State of student-run businesses' appeal up in the air

By Nicole Zhao     11/1/12 7:00pm

 

In response to the requests made by student-run businesses to eliminate their rental and administrative fees on Oct. 24, Dean of Undergraduates John Hutchinson said the university would consider the requests as part of the university's annual budgetary analysis and allocation process. 

Hutchinson said the budget enhancement requests made by the SRBs were reasonable but would have to be considered in competition with other resources and requests requiring university funding. 

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"There's not just money lying around that I'm going to decide 'yes' or 'no' to give them the money," Hutchinson said. "We have a process by which we analyze all budget requests. [This is] one of dozens of such requests that we get from students in ways they would like us to enhance their experiences here. I have to consider them all in competition with each other." 

The Hoot Marketing Manager Helene Dick said she hopes the university recognizes and supports SRB's current impact on the Rice community, as well as its growing potential. 

 "We really are only asking for fair consideration," Dick, a Martel College junior, said. "It's not about cost. We're not here to reap a profit, but to contribute something substantial to Rice and learn in the process. Our prices and priorities reflect that. We're just asking that the university's priorities reflect the same."

Hutchinson said the university already supports the SRBs with advising resources not covered by administrative fees, subsidized rent for Willy's Pub and subsidized utilities.

"Of course, we've been happy over the years to support them ... but I don't want it to be a pretend business," Hutchinson said. "My view is that it is an important part of the learning experience of running a student-run business that you understand how to cover your costs."

Dick said that though other student-run programs pay students salaries and would be expected to pay rent "in the real world," no other student-run organization is required to pay rental and administrative fees. 

Dick said that although the university currently subsidizes some costs and has provided funds for SRBs, such as for the renovation of Coffeehouse and the Hoot's launch, the support should be increased because of the growing impact SRBs have on the Rice community. 

"Our first priority is our customers, but if we need to rally the community around this issue to demonstrate that we are a priority, we will definitely bring this issue to the student body and the larger Rice community any way we can," Dick said.

Will Rice College sophomore Vinay Kotamarti said there is a lot of value to Coffeehouse, Hoot and Pub being student-run.

"It makes me feel way more connected to Rice when I go to these student-run businesses," Kotamarti said. "I love seeing my bros behind the counter."

Director of the Student Center Boyd Beckwith said Coffeehouse pays the full rental and utilities cost, and Pub pays a subsidized rental cost. In the past, Pub had to pay rent for the entire square footage of its space, but since 1995, Pub has been mandated to pay rent for only the square footage of the space behind its bar. 

This rental cost is further discounted, according to Beckwith. Pub's rental cost is $7,828 for the fiscal year of 2013; if the university were not further discounting the rent, Pub would have to pay $16,291 this year for the space behind the bar, Beckwith said.

Coffeehouse's rental cost is $10,529. Rental fees are paid to the university and cover costs such as utilities, police and custodial charges, Beckwith said.

Unlike other student organizations, SRBs pay rent because they were established as businesses, and they have been paying rent at least since Beckwith came to Rice in 1998, according to Beckwith. Beckwith said the Hoot does not pay rent because Housing and Dining is invested in the Hoot's success and thus will not charge the SRB to use the servery space.

Dick said that unlike at Rice, peer schools such as Princeton University and Harvard University do not charge SRBs rent or advising fees.

"We are student-run first and businesses second," Dick said. "The university's choice not to subsidize this cost substantially detracts from the educational spirit of student-run business."

Beckwith said the SRBs must pay for the majority of their advising resources because the adviser position was initially created in response to Coffeehouse's growth. The SRBs - Coffeehouse, Pub, Hoot and Valhalla - collectively pay around $37,000 in administrative fees to the Student Center, Beckwith said. Dick said Valhalla is not participating in the appeal regarding the fees because organizationally, Valhalla and undergraduate SRBs work together less frequently, but she said they would be open to involving Valhalla more in the future.

The $37,000 figure includes the cost of fringe benefits for employees on top of the $29,000 previously reported, Beckwith said. 

In the past, staff members in existing positions advised Coffeehouse and Pub, Beckwith said. Once Coffeehouse began to grow, a separate advising position was created, paid for by Coffeehouse and a small portion of university funds.

Dick said the advisers play a valuable role in the educational aspect of SRBs for students.

"None of the student managers arrived fully knowledgeable of how to run a business," Dick said. "We got there by having great advisers to both encourage and educate us."

Beckwith said that ideally he would not have to charge the administrative fees, but he said there are currently no existing university funds to go toward supporting the adviser roles, citing the economic recession and two consecutive years of budget cuts.

"We did not have the funds at the time when [Coffeehouse] needed additional support, and that's why it's coming out of their budget," Beckwith said. 

Beckwith said all the Student Center staff play a role in supporting the SRBs, so the administrative fees do not cover the salary of just one person. He said he also spends time assisting the SRBs, and the administrative fees do not pay for that time.

Beckwith said that though he believes in the value of SRBs, it is a matter of prioritizing expenses.

"Students probably don't realize that the change from the blue and green 1950s curtains in the Grand Hall to the current, much less dated curtains - that's a $15,000 purchase," Beckwith said. "The new podiums and new carpeting to make this really old building not so old are really expensive. There's just other expenses that we have to pay for."

Beckwith said he has told Dick he would commit whatever funds were left over for the Student Center's annual summer renovation project this year toward renovating Pub over the upcoming winter recess. Beckwith said that based on revenue thus far, he could comfortably commit to spending $10,000 to $15,000 on renovations for Pub over winter break.

"The opportunities SRBs provide is one of the things that sets Rice apart," Beckwith said. "It's great to see the SRBs banding together. The campus probably doesn't have an appreciation for everything they do, the specific challenges that they have as SRBs and what they bring to the campus, as well as what they bring to their employees."

Dick said that regardless of college or major, every Rice student will be impacted by an SRB.

"It's not just about coffee, beer, and pizza," Dick said. "It's about a tradition of student leadership, an incredible asset to campus life, and a part of Rice culture that makes Rice, Rice."

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