By Nikita Stewart
Washington Post Staff Writer
Thursday, March 13, 2008; B01
Tucked away in a Northwest Washington alley is a junk food paradise. WG Food Distributors has everything that anyone craving street-vendor fare could want: mountains of Lemonheads and Red Hots, Utz potato chips, Diet Coke, Sprite and Oreos. And packages and packages of the company's bread and butter: hot dogs, plus buns.
Many of the city's vendors have been buying their supplies from the family that owns WG for more than 20 years. Now, the owners fear their days as major suppliers of food on the go could be in jeopardy. They might not be right -- the city says it has no interest in destroying their business. But they might not be wrong, either -- over the next few months, the city will embark on an effort to rewrite vending rules that could bring them more competition.
The D.C. Council approved legislation last week to grant Mayor Adrian M. Fenty (D) the authority to draw up new regulations, and a hearing is set for today.
"We would like them to voluntarily reform," said Sam Williams, the city's vending coordinator. "We prefer a soft-hand touch, but something has to happen."
About 230 licensed food vendors hit the District's streets each day in an industry that has long been filled with turf wars. But the past two years have been especially intense, as WG and others face a city aspiring to boost its vending image and competitors eager to fight to become new kids on the block.
"It's a game. We know it's a game," said Akbar Nazary, one of WG's three owners.
He and his brother Hdayathulla Gulajan have taken over the business from their brother Himmat Gulajan. They say they stand to lose everything they have worked for since moving to the United States from Afghanistan in the early 1980s. They proudly tell their story of being street vendors who sold ice cream in front of the Capitol to becoming operators of a multimillion-dollar business. WG, which they bought from a Greek family, had $4.8 million in sales last year. Now, the city wants to take it away, they say, to replace hot dogs with haute cuisine.
The older vending carts and the days of $2.50 deals for a hot dog, chips and a soda don't seem to mesh with a downtown filled with luxury condos and residents hungry for variety. In 2006, the city conducted a survey of 480 people and found that 82 percent wanted a bigger food selection.
The city's vending carts must mirror the city's diversity, Williams said, from the consumer who wants a hot dog to one who craves chicken shawarma. There's room for both, he said. But the price means unraveling and rebuilding an industry that the city helped to construct.
For decades, Washington has been a partner in the street-food industry, creating laws that require vendors to store their carts in depots, away from rodents and in areas where the carts can be properly cleaned. Under those regulations, businesses such as WG could offer vendors a place to store their carts while encouraging them to buy supplies from the company.
The WG brothers aren't surrendering without a fight. They have hired a lawyer, and the issue has fueled a feud with newer vendors. Name-calling has flown from both sides. The fear, the brothers say, is that chains such as Starbucks could take over the vending.
People on each side of the debate say they're trying to protect small businesses. But the city has already picked a winner, Nazary said. "The young guy. With the backpack," said Nazary, 37. "What's his name? Gab? Gabe?"
That would be Gabe Klein, 37, an entrepreneur who helped take the Zipcar vehicle-sharing company from 20 cars to 450 in four years. Now his sights are set on vending.
Klein says he just wants a fair shot in an industry whose old model left little room for his idea: to sell gourmet and healthful, fresh foods from electric-powered carts.
Klein, who was raised in Yogaville, a commune in Virginia, calls his eco-vending business On the Fly.
To WG's owners, he is the "backpack" guy. Klein has a name for his rivals, too: "the hot dog kings." It is not a term of endearment.
In addition to two electric SmartKarts -- he wants to add six more -- Klein owns two SmartKafes, small stores that offer fresh food. The cafe at the Farragut North Metro station looks like a giant version of Klein's carts -- bright green, well-lit and funky. There wasn't a bag of Utz in sight. Soy Crisps, Soytato Chips, Latke Crisps, hummus, granola bars, pistachios, cupcakes from Buzz bakery in Alexandria and empanadas from Julie's Empanadas in the District were neatly arranged alongside fresh-cut flowers.
"The reality is that it's in someone's financial interest to keep things the same," Klein said.
The reality is, it's in someone's interest to change things, the WG brothers say.
At first, Klein and his partners wanted to open a gourmet pizza chain but chose vending. They met with Williams and others at the city's Department of Consumer and Regulatory Affairs and won some exceptions to the old rules.
Those exceptions, such as allowing him to park the motorized carts on sidewalks, will probably become law when the regulations are rewritten, Williams said. The exceptions, he said, were made for On the Fly because the company has its carts in a demonstration zone, a test to see how vending could look. But Klein got what WG sees as the biggest exception: He doesn't have to park his carts at a depot.
"Our carts are technically parked outside, but they are covered, so rodents don't come in. Basically, it qualifies," Klein said.
He said the WG brothers have fueled rumors of chain restaurants taking over the industry to manipulate vendors. All of the partnerships that On the Fly has formed have been with local businesses, Klein said.
The battle has trickled onto the streets.
Akindele Akerejah, 23, a native of Nigeria, said he pulled his cart out of WG because he felt pressured to buy hot dogs. "I saw so many vendors, and I realized you can only eat so many hot dogs. Shawarma is what I remembered from Nigeria," he said.
Because he did not buy as much food as other vendors, he said he paid $200 a month. Now he is working with Klein, setting up next to him in the demonstration zone.
Nazary said the regular storage rate at WG is $75 to $100 a month. "There are no contracts to buy our food, but to keep us in business, there's an unwritten rule," he said.
It's that or raise the rent, Nazary said, noting that a small storage facility with hot water and enclosures necessary to meet health standards could cost $900 a month.
Tekeste Woldemariam is a vendor sticking with WG.
"Why would we fight with someone who's sold us stuff" for decades? Woldemariam asked. He and his wife wake up at 4 a.m. each day to travel from Springfield to operate their cart at Vermont Avenue and I Street NW. He described the brothers as part of his family and On the Fly as a group of wealthy investors.
"If I'm a millionaire, I can go to a mall" to open a store, Woldemariam said during a recent stop at WG to pick up two packages of hot dogs.
Nazary and Gulajan said the city favors Klein and dislikes WG and other depot owners. "It's about putting more money in the big man's pockets," Nazary said.
The new rules will also probably favor D.C. residents. Klein and his partners live in the city, but many vendors live in Maryland and Virginia because they can't afford Washington, said lawyer Timothy Jenkins, who represents the WG brothers and more than 100 vendors. The brothers live in Virginia.
"A lot of people have gone out of the depot business," Nazary said. "There were more than seven depots. They had to shut down. . . . Now, there are three."
On a recent day in the alley called Wiltberger Street, Hdayathulla Gulajan took a sip of a Monster Energy drink and a drag on his Marlboro Light. At the warehouse entrance, a paper American flag was stuck to a window with bright-orange 59-cent stickers.
He and his brother still joke about the days when they fought each other over prime spots.
"You know," he said, "at one time, hot dogs were new."