Brett’s Waveland Cafe, the immensely popular ivy-covered restaurant in a corner of Lincoln Park, is closed now until spring. But if recently adopted rent hikes for park concessionaires are enforced, its winter hibernation may become permanent.
“The Park District now takes 17 percent of my gross income for rent, which is much higher than most restaurants pay,” says owner Brett Knobel. “They want to raise my rent to 24 percent [of gross revenues]. If they do that, I can only stay open by paying minimum wages and selling nothing but hot dogs. I could also lie about my gross revenue, but that’s no way to do business.”
The rent hike is part of a larger package of concessions guidelines produced last summer by a task force made up of restaurateurs, Park District employees, current park concessionaires, and park advocates. The guidelines were then approved by the Park District Board of Commissioners.
Concessionaires like Knobel own their restaurants but must bid for the right to operate them on park property. Carolyn Wade, chief of the Park District’s concessions department, calls the rent hike a “suggestion.” That means Knobel can suggest a lower rent when she bids to continue operations next year. But if Knobel makes a bid below 24 percent, there’s a chance that the Park District will reject it because it falls short of the guidelines.
For Knobel, it seems a catch-22. And at least two park board commissioners admit that they did not read the guidelines closely before they approved them; they now believe the suggested rents are too high and should never have been adopted.
“It was never our intent to hurt the mom-and-pop vendors like Brett’s,” says Joseph Phelps, a board commissioner. “These [little] vendors go into locations the big operators won’t touch. They’re doing us a favor, and we should treat them right. Whatever errors we made before, we intend to rectify.”
In case they don’t, the cafe has many fans ready to raise a fuss. “We recommended that they not adopt those rent guidelines, and they did it anyway,” says Erma Tranter, executive director of Friends of the Park, a not-for-profit watchdog group. “If they drive Brett’s out, it will be awful. Brett’s is the best restaurant in the Park District. It has a diverse menu, low prices, and a good community spirit. It’s the model for other vendors in the park.”
The rent hike is one of several disputes between Wade’s department and Knobel, who opened the cafe in 1981 as a subcontractor of Lakefront Parks Concession, which then had contracts for all the concessions in Lincoln Park.
When Knobel took over, the cafe was shuttered and in disrepair. Since then, she’s made it a cozy and informal eatery with low prices. The menu is listed in colored chalk on a blackboard above the entrance to the kitchen. There’s no table service so patrons order at the counter and eat on paper plates. The menu offers fresh-baked cakes, fresh fruit, fresh-squeezed orange juice, and a variety of cooked-to-order food ranging from hamburgers to French toast. As word spread, Knobel’s business has grown. On sunny weekends, the line of customers often stretches out the door.
“It’s a beautiful place to eat,” says Tranter. “You’re overlooking a big playing field, so you can watch softball, or football games, or dogs running. Or you can take your food and sit beneath the big clock tower that overlooks the golf course.”
At first Knobel paid her rent directly to Lakefront Parks Concession. When Lakefront lost its contract, she dealt directly with the Park District, signing a three-year lease in 1986.
“The District used to run the concession operation out of the treasurer’s office,” says Knobel. “A young woman named Janice–who was, I think, the treasurer’s secretary–handled everything. If I wanted a leaky faucet repaired, I’d call Janice. It was informal, but we got along.”
In 1986, however, Jesse Madison became the District’s new chief operating officer. He created a concessions department, with three staffers, a budget of about $100,000, and Wade as its $40,000-a-year director. “I was a big supporter of Harold Washington,” says Knobel. “I was happy when he took control of the parks and brought in Madison. I thought it meant reform.”
Instead, she says, for her it meant aggravation.
“I started getting these weird letters, like the one about the sink,” says Knobel. “Health laws require a three-compartmental sink, and the Park District had been promising to install one for my kitchen. I told [Wade] that. The next thing I know, I get a letter that says, ‘It has come to our attention that your premise does not come up to standards. Please fix it, or else.’ I was shocked. I can’t afford capital improvements with the rents they’re charging me. Besides, it’s their property; if they’re going to rent it as a restaurant, they should make sure it’s up to code.”
Wade points out, however, that Knobel is obligated to make capital improvements; that’s stipulated in the contract she signed in 1986.
“She signed a contract in 1986 in which she agreed to comply with all the conditions, regulations, and provisions of the Park District,” says Wade. “She agreed to make repairs and maintenance. And she agreed to be responsible for all plumbing and electrical. As I look in my files, I see that she was cited for not having the proper sinks by the previous [administration]. So her troubles did not start with us.”
Knobel says she signed the contract only because officials in the old administration promised to install a new sink. “I had a verbal understanding,” says Knobel. “In fact, I was told that the sink was being ordered. But it never showed up. I know it was a lousy contract. But I had no choice; it was either sign it or lose the cafe. Fool that I was, I signed it.”
