UPDATE: Former Boocoo Directors Express Culture of Financial Woes

UPDATE:

“I think facts will stand as they are” Cheifetz said. "People who care about Boocoo and city understand the investment that has been made in Boocoo and we welcome them to get to know the place better and support it and give us their constructive feedback.”

Earlier:

Two former directors of the say that the center’s Oct. 2 fundraising event will do little to help the financially strapped business and that the real problem is mismanagement.

Ted Sirota and Debi Chess Mabie, directors from December 2007 to August 2008 and September 2008 to spring 2009 respectively, both independently said that the center failed to create a financially viable business model and that the owner did not seek out grants and alternative forms of funding, would routinely ignore employee phone calls and emails, and often failed to pay vendors and other contractors on time.

Daniel Cheifetz, director of Enterprise Development Foundation, the Evanston-based nonprofit that owns Boocoo, did not return calls and emails for comment for this story.

Located at the intersection of Church Street and Dodge Avenue, across the street from Evanston Township High School, Boocoo is a combination coffeehouse, eatery, recording studio, meeting space, live-performance stage, garden, art gallery and music school that opened in July 2007 and lists its mission as “[providing] a safe and nurturing environment in which individuals can explore and express their creative passions.”

But Sirota said that financial problems were part of Boocoo almost from day one, and that the business was already running a substantial deficit when he took the reigns as co-director after the center was open for only four months.

Boocoo’s first director, Carolina Pfister, said she left the center after she “found [her] efforts were not sufficient to guarantee Boocoo's continuity.”

While Sirota acknowledged that Pfister may have made some poor decisions early on, he maintains that the center’s business strategy made self sustainability a near impossibility.

Boocoo had two main sources of income: sales from the café and revenue from music and dance classes. But business continued to be slow on both ends.

Mabie said that the café always underperformed. While Cheifetz had imagined it as someplace that would sell not only coffee, but food and smoothies, Mabie noted that the eatery often sold fewer than 10 sandwiches and 20 slices of pizza a day, barely enough to pay employee salaries, let alone ingredients and overhead.

The place was simply never full.

“They banked on this café being the cash cow thinking ETHS students would come here to eat the food,” Sirota said, “but that just never happened. So instead of being this big bread winner for the place, it became this big blood sucker.”

On the other side, music and dance classes were more successful. Sirota, a professional musician and drum teacher, had brought his music students’ business to Boocoo when he was hired and had even convinced several other music instructors to make the center their studio, as well.

But the students didn’t come in droves either. And it wasn’t for lack of promotion.

Mabie said that when she was director (Sirota had been demoted to music director during this time), she worked with Northwestern University marketing students, created a community advisory board, attended monthly ward meetings, put up fliers, spoke to ETHS students, invited youth to take internships at Boocoo, met with Evanston Art Center representatives, put handouts in District 65 “Friday folder” send-home materials, sent out regular emails, communicated with both the Evanston Community Foundation and the Evanston Community Development Corporation, and talked to neighbors in local barber shops.

Still, business remained stagnant.

Part of the problem, Sirota said, was Boocoo’s location. Parents from higher-income areas of town were sometime hesitant to sign their children up for music lessons at a location they viewed as dangerous. Parents from the lower-income neighborhood surrounding the center often could not afford the $25 per half hour, $50 per hour music lessons.

Both Mabie and Sirota said that they attempted to tackle the latter problem by asking Cheifetz to apply for grants so they could create scholarships and free classes for whoever could not afford the fees.

However, according to both, Cheifetz expressed leeriness for grants, saying that he feared the funding would come with strings attached that would alter Boocoo from his vision of what the center should be.

Further, Mabie and Sirota said Cheifetz would not allow them to file their own grants requests on behalf of Enterprise Development Foundation or to alter Boocoo from a limited liability company to a nonprofit so that they might apply for grants on their own.

“Daniel was not providing us with the information that we needed to apply for grants,” Mabie said. “He wouldn’t divulge financial information, he wouldn’t divulge board structure. I put together an [application for Boocoo to become a nonprofit] and all he had to do was sign it. He wouldn’t agree to sign it and never gave me a reason why."

Mabie also blamed the lack of business on the “schizophrenic” character of the center. She said it was hard to market Boocoo because it was trying to be so many things at once.

Sirota said that the center tried to do too much, too early on.

