As Rough-Hewn Area Goes Upscale, Merchant Shifts From Beer to Champagne
By Sarah Halzack
Washington Post Staff Writer
Monday, December 24, 2007; D01
Barrel House Liquor is a longtime fixture on 14th Street just west of Logan Circle in Northwest Washington, a distinctive landmark in a once rough-edged neighborhood being transformed by expensive shops and posh condos. Below the pink neon sign bearing the store's name, the main entrance appears to be cut into a massive, wood-looking barrel.
It's hard to miss, and it's been that way for decades.
Inside, though, the store has been changing like the neighborhood around it. Brightly colored posters of Hennessy cognac and Moet champagne hang above shelves lined with Grey Goose vodka, Bombay Sapphire gin and a variety of single-malt scotches. The opposite wall features wines organized by origin: France, California, Australia and Chile, to name a few. Further back, microbrews and imported beers are stacked alongside domestic ones -- all offering hints about its upscale clientele.
And yet, the store, owned by Mesfun Ghebrelul since 1995, still bears vestiges of its past, including some bulletproof glass, a phone and podium designated for police use, and refrigerator cases stocked with 24-ounce beers.
Ghebrelul is trying to navigate his neighborhood's transition, catering to new customers while hanging on to old. Keeping a business humming in such an environment is difficult for any small-business owner, and some on his block have fared better than others.
Many have benefited from wealthier neighbors and increased foot traffic, while others have lost ground or left altogether as rents and real estate taxes rose and their old customers were displaced. Now, a credit meltdown and slowing national economy could present new challenges to their survival.
Gentrification is "not always predictable," said Neil Smith, an urban anthropology scholar at City University of New York.
Known to regulars as "M.G.," Ghebrelul is an Eritrea native and son of a citrus farmer. He came to the District in 1993 after more than a dozen years in Texas. When he took over Barrel House, he said, "the product we used to sell was a much lower-end product." Cobwebs clung to the wine displays, and the walls above the shelving were stark and unadorned. One of his darkest memories of those early years was in 1997, when three burglars entered the store, held a gun to his head and ordered him to open the safe. Money was taken, but no one was hurt. After this incident, D.C. police agreed to have an officer visit the store once a day. It also led Ghebrelul to install a bulletproof glass chamber around a large section of his cashier's counter.
It wasn't long, however, before the neighborhood, once one of the District's notorious bastions of prostitution and drug dealing, began to change. A crop of upscale condos and high-end retail stores brought with them an influx of wealthy consumers. Commercial real estate agent John Asadoorian said the retail market stabilized around December 2000, when Fresh Fields, now Whole Foods Market, opened nearby on P Street. Ghebrelul was determined to keep pace. "It's very beneficial to change with your neighborhood," he said.
In addition to stocking pricier brands, he stopped sales of 40-ounce beers. He also enlisted the help of Diageo, the company that provides many of the brands he sells in his store. Diageo gave him the posters to spiff up his walls and sent people to help Ghebrelul when he refurbished his wine shelves in 2005.
Ghebrelul didn't stop there. He added a small parking lot behind the store and eventually removed the bulletproof glass surrounding the cash register, which Ghebrelul said was "like a cage."
He also reached out to his new neighbors. He said he was the first business owner in the area to volunteer to sell tickets to the Logan Circle Community Association's annual house tour. He offers a 15 percent discount to association members. "I want to be associated with the neighborhood and be as family with the neighbors," he said.
Ghebrelul insists on having a fully stocked store because he worries he will lose customers if he is out of the product they are looking for. Recently retired liquor salesman Steve Mostow said Ghebrelul would call repeatedly if an order went unfilled. "He doesn't wait for a salesman, he reacts to a need," Mostow said.
Others changes are in the works. Ghebrelul said he has noticed customers place a premium on fast service. To that end, new cash registers will be installed after the holidays along with several credit-card processing machines. This will enable Ghebrelul to phase out the single machine he uses for all credit card transactions. He also plans to hire a wine expert and expand Barrel House's Web site.
The initiatives appear to have paid off. Sales, which he keeps by hand on a single manila folder, have approximately tripled since he took over the store 12 years ago.
Other shops on this stretch of 14th Street have not fared as well. Chong Won-Hu owns Carry Out Deli, a restaurant that dispenses eggs, grits, home fries and other home-style cooking to customers on the run. Though she has owned and operated the store since 1989, she plans to leave when her lease expires in 2011 because business is down. She laments the departure of old neighbors and said newcomers prefer to grab their breakfast at relatively recent neighborhood additions Starbucks and Caribou Coffee.
Some upstart businesses targeting new, affluent residents also have struggled with soaring rental rates and real estate taxes. Maison 14, a 3,000-square-foot furniture store that peddled contemporary European designs, French antiques and handmade Moroccan pieces, opened on this block in July 2002. Former co-owner Christopher Walsh said he and business partner Giles DeConcilio thought Logan Circle seemed a good location for their store because it was an affordable and up-and-coming neighborhood. Maison 14 closed in 2005 when, Walsh said, their landlord upped the monthly rent from $6,500, which included some storage space, to around $12,000. Walsh said their landlord attributed the increase to a hike in real estate taxes.
For one business, a move across the street made a difference. The Fair Price Market and Deli had been on 14th Street for about a decade when its lease was up for renewal in 2006. Store manager Anwar Haq said the landlord doubled the rent. Unable to afford the increase, Haq moved into a smaller space almost directly across from its old location. Since the move, Haq said, business has increased about 15 percent and the customers are more racially diverse.
Downtown Lock Co., a neighborhood fixture since 1960, has received offers from law offices, restaurateurs and art studios looking to buy the property and be a part of an increasingly trendy neighborhood. So far, the company has resisted, but co-owner Reuben Houchens said that with real estate taxes close to $15,000 annually, "it's kind of tough to keep."
Though Ghebrelul owns Barrel House Liquor, he does not own the building. His lease will be up for renewal in 2010. Asked whether he plans to stay, he said: "Oh, yes. There is no other place."