Café Europa supporters missing the point that will concern all taxpayers

 

Can you spot the error?

“According to a recent article in this newspaper, the building from which Europa leases its space is owned by the city. When the lease runs out, the city wants to lease the space to the highest bidder, which may or may not be Europa.” –Maureen Parker, News & Record editorial 

 

GREENSBORO, NC — With their appeals to tradition and fairness, supporters of the imperiled Café Europa downtown are missing the issue that is most important and of widest concern. The most alarming aspect of the situation is not that the restaurant might lose its space in the publicly-owned Cultural Center and it is not that the rent might go up. The most important thing is that those might happen because the public’s interest have been subverted by cronyism.

With the stroke of a pen, an assistant city manager assigned the right to sublease the city-owned restaurant space to a third party who will now siphon into its bank account all of the rent that used to go to the public coffers. So when supporters of Café Europa say that “the city wants to lease the space to the highest bidder,” that elides the fact that the city is no longer leasing the space and has permitted a third party to step in and receive and keep the rent. It is the redirection of income from a publicly-owned facility to private hands that is the most objectionable aspect of this whole affair and of concern to all residents.

(In case you aren’t aware of the specifics: Café Europa is a long-time fixture in downtown Greensboro. The restaurant leases a space in the Greensboro city-owned Cultural Center under the management of the Greensboro Parks & Recreation Department and, for decades, has been paying rent to the City of Greensboro. Last year, the restaurant’s management was informed that the rental of the space would no longer be managed by the Parks & Recreation Department. The right to sublet the space had been assigned to a third party who is now putting the lease out to bid.)

Assistant city manager Chris Wilson decided on his own, he says, to let a third party collect the the rent from the restaurant space. Without a competitive bid process, without any public discussion or debate and without City Council approval, Greensboro Downtown Parks Incorporated (GDPI) was granted the right to start collecting the rent from the city-owned space. Along with that authority came permission for GDPI to put out a request for proposals (RFP) to solicit bids for use of the space, which it has done.

It is this scheme—a bureaucratic transfer of income generated from public property to a private third party—that should concern every resident of Greensboro. Unfortunately, the public debate has surrounded a multitude of specious arguments with the result that the violation of the public interest has hardly been noticed.

The arguments of those defending the decision to let GDPI intercept the rent from the restaurant space don’t stand up to even cursory scrutiny. Let’s take a quick look at how lame they are so that we can appreciate how much more important and substantive the public interest argument is.

Argument:
“Café Europa has been paying below market rent, and that’s not fair to the taxpayers.”

This is an argument of the highest absurdity, regurgitated without challenge by the unthinking News & Record.

“The city said the bidding process will allow rent on the space to align with fair market value.”
— Carl Wilson, News & Record

If taxpayers were not collecting a fair amount of rent previously, then an arrangement that redirects all of the rent to a third party is not going to remedy that. That’s ridiculous. It’s like a landlord saying she isn’t getting enough rent for her basement apartment, so she is going to hire a management company to raise the rent — and let them keep all of it. This argument is just dumb and if the press is going to report it, they should add the context that illustrates just how stupid it is—specifically that, whether the rent is raised or not, taxpayers will no longer be getting any of it.

Argument:
“Café Europa doesn’t even pay for utilities, they are paid for by the taxpayers.”
Just like the “rent is too low” argument, this one identifies a “problem” without admitting that the new scheme doesn’t solve it.  According to the city’s contract with GDPI, the taxpayers will continue to pay the utilities for the space. GDPI not only gets to keep the rent but also doesn’t have to pay the utilities either. Two “problems” not solved.

Argument:
“The city recently put the operation of the concession stand at the city-owned Gillespie Park Golf Course out to bid, so it is only right that the city do the same for the space occupied by Café Europa.
This is an infuriating argument because it confirms that those making it don’t know what they are talking about. The city did not assign a third party to leech the rent from the Gillespie Golf Course concession stand like it is doing with the Cultural Center restaurant space. Getting the highest rent possible for the taxpayers from a city-owned concession space is not comparable to getting the highest rent possible for GDPI from a city-owned restaurant space. An eye-roll and a sigh are the only appropriate responses to this “argument.”

Argument:
“GDPI will better manage the space in the public interest.”
This is highly dubious and early indications are that this new arrangement may actually work against the public interest. Aside from the fact that none of the rent will any longer be going into the city’s coffers, there is no better indication of whose interests will be served than the fact that GDPI unequivocally states in its RFP that GDPI will make decisions in its own interest, not the public interest:

“GDPI reserves the right to accept or reject any or all proposals with or without cause, to waive technicalities, or to accept the proposal, which, in its judgment, best serves the interest of the GDPI.”
— From GDPI’s RFP (emphasis added)

Another example of conflict between GDPI’s interest and the public interest was on display at Tuesday night’s city council meeting. When the owner of Café Europa rose to speak from the floor and address city council, the city attorney instructed Mayor Nancy Vaughan and council member Justin Outling to remove themselves from the chamber. Because they serve on the GDPI board, the city attorney thought it would be improper for them to hear from someone who is responding to GDPI’s RFP. Whose interest prevailed in that circumstance? Clearly, it is not in the interest of the people of Greensboro when their mayor and a council person cannot hear from citizens at a council meeting.

