Kitchen incubator to close

May 1, 2009
By

JOHN RUCH

BROOKSIDE—Nuestra Culinary Ventures (NCV), a non-profit program providing kitchen space and business ad-vice to start-up food service companies, will shut down next month due to its own faulty business model.

“It doesn’t work financially,” said David Price, executive director of Roxbury’s Nuestra Comunidad Devel-opment Corporation (NCDC), the non-profit organization that runs NCV at The Brewery complex at 284 Amory St. The program will close on June 30.

NCV has suffered operating losses of nearly $1 million since its founding in 2002, among other financial problems, according to a letter NCDC sent to NCV food businesses on April 16 announcing the shutdown. The letter, a copy of which was obtained by the Gazette, blames unfixable “inherent structural weakness” in NCV’s business model.

NCV is used regularly by about 16 businesses and occasionally by several more. Specialty food producers, caterers, restaurants and pushcart vendors are among the business incubator’s clientele, making everything from wedding cakes to baby food. NCV will assist them in finding new homes, though that can be “very difficult,” Price said.

The NCDC letter suggests another organization, possibly even a cooperative of client businesses, might take over the NCV program. But Price said survival of the NCV program is unlikely.

“It’s possible, but I wouldn’t want to hold out hope of it,” he said.

NCV’s landlord at The Brewery is another non-profit, the Jamaica Plain Neighborhood Community Development Corporation (JPNDC), which also operates business-assistance programs. It is unclear whether JPNDC has any interest in taking over any NCV programming or what it will do with NCV’s roughly 5,000-square-foot Brewery space. JPNDC Executive Director Richard Thal did not return a Gazette phone call for this article.

NCV nearly went under for the same reasons in 2006. Mayor Thomas Menino rescued the program at that time by delivering $150,000 in city grants and private donations. But no city bailout will happen this time, Price said.

“We did talk to the city,” he said. “In the current economy and budget situation, it’s just not possi-ble.”

NCV is not sustainable in any case, Price said, adding that attempts to restructure the program after 2006 didn’t help. “Typically, foundations and agencies invest in start-up programs like this…on the basis [they] will become self-sufficient,” he said. NCV was started with a $200,000 grant from the city’s Depart-ment of Neighborhood Development (DND).

“The City has supported NCV for many years with substantial resources, and we are very sorry to see them close, especially during these difficult economic times,” said DND spokesperson Lucy Warsh in a written statement to the Gazette. She added that DND will offer assistance to NCV’s client businesses.

The Mayor’s Office did not have immediate comment on the NCV situation.

Price said NCV provided good business advice to its commercial clients while operating on a flawed busi-ness model of its own. The advice-giving itself was part of the problem, he said, noting that it consumed lots of expensive staff time that is not covered by traditional grants.

“There were never the economics to pay for that,” he said of the technical assistance part of the pro-gram.

The NCDC letter said that NCV spent more than $700,000 building and equipping the kitchen facility and needed about $280,000 in annual income to break even. But its annual income—based entirely on hourly rental rates—was never more than $135,000, the letter said.

There was no way the start-up business clients could afford large rental rate increases or for funders to pony up $180,000 a year so NCV could break even, the letter said.

All of that financial analysis was done over the past six months by a food service consulting company, the letter said.

Price said NCDC remains a stable organization that is focusing now on its core mission of providing af-fordable housing.

“We’re in overall good financial health, but there are a number of programs that aren’t performing as we’d like them to economically,” he said. No major restructuring of the organization is needed, he said.

“The priority for us is to respond to the housing crisis…We really need to get out of the food business to do that,” Price said. That’s a switch from the original intent of starting NCV—to provide a “holistic approach to community development,” as NCDC’s web site puts it.

NCV grew out of NCDC’s former Village Pushcart Program, as a way to provide safe and legal kitchen space to sidewalk food vendors, according to the web site.

Food service business incubators are a rarity. NCV was partly inspired by a few models, including a pro-gram in Denver, Colo. The Denver program is still operating, Price said, but noted it has the advantage of city-provided space. That’s not possible here, he said.

Price noted that funders are scrutinizing non-profits’ finances more closely than ever, and said NCV’s losses have led housing investors to downgrade the entire NCDC.

Price said the Dudley Square-based NCDC will not maintain a Jamaica Plain presence of any kind, focusing instead on its Roxbury/Dorchester neighborhood.

Like many other non-profits, community development corporations (CDCs) are facing tough times and a new focus on the financial bottom line. Urban Edge, a Jackson Square CDC, underwent a major reorganization and programming changes last year.