There’s a lot about the Grove Caffe that worries the A.S. Council.
Most concerning is the roughly $126,000 of debt that hovers over the cafe, roughly $80,000 of which has accumulated over the last two years alone.
Accordingly, the few councilmembers aware of the Grove’s predicament are pushing to shut down the longtime campus landmark once and for all, cutting their losses and paying off the debt with funds generated by other A.S. enterprises.
The council’s final vote on the fate of the Grove is set to take place this Wednesday.
Last year the council decided to review the Grove’s financial performance, using this year as an evaluation period. After witnessing continued losses throughout the last two quarters, A.S. President Donna Bean is about ready to jump ship.
‘We’re pouring student fees into the Grove right now,’ Bean said. ‘It’s over $120,000 in debt. If we continue to run the Grove then we’re basically subsidizing it.’
Yet others still see hope for the beleaguered enterprise. The Grove’s employees, led by student managers Thomas Frank and Autumn Hays, are in the process of devising a new business model for the Grove, which they intend to present before the council at this Wednesday’s meeting. They want to sell fewer espresso drinks and more food, escaping the now-saturated campus coffee market and attempting to carve out a new niche by offering a variety of hot sandwiches and pizza.
They also said they want the Grove to stay open for a shorter period throughout the year, closing in the summer and over campus breaks when fewer customers are around.
Additionally, Frank and Hays said that manager Cleveland Thomas ‘mdash; hired by the council in the summer of 2007 in an effort to revive the failing business ‘mdash; informed them that he wouldn’t be returning next year. Thomas’ departure would mean the removal of his $50,000 annual salary from the Grove’s expenses.
But it might not be enough.
‘I’m torn because while it’s a great place and it serves a lot of students, we can’t just fall further and further into debt,’ Associate Vice President of Enterprise Operations Chelsea Maxwell said. ‘Ideally I would love to do something where it could stay open, but I just don’t know if A.S. has the means.’
Since September 2008, the Grove’s profits have been marginal at best, fluctuating month-to-month. Most recently, the cafe reported a profit of just under $200 for the month of February.
It then lost over $7,000 in March.
According to Vice President of Finance and Resources Naasir Lakhani, these inconsistencies are explained by a simple formula: The Grove loses money when students go on vacation and makes money when students are around. This past summer, the cafe remained open and lost over $14,000; in December and January, when students left campus for winter break, it lost nearly $11,000.
November and March, which saw losses of $6,000 and $7,000 respectively, remain something of an anomaly, Lakhani said.
The Grove’s financial troubles extend far into its long history at UCSD.
When it opened in the mid-1980s, the Grove
existed as a part of the Crafts Center. The wood patio that still surrounds the cafe was constructed by Crafts Center Director Ron Carlson, who also planted the trees and shrubbery that adorn the Grove’s planked walkways.
Carlson ran the Grove for several years, gradually ceding the reigns of management to the cafe’s student employees. Things didn’t always go smoothly. Every few years, business went sour and profits dipped into the red, prompting Carlson to step in and lend his expertise to the students in charge.
But in 2007, Carlson decided to cut loose from the failing business ‘mdash; at the time over $25,000 in debt ‘mdash; and sold his 50 percent share of the cafe to the A.S. Council, rendering the Grove a fully student-run enterprise.
Another year of sinking profits forced the council to take action. After rejecting the idea of a Grove partnership with the Rady School of Management, and considering shutting the Grove down completely, the council hired Thomas, who had previously managed campus eateries, with hopes he would bring more stable leadership to the cafe.
Now, a year and a half later, things have only gotten worse. Employees initially blamed the Grove’s continued accumulation of debt on construction work in the Student Center, which made the cafe virtually inaccessible to students for much of Fall Quarter 2007. Others attribute these failures to the high cost of maintaining a nonstudent manager.
‘There’s been revenue, but not the kind of revenue to sustain that type of salary,’ Lakhani said.
Bean acknowledged that when councilmembers hired Thomas, they were aware that revenue would dip with the expense of the new position. However,’ she said they never anticipated that the cafe’s debt would reach the excessive level that it has.
‘[The debt] was supposed to hit maybe eighty or ninety thousand, then peak and turn around,’ Bean said. ‘But it hasn’t done that. It’s just gone deeper into debt.’
Some former employees have been critical of Thomas’ performance as manager.
‘I didn’t know what Cleveland’s role was,’ said a former employee of the cafe who was let go earlier this quarter and who wished to remain annonymous. ‘I saw him there, but I didn’t know what he was really there for.’
Though Bean, Frank and Hays are unwilling to lay the blame on the new manager, they acknowledge that Thomas has taken a largely hands-off approach to managing the cafe over the last several months.
‘He did pretty much leave a student in charge a lot of the time,’ Bean said.
However, Frank and Hays ‘mdash; who have been responsible for running most of the Grove’s day-to-day operations, including the hiring and firing of employees ‘mdash; say that Thomas has simply been preparing them to take over once he leaves in June.
‘Cleveland is the guy who is always on our backs going ‘no, no, no, you’ve got to do it like this,’ and making sure all the employees are working and things like that,’ Hays said. ‘Mainly, though, his biggest thing has been making sure he gets really good management in there and really good employees and training them to take over.’
