It’s been a year since Green Roots Cafe, a student-run vegetarian and sustainably sourced restaurant, opened in the basement of the Smith Memorial Student Union. But the eat-in is already facing serious challenges that might threaten its existence.
After the previous establishment, Food for Thought, closed due to severe financial mismanagement, GRC opened with an entirely new student staff at the helm. They operate on a break-even model and receive no funding from the university, except for $107,000 from the Student Fee Committee, all of which goes directly to the building as rent.
But since opening in January 2015, the business has accumulated $38,000 of debt and if this figure isn’t reduced to $10,000 by June 30, they may not be able to continue.
According to Angela Hamilton, the coordinator of student-operated services and the advisor for GRC, their financial struggles have been exacerbated by two pipe leaks that have forced them to close the kitchen for three weeks. This is usually the cafe’s busiest time of the year, but at this point they are only able to serve coffee and pastries, causing a drastic hit to their sales.
They’ve also confronted unanticipated expenses, like a $4,000/year contract for their POS system support. In addition, a high turnover rate among the student staff has made addressing these financial problems an even greater challenge.
The managers feel that if they had more opportunities to cater on campus, that could significantly help. They brought in $11,000 in the 2015 fall term just from catering, which has a larger profit margin. However, because of the university’s contract with Aramark, they are prohibited from serving anywhere in SMSU other than their own space.
But whether or not a student-run cafe can succeed at all is a question on many people’s minds. Hamilton has been in her role since November 2013 and she’s only seen financial records for about the last five years. She said the model they’re working through is in itself problematic because it’s like a non-profit model imposed on a corporate model, in which they have to project what their revenue and expenses will be.
“Your success is based on whether your projections were right, not necessarily whether you profited,” Hamilton said. “There could have been instances when the cafe was profiting but they had overestimated what their revenue was going to be and therefore it showed as a loss at the end of the year.”
The GRC managers are also frustrated with how they’ve been represented by their liaison on the SFC, the seven member body responsible for allocating the $15 million of collected student fees.
That liaison, who recently resigned from the position, was Khalid Alballaa. He’s a MBA student with a background in business, finance and accounting. He is also a frequent visitor of the cafe; he loves visiting the restaurant and acknowledged that they do a great service to the community.
“There’s not a lot of places to hang out on campus and this is one of my favorites,” Alballaa said.
However, he feels that GRC should be self-supporting, and if they can’t break even then an external vendor should replace them. He said he was disappointed by their failure to manage the restaurant and thinks everyone would benefit from professionals taking over.
“I know that we can have the same level of service, or even better, with an external tenant doing it,” Alballa said.
The way Alballa sees it, instead of paying to house GRC, they could be collecting rent from someone else. In addition, students could still work at the cafe and gain that valuable experience, which would improve from the expertise of professionals to teach them the best practices of the industry.
Alballaa said he took his role as liaison very seriously and that being responsible meant cutting inefficiencies.
“It’s my obligation, my duty, to advocate for students on campus and their money because every student pays for that. They trust us to make wise decisions in funding programs,” Alballaa said.
Hamilton envisions another option. She believes an ideal model would have a professional staff member dedicated solely to the cafe, something she’s just not able to do as the supervisor of five (soon to be six) other student organizations.
Antonio Matic, one of the managers, agrees with Hamilton.
“I think that things definitely will need to change—an actual staff member would be very helpful,” Matic said.
And this way the students could still have ownership over every aspect of the operation.
“In terms of what the students learn and get from it, even if they’re failing, they’re learning,” Hamilton said. “If learning is only focused on getting it right, then we’re creating a bad learning environment.”
Hamilton believes that they are acquiring valuable high-level business skills they wouldn’t get if someone else was running it.
“I don’t think there’s anything more important than for them to work on something themselves,” Hamilton said. “They’re also providing this service to students. And through providing that service they’re still creating value for every student at PSU who wants to get a nice meal.”
Regardless of whether GRC is able to pay down some of their debt by the end of the year, GRC staff and advisors agree that something will need to change in their business model.