Loading...
Memo- Depot Coffee House Update FACILITIES DIVISION MEMORANDUM To: FROM: DATE: SUBJECT: Honorable Mayor and Members ofthe City Council Jay Strachota, Facilities Director April 6, 2006 Depot Coffee House Update April 11, 2006 Work Session The purpose of this Depot Coffee House Update work session is to update the Council on a few key areas of change and possible change at the Depot. The Depot Coffee House program is in a Depot Board approved transition period in which a new business model is to be tested. If the model proves successful and sustainable the Board would consider this model as the long-term model of operation. Background The Depot Coffee House has operated under a variety of staffing plans since it opened in 1998. The most recent business/staffing model has been to operate/staff the coffee house business under a contractual agreement with the Royal Cuisine, with the Ridgedale YMCA employing the Teen Coordinator, and the City employing a few sound technicians. This model is about to change as the I-year contractual business operations agreement was not renewed, and as the Depot Board desires to move toward a more active "teen center" presence at the Depot. Transition Period Since February 2006, Depot adult board member Fran Hesch has been proposing to the Depot Board and Partners Advisory Team the concept of a business operating the coffee house in the morning up until about 2:00 pm, and after 2:00 pm the facility is open for teen and community use. Ted Duepner, the Depot Teen Coordination, and the Depot Board have at the same time been working toward increasing the teen center & community presence in the Depot. The two plans could blend together under a one department Depot budget that may have a separate coffee business, but a more synergistic effort between the business and teen center. The proposed business is a for-profit business that will be created specifically to operate this coffee shop. An agreement could be set up that would state the Depot/City agrees to this arrangement contingent on profits being plowed back into the Depot. The business is being created as a vehicle to maintain a business in the Depot, which if successful, would help fund the project, and also this type of business will be more typical of an actual small business, thus making it more desirable to use as a learning lab for the business educational piece at the Depot. During the transition period the new business, named "Depot Express", will cut costs by eliminating low volume and low margin products, have the advantage of not being open later in the day which is a low volume period, and will work toward more effective marketing and customer responsiveness, all this in an attempt to increase profitability. The Depot Board has begun to make changes by bringing in vending machines and video games, and exploring more Depot based activities and staffing/volunteering opportunities at the Depot. The Depot Board approved the transition period to be from April 1 to May 31, 2006. During this time it is the responsibility of the Depot Express to determine if the proposed business can in fact be successful and sustainable. The Board during this period will work toward developing more after school and evening activities for youth and the community. Long-term Model of Operation If the new model proves to be successful and sustainable an agreement will need to be signed between the Depot Express and the Depot, outlining responsibilities in the areas of maintenance, equipment ownership, hours, revenue return to the Depot, liability, insurance, etc., much the same as the previous operations agreement. Employment of the Baristas (coffee employees) will be transferred to the Depot Express. All coffee shop related expenses and revenues would flow through the Depot Express taking that bookkeeping function out of the responsibility ofthe City's Finance Department. The long-term model may look much like the current model to the general public with the exception of fewer operating hours and also there will be periods where the facility is open, but the coffee counter is closed. Over the transition period Depot Express and the Depot Board will get a better understanding of cost and ability to be open hours more similar to today's operational hours. Conclusion The transition period at the Depot is a time to test a new model and ask and to answer questions about the long-term plans for operations at the Depot. The Depot is only a few days into the transition period so there are still questions that are yet to be answered Depot Express and the Facilities Director has been meeting weekly with Depot representatives to promote communications and to help flush out questions/concems. At this work session Fran Hesch and Ted Duepner will be present to layout more detail ofthe concept and plan as it is today, and to answer questions for the Council.