“I can’t be responsible for verbal agreements other people may or may not have made with Brett,” Wade counters. “I can only go by what’s in the contract.”
Wade also notes that concessions rents are set on a sliding scale geared to gross revenues–the higher the gross, the higher the percent–and that other vendors pay a higher rate than Brett’s. For instance, ARA Leisure Services, which operates concessions at Soldier Field, pays 44.3 percent of its gross to the Park District. And the Bismarck Sport Service pays the district 34.1 percent of its haul from Grant Park concessions.
These operators, however, have lower overhead costs than Knobel. They have limited menus–mainly beer (a big money-maker), hot dogs, and soda–and a much higher markup. Most important, they serve a different purpose.
“You may eat a hot dog at a Bears game, but you go to Soldier Field to watch the Bears, not eat a hot dog,” says Tranter. “But people go to Lincoln Park to eat at Brett’s. She provides a service that encourages people to use the park. That’s what we want from our small vendors. We’d like to see more restaurants like hers that offer healthy or ethnic foods instead of hot dogs and junk food.”
From the Park District’s point of view, these rent hikes–which affect all concessionaires–raise Park District revenues without increasing property taxes. But higher concessions rents can be counterproductive, since they’re usually passed on to park users in the form of higher prices or poorer service. Besides, last year’s revenue from concessions accounted for only $1.8 million out of a $270 million budget. It’s a cow that can be milked only so often. “To avoid raising taxes, you should cut the budget, not raise rents on small vendors,” says Tranter. “Believe me, there’s plenty of fat for the Park District to cut.”
Knobel already pays a greater portion of her gross for rent than most restaurants do, according to a survey by the National Restaurant Association. “Some fast-food places pay around 11 percent,” says Knobel. “The others pay between 3.5 and 7.5 percent of gross. I’m only open half a year, and I’m at the mercy of the weather. You have to walk through the park to reach me. My business drops when it rains.
“At best, we gross about $150,000 a year. I pay 38 percent of that for wages; food costs another 40 percent. If I paid 24 percent in rent, I’d be 2 percent in the red–and that doesn’t include my other bills, like insurance.”
By way of contrast, look at the 30-year lease the Park District recently awarded to the Chicago Zoological Society. It will operate all the concessions at the Lincoln Park Zoo, including such money-makers as roller-skate rentals and popcorn stands, for only 10 percent of the gross.
The length of the lease is another issue. Knobel would like a five- or ten-year lease at 10 percent of her gross. “I’d like a long-term lease; it’s too nerve-racking going year to year and worrying if the Park District’s going to pull out the rug,” she says. “When I told [Wade] that I couldn’t make any money under these rents, she said, ‘Maybe you’re in the wrong business.'”
Wade thinks that Knobel has taken the issue too personally. “I’ve got nothing against Brett; I think she’s done a damn good job,” says Wade. “She doesn’t seem to like the way the system runs, but I didn’t make up the system. . . . Sure, Brett runs a good operation, but what’s to say that Joe Blow couldn’t run it better? I have to be fair. I have to give everybody a chance to bid for that concession. I don’t play favorites. Maybe Brett’s developed an attitude toward me. I don’t know, and I don’t care. I do know that in my heart I’ve done the right thing.”
Wade says the rent guidelines were based on a survey of concessions rates paid in Chicago and other cities. She adds that there were park advocates (including Tranter) and experienced concessionaires (like restaurateurs Marc Schulman, whose family owns Eli’s the Place for Steak, and Charlie Robinson, who owns Robinson’s No. 1 Ribs) on the task force. If they disapproved of those guidelines, they had their chance to say so during their meetings.
Tranter says she attended almost every meeting and never heard specific rental guidelines discussed. She adds: “The rent recommendations came from staff, not the task force.” Robinson recalls discussion on the matter; Schulman says he attended only one meeting and had no hand in writing the guidelines.
Whether the rents are fair is a matter of some dispute. “I think they’re fair,” says Robinson. He believes that if a merchant moves out, “There’d be hundreds of folks ready to bid on that spot. If you want your restaurant bad enough, you’ll do what you have to do.”
“Carolyn Wade is a nice person, and I don’t want to get involved in other people’s fights,” says Schulman. “I had no input on this task force; I don’t know where they got that 24 percent figure. I don’t think it’s reasonable. It’s OK to take that much from Soldier Field; they’re selling beer. But if you charge that much to the little guys, they have to cut the ambience or food, and you don’t want that. You want people to use the parks.”
Art accompanying story in printed newspaper (not available in this archive): photo/Bruce Powell.