Dining Services Squeeze Out Small Businesses at AU

by Jacob Wallace

By the time classes began this August, Tom Gera was already having issues with the university. Since May, he’d been informed that the EagleBucks program was going to be handled by a new contractor which meant his EagleBucks fees would be going up from two percent to a whopping nine percent. He also would no longer be able to accept Dining Dollars from students, which was a particular point of contention for Gera, whose businesses had been accepting Dining Dollars since the program’s inception in 2011.

“[Dining Services] let us know in the summer,” said Gera. “The definition [of Dining Dollars] is dining on campus, and we are dining on campus.”

After students kept asking about the change, Gera, who owns MegaBytes, Mudbox, American Cafe and Asian Flavors on campus, decided to post a flier in MegaBytes informing students that if they had any questions about the dining policy they could contact Ann Marie Powell, the Director of OneCard and Dining Services.

Tom Gera at Megabytes.

Kevin McDermott, a frequent MegaBytes customer, noticed the flier and decided to post it in the “AU Memes for the Most Politically Active Teens” Facebook page, where it quickly gained over 200 reactions.

“I decided to help the owner out,” said McDermott. “I was very annoyed about my beloved sandwich shop not being allowed to accept Dining Dollars.”

These changes in dining policy were set in motion by AU’s Auxiliary Services Department last spring, under which the Dining Services program operates. Over the past year, the department has chosen to only allow Dining Dollars to be used for “on-campus dining,” which means, in practice, only places that are operated by Aramark. Other establishments on campus that also offer food, including Gera’s four businesses and the two student-run coffee shops on campus, The Bridge and the Davenport Coffee Lounge, cannot accept Dining Dollars under this new policy.

“It has been going on for a while that places were accepting [Dining Dollars] that shouldn’t have been,” said Powell. “This was a correction that we made.”

Yet this correction lacks precedent. When the Dining Dollars program initially began under Dining Services Coordinator Aaron Long’s tenure, emails shown to The Rival between Long and Gera say that Dining Services intentionally enabled Dining Dollars for MegaBytes and the rest of Gera’s businesses. Long did not specifically recall the exchange, but he’s confident the choices that his department made were correct.

“If there’s an email saying they were active and supposed to be then they were active and supposed to be,” said Long.

In an email on Aug 29, 2011, Long confirmed that Dining Dollars would be enabled at all of Gera’s businesses on campus.

In terms of a motive, Powell said that changes were made to Dining Dollars and EagleBucks after receiving feedback from the Dining Advisory Board, which consists of members of the Dining Services Department and students. Yet three students who regularly attended meetings over the past year said they were unaware of any requests by students for Dining Dollars to be removed from any campus locations.

The EagleBucks changes have caused headaches for Gera. Over the summer, management of the program was outsourced to Blackboard Campus Cash, who were responsible for the 450 percent increase in usage fees that had frustrated Gera.

“If your health insurance gets raised by 100 percent, you’d get upset,” said Gera. “Have you ever seen anything increase that much?”

Taken together, the issues with dining options on campus seem to suggest a difficult business environment for Gera, but in fact it’s not just Gera who has suffered over the past five years. In fact, since Aramark arrived on campus in 2013, the university has become increasingly more hostile towards small businesses on campus, and attempted to stifle any dissension within Dining Services. If current trends continue, food options may be run exclusively by Aramark on campus in just a few years.

ARAMARK’S TROUBLED START

When Aramark came to campus in 2013, dining options were limited. Aaron Long, who had recently left the university, had spent the bulk of his three-year tenure bringing the meal plan system fully online, before moving on to pursue a doctorate degree elsewhere.

“I took that position over and we were still doing meal plans on paper,” said Long. “We weren’t really doing anything well, and I was like ‘You’ve got to be kidding me, it’s the twenty-first century.’”

Meal plans’ modernization made it easier for students on the front-end, but they still had far fewer meal swipe locations on campus than students enjoy today. A failed McDonald’s location under the bridge had remained empty for a year, with no sign of a new tenant. Bon Appetit, the company who had been operating food services, only offered a few locations where meal swipes could be used: Terrace Dining Room and The Tavern. According to a 2013 article from The Eagle, this made even a 150-block meal plan difficult for students to burn through.

Aramark, who was already running cleaning services at AU, offered solutions. For meal swipes, they promised two new meal swipe locations in The Tavern, their Provisions on Demand (POD) meals, and a partnership with Einstein’s Bagels. They also promised to bring a Starbucks location to the vacant former McDonald’s space.

Aramark was awarded the contract, although not without controversy. Workers at Bon Appetit had recently unionized, and students and union representatives protested after Aramark didn’t immediately promise to rehire these long-time workers.

Eventually, an agreement was reached, and Aramark’s time as food services provider began. Very quickly, the tensions between Aramark and small businesses on campus began.

EARLY GRABS

Gera has managed food service locations on campus since 2003, and has long had a complicated relationship with the university. As recently as 2015, the university reached out to him about the recent earnings of Asian Flavors. Soon after, the university asked to purchase the lease out from under Gera, even though the location’s earnings had shown it to be profitable. He declined.

In fact, Gera originally operated Argo Tea in the Katzen Arts Center when the location opened in 2006. As Gera describes it, the pre-Aramark environment on campus was friendly to small-business owners and mostly concerned with whether continuous and friendly service could be provided for students.