Cities are also bound by state law to be transparent with the public. In North Carolina, but for some exceptions, government records are acknowledged to be the people’s records. That means the public can ask for and receive records that document finances, decision making, plans — just about anything that government does, the public is entitled to see. That is not so for third parties and it did not take long for this difference to be demonstrated with GDPI. When Yes!Weekly contributor Ian McDowell asked GDPI head Rob Overman for a copy of the RFP, McDowell says Overman told him that the RFP was “not public.”

GDPI’s contract with the city obligates GDPI to put all proceeds generated from leasing the restaurant into the “operations and maintenance” of the abutting Lebauer Park. How will we know if GDPI is meeting this obligation? The city could have put in its contract with GDPI a stipulation that GDPI make its financial records public, but it did not. We will still be able to see from city records how much the city is paying to provide upkeep and utilities to the restaurant space to the benefit of GDPI, but we may never know if the rent GDPI collects is going to legitimate expenses or exorbitant salaries. If GDPI’s director tells the press that its RFP for the restaurant lease is “not public” what expectation should we have that the public will have insight into GDPI’s finances?

The City of Greensboro has an award-wining, highly competent, widely respected and much appreciated Parks and Recreation Department. It has been managing the Cultural Center restaurant space for decades to the satisfaction of the public. There have been no valid reasons provided for why it was no longer in the public interest to have Parks & Rec manage the restaurant space, just as it continues (for now) to manage the other galleries and venues in the Cultural Center.

Supporters of Café Europa should use their energies to direct public awareness to the question of whether this arrangement is in the public interest because it does not appear to be, and that will matter to people who have never even been to Café Europa.

 

12 Comments on "Café Europa supporters missing the point that will concern all taxpayers"

  1. Thanks for pointing out that the proposed arrangement means that the City will be taking a loss.

  2. I had no idea that GDPI was involved. I had no idea it had been given a no-bid contract. That kinda changes everything. Thanks.

  3. Keith Osborn | February 9, 2018 at 5:50 pm |

    Not only the rent but GDPI will be skimming a percentage of the gross sales.

  4. Greensboro 101 | February 9, 2018 at 6:06 pm |

    Yes, Keith, the RFP does invite bidders to offer a percentage of their income to GDPI as part of their proposals. Thank you for reminding us of that.

  5. Jeffrey Barbour | February 9, 2018 at 9:29 pm |

    Extremely important to point out that this unilateral stroke of a pen was done with zero oversight to transfer control of city owned property by Asst. City Manager to his girlfriend Cecilia Thompson who was chairman of the board of GDPI at the time of the changeover. City funds transferred by city employee to private non profit in a romantic relationship. And to date no one from either the City of GSO or GDPI have even acknowledged the question when raised much less offered an explanation.

  6. So let’s get the names of every board member of GDPI so we know who contact when all this goes sideways!

  7. There are other issues with the RFP (which is no longer available on the city page)…… http://web.archive.org/web/20180209215436/http://www.greensboro-nc.gov/home/showdocument?id=36810

  8. Greensboro 101 | February 10, 2018 at 11:06 am |

    ZhaK,

    The city updated its website and broke a bunch of links in the process. The new address for the Café Europa document repository is:

    http://www.greensboro-nc.gov/government/city-council/cafe-europa-property

  9. Speaking of “missing the point,” you fail to mention that no taxpayer in Greensboro elected the board members of GDPI. They elected themselves! It cannot be overemphasized that the real issue is the failure of this self- elected GDPI to communicate their intentions with Europa in the first place. Zero transparency.

  10. Greensboro 101 | February 10, 2018 at 11:33 am |

    The link above at the city’s website documents the communications with Café Europa.

  11. That’s good homework right there

  12. Julia Abrams | February 10, 2018 at 3:51 pm |

    Addendum: Should revisions to the RFP documents become necessary, those who attended the pre-proposal informational conference and/or have previously expressed a specific interest in submitting a proposal will be alerted and an addendum will be issued. All addenda will be required to be acknowledged, signed and returned with proposals to avoid disqualification.

    -from the rfp.

    Is the “and/or” phrasing a workaround for the original mandatory meeting for all bidders?
    Reads that way to me.

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