Fremantle Markets - the story so far

Fremantle is probably one of the loveliest cities in the world. Beautiful old buildings, laid back pubs, huge green parks with plenty of trees, countless cafes and coffee shops and all sitting right on the harbour and short distance to the beach.

Fremantle really comes alive on weekends in a casual, friendly way. It’s a place to go and just wander around. Many people enjoy a long leisurely breakfast on the sidewalk; sit drinking coffee and reading papers or just chatting with strangers. Probably the biggest draw to Freo is a wander through the markets, a seafood lunch on the harbour, a frolic in the park and a cappuccino on the café strip.

For many, including me, the jewel in the crown is the Freo Markets. It’s an old fashioned ‘flea market’ or bazaar. I have been shopping there for around thirty years. Some of the current stall holders have been there that long and many for ten to twenty years. Many of today’s business leaders and entrepreneurs will admit to starting out at the Freo markets. Many thousands of people have worked week-ends down at Freo Markets and it is pretty precious to all of them.

It’s an eclectic mix of people and products. Fresh fruit and veg, cheap and unique gifts, massage, exotic foods, hand made pottery, specialized clothing, unusual jewellery and art, tarot readings, buskers, a quaint little pub, antiques, books and lots of surprises. There is colour, smell and sound all around and even the people watching is fascinating.

The main reasons it has been so successful for so long is that it’s interesting, cheap and casual and you get to talk with the stall holders with none of that “Have a nice day,’ cheesiness or ‘Just give me your money and be gone,’ attitude of regular shopping. It’s not just a matter of shopping – it’s a day out.

The land and the building is owned by the people of Fremantle; managed by the council and leased out to the Murdoch brothers. The Murdoch brothers run the market and collect rents from the stall holders.

Commercially it is very profitable to both the council and the Murdoch’s. The Murdoch’s have just had their lease renewed for the next 18years and even at loose estimations it is easy to see that they have a million dollar + p.a. cash cow.

To date, everyone’s a winner. The council gets more than 1/2 million dollars in rent but more importantly the markets bring people into Fremantle from the outer suburbs, interstate and overseas. It is a must see tourist destination. This pulls money into the overall economy of the city. The Murdoch’s win with their 18year lease and projected rents and up until recently the stall holders had a win by having fair rents in place and thereby passing on fair prices to customers.

When the lease between the council and the Murdoch’s was renewed, the council increased their rent by 12%. We all assume there was an independent valuation to arrive at this figure to establish ‘fair market rent’. The Murdoch’s then turned around and increased the rent from the stall holders between 50-80% on average, but also presented one woman (in a prime location) with a 300% increase.

The stall-holders association employed their own independent valuer and his figures confirmed that the previous rents were very close to fair market value. He was perplexed by the overestimation given by the Murdoch’s.

Who did the Murdoch’s valuation? How were those numbers so much greater than the councils and the stallholders? Is there any legitimate justification for this assessment? We have asked for a copy but so far it has not been forth-coming.

The Murdoch’s have stated a couple of times that the stallholders have had it too good for too long and that is why the rent increase seems to be so extreme. They said that the stallholders have been like kids let loose in a lolly-shop and now they are just catching up with what’s real.

The rent per sq metre has never been cheap; it has always been based on fair market value. The concept of cheap is simply the fact that people can rent a very small space with no frills and that keeps the overall cost down. Per sq mtre it has been the same as any comparable location.

The new rents also come with new extras; like approx $50,000 for administration. Basically this is the new fee charged for taking and banking the rents. Considering most rent is auto-banked these days you can only wonder what it could have been worth back in the days of counting cash and writing receipts.

Signing a new lease agreement costs around $800 per person. Even if only 100 people sign, that earns $80,000 for what amounts to not much more than a few keystrokes and printing out from a computer template.

What I thought was really sneaky, is that they only approached twenty of the stall holders to begin with. It was just before Christmas and they were given just 2 weeks to agree to the new rents or be given notice to vacate. Knowing that the stall holders would have invested everything in Christmas stock and that pre-Christmas is the most profitable time of the year, I would say that this was blatant intimidation. Targeting only twenty also gave them some feedback on reaction or opposition; and made these stall holders “guinea pigs”.

