How St. Paul could have saved big money by ousting cafe earlier

Documents show the city of St. Paul could have avoided paying an $800,000 legal settlement to a cafe owner if it had taken action sooner to oust the business from Como Park.

Instead, a court ruled earlier this year that the city breached its contract with Black Bear Crossings. That resulted in the third largest settlement payout in city history.

Reporter Curtis Gilbert talked with Morning Edition host Cathy Wurzer.

Gilbert: It all started when the city council approved this huge settlement about a month ago. Usually those types of approvals are totally perfunctory. There's no debate or discussion. In fact this settlement, like most such agreements, includes a requirement that the parties won't talk about it. But Council Member Dan Bostrom said this time, he just couldn't stay silent.

"I just find it totally unacceptable to pay out this kind of money on something like this, and with the citizens being totally in the dark as to how we got there."

So I took that as a call to action.

Wurzer: What did you find?

Gilbert: I found the city had plenty of opportunities over the last 14 years to get rid of Black Bear Crossings, but until last year there's no evidence it ever tried to do that. For instance in a 2007 memo, the city complained about the company's "consistent lateness with required financial reports and payments." Black Bear was supposed to pay the city around $25,000 every January, but those payments often arrived months late. The memo also said the company's "financial statements are not done accurately, if provided at all." Later that year, it informed owner David Glass that he was in breach of the contract. The city could have used that as grounds to terminate the agreement, but it didn't. In fact, just two years later, the city renewed the contract. In a 2009 email, around the time of the renewal, Parks Director Mike Hahm wrote that he "had heard no controversy of any kind related to the facility."

Wurzer: What changed?

Gilbert:The turning point appears to have come last year. City Council Member Amy Brendmoen, who represents the Como Park area, had been hearing from constituents who wanted to know why the St. Paul Parks system didn't have the kinds of super-popular restaurants that the Minneapolis Parks system does. Several brought up Sea Salt in Minnehaha Park. If you've been there, you know there's often a line out the door on summer evenings. Besides bringing lots of people and vitality to the parks, those restaurants have become cash cows for the Minneapolis Park and Recreation Board. Sea Salt pays the park board more than a quarter million dollars a year to operate there — about 10 times what Black Bear Crossing pays St. Paul. So Council Member Brendmoen and then-Deputy Mayor Paul Williams tried to get Black Bear Owner David Glass to make his cafe a little more like Sea Salt. In an email the following week, Brendmoen described that meeting as "frank and slightly painful."

Wurzer: How did Glass respond?

Gilbert: He said he was open to making some changes, but he didn't want to make them binding. His contract gave him the right to extend his lease through the end of 2018, and he had no interest in adding any additional requirements. Then he lawyered up. The city wanted changes; Glass wanted an unconditional contract extension. They tried mediation, but they hit an impasse. And Glass took the city to court.

Wurzer: What happened in court?

Gilbert: The judge ruled the city breached its contract when it refused to extend the lease for Black Bear Crossings, without what the judge saw as a good legal reason. The city noted all the past late payments, but since they were no longer in arrears by the time the city got to court, the judge ruled them immaterial.

Wurzer: So what happens to the cafe now?

Gilbert: Black Bear Crossings will be moving out of Como Park in December. The city is looking for a new vendor to start in January. And David Glass, the cafe owner, is running for city council. He'll be challenging Brendmoen for her seat next year.