A map posted earlier this year on the Selma Cafe website aimed to address parking and traffic concerns in the neighborhood.

The group has also received notice that the nonprofit Food System Economic Partnership (FSEP) has decided to end its fiscal sponsorship of Selma Cafe, citing “significant violations” of the terms in a memorandum of understanding between the two entities. The FSEP board voted to make the move in late March.

But it’s the zoning violations that could force a dramatic change in Selma Cafe, which often draws more than 200 people to the home of co-founder Lisa Gottlieb, located near Eberwhite Elementary School. The letter, dated April 3 from city planning manager Wendy Rampson, notes that home occupations are allowed in residential areas, but with certain restrictions. The letter states that Selma Cafe violates those restrictions in three ways: (1) more people are involved in the operation than are allowed under city code; (2) more than the permitted 10 vehicle trips per day are generated; and (3) the need for parking is not being met.

Reached by phone on Friday, Gottlieb said she plans to hand-deliver a response to the city on Monday. She believes the parking, traffic and congestion issues are resolved, and she is actively pursuing two other locations as possible venues for the weekly breakfasts. She disagrees with the city’s interpretation of the code, noting that Selma Cafe is not a business and the people who work there are volunteers, not employees. Although she hopes to continue holding the breakfasts, she said at this point it’s unclear how things will play out and whether that will be possible.

Gottlieb noted that one neighbor had criticized Selma Cafe for bringing thousands of people to the neighborhood since they started in 2009. Although the neighbor had cited that as a negative thing, Gottlieb said to her it seemed “pretty incredible” that the effort had been able to engage so many people in raising money for the local foodshed, keeping money in the community and helping local farmers.

Regarding the issues raised by FSEP, Gottlieb explained that she had withdrawn funds from the FSEP-managed bank account to transfer into a new account created as Selma Cafe transitions to become an independent 501(c)3 nonprofit. She had not first informed FSEP of the withdrawal, as required under terms of the memorandum of understanding. Even if that had not occurred, she added, “the fact is they wanted to be done with us.”

Obtaining the nonprofit status is taking longer than anticipated, so Selma Cafe is seeking another fiscal sponsor. Until that happens, the funds for Selma that remain in the FSEP-managed account – which total about $40,000 – are frozen. If no new fiscal sponsor is found and Selma does not obtain its 501(c)3 designation by May 31, FSEP could take the Selma assets permanently, under terms of the MOU. If that happened, FSEP would need to allocate those funds “in any manner consistent with applicable tax and charitable trust laws and other obligations.”

Selma Cafe: Background

Selma Cafe today still reflects its origins as a homegrown venture, started by Lisa Gottlieb and Jeff McCabe in their home on Soule Boulevard, just down the street from Eberwhite Elementary. The breakfasts are prepared and served by a staff of volunteers, often featuring chefs from local restaurants and using locally-produced food. Recent chefs have included Keegan Rodgers of the People’s Food Co-op, Peter Roumanis of Vellum Restaurant, Rebecca Wauldron of Busch’s, and others from The Beet Box at Mark’s Carts, EAT, Sweet Heather Anne Cakes, and Tantre Farm.

The effort started when the couple – now separated – hosted a fundraising dinner for the nonprofit Growing Hope about five years ago. Because the tickets for that event were fairly high, they decided to hold something more informal as well, and hosted a fundraising breakfast called Diner for a Day, featuring the filmmaker Chris Bedford. The event drew about 160 people – enough to indicate an interest in people willing to support the local food economy.

They decided to keep it going as long as there were volunteers to support it, and eventually grew their volunteer pool to more than 500 people. The breakfasts are held on Friday mornings from 6:30-9:30 a.m. Diners pay voluntary contributions for their meals, raising money for microloans to build hoop houses for local farms, as well as other local food-related activities. The Selma Cafe website cites a broader mission as well, describing it this way:

A hub, a center, a heart of the many ongoing efforts to improve our lives through community building, free access to affordable, healthy foods and the fostering of right-livelihood in vocations with meaning and purpose.

A celebration of seasonal, local ingredients from the abundance of what our region has to offer.

An inclusive community, building the next stage of our local-foods infrastructure founded on the principals of openness, transparency and joy. We seek your help in building the tools and organizational structure to maintain these foundational principles.

A source of funding for building new local-foods infrastructure through loans for hoop houses, affiliations with other community non-profits, and support for the Tilian Farm Development Center.

Money contributed at the cafe also supports Farmer Fund, which was created to administer the microloan program. According to the cafe’s website, University Bank originates and services those loans.

Selma Cafe has been warmly received by many in the community. For example, when Gottlieb and McCabe made a presentation to the Ann Arbor greenbelt advisory commission’s Nov. 10, 2010 meeting, commissioner Dan Ezekiel praised their work and said he’d eaten there many times: “Your efforts and your activism are amazing.”

The breakfast salon is regularly featured in local, state and national publications and blogs. A recent example is from a March 25, 2013 post on Shareable.net:

I was lucky enough to share a table at the [local economics] forum with Lisa Gottlieb, a social worker and founder of Selma Cafe – a community breakfast that benefits local, sustainable farming efforts. Lisa invited me to the Selma Cafe and I squeezed it in one morning. Though Lisa was on her way to work when I got there, I shared a meal and lots of interesting conversation with some remarkable people, including a man who volunteers part-time in Haiti doing healthcare and other friendly folks interested in the concept of Ann Arbor as a sharing town.

City Code Violations

The popularity of Selma Cafe has also led to complaints from some neighbors, even in its early days. As The Chronicle reported in July of 2009, an anonymous letter – signed from “an Eberwhite Elementary School parent” – raised concerns about various possible city of Ann Arbor and Washtenaw County code violations occurring at the home. The possible violations included operating a restaurant in a residential area without licensing and inspection. Those issues were resolved at the time to the satisfaction of city and county officials, but complaints have since re-emerged.

