OPINIONS

R&DE: No Substitute for Ike’s

Op Ed

By: Op Ed

Dear Shirley Everett and Michael Gratz,

More than 1,400 students and I are disappointed that under your leadership, Stanford Residential and Dining Enterprises (R&DE) sought to compete for the Forbes Family Cafe space in Huang Engineering Center, soon to be vacated by Ike’s Place. By and large, Stanford students prefer Ike’s to R&DE’s restaurants. I can’t compare Ike’s to your replacement offering, because you haven’t even declared what kinds of food it will serve.

Although some students griped about Ike’s price increase, more students gripe that R&DE’s prices are even higher. R&DE’s “grab and go” bottled drinks are 20-30 percent more expensive than those sold by independent vendors, with a nearly 100 percent markup. For example, an 8 oz. Red Bull at Tresidder Express costs $2.29, but the same item at Munger Market costs $3.75. R&DE’s high prices, skimpy product offerings and minimal operating hours are all reasons why R&DE should not be opening any more restaurants on campus. Do you really think students want more restaurants that are only open from 11AM-2PM, five days per week?

Furthermore, it is appalling that you are able to operate your restaurants tax-free under Stanford’s 501(c)(3) status. As you know, R&DE restaurants fail the IRS’s three-part test for Unrelated Business Income. Per IRS Publication 598, R&DE restaurants are 1) “A trade or business,” 2) “Regularly carried on” and 3) “Not substantially related to furthering the exempt purpose of the organization” (that organization is Stanford University).

Despite its good intentions, R&DE Hospitalities & Auxiliaries doesn’t seem to be acting “in support of Stanford’s academic mission.” Remember, R&DE’s existing restaurants would be paying a 30-38 percent Unrelated Business Income Tax if it weren’t for the IRS’s broadly defined “Convenience of Members” exemption. (However, I would argue that R&DE’s restaurants are not convenient for students, faculty or visitors.) R&DE restaurants unfairly outcompete private vendors that actually have to pay business taxes. Your vast $180 million annual budget will only grow now that you have eliminated one of your largest competitors.

Enough is enough. Stop expanding your restaurant business. “Fundraising” via food sales is not appropriate, and we deserve better.

Students want high-quality independent vendors, like Ike’s, on Stanford’s campus. In fact, a petition to save Ike’s has garnered more than 1,000 signatures in the last 48 hours, adding up to over 1,460 signatures total.

We ask that you forfeit your newly awarded lease in Huang Engineering Center.

Sincerely,

Andrew Aude ’16

Contact Andrew Aude at ataude@stanford.edu.

Unpopular opinion holder

This is the most ridiculous thing I have ever heard. Ike’s food is overpriced, moderately unhealthy, and always has extremely long lines. I think it’s a better move to allow RD&E to take over, in order to allow people to use their swipes, etc. This has much higher functionality and is something that I would use. To me, this setup is similar to late night and TAP, both of which are absent from this letter. In those situations, students use their swipes to get food from a RD&E restaurant, I fail to see how these situations (which students love) are any different from this one. The most valid claim is that some of the food (though I’d like to see more evidence than just the Red Bull) is overpriced, and this is something that should be addressed. But we are losing a lot of ethos with RD&E by calling them out for tax fraud. I get that Andy has a current vendetta against RD&E, and some of his claims are valid, but I truly think this is a wrong area to focus our efforts.
Andrew T Aude

I would like to clarify that I am making no claims of tax fraud.

What R&DE is doing is strictly legal. However, the spirit of IRS’s U.B.I.T. law is to prevent nonprofits from competing unfairly with private businesses.

I bring it up merely to highlight that R&DE enjoys an added economic *privilege* that other vendors do not. They are *lucky* that they have a special exemption that allows them to exist because they are technically here for our “convenience.”

Furthermore, R&DE has not said that it plans allow patrons to use any such “swipes” or “meal plan dollars” at the “new Forbes Family Cafe.” Instead, they are only allowing use of “Cardinal Dollars” as of yet.

