ITHACA, N.Y.—It was something of a question mark to start. The Ithaca Urban Renewal Agency was told there might be an opportunity for a city-managed shared commercial kitchen, and was willing to pay for a study to explore if Ithaca’s restauranteurs and food vendors had an appetite for such a space. Short answer: if the city serves it up, local food servicers will line up for helpings.
The shared kitchen is seen to dovetail with efforts to promote Ithaca and Tompkins County as a place to host small-scale manufacturing and production, artisanal/craft kinds of activities. Large-scale manufacturing is unlikely to move in due to comparably high production costs compared to neighboring counties, so Ithaca has to build on its assets, such as being a regional draw for foodies allured by Ithaca’s culinary scene.
As envisioned, the shared commercial kitchen would have multiple workstations that could be rented by the hour for food prep. For a budding food entrepreneur, it would be a step above making everything in their home kitchen, but not quite yet at the production scale where a budding food entrepreneur can cover the costs and logistics of operating and managing their own full-scale, full-time commercial prep kitchen.
Since we’re talking about taxpayer dollars being used to get the potential kitchen space off the ground, these kinds of studies have to always err on the side of conservative financial projections, and they have to be fairly robust in terms of data collection and analysis. Work on the Ithaca Food Business Incubator study, now called “Shared Kitchen Ithaca” (SKI) was commenced by consultant Rod Rotondi back in January.
“This study includes a review of the local history of similar efforts, the national experience with shared use kitchens over the past 50 years, over 80 meetings and interviews with a wide range of institutions and individuals knowledgeable and/or experienced in this sphere, and a Needs Assessment Survey which resulted in a strong showing (68 respondents) by the local community of food entrepreneurs,
yielding significant data allowing a data-based analysis of demand and financial projections,” Rotondi wrote in the executive summary.
Financial projections show that even the more conservative outcome would have the kitchen turning a net profit for the city by the second year of operation, and a net annual profit of about $96,000 in year five. To note, the city’s not exploring this for the purpose of making money, it’s intended to encourage economic growth and simply be self-sustaining with revenue covering operational and equipment expenses.
“The result of this Feasibility Analysis is a clear and conclusive determination that there is a strong demand for a properly structured and set-up shared-use commercial kitchen and that such a facility would be financially and economically viable,” Rotondi states in bold font in the summary. “(The IURA) even received seven signed Letters of Intent from local businesses who want to start working out of this facility as soon as possible.”
Now, while financial sustainability has been determined as reasonably possible, there are still some major questions to be answered—such as, where the kitchen would be, and how exactly it would be owned and managed.
According to Rotondi, a currently available space has already been identified, though the costs to fit it out and make it operational means that the kitchen would need to operate several years to make full return on the investment.
“An ideal facility, currently available for lease, has been identified and is purpose-built for a commercial kitchen. It is centrally located and needs very minimal set-up to customize its use as a shared-use commercial kitchen. It will deliver a 5,836 square-foot commercial kitchen which can be run on a 24/7 basis accommodating up to eight businesses at any one time. Estimated investment cost to fully outfit the
kitchen, prepare it for occupancy and support the project over its first years is projected at $325,000,” the study states. That kitchen facility is Greenstar’s former prep kitchen space at 700 West Buffalo Street.
As for management, a few different ideas are offered up, though the study advises a for-profit entity responsible for the property lease and equipment, with a not-for-profit operator to run the space. Local investors have expressed interest in the kitchen, concerns that existing non-profits would not be able to host the kitchen space, and that operation by a non-profit would allow the shared kitchen to apply for community grant funds at the local and state level.
With the study completed, it’s now up to the IURA and its citizen committees to decide how they wish to proceed. The study is included as a discussion item in this month’s IURA Economic Development Committee agenda, but no votes on moving forward with a kitchen or steering committee to handle the matter are currently scheduled. Keep an eye on it over the next few months to see if the IURA endorses the idea and how it develops.