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Should stores that sell records, vintage clothes, and used books be regulated in a manner similar to pawn shops? The District code seems to say so—-which is what some small-shop owners found out, rather unpleasantly, earlier this week.
On Wednesday, an inspector from the Department of Consumer and Regulatory Affairs and a detective from the Metropolitan Police Department took a stroll through Adams Morgan and the 14th Street NW area, stopping by Idle Time Books, Smash Records, Crooked Beat Records, vintage shops Meeps and Treasury, and GoodWood, an “American mercantile and dry goods store.” In each case, they told employees that without a secondhand business license, they were operating illegally and faced steep fines until they complied with the law. They’ll have to get criminal background checks, a requirement for the license. And that piece of paper will cost them more than $700. The inspectors gave the businesses seven days to comply.
At Idle Time, the MPD detective, Avis Johnson, asked manager Adam Schaeffer if a book she was holding was used, Schaeffer says: “I said, ‘yeah, it’s a used book store.'” He says they asked him for his secondhand business license—-which, he says, the shop’s owners never told him about. Instead, he pointed to the store’s general business license. He says Johnson and the DCRA inspector, Terrell Hill, “started using this farcical good cop/bad cop routine. It was rude and unusual and bizarre in the extreme…I just didn’t have any information to give them.”
Cathy Chung, the co-owner of Meeps and Treasury, wrote to DCRA Director Nicholas Majett, Ward 1 councilmember Jim Graham, and Kristen Barden, the executive director of the Adams Morgan Partnership BID:
I received a similar shockingly unpleasant visit when I experienced an interrogation by Mr. Hill about the same “secondhand business license.” Ms. Johnson had a more “pleasant” approach but neither of them could tell me where I could find information about this law (I even showed them the DCRA web posting referenced below to discuss it and they just scoffed at me) or who I could speak to at the DCRA. They just told me I would be fined several thousand dollars. Then they visited me a second time to amend that statement, and in front of a customer, pulled me aside, and Mr. Hill informed me actually that I had seven days after the notice to be compliant. Why they didn’t tell me that the first time is a mystery. Then he proceeded to tell me “that is, unless you have a criminal record, do you have a criminal record?” The customer heard everything and was appalled.
I had informed both detectives that I was the owner at Treasury as well and let them know that we did NOT have the secondhand license at either location. Did that prevent them from going to my other store less than an hour later and interrogating my employee? No, it didn’t. I was afraid of this and had told her they were coming and to show them the licenses we did have, let them take their pictures of the licenses, let them know I had already spoken with them, and to call me with any issues. I thought that this would prevent an altercation. They screamed so hard at her that the employee was shaken when I spoke to her about it. What is the point of this during a business day? It’s disruptive and unprofessional and inhuman. And it comes across as merely a scare tactic when I had ALREADY spoken to them regarding both businesses.
“That’s something we’re going to look into,” says Kevin Carter, the supervisor of DCRA’s Regulatory Investigations Division, when asked about his employee’s alleged behavior. “Compliance inspections are generally noncontroversial. We don’t go in and shut them down.”
In an email, Gwendolyn Crump, the director of MPD’s communications office, writes: “MPD assisted DCRA. Please direct your inquiry to them.” But Carter says DCRA was first notified of the compliance issues by MPD’s pawn unit.
Carter says the inspections concluded that all of these businesses should be operating under a secondhand business license and not the less restrictive general business license. If he’s right, that means each of the inspected businesses has to fit into one of these three categories of secondhand businesses, according to D.C. municipal regulations:
A Class A secondhand dealer shall be a person, firm or corporation, other than a Class B or a Class C secondhand dealer, engaged in the business of buying, selling, trading, exchanging or dealing in secondhand personal property of any description (other than motor vehicles), including the return or unused portion of any railroad ticket, order or token.
A Class B secondhand dealer shall be a person, firm or corporation primarily engaged in the sale of new merchandise, and incidentally engaged in selling, trading, exchanging or dealing in secondhand personal property of any description (other than motor vehicles) as the result of having received that secondhand personal property in trade, or by repossession or as part payment for new merchandise.
No Class B secondhand dealer shall engage in the business of dealing in used personal property except as an incident to the sale of other merchandise.
A Class C secondhand dealer shall be a charitable organization, as defined in § 501(c)(3) of the Internal Revenue Code of 1954, which purchases or receives secondhand personal property (other than motor vehicles) for the purpose of resale; or a person, firm, or corporation which purchases or receives secondhand personal property of any description (other than motor vehicles) on consignment for the purpose of resale.
The first category seems broad enough to include businesses like Crooked Beat and Smash, which sell mostly new records but also some used ones; Idle Time, which sells almost entirely used books; Treasury and GoodWood, which sell vintage and antique items bought through dealers and auction houses; and Meeps, which sells clothing from dealers as well as items purchased off the street.
But there are several problems. For starters, every owner I spoke with said either they were never told by DCRA that the secondhand business license existed, or they were told specifically that it did not apply to them because they bought from licensed dealers and not off the street. Bill Daly, the owner of Crooked Beat, says that when he came to the District in 2004, he explained the nature of the shop to DCRA and was told he could use the general business license. GoodWood, in fact, used to have the secondhand business license; owner Anna Kahoe says she heard from others in the vintage and antique industry that because she wasn’t buying from individuals (but from dealers and auction houses) she could instead operate under the general business license. When she went to DCRA three or four years ago to make the change, she says, she explained the nature of her business and was told the general business license was fine. “I thought I was in the clear until yesterday,” she told me Thursday.
“I’m not certain why they didn’t know,” Carter says. “But what I am certain of is that if they had come to DCRA or gone online, someone would’ve told them what they should have told them.”
Problem No. 2: The requirements of the secondhand business license are notably onerous. In addition to the background checks, businesses have to record every single purchase of secondhand goods they make and file it with MPD’s pawn unit. The idea is to safeguard against the selling of stolen goods—-which makes sense when regulating pawn shops, which buy jewelry and electronics off the street. But record stores?
Problem No. 3: the cost and the timing. The secondhand business license is $651.20, and additional fees bring it to more than $700. Compare that to the general business license, which is $324.50. “This is an expensive license,” says Barden, from the Adams Morgan BID. “For some people it’s a real cash-flow issue. Most people plan on paying certain licenses at certain times of the year. Getting a surprise license like this—-it’s kind of unfair.” Carter says that under extenuating circumstances, DCRA will allow the businesses more than seven days to comply.
Reached by email, councilmember Graham writes: “I have communicated with MPD and the US Attorney, requesting detailed information on what happened here. I am awaiting the response. I am very concerned.”
While Daly’s lawyer, Robert Clayton, told me his client is considering filing a restraining order if this situation isn’t cleared up soon, every business owner I spoke with stressed they don’t want to be in violation of the law. “We are willing to do anything we need to do to be compliant,” says Chung, of Meeps and Treasury. “We just want to be shown a level of respect being a small business and doing everything we can to contribute to the local economy. We’d like the same manner of respect in return.”
Photo by Darrow Montgomery