Many knew that the price hike would destroy them, a few had to walk away but most have held on in the hope that the stallholders association - their collective voice, would swing into action; which they did. Meetings were held, legal advice sought and meetings with the Fremantle council were arranged. The media was quick to investigate after conflicts and despair over other issues in previous years.

Almost half of the Fremantle councillors had voted against the Murdoch’s being given the lease renewal but lost the vote by one. Mayor Tagliaferri pushed for the lease renewal to go ahead. Many, including me, wondered why it was not put to public tender and why it was renewed years earlier than the old leases expiration. I am still wondering why the council didn’t take over the running of the market themselves, as is the case in the Eastern States? I also wonder why the discrepency in rent value didnt set off any alarms.

Trying to get the mayors attention with this new turn of events took a number of letters and pleas from stall holders and a lot of tenacity from the stallholder’s spokes people. With the threat of legal action, pressure from some councillors, newspaper articles and a solid document from the stallholder associations Q.C. Mayor Tagliaferri appeared to show some interest and agreed to, “Look into it”.

(Months later he became known around Freo as the Mirror Mayor as his stock answer to most questions was, “I will look into it.’’

Meanwhile, the Murdoch’s continued their twenty at a time notifications and some later said that they felt intimidated into agreements. The hard and obvious questions were:
Can I afford the rent increase?
Can I index the rent increase into the sale of my product?
Can I afford to walk away?

Most of the stall holders had paid tens of thousands of dollars for their businesses and without the security of a long term rental agreement they would have no business to sell. They would just lose their initial investment and be left with stock and no income. Some are still paying off their initial loans.

If the fruit and veg guys increased their prices they would then be competing with all of the big supermarkets in all of the suburbs. The markets are not air-conditioned; there are no wide aisles, no on site parking and no shopping trolleys. Their food is fresh and cheap but, who would bother shopping there if they could buy at the same or perhaps cheaper prices locally? This was the same dilemma for most of the stalls.

Sometime later, the Murdoch’s reasoned that they would relocate a number of outdoor stalls into the inside section because they were planning on turning the outer area into glorified Deli. They have big dreams of mimicking eastern states markets and selling seafood, meats, cheeses, olives, and upmarket or gourmet food items and possibly having wine tastings and cooking demos.

A few points on this I don’t understand:

How can people be charged higher rent now for upgraded facilities to be built sometime later? (Can a landlord near double a tenants rent because he is going to renovate the bathroom next year?)

Why would people come from outer suburban locations to buy what they can get at their local modern shopping centre?

How can the outdoor stallholders fit into the already full indoor area? Are stalls going to be down-sized or are they counting on pushing some out. Maybe that explains why some rent increases are much higher than others.

Interesting, that the guy who runs the fresh seafood business, in a prime location, had his rent increased so much that he has already walked away and lost everything. The Murdoch’s stated that they would rather have frozen seafood in the new development. Now, who wants to go to Freo to buy Frozen Fish? Fremantle is famous for fresh fish and every supermarket in town sells frozen fish.

Why introduce wine tasting and promotion when there has been a great little bar inside the markets forever! Won’t this threaten or destroy his business? There are two great pubs within a 1 minute walk from the markets.

Why would they want to bring in coffee shops? The main street of Freo is well known as “The café strip”.

Why would the market management bully out long term successful stall-holders to bring in unknown traders, selling common grocery items and expect them to be successful? OR are they having their rents subsidized by the others paying almost double?

Who the hell wants to walk around Freo on Sunday afternoon looking at meat and olives?

The very popular Canning Vale growers markets have already announced a multi- million dollar upgrade going ahead this year. They have around 13,000sq metres and anticipate 300 stalls being set up. Perth city, Kalamunda, Subi, Claremont, Morley and Bayswater areas also have plans for new fresh produce markets. Not to mention others that are already in place throughout the metro area. Many suburbs have roadside fish vans and most suburbs have supermarkets to cater to frozen seafood and meat. The Swan Valley has an abundance of vineyards and wine tastings.