Also, Stanford University is named in a civil lawsuit on grounds that Cardinal Dollars are an unlicensed money transmitter. (See 18 U.S. Code § 1960)
http://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1379&context=historical
Unpopular opinion holder

There are many things to be unhappy about with RD&E. One thing not to be unhappy about is the fact that RD&E is tax exempt. If they weren’t, the prices would be even higher than they already are. I find this nonsense about the taxes to be very non sequitur to the issue of Ike’s being replaced. The fact is, the tax-exemptiveness of RD&E is good for students, yet you seem to antagonize them for following the law. You say that students want high quality independent vendors, and there are many on campus, including those in Tresidder and in Y2E2, 100 yards from Huang.

That being said, I do agree with you that RD&E does have a duty to serve students, and there are obviously a variety a ways that RD&E is successful. This isn’t to say there is not room for improvement.

I suggest that you instead focus on ways that RD&E could be improved in a productive manner. As I mentioned, exploring the reasons for the price discrepancy is something that students should be made aware of. For example, you might find that the reason for the price discrepancy is so that Stanford can sustainably source its ingredients, or so it can pay its employees fairly. Neither of us know the details about why the price is higher, yet you claim that they are “fundraising” by exploiting students. I believe this is likely false, but I don’t know.

To be short, I think you have been unfairly antagonizing RD&E. This didn’t stop me, and other students, from voting you to ASSU Senate. But I think this “act first, talk to RD&E second” is an unsustainable policy for verifiably changing things on campus.
Andrew T Aude

Believe me, I asked R&DE for relevant information time and time again. I’ve tried to setup a meeting with Michael Gratz before spring break, but alas I never received a response. I forwarded my questions onto ASSU Senator Ilya M. for when he met with Ms. Shirley Everett, and I received some of the answers I wanted.

Prior generations of Stanford students have faced similar struggles, when you look back at Stanford Daily archives throughout the 2000s. I’ve tried asking R&DE for the most basic of operating statistics:
1) What are your customer satisfaction survey results?
2) How is your budget allocated?
3) What are your food waste / compost numbers?

Every time, R&DE has come back with a non-answer or something along the lines of “confidential & proprietary.” I’m saying it’s not just me they withhold these figures from — they withhold them from everyone.

I even tried to obtain UC Berkeley’s monthly dining hall budget so I could better understand the economics Stanford Dining and R&DE is facing. I wanted to be able to suggest meaningful, cost-effective improvements by having some sample data. Cal provided me their budget overnight via email, and they were obligated by law to. (This was via the California Public Records Act, which does not apply to Stanford.)

If R&DE refuses to be held accountable to students, act transparently in its decision-making, provide straight answers to inquiries, or make meaningful improvements to its system, sometimes I have to nudge a little.

What do I mean “nudge”? That means petitioning to run for ASSU Senate, asking the media for help in covering these issues, protesting for Ike’s, and writing this Op-Ed. Somehow, every little nudge has led to a meeting with relevant R&DE administrators within the span of a few days, as opposed to the multiple weeks out that they usually schedule me for. I understand they’re busy, but every “2-3 weeks away” meeting delays time for progress in a 10 week quarter.

I’d like to credit Stanford Dining with making meaningful improvements in menu development by adding some of Chef Joe’s specials to the Core Menu. I look forward to continue working with them to create meaningful changes in the system.

Now I’d like to ask R&DE Hospitalities & Auxiliaries to make meaningful, systemwide improvements.
Snoopy

How about a student run cooperative that sells healthy meals at real prices and employs students!! Privatization is so out of vogue. Not to mention out of touch.
Andrew T Aude

Ike’s is one of the few vendors who employs student workers. Ike’s also has a lot of sandwiches that are rather healthy — there are over 100 of them!

Also, note that R&DE seems to prefer hiring “casual” (aka temporary) workers:

II. About Stanford Hospitality & Auxiliary Services
“The division is newly created, and has an annual operating budget of $13M and 179 full-time employees (20 exempt, 11 nonexempt, 71 bargaining unit workers plus 77 casual employees) and encompasses all aspects of a complex auxiliary enterprise with five major business segments including Retail Cafs, Stanford Catering, Athletic Concessions, and Accommodations & Meeting Planning Services and Campus Vending. The retail cafs and restaurants consist of Union Square, Subway and Peet’s at Tresidder Memorial Union, The Axe & Palm Caf at Old Union, Olives Caf @Building 160, The Alumni Caf the 750 Pub at Graduate Community Center and Munger Graduate Residence caf and convenience store. All are popular destinations for students, faculty, staff and guests.”

