Student-run businesses set demands

By Seth Brown     10/24/12 7:00pm

 

Student leaders from each of the student-run businesses met with Dean of Undergraduates John Hutchinson on Wednesday to request that he work to relieve SRBs of the administrative and rental fees they must pay to the university. 

Rice's three SRBs are Coffeehouse, Willy's Pub and the Hoot; they were represented at the meeting by Coffeehouse General Manager Emika Ijuin, Pub General Manager Jordan Rueter and the Hoot Marketing Manager Helene Dick. 

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The annual administrative fees go primarily toward supporting the salaries of staff advisers to the SRBs, according to Dick, a Martel College junior. According to Rueter, Willy's Pub must pay a rental fee of $9,000 and, according to Ijuin, Coffehouse must pay $10,800 a year, respectively, to the Student Center. 

No other student-run program at Rice is held responsible for paying rental fees to the university or advising resources fees, Dick said. 

Currently, the three SRBs are advised by Student Center Assistant Director of Marketing Erin Willey and Student Center Assistant Director of Student Businesses Kerim Davis. Willey declined to comment on the situation. 

"We're just asking that we don't have to pay, at a minimum, these costs that aren't incurred [by] other organizations," Dick said. "We do not believe these charges are in the spirit of the educational nature of SRB. We're not businesses at the end of the day. We're student-run businesses, and that's a whole other animal."

Hutchinson declined to comment on the situation except that he would first need time to discuss with his staff the requests made by the SRBs. 

The Student Center decides the distribution of administrative fees across the three businesses annually, Dick said. 

"The distribution is decided [...] on the 'basis of what we can afford,' not on the basis of the actual hours we spend with our advisers," Dick said. "Given the volatile nature of our market - the Rice community is not the most stable demographic - we all feel that the fees prevent us [from] ensuring our developmental stability as well as future growth."

Specifically, Ijuin, Dick and Rueter asked that Hutchinson recommend to Vice President for Finance Kathy Collins that the university relieve the SRBs of their rental fees and that he provide for an addition to the Student Center budget to accommodate for the administrative fees currently charged to the SRBs. 

 Dick said although the meeting came after reports of Pub having financial troubles (see "Business model changes in store for Pub," Oct. 5, 2012), the presentation and the requests made were not primarily about Pub. 

"There's no point in denying that Willy's Pub is part of the puzzle, [but] the big picture here is not Willy's Pub's financial issues," Dick said. 

Pub Operations Manager Teddy Grodek said Pub has been profitable, making its monthly projections and will stay open for the rest of the academic year. However, Dick, who will become Pub's general manager in December or January, said Pub's business model will change regardless of whether or not the requested changes are made. One aspect of that change will be expanding Pub's daytime market, Dick said. 

Whether Pub gains financial stability or closes, the SRBs will continue to appeal for the elimination of the rental and administrative costs, according to Dick. 

"It's slowly killing us," Grodek, a Martel College senior, said. "It's very hard to compete in the RMC with legitimate businesses, especially when trying to sell products to students at the smallest margin possible."

Ijuin, a Sid Richardson College senior, said that the SRBs' leaders do not currently have a plan for how they will respond if their requests are not met. However, Ijuin said that, based on their revenues and costs last year, she expects Coffeehouse to make at least $40,000 this year even with the adviser fee and rent taken into account. 

Rueter, a Martel College senior, said the Hoot is currently projected to make $1,000 this year after its adviser fee is taken into account but that she is not able to make a projection for the amount Pub will make this year due to changes being made to Pub's business model. 

Dick said that although the three SRBs are technically nonprofits, they need to have some money in the bank at the end of the year in order to deal with extraordinary expenses, such as new equipment and emergency repairs. Rueter cited two broken ovens and two broken refrigerators as expenses for Pub over the past six months. 

Ijuin said that while Coffeehouse is currently able to pay rent and the adviser fee while remaining financially solvent, all the SRBs are subject to significant changes to their business climates over time. 

"It is not just a question of affordability," Ijuin said. "Our business models are prone to fluctuation inherently."

According to Dick, while student-run organizations work with yearly budgets, SRBs must work with revenue as it is collected. 

Ijuin said she feels the administration misunderstands the purpose of SRBs. 

"We don't measure our success in monetary terms; we measure it in terms of the learning and growth opportunities we offer to our employees as well as the ability to provide affordable goods to the students, faculty and staff of Rice," Ijuin said. "We don't really cleanly fit into [the category of business or student-run organization], so as a result, we're placed in this awkward no-man's-land. It seemed as though [the administration] expected us to be able to operate autonomously, but like many other groups on campus, we need the support of the university to exist."

The presentation given to Hutchinson also included what each SRB would do with the money saved by not having to pay rent or adviser fees. 

According to a copy of the presentation Dick provided to the Thresher, the Hoot would equip the Hoot South with furniture and entertainment equipment, Coffeehouse would replace equipment and expand team development opportunities and Pub would improve its acoustics and lighting setup to make the space more conducive to student performance and rental opportunities. 

Dick said the amount the Hoot spends on the Hoot South relative to the amount of money the Hoot makes total will depend on whether or not it exceeds its current projections. 

Ijuin said she also hopes that Coffeehouse will eventually be able to give more back to the Rice community. 

"If we were to ever find ourselves at a point where it would be a feasible option to explore, we would love to be able to find ways to invest the money into the greater Rice community," Ijuin said. "That being said, that's still a distant dream that we can't [fulfill] right now and not a main priority." 

Dick said that during the meeting, she cited the University of Massachusetts at Amherst, Harvard University and Princeton University as three institutions which do not charge their SRBs for advising. 

"[Those institutions] all pay for adviser resources because they consider SRBs to be educational," Dick said. 

Coffeehouse Special Projects Manager Mathison Ingham said that, because of the transient nature of an individual student's involvement with a given SRB, the advisers are a necessary source of institutional memory. 

"Our advisers [...] offer long-term plans and visions," Ingham, a Hanszen College junior, said. 

Wiess College junior Jim Sheng said he thinks SRBs deserve to have their rent and advising fees removed because of the service they provide to campus. 

"The student-run businesses are extremely beneficial for the students both as a source of income, a way of getting out into the working world and as ways for students to get late-night food," Sheng said. "It would be very unfortunate if the businesses suffer because of a lack of funding from the school since they are so rewarding and bring so much positive spirit to the student population." 

Brown College sophomore Oke Orieka, who works at the Hoot North, said SRBs are part of Rice's student life. 

"Going to the Hoot, Coffeehouse and Pub is as regular as going to class, in my opinion," Orieka said. "I go to Pub and Coffeehouse once a week, and when I work at the Hoot, I see a lot of people who come at the same time every week and order the same thing." 

Nicole Zhao contributed to this article. 

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