The New Deal Café is currently in talks with a new vendor, which came as a surprise to their current vendor, the Greenbelt Co-op Supermarket.
Around April last year, as the Co-op continued to lose money as the Café’s vendor, they recommended the Café look for alternate vendors, which they began to do, explained outgoing Café President Michael Hartman. At that time the Co-op board had not yet decided if they could continue as vendor, having lost around $200,000, said Hartman. Co-op General Manager Dan Gillotte confirmed that the Co-op board told the Café they’d need to think about what would come next if they found they couldn’t continue. At that time, the Café agreed to take over paying the rent to help mitigate Co-op’s losses. In June they extended their contract on a month-to-month basis, with the Café paying the rent and waiving any profit sharing while the Co-op attempted to recoup some losses. In the fall last year Co-op was trying to figure out if it could continue to operate at the Café or not.
Under the new agreement, in particular with the Café covering rent, the Co-op began to see some profitability and was becoming more hopeful. Yet, if they couldn’t continue as vendor they wanted to make it as smooth a transition as possible, “because we care about the New Deal,” said Gillotte. He and their food and beverage manager for the Café, Raul Lord Baptiste, met with a few possible vendors at the start of the year. “Dan was very generous with his time,” said Hartman. Then, after over six months of month-to-month arrangements, the Café and Co-op signed a new year-long contract (see page 8 of the January 18 issue). The previous contract had enabled the vendor to exit the contract with a 90-day notice, but in the new contract the Café requested the exit option be for both parties. In the new contract the rent remains the Café’s responsibility.
The Co-op has started to see some profitability and its board thinks the service they’re providing to the community is worth it, Gillotte told the News Review. Though either party could leave the contract with three months’ notice, there was no expectation that they would do so, at least on the Co-op’s part, said Gillotte, who felt at that point they were in agreement. Gillotte had been anticipating future talks about the next contract to begin later this summer. Thus, the news late last week that the Café is in negotiations with a new vendor and wanted to let Gillotte know came as a surprise. Though they’d met with other potential vendors prior to the year-long contract, Gillotte said there was no indication to him that they were continuing down that path.
Hartman told the News Review that the Co-op knew the Café was looking at other vendors but agreed that the news they were engaged in “a deeper exploration with a vendor,” including “discussion of terms,” came unexpectedly. “Furtherance of our discussions wasn’t really solidified until right before the [annual] meeting,” explained Hartman of this new development. He also believed the Co-op had understood this was the reason for making the exit clause available to the Café.
An article on page 1 of the February 1 issue of the News Review noted that the Café was advertising on their website for a new vendor able to take over within 90 days. That article, just after the Café and Co-op had signed a one-year contract, reported the Café Board of Directors found the contract didn’t meet the Café’s financial needs and the arrangement was not sustainable for the long term. Discussions with vendors were reported to be in early stages at that time and Café Treasurer Dorian Winterfeld was quoted as saying, “We’re still waiting for our knight in shining armor!”
Café Financial Concerns
The Café has been making a profit for a little while, but the last time it had any income from Café operations was March 2020, when it had to shut everything down by order of the county council, Hartman told the News Review. Since then they’ve survived on government grants, ARPA grants, Covid grants, donations and things of that nature and they managed to keep their doors open for four years, he said. The Café is now generating some income from the 4 percent surcharge that was implemented a few months ago but doesn’t see anything from profits. “The surcharge was designed so we can keep the doors open,” said Hartman. It pays the rent. Other expenses the Café faces include the music coordinator, licensing fees for songs played by performers, and insurance, among other things. The weekly advertisement in the News Review is paid for by a member, said Hartman.
The Café is concerned about its financial stability, Gillotte understands. Currently the rent is largely being paid by the 4 percent surcharge, so that’s helped a lot in the months since it was implemented. “They have some thoughts that we should be contributing more, besides covering most of the expenses,” Gillotte told the News Review, but he’s proud of what they’ve been able to do so far.
“I’m really proud of the accomplishments we’ve had at the New Deal and the service to the community and would be sorry to see that go,” said Gillotte. The view of the Co-op is that they plan to continue until January 21, 2025, per their contract, unless they hear differently from the Café, he said. They’d be in a position to start talking about a new contract in the fall, in preparation for next year, said Gillotte, but he was unable to say what changes it might include. He would also caution the Café to make sure any potential vendor is able to deliver what they say they will.
As for the Café’s position, nothing new has been signed with anyone but they are in negotiations, said Hartman. Much may now depend on the decisions of the new Café board, which was elected at the annual meeting on Sunday, and its officers, including a new president, who were elected by the board on Monday.