http://www.higheredjobs.com/admin/details.cfm?JobCode=175885427&Title=Front%20Desk%20Agent%20at%20Stanford%20Guest%20House
Johnny J

if you go to Stanford you must be very smart and dedicated to stomp out activities that do not match it’s core values; transpirarcy with your money must be allowed, see if you get information that you deserve to have; best of luck!
3L

Hey Andrew, I really appreciate you taking the time to research this issue and bring more attention to an important issue on campus. The Stanford community can only benefit from more thoughtful discussion about the issues that affect our daily lives.

I wanted to quickly bring attention to the lawsuit you link to, “Think Computer Co. v. Dwolla, Inc. et al.” Reading the complaint it seemed very weak and suspiciously like a frivolous lawsuit. Sure enough, I poked around and found that the case was dismissed for lack of jurisdiction. A copy of the court’s order can be found here: http://docs.justia.com/cases/federal/district-courts/california/candce/5:2013cv02054/265908/158.

I don’t think it’s appropriate to use this former lawsuit as a way to discredit R&DE. That being said, I think it’s great that you’re interested in law and there are a lot of ways to get involved even while you’re still an underclassman. I’m sure the Stanford Pre-Law Society would love to have you and you could even try auditing a class at the Law School.

Good luck with your Ike’s campaign (I’m all for it), just maybe be a little more thorough with your legal research in the future.
Andrew T Aude

3L: You’re right – I should have verified that it was dismissed. (Everyone – please accept my apologies.)
I included the claim because I had met with “Think Computer Corporation” in mid-March to talk about money transmission, Bitcoin, mobile payments, etc, and I was casually told that the lawsuit is “still pending” and “endlessly delayed.” On the 24th of March, it was dismissed, however I did notice it until now.

Granted, the lawsuit was determined to be “frivolous,” it cost Stanford’s legal team some time and money that it might have otherwise saved if it weren’t for Cardinal Dollars.
Andrew T Aude

Ms. Akin

Are you aware of the history of R&DE’s SLAC Linear Cafe, now known as Harvest Cafe?

SLAC Linear Cafe / Harvest Cafe:
• Per Yelp, it serves “Buffet, Mexican, Sandwiches”
• Run by R&DE as Harvest Cafe, however long ago it was operated by Epicurean
• R&DE had promises of lowered pricing, fast service
• It had a ~3 star review on Yelp (SLAC Linear) which declined to a 2 star rating under R&DE
— Yelp comments suggest that current Harvest Cafe customers are unhappy: R&DE promises were broken; prices increased; service declined.

Note: The building that Harvest Cafe is in is being torn down, and R&DE may be looking to relocate the cafe’s business elsewhere…

R&DE’s proposed new Forbes Family Cafe:
• Buffet, Mexican, Sandwiches? (Despite format not being final, Ms. Akin said R&DE presented “Cauliflower & Bacon Mac & Cheese, Truffled Mashed Potatoes, Sandwiches, Horchata, Salmon, Cilantro Curry, Rotisserie Chicken, etc” )
• Run by R&DE, previously operated by Ike’s Place
• R&DE has promised lowered pricing, faster service

Do you think R&DE will follow through with a better product, and satisfy needs of the SEQ and the larger Stanford Community?

Regardless, read the Yelp reviews.
http://www.yelp.com/biz/slac-linear-cafe-menlo-park

http://www.yelp.com/biz/harvest-cafe-menlo-park

I worry that history may be repeating itself.
lake2cruise

I think the world is facing bigger challenges!
Andrew T Aude

How not to handle a PR Crisis:
Dismiss, deny, downplay, deflect, discredit, doubt, disparage…
http://sustainabilityadvantage.com/wp-content/uploads/2010/12/4Ds-of-Mishandling-a-PR-Crisis1.jpg

Here’s a better way to handle a PR Crisis:
http://sustainabilityadvantage.com/wp-content/uploads/2010/12/4As-of-Handling-a-PR-Crisis1.jpg
BrokenSystem

Hi “Unpopular opinion holder”, Michael Gratz, director of R&DE Hospitalities & Auxiliaries.