What I find rather intriguing is that Mayor Tagliaferri used to own a successful gourmet deli before becoming the mayor. I also find it intriguing that in an article published in the Fremantle Herald in 2006 he had stated that HE wanted to see the markets redeveloped with exactly this in mind.

I believe his motivation was that Freo was pretty quiet during the week and he thought if the markets opened during the week it could bring more people to the city. As the upgrades won’t be completed until later this year or next, and the Mayor is de-seating himself very soon, I am now wondering if perhaps he has a personal financial interest in the market?

Well, there will be no conflict of interest if he is no longer mayor and he has expertise and experience in that type of business. That’s not an accusation, but I can't help but wonder. After all, there was a lot of opposition to the Murdoch’s having that lease renewed, and as soon as it was, they announced ‘their’ plans for the glamorous delicatessen.

I just can’t imagine how anyone could make a living selling these products if they are paying the new rent prices. The seafood guy knows that he can’t; he has the figures to prove it and he was in a large space, in a prime location, with a regular clientele. Not only did he know that he wouldn’t survive with the new rent increases but he would not risk signing himself into a new 5 year contract. He had no choice but to walk away from a previously successful business and is now unable to sell what last year might have been worth almost enough to retire on.

The Murdoch’s have stated that they already have people waiting to go into the new food site. Now that’s really peculiar. How or why would they be so confident that a list of people will wait a year or so to find space in a yet to be developed market? Canningvale has 300 stalls coming up and all the facilities one could ever wish for. Could it be possible that one person or one company will be taking on the whole of the new development?

Opening midweek or any additional days was strongly opposed the year before last by the stall holders. Most lose money, break even or make very little as it is by opening on Friday. The market rocks on week ends. Forcing full time trade would do nothing but force people to employ additional staff, waste valuable time and force many to leave. Again though, as they pay rent by the day, it would be another way of further increasing rents.

Although the stall holders retail Friday to Sunday many of them are busy making products through the week; buying, loading and packing produce and quite a few have taken on the stalls to work weekend whilst spouses look after children. Many of the stall-holders bought into the markets specifically because it was a week-end business. Many are owner operator businesses and it would be impossible to pick up stock or make products without time during the week. None anticipated or had any warning that that could change at managements will.

Trading extra days would require larger storage facilities, more cool-room space for some and loss of perishables for others. Don’t forget that most of the stalls are only a few metres wide and many need to run in and out to their cars or vans to restock the shop during the day. Generally speaking most are really home businesses retailing on weekends.

The majority of the stalls are only a few trestle tables wide. Recently, some have had their space reduced by 1/3 even though the rent has increased so dramatically. There is almost no storage space, limited display area, no on-site parking, limited dispatch area, no personal amenities and few stalls have doors or windows. The management refuses to air-condition the premises even though temperatures in summer can reach over 40 degrees Celsius and the winter months are teeth-chattering cold. Many of the outdoor vendors have had tarpaulin covers fill with water and stallholders have had to wear gumboots and raincoats.

Recent rent comparisons have shown that the new rent rises make price per square metre more expensive than many of the very upmarket and modern shopping centres throughout the metro area. Jamie Murdoch has stated in at least two newspapers that many stall holders are happy with the price rise. They may have agreed to accept the rises but happy they are not. John Murdoch suggested “Take it or leave it’. Most of the people who agreed have been nervously forced to take a punt on making a go of it, knowing that declining the offer would mean walking away with nothing. The fact that around 80% of stall-holders showed up at the Councils meeting to support the stall-holders associations is a more accurate indication of who is happy. Only one stall-holder came in support of the Murdoch’s, but he declined to speak.

Speaking about that meeting, I need to mention a rather shocking incident that occurred:
The room was filled beyond capacity with market supporters; many who have never attended a council meeting in their lives. There was a large crowd of people who were crammed into the doorway and out into the foyer. One woman called out to Mayor Tagliaferri that they could not hear and she requested that the audio be turned up. I can't say off-hand exactly what was said but I know that it was recorded and more importantly I know what the gist of it was:

He said YOU don’t need to hear, these people are here to speak with ME!

I also noticed that throughout the night the mayor often whispered to the guy sitting next to him even though people on the floor were speaking to him.