“I had a more casual relationship before where it wasn’t necessary to renew immediately,” said Gera. “With previous dining coordinators I didn’t have to worry because it was understood it was an ongoing business.”

All tenants on campus are offered a five-year lease that they can renew at the end of each cycle, which meant that the lease was officially up for renewal in 2011. However, Gera continued to operate the location for another two years without renewing the lease without any major hassle.

But it wasn’t until May 2013, once an agreement with Aramark to take over dining services had been reached, that Gera was notified he would be ceding control of the operation to another tenant. Aramark began operations of all food services on Jun 1, 2013.

A HAIR SALON GETS CUT

The next year, Taher Kaheil found himself in the same scenario. As owner and manager of TIGI Boutique, a hair salon under the bridge since 1999, Kaheil had become not just the campus barber, but a de facto community member. Regular clients included professors, deans and even vice presidents. Kaheil was such a reassuring presence in the bridge that students who had long-since graduated returned just for his salon.

“It was a dynamic and versatile place and I really loved it,” said Kaheil. “Honest to god, it was like a home for us.”

In March 2014, Kaheil was up for his third lease renewal for TIGI Boutique, and he was preoccupied with a $30,000 pending renovation that was about to get underway. He did not expect that in a few months, Aramark would take over his spot on campus and he would be permanently ousted from AU in favor of a new Subway.

“After we did all the remodeling, we received the letter saying you’ve got to move out,” said Kaheil. “It was not really a happy time for us.”

Kaheil was told in July that he would have to vacate the property he had been leasing since 1999. At first he tried to fight the decision, even taking AU to court. When students and faculty returned in August, they were aghast at the decision to remove TIGI Boutique, and a petition to keep TIGI on campus quickly gathered approximately 1,500 signatures from students, faculty, and senior staff members.

Dr. W. Joseph Campbell, a professor who has been teaching at AU since around the time the boutique was opened, was especially incensed.

“I long considered him a member of the community,” said Campbell. “He knew a lot of faculty, colleagues of mine and staff.”

Beyond being friendly to all manner of AU clientele, Kaheil also frequently employed students to help run his front desk. Many customers have described the boutique as a place that not only served its function, but enhanced the quality of the university.

In the end however, a petition to stay was not enough. Kaheil and the university settled out of court, and TIGI Boutique moved off-campus in October of 2014, taking many of its clients with it.

“There was no room for the small guys,” said Kaheil. “We were the easiest to kick out.”

Immediately after, Subway moved from its location inside Eagle’s Nest to the space formerly occupied by TIGI Boutique. It was another dedicated dining option leased and operated by Aramark.

FOLLOWING THE MONEY

The attitude towards businesses such as TIGI Boutique and MegaBytes on campus has changed significantly over the past six years, and the changes in the Dining Dollars program are a part of that broader shift. When Dining Dollars were initially introduced under food-service contractor Bon Appetit, they were designed as a way to retain revenue from meal plans for dining services. According to Long, food service providers run probabilities to try and gauge what sort of meals they’re going to need on specific days.

“It’s a really difficult business because there are a lot of factors that are hard to account for,” said Long. “What they were trying to do was balance out the profits and losses that were so radically based on probability.”

When Dining Dollars began in 2011, EagleBucks already existed, but EagleBucks could be used for food and non-food options on and off campus, so students weren’t spending a lot of that balance at Bon Appetit locations. An additional currency that could be used “for food purchases on campus,” as Long described it, could therefore create this balancing force for meal plan revenues.

“What I saw at the time was an initiative that was really recreating the wheel,” said Long.

Nevertheless, the idea would provide extra options to students for purchasing food on campus, and the plan was adopted.

Although Aramark did not create the Dining Dollars program, they certainly profit from it, and the dominant philosophy in the Dining Services department appears to be to serve the profits of the meal plan program.

While these actions cannot specifically be traced back to any one source, it’s clear that over the past six years, tensions between small businesses and the university have reached a boiling point. In the spring, Gera asked the university if they could perform maintenance to deal with the issue of rats cropping up in the bridge area. Initially, Gera was told the university didn’t view this as a major issue, and so he offered to have students video each time they saw a rat in the tunnel in order to prove there was an issue.

In an email, Chuck Smith, the executive director of Auxiliary Services said he didn’t know how to respond to such an idea.

“If you have such an issue with the way the campus is run,” said Smith, “we would be more than happy to buy you out of your lease.”

Ultimately, the university gave Gera an offer on the rats. They would perform maintenance to deal with the issue if he agreed to shut down his business for a month as soon as the semester started - in other words, as soon as he could start earning serious money again. Gera now only communicates with the university through lawyers.

Gera would like this pest problem to be dealt with in winter, when he won’t risk losing a sizeable amount of business. But overall he’s concerned about his future on campus, and he knows that if he slips up, there’s a much more powerful business more than willing to take his place. Under current circumstances, he has a hard time seeing a way he could stay.

“if they can get more money from someone to take over a space… they need to balance it with people who have been with the community for a long time,” said Gera. “Even though we are the most popular food shop on campus, we will not get the space again.”

[Originally published October 10, 2018.]