The problems for Lola on the Lake began long before the May fire that gutted its home base at the Bde Maka Ska refectory.
Entrepreneur Louis King Jr. was handed an established concession site with a 14-year record of success but still managed to lose money in 2018, Lola’s first year of operation.
Part of that was beyond his control. A blizzard struck on the weekend he proposed to open, and city-required code upgrades didn’t get completed by the Park Board until just before a sweltering Memorial Day weekend. That left little time for a soft opening.
But Lola had pitched itself as a veteran team with extensive food-service experience at similar venues. Instead, its food and service were quickly panned by online reviewers.
The resulting word-of-mouth constituted the biggest strike against its maiden-year performance. It fell far short of the sales it boasted it would record. Its pro forma projected $1.5 million in first-year sales. That’s slightly more than popular predecessor Tin Fish ever generated in any of its 14 years on the lake. It’s more than was ever generated by its nearest competitor among park concessionaires, Lake Harriet’s Bread and Pickle. It’s almost twice what Sandcastle grosses at Lake Nokomis.
Instead, Lola grossed $607,225 in its maiden year.
Shane Stenzel, the top Park Board official dealing with concessionaires, said he considered Lola’s sales projections overblown from the beginning and didn’t expect them to be met. He said that entrepreneurs come to refectories envisioning big numbers, based on Sea Salt’s phenomenal success at Minnehaha Park, where it grossed $3.5 million last year. That’s unrealistic, given Minnehaha’s advantages: a waterfall, frequent music, outdoor seating shaded by tall oaks and indoor seating for inclement weather.
Still, Stenzel said, he’s satisfied with Lola’s first year. After all, he noted, Tin Fish grossed only $447,237 in its first year. So $607,225 looks like success to him.
Except Tin Fish’s first year was in 2004. Inflate the $447,237 by 35% to 2019 dollars, and it’s much higher. Then adjust for the fact that Lola had a wine-and-beer license and Tin Fish didn’t at first. Those adjustments would give Tin Fish’s first-year sales with booze a value somewhere in the range of $639,640 to $747,054 in today’s dollars. And that was without a history of private food sales at the refectory.
This might be dismissed as mere schadenfreude but for its impact on the park system. Tin Fish paid a sales-based rent of $172,735 in 2017, its last year. It paid another $42,673 into a Park Board escrow account for building improvements.
Lola paid only $72,868 in its first year of disappointing sales, far less than the $210,000 touted in its pitch to park officials. And its rental payments were paid weeks or months later than other concessionaires. Owner King attributed that to cash-flow problems, saying he lost money last year.
“It didn’t work. We learned from it,” said King. He said he’d made process improvements for this year, though the fire has now left him without electricity, running water or bathrooms, operating from food trucks.
The rent payments from concessionaires go into the park system’s enterprise fund. That fund can be used for purposes such as retiring park improvement debt, subsidizing money-losing enterprises, rehabbing park facilities — or improving refectories.
Sheff Priest, who ran Tin Fish with his wife, Athena, said the couple was willing to stay at Bde Maka Ska but found the Park Board’s proposed lease renewal terms onerous. In exchange for a lease allowing up to 15 years of additional tenancy, the Park Board wanted lease payments to contribute substantially toward refectory renovation. Just how much remains murky. Tim Prinsen, an East Calhoun resident who works in commercial real estate, served as a sort of informal intermediary between the park system and the Priests. Priest said the Park Board’s price was too steep. Stenzel suggests that the Priests were looking for an excuse to walk away. Prinsen, who believes the closing of Tin Fish was a big neighborhood loss, said he thinks a deal could have been salvaged had the Priests not been ready to get out of the business. But he said they had hoped that a new generation could continue the Tin Fish concept.
So the Park Board threw the Bde Maka Ska refectory open to competitive proposals. Bde Maka Ska is where the Park Board first pioneered having a private food concessionaire, a popular European tradition. Before Tin Fish, the Park Board offered only limited snacks such as popcorn and ice cream at its staff-run refectories, typically a breakeven proposition.
The opening of the Bde Maka Ska refectory to post-Tin Fish proposals drew lots of them. They were narrowed to Lola and a proposal for a continuation of Tin Fish-style operations submitted by three Tin Fish employees.
Stenzel said that one major issue was that the trio couldn’t address basic operational questions, such as how to serve racially diverse populations using the lake. Another issue for him was losing the participation of the Priests. “When you take them out of it, we had lots of concerns,” he said.
Sheff Priest disagreed. “We would have trained and would have worked with them,” he said. “It would have been actually seamless.”
Lola’s pitch to be selected as concessionaire promised four food kiosks at three locations around the lakes. The kiosks never materialized.
Lola also promised to contribute $10,000 annually to the Minneapolis Parks Foundation, and to encourage its customers to donate more at its counter. So far the foundation has received nothing.
Stenzel said the promised kiosks never appeared last summer because he wanted Lola to concentrate on refectory-based food. He said he never made the contribution promised to the park foundation part of Lola’s contract. He said plans for the shading pergola that was to be added at Lola’s cost to the refectory’s west side this summer weren’t very far along when the fire erupted.
Lola’s owner King said the business was relieved of some contract requirements because of investments he made. Stenzel said he only waived the initial year’s building escrow payment because of the delay in Park Board crews completing code upgrades and because of King’s facility upgrades.
Perhaps given the heat the Park Board has taken on equity issues, it was inevitable that it would choose a proposal from a minority-owned business such as King’s. Especially when park commissioners or staff held a majority of seats on the selection committee that overwhelmingly favored King. His contract has four more years to run.
Prinsen offered this perspective on the selection of Lola: “He made a lot of promises. None of them were believable.”