The New Deal Café (NDC) remains in a precarious financial situation despite the recent contract renewal with the Greenbelt Consumer Cooperative (also known as the Greenbelt Co-op Supermarket and Pharmacy) to continue as the NDC’s food and beverage vendor. As reported in the January 18 issue, the NDC and Co-op Supermarket recently agreed to a contract extension through January 2025 after “minor but necessary changes to the contract.” However, follow-up discussions with members of the NDC Board of Directors reveal these contract changes still do not meet the Café’s financial needs and the arrangement is not sustainable in the long term.
Current Revenue
Currently, the Café’s only regular source of revenue continues to be the recently adopted four percent fee added to food and beverage sales (with profit from food and beverages going to the Co-op Supermarket). According to the NDC board, the fee is necessary to help cover the Café’s operational costs. Additional financial sources include donations, grants and fundraisers, which, according to NDC Treasurer Dorian Winterfeld, have historically helped sustain the NDC propelling it as “the little café that could.” (The Café’s Masquer-Aid Ball in October raised $26,000.)
Expenses Not Covered
Still, these revenue sources do not entirely cover the NDC’s expenses such as rent, salary for the music coordinator, music licensing fees, debt servicing and operational incidentals. This leaves the Café’s financial situation – separate from the Co-op as the NDC’s food and beverage vendor – still operating at a loss.
Undoubtedly, the NDC’s biggest expense continues to be the monthly rent payments. Previous food vendors paid for at least some of the rent. However, the NDC board agreed to take responsibility for those payments in April 2023 due to the financial challenges the Co-op Supermarket, like most others in the food industry, was facing in the aftermath of the Covid pandemic. This was done in exchange for extending the contract for six months and continues under the current agreement that extends until January 2025.
According to NDC Board President Michael Hartman, rent payments were not a concession the Café was able to secure as part of the most recent negotiations with the Co-op Supermarket Board of Directors. Nor were the meals provided to the band as part of the music program, which the Café board also requested. The one concession the NDC did ask for and receive was a 90-day termination clause in the contract, allowing either party to exit the contract.
Hartman conceded that the situation is not ideal and that the new contract does not help improve the Café’s financial situation, hence the request for the termination clause. Yet, he stated, the NDC board was simply not prepared to be without a food and beverage vendor, which necessitated signing the new contract.
According to Co-op Supermarket board member Kim Kash, the Co-op board understood the difficult situation. Still, she advised, “We see the value in keeping the Café open and there is an awareness that the Café needs to act in its best interest.”
It is likely the small profit the Co-op has begun to generate as the Café’s vendor would disappear if they had to pay rent. Hartman doesn’t blame the Co-op board though. “Their fiduciary responsibility is to their membership,” he said. “And ours is to our Café membership.” He was also quick to say that the Co-op continues to cover some Café operational costs, including utilities and some kitchen upgrades.
Search for a New Vendor
Although the NDC board has had discussions with other potential food and beverage vendors, those discussions are still in the early stages. There appears to be no finite due date for expressions of interest from other vendors, only that a new vendor be ready to take on operations “within the next three months,” according to the NDC’s website. Board members said that they’d love to find a vendor that meets the needs of the community while also providing a more favorable financial situation for the Café.
“We’re still waiting for our knight in shining armor!” Winterfeld added.
Revenue Ideas
Thinking ahead, the NDC board and its membership have generated many new ideas to bring in additional revenue, said Brandon Cole, NDC board member at-large. Some of these ideas include the already implemented four percent operational fee and the children’s area to attract more parents and caregivers. Automating collection of Café membership dues, a minimum spend for food/beverages during music nights, and music ticket sales are other ideas. Cole also believes that standardizing the financial relationship with FONDCA, the Café’s arts nonprofit arm, is also something the NDC board and membership should consider.
When asked about challenges to implementing some of these new ideas, Cole said that change can be uncomfortable for some. “There is still a heavy reliance on how things used to be done. But we have to explore nontraditional methods of generating revenue to ensure the Café’s survival. Ultimately, progress still needs to be made to keep the doors open,” he said.
NDC board members were quick to point out that the Co-op Supermarket board and its General Manager Dan Gillotte have remained good partners for which they are grateful. Hartman and Winterfeld, in particular, were optimistic about the Café’s future success, saying that the Café’s members and community always get them through tough times.
“We understand that the Café is the community’s living room. And we want it to remain that way,” Cole said. “But no living room operates without costs.”