The revamped H Street corridor in Northeast D.C. has become a profitable place for African Americans to open bars. But they face more hurdles to getting a business running than the area's mostly white newcomers.
Halftime Sports Bar in Northeast Washington has gone through several lives in the last 50 years. It was a TV repair shop, a Caribbean restaurant, and most recently a rat hotel. The storefront has witnessed H Street's transformation, from a shopping district to a burned-out ghost town to a gentrifying powerhouse. Owner Karl Graham has seen each of these versions. He grew up six blocks away, and now he's ready to make his mark on this neighborhood's newest form.
"This is where my mom brought us down to go shopping," the 56-year-old says, sitting in his Washington sports-themed bar that opened earlier this year. "This was downtown for us. Once the riots hit, there was nothing for a very long time. But the whole city has changed."
H Street is just one of several neighborhoods here in the capital where business owners are flooding in, boosting a local economy that's propelled by a wave of young professionals who didn't grow up in the city. Where abandoned, boarded-up buildings stayed dormant for years, now hip, inventive gastropubs and taverns reside.
Liquor is where the money is in Washington. Last year, the D.C. government brought in $5.9 million in wholesale alcoholic-beverage tax revenue—the largest sum in five years, and likely the largest in many years before that. While that number represents all liquor sales in D.C., from bars to stores, it does show that with a boom of new residents comes a boom for selling booze.
But Graham is a rarity in the bar boom: He's an African-American owner, and he's from the District. Like the new residents of D.C.'s gentrifying neighborhoods, the owners of the bars that are coming in don't look like the historically black population.
Of the 44 liquor licenses issued for taverns that have opened successfully over the past two years in six historically black neighborhoods (Columbia Heights, H Street NE, Petworth, Shaw, Trinidad, and U Street), only 13 were by black applicants—several of whom are not from the District. Half of the applicants were white. And while some white owners grew up in D.C., such as Ghibellina (14th Street) owner Ari Gejdenson, most did not.
Owners apply for liquor licenses through D.C.'s Alcohol Beverage Regulation Administration, where they submit paperwork, pay a fee, and seek approval through the Beverage Control Board for taverns, restaurants, nightclubs, and hotels. Bars fall under the tavern category since food accounts for at least 45 percent of a restaurant's annual receipts.
White applicants overwhelmingly dominated U Street and Shaw in successful liquor license applications—two neighborhoods that are almost unrecognizable compared with five years ago. Over two dozen restaurants have opened along 14th Street in the past two years alone, complementing new interior-design and high-end clothing shops. The transformation there started long before other neighborhoods to the east.
H Street is different, where a plurality of applicants were local African-Americans; one of them is Avery Leake. The owner of Avery's Bar and Lounge grew up near Eastern High School, served for nine years with the Capitol Police, and then pursued a career in party promotion. For someone with limited resources like Leake, H Street worked.
"It's not fully there yet, and the rent isn't as high," the 30-year-old says. "So, it's a good place for a minority to start a business who doesn't have a lot of capital. Take the same business up on U Street, and you're talking about maybe double the rent."
But even with the lower costs, Leake's path here was far from easy. He couldn't get a loan, he didn't have good credit, and he had to settle for a second-floor bar until he made enough to buy the rest of his building. With limited capital, he couldn't change the building structurally, but he could fix up the place with the help of friends and IOUs. The guy who was supposed to paint the bar's logo on the wall didn't even show up.
"I got a level, and I sketched it out," he says in his hip-hop-themed bar. "My stars were not perfect, and I was like, 'You know what, it shouldn't be perfect because everything about this place isn't perfect.' I got steep stairs. I'm a second-floor bar. I can't even afford a sign right now. I'm just going to embrace every negative thing that's happened and turn it into something great."
The financial barriers that Leake experienced are not uncommon for local African-Americans trying to make it in these gentrifying neighborhoods. It's difficult to secure loans in high-risk, low-yield businesses. And your business history also affects a new business owner.
"It's dollars and cents," says Halftime's Graham, who just sold his other H Street bar, the Elroy. "It costs a lot of money to start up a bar. You ain't starting up a popsicle stand. There are a lot of specifications. You can't be a criminal. You can't owe the District any money. And besides that, you need some kind of business background."
Graham, as a general contractor, didn't have the same construction barriers as Leake. He was able to get around a lot of the overhead that other people have in remodeling a new bar. But he, too, couldn't secure any property on U Street or in Shaw, because of the cost. Nor could he take advantage of grant programs from the District for new businesses, because they don't cover bars. But officials did hold his hand through the application process.
While this isn't for everyone, he warns, local African-Americans interested in opening a bar shouldn't shy away from it. The black community, he says, needs strong business leaders. And even though the change in the city has meant a changing face of Washington, neither man is upset with gentrification.
"This was our Georgetown for so long," says Leake, who thinks back to his great-grandparents who owned a business on H Street. "It wasn't pretty. It was what it was. But we have to accept the fact that D.C. is not the old Chocolate City. I think change is great. Evolving is great. If H Street evolves, everyone has to evolve with it."
But the city can't forget its past. And that's why it's disheartening to the communities' longtime members that the ones taking advantage of the boom don't look like the people who lived here for so long. It's why Leake wants his bar to serve young African-Americans who are looking to spend money "with someone who looks like them." And while Graham wants to serve all facets of the new H Street, he says his history here is invaluable to people looking for a neighborhood bar run by someone who saw every version of what the property looked like.
"A lot of outsiders have come in, maybe just to capitalize on what they think is a boom," Graham says. "I'm not an outsider. I've been here. I can talk about the city. I used to climb the fence at RFK to sneak into the Redskins game, back in the day. I remember when the Senators played and Frank Howard hit home runs. I was here. This is my home."
Stephanie Stamm contributed to this article.
This post originally appeared on National Journal, an Atlantic partner site.
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