Alan Carpenter recently called Mayor Tagliaferri “A man of the People” What a joke!

Fortunately the Mayor’s apparent indifference was no deterrent to Cr Haney who ended the meeting by announcing a special meeting to do something and get this mess sorted out quickly. True to her word, and with the support of other councillors, the special meeting achieved more in a few hours than the months of consultation with the mayor.

We were appalled that the mayor did not even show up for this meeting. All of the tea and sympathy, the looking into it, the long list of platitudes and the ducking, diving and dodging finally made sense. It seems pretty clear that he has been covering his own arse all along and not only supporting the Murdoch’s but has probably instigated a sweetheart deal which included getting his GlamDeli up and running.(?)

I should also mention that Deputy Mayor John Dowson, chaired that meeting and whilst consulting with a lawyer and being mindful of legal responsibilities, obligations and limitations, he clearly paid attention to the human factor and gave everyone a chance to be heard. I might also mention that he bought in additional chairs so that no one was left outside the room.

Mayor Tagliaferri has high ambitions to take Jim McGintys seat in the up-coming bi-election for Fremantle. When council colleagues where asked to comment on Mr Tagliaferri, one was quoted as saying, “Much of my time is spent trying to clean up the mess made by the mayor with his poor decisions and stunts, and that is what I am wholly focused on at the moment, addressing the crisis at the Fremantle Markets.”

Another councillor was quoted as saying, “I would much rather support another candidate who… (has) a reasonable ego.” A man of the people – indeed!

It seems that the Freo Markets, the stall-holders and the ratepayers have been screwed around by greed, ego and personal agendas but there is even more at stake than that.

We are in a recession and responsible leaders and hard working taxpayers are all making hard, complex and mindful choices about how to turn things around. I see the issues of Freo markets as a microcosmic view of the world stage. I think world-wide we all see clearly that this entire mess is a matter of greed and it’s now the workers who are financially bailing out the administrators.

Governments, banking industries and the big end of town have been forced to realize that it is, ‘the little people,’ who have always held the economy together. The smart ones have already swung into action to protect and support the retail and manufacturing industries. You can almost hear them screaming “Nurture the workers”.

Tagliaferri and the Murdoch boys must be living in a bubble. Are they oblivious to the precarious position that the stall-holders are in and are they completely blind to the fact that it is the Markets which finance them? If they lose the stall-holders, they lose the stalls and that means they will lose the Markets. Didn’t anyone point out that this is exactly what happened with the previously successful Pavilion Markets in Subi?

When someone is willing to give a new idea a go, they need a low cost opportunity to test themselves. The Government has been handing out millions of dollars over the years to finance and mentor new enterprises and all along The Freo Markets has encouraged and supplied a perfect venue for such creative and innovative people. These are people who have not gone looking for government hand-outs and have got themselves up and running. Many are still there after decades and many have gone on to bigger and better things. Actually, it really would be good business sense for the government to subsidise the markets to encourage and support such people; it would certainly be much cheaper than paying them dole money, lending start up costs and staffing mentors.

There are also a good number of people past retirement age working at the markets. These people could easily have sat back and accepted a pension but instead they have continued to be self-employed and self sufficient. I know of at least one stall holder who is over eighty and still actively working his stall with no desire to retire.

Many of the stall-holders are single parents and again they could be receiving government benefits but they have chosen to finance their own business and are fully self-supportive. However, if they are forced to pay the new rents then I think many will realize that their profits will not be much more than pensions and not worth the time or the stress.

The Government also spends a bomb on advertising and promoting tourism. The Freo Markets are already known world-wide and don’t even require expensive promotion. I think it’s time that the Tourism Board got onboard this argument and protected one of its greatest assets. The Freo markets bring tourism dollars into Fremantle and into WA.

Let’s stop treating it like a shopping venue and encourage its uniqueness.

Commercially it is already a profitable and successful enterprise. Any fool knows that you don’t fix what aint broke. If you lose the people who have made it what it is or if you change the nature of what it is, then you lose something very special and much loved. To even suggest that Freo Markets needs to be similar to other markets is just indicative of the ignorance and arrogance of the current administrators.

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