“To me, the vision was the problem,” Sirota said. “There was west African dance and belly dance and hip hop dance and story time for children and group guitar and just a lot of stuff going on there…I was involved from the beginning and sometimes I’d walk in there and say, ‘what is this place?’ It was just too broad..I would have started with a handful of targeted classes and try to build those up, and then buy the equipment and the expensive gear as you’re going along rather than dumping all that money on it at first and then expecting the people to come in droves.”

But the kicker came when the center stopped paying bills, Sirota said.

According to both Sirota and Mabie, Boocoo was perpetually behind in payments to vendors and contractors. Mabie recalled the business owing money to a web designer for a period of time, while Sirota talked about Boocoo's failure to pay coffee providers, produce distributors and a security system company.

An accountant for Stonecreek Coffee Roasters, Boocoo’s former coffee supplier, confirmed that company records showed that Boocoo made late payments sometime in the past but would not provide further information on the frequency with which this happened, the amount of money involved or whether this was the cause of the two sides severing business ties. Representatives from other vendors contacted either refused comment or stated it went against company policy to divulge business dealings to a third party.

Soon, the directors decided to scale back, cutting deals with cheaper vendors and eventually resorting to buying café supplies from Costco Wholesale stores. To pay for operating costs, Sirota said he began selling excess equipment from classes that never got off the ground, including dance instructor headsets, kickboxing gear and yoga mats. The limited funding was kept in cash, and operations were dependent upon however much was available day to day.

Ultimately, Sirota was let go from Boocoo after they informed him they could no longer afford to pay his salary. Since then, he has moved his drum lessons into a makeshift studio in his Rogers Park apartment. Mabie quit out of frustration and moved to Toussaint, Arizona with her husband.

Looking back at their tenures, both expressed a fondness for the neighborhood and the people who came into the center.

“There were some kids who had been waiting for something like this, and they basically lived there,” Sirota said. “It became like a second home. It definitely had an impact. We were part of the fabric of the community, but that doesn’t necessarily translate into dollars.”

Mabie even expressed some fleeting admiration for Cheifetz and his vision.

“Daniel had a wonderful idea and I think his heart was in the right place in wanting to contribute to the economic and social viability of that part of Evanston,” Mabie said. “He was really good at getting people excited about that and buy into the idea. But he did not provide.”

“There was something in his thought process that made it really difficult to let go of Boocoo and let it become what it needed to become,” Mabie continued, “which is a community-run space…[with] stakeholders. The aldermen, the kids that came to Boocoo, the instructors having an active say in the direction of it. And he could not allow us to develop the means to let that happen.”

Sirota said he would like to see Boocoo survive and thinks it could be a valuable part of the community. But he also said he believes that unless there is a change in ownership, the cultural center will be doomed to fail again and that any donation will merely be a small plug in a sinking ship.

 “I would love to see a place like that survive and exist in the community,” Sirota said. “I was just thinking about these people handing money over and I didn’t think that was right…If they’re honestly in that kind of trouble, they’re not going to last. I think people should just ask questions, that’s all. The crisis is going to come up again. I mean, it was constant crisis there.”

The Boocoo Cultural Center and Café is hosting an Oct. 2, Boocoo fundraising event from 2 to 8 p.m. that reportedly will include an address from Evanston Mayor Elizabeth Tisdahl, an open forum to discuss the role of Boocoo in the surrounding community and a live Jazz band. In a mass email sent out Sept. 8, the community center asked residents for monetary donations, but said contributions of time, ideas and event equipment would be welcome, as well.

Cheifetz is also CEO at Indie Energy Systems Company, an Evanston-based company which develops energy-efficient building technology. In the 80s and 90s, Cheifetz was a technology entrepreneur and founded a software development company.

Enterprise Development Foundation also owns the Community Builders of Evanston, a program aimed at educating Evanston's young adults as construction workers and employing those who have trouble finding work due to criminal records and incomplete education.

Enterprise Development Foundation's 990 PF tax form for April 1, 2008 through Marc 31, 2009 (a period of time comprising portions of both Sirota's and Mabie's tenures) shows that the nonprofit claimed $66,522 in cafe sales, $32,332 in cafe expenses, $32,695 in adjusted net income payroll expenses, near $7000 in sales tax expenses, an average monthly cash balance as $266,837, a yearly loss of $354,424, total assets of $1.63 million and total liabilities of $2.62 million.

Evanston Patch will continue to report on this story as it develops.