Thomas has also been criticized by a number of former Grove employees and customers for his allegedly abrupt workplace demeanor.
‘I think there were a lot of factors working against him,’ Bean said. ‘But I know some workers personally and there are a lot of students and customers who have had bad experiences with him. On a personal level I don’t think he was the best of managers.’
Thomas declined to comment.
In general, all involved in the Grove’s dilemma agree that its poor performance is mostly a result of the lack of foot traffic in the area.
In its glory days, the Grove was the only coffee shop at UCSD, and was afforded plenty in the way of customers ‘mdash; until the Student Center began losing much of its business to new campus hub Price Center in 1993.
In addition, there are over 10 coffee shops spread throughout campus, with more are on the way. Espresso kiosks seem to spring up overnight in ever more convenient locations.
‘Twenty-four years ago you couldn’t get coffee every two steps on campus,’ Hays said. ‘We were the coffee place, and it was still kind of an exotic thing to go and get a cup of coffee. But now, every two steps there’s a coffee cart. They’re all over the place.’
As a result, profits simply aren’t what they used to be.
‘There’s a focus away from the Student Center to the Price Center expansion and there’s an oversaturation of coffee on our campus right now,’ Bean said.
Nevertheless, the cafe’s employees have fought to draw more attention to the former campus hub. The Grove has run an extended guerilla marketing campaign over the last two quarters, distributing coupons on Library Walk and talking up a newly revised menu including sandwich wraps and breakfast burritos. Thomas set up a grill in front of the cafe shortly after he was hired, serving barbequed items like burgers, ribs and pork sandwiches in an effort to attract more lunchtime business.
‘The fact of the matter is that we don’t have foot traffic,’ Frank said. ‘So what we’ve been working on for the last quarter is finding new ways of getting that foot traffic. It’s our job to physically pull students into our shop.’
Despite these efforts, the Grove has continued to flounder. The theory that the cafe is still capable of turning a profit while students are in session ‘mdash; also shared by Maxwell ‘mdash; appears defeated by November’s significant loss. According to Lakhani, March’s $7,000 loss is also surprising, despite the fact that finals week and spring break fell within that period.
‘Before seeing the March numbers, I was really wondering, ‘Why would we want to shut this place down after looking at January and February and seeing positive numbers there?” Lakhani said. ‘But then, after seeing March and seeing it lose $7,000, that was kind of a big shock to me.’
Grove employees think the council might be able to offer additional assistance rather than shut the cafe down completely.
Frank and Hays have suggested moving the popular A.S. Bear Garden to the grassy hill near the Student Center once a month, and would like the Grove to cater the event rather than see the council offer the lucrative task to an outside vendor like Subway.
‘If we catered the Bear Garden, [the council] would be paying an A.S. enterprise,’ Frank said. ‘They would be paying themselves.’
According to Associate Vice President of Programming Garrett Berg, however, the likelihood of creating a Grove-centric Bear Garden is extremely slim.
‘We looked into the Grove doing the food and they just don’t have the capability to make enough food for a thousand people,’ Berg said. ‘In addition, there’s literally not an ounce of flat land on the [grassy hill], so we wouldn’t be able to do any of the things we do [at Bear Gardens], like booths, tables, games ‘mdash; any of it. It’s also just not big enough for a thousand people, whereas Matthews Quad is.’
After Thomas’ entrance as manager, the council formed the Grove Advisory Committee. Consisting of Maxwell, Lakhani, Bean, Thomas and Student Center officials, the body is designed to oversee the cafe’s finances and provide the council with greater insight into its operations.
However, the committee has met only a handful of times, and has kept any interaction with Grove management at an informal level.
‘It’s just really informal,’ Maxwell said. ‘It’s not like ‘this is our agenda,’ and stuff. It’s just to keep the lines of communication open.’
Frank and Hays just met with members of the committee for the first time earlier this month. It was at that meeting that they found out the council would be voting on whether to shut the cafe down during week five.
Last week, the legislation to close the Grove was moved up to this Wednesday; neither Frank nor Hays were notified of the change in schedule.
‘I only recently even knew the advisory committee existed,’ Hays said. ‘That’s one thing we’re going to bring before A.S. We want to have more communication with them. Until recently, we didn’t even know we were supposed to have that kind of back-and-forth communication with them. We would actually really like that, in fact.’
Frank believes some funding from the council would go a long way toward helping the Grove.
‘We never get any funding from them,’ Frank said. ‘We’re $0 on their budget. So even if we just had $5,000 a year, I wouldn’t be using a 1968 freezer that gets us marked off on our health inspection every time.’
However, Bean is unwilling to put student fees toward the ailing business. The council currently has enough funds saved up from profits generated by A.S. Soft Reserves and Lecture Notes to pay off the debt accumulated by the Grove if it is closed this Wednesday.
Whether the Grove shuts its doors for good will depend largely on how well its student employees are able to convince councilmembers that the cafe still has a shot at making a comeback. They’ll be presenting their new business model before the council on Wednesday, following a public forum on the matter.
Readers can contact Reza Farazmand at [email protected].