays to the Port of Olympia through a contractual arrangement with the City of Olympia.

The growing season for produce sold at the market is heating up, and so are talks market leaders are having with port officials and city officials over rent relief.

The market has depleted its cash reserves and is struggling to fill a $100,000 maintenance and repair fund required by the city, which owns the market building, said longtime market seafood vendor Steve Wilcox.

“Our backs are up against the wall,” Wilcox said. “We have no way of cutting costs any further.”

Herein lies the problem, said market officials: The base rate the market pays in rent each year is $20,000. But the rental schedule also includes an escalating percent of the market’s gross receipts, starting at 1 percent when gross receipts from market sales top $2 million, climbing to 4 percent if gross receipts reach $5 million of more per year.

In 2009, the market paid $92,500 in rent and leasehold taxes, which is 19 percent of its budget.

“As market sales approach $6 million, the port rents plus leasehold tax will eat up 25 percent of the budget,” farmers market president David McDorman said in a June 19 letter to port commission president Jeff Davis. “This has caused a financial crisis that threatens the Olympia Farmers Market’s ability to fund operating expenses and the ever-increasing maintenance expenses of an aging facility.”

The nonprofit market corporation charges its vendors 7 percent to 10 percent of their individual receipts. In 2009, the income from stall rentals was $399,415, or about 82 percent of the market income.

Market officials fear that passing on higher rental costs to their vendors will boost prices consumers pay for market goods. They see the rent escalator clause as a disincentive for the farmers market to grow.

In sum, the market wants the port to eliminate the supplemental rent based on gross receipts and accept the base rent of $20,000 as the total rent.

The market is located on port property, but ports don’t have the legal authority to run a farmers market. The city owns the farmers market building and has legal authority to partner with a farmers market.

Davis said the port commission will meet July 25 to dig a little deeper into the farmers market budget woes. Commissioners invited City Council members to attend the workshop, but officials at City Hall said Monday that the meeting was not on the council’s agenda calendar.

“At the end of the day, we want the farmers market to survive,” Davis said. “My goal is to make sure it exists — it’s a crown jewel of Olympia.”

The Olympia-Lacey-Tumwater Visitor and Convention Bureau agreed, naming the farmers market the 2012 tourism attraction of the year.

Olympia Mayor Stephen Buxbaum said it’s in the best interests of all the parties involved to explore the rent issues raised by market officials.

“The Olympia Farmers Market is a precious thing for us,” he said. “I’m very interested in making sure the farmers market is supported.”

During its nine-month season, the market draws some 500,000 visitors. Located at the foot of Capitol Way, the market is currently open 10 a.m.-3 p.m. Thursdays through Sundays.

Meeting

The Olympia Farmers Market’s request for rent relief will be discussed when the Port of Olympia commissioners meet at 6 p.m. July 25 at the Olympia Regional Airport terminal building, 7702 Terminal Way, Tumwater.