Specifically, the city’s planning staff have communicated with Gottlieb and local attorney Nick Roumel – a Selma volunteer and occasional chef – about complaints that the city has received. That culminated in a letter sent to Gottlieb on April 3 from planning manager Wendy Rampson. [.pdf of Rampson's letter] The letter references a discussion held with Gottlieb on March 11 that had raised the same issues that are outlined in the letter.

The letter states that home occupations are allowed in residential areas, but with certain restrictions. The city defines a home occupation in this way: “an accessory use of a nonresidential nature which is performed within a dwelling or within an accessory building, and conducted by members of the family residing in the dwelling and not more than one additional employee.”

The city contends that the operations of Selma Cafe – the weekly breakfasts as well as other activities that have been held there, including a happy hour and concerts – have violated Chapter 55 of the city code, in the section related to “use regulations” for home occupations. The relevant part of the code states:

(c) Home occupation, subject to the following performance standards:

1. Total floor area devoted to the home occupation in the principal or accessory building shall not exceed 25% of the gross floor area of the dwelling.
2. Outside appearance of premises shall have no visible evidence of the conduct of a home occupation.
3. No outdoor display of goods or outside storage of equipment or materials used in the home occupation shall be permitted.
4. No article or service shall be sold or offered for sale on the premises except those which are produced by such home occupation on the premises.
5. The nature of the home occupation shall not generate more than 10 business-related vehicle trips in any 1 day in the vicinity of the home occupation, and any need for parking generated by the conduct of such home occupation shall be provided offstreet in accordance with the offstreet parking requirements.
6. No equipment or process shall be used in such home occupation which creates noise, dust, vibration, glare, fumes, odors or electrical interference detectable to the normal senses beyond the property boundary.
7. The following are typical examples of uses which often can be conducted within the limits of these restrictions and thereby qualify as home occupations. Uses which may qualify as “home occupations” are not limited to those named in this paragraph (nor does the listing of a use in this paragraph automatically qualify it as a home occupation); accountant, architect, artist, author, consultant, dressmaking, individual stringed instrument instruction, individual tutoring, millinery, preserving and home cooking.
8. The following uses are not permitted as home occupations if conducted as a person’s principal occupation and the person’s dwelling is used as the principal place of business: vehicle repair or painting, dental office and medical office.

Selma Cafe violates the city’s Chapter 55 zoning code in three ways, according to Rampson: (1) more people are involved in the operation than are allowed under city code; (2) more than the permitted 10 vehicle trips per day are generated; and (3) the need for parking is not being met.

Rampson’s letter states:

To resolve this violation, you may discontinue your home occupation or make changes to bring it into compliance with the performance standards, which would substantially reduce the scale of the activity. Another way you may resolve the violation is to relocate these events to an appropriately-zoned location that allows for assembly use and/or a commercial kitchen.

I am in receipt of a letter from your attorney, Nicholas Roumel, and appreciate your interest in reducing the impact of SELMA Cafe’s activities on your neighbors. However, none of the methods suggested by Mr. Roumel to address the traffic and parking problem would bring the current operation into compliance with the ordinance, because traffic and parking is still being generated by the use, albeit in a more dispersed manner. I’d like to emphasize that the City has received numerous complaints from a variety of sources, including neighbors and parents of Eberwhite students, all of whom are concerned about the concentrated traffic and parking issues that result from SELMA Cafe’s operation.

Rampson asked for a response by Monday, April 15 that provides a schedule for discontinuing Selma Cafe or any other activity that doesn’t comply with the city’s home occupation standards.

In a phone interview with The Chronicle, Gottlieb said she plans to hand-deliver her response to Rampson on Monday.

Lisa Gottlieb, co-founder of the Selma Cafe, at the Nov. 10, 2010 meeting of the Ann Arbor greenbelt advisory commission. (Chronicle file photo)

Gottlieb said she first heard about these complaints in early March, though she wasn’t contacted directly by the neighbors. She characterized them as a handful of people who were primarily upset about the traffic, parking and congestion, as well as with a happy hour that was held as a fundraiser for the nonprofit Growing Hope. She said she immediately stopped all activities at her home – other than Selma Cafe – as soon as she heard about the neighbors’ concerns. Those events had included the happy hour, yoga sessions, some concerts by local musicians, and a Balkan dance party.

Gottlieb said the changes to parking – urging people who attend Selma to park outside of the immediate neighborhood – has eliminated that problem. Based on exchanges on the neighborhood’s listserv, she said, the general view is that issues stemming from parking, traffic and congestion at Selma are resolved. And since the Selma traffic and parking problem has been eliminated, she said, it’s now clear that the neighborhood has a serious problem with parents speeding through the streets on their way to drop off or pick up children at Eberwhite Elementary. Regardless of what happens with Selma, Gottlieb said she plans to work on addressing that problem.

Regarding the other issues cited by the city, Gottlieb indicated that she and Roumel disagree with the city staff about interpreting the code. For example, she said, Selma Cafe isn’t a home business, so the “not more than one additional employee” standard doesn’t really apply, since everyone there is a volunteer – including her.

Gottlieb likened the current situation to one that involved concerns raised by Washtenaw County public health officials a few years ago. Selma Cafe is unique and new, she said, and doesn’t necessarily fit within the strict understanding of existing regulations. Whenever something new like this emerges, she said, “it often meets with resistance.”

Because of its uniqueness, she said, there aren’t a lot of places that can accommodate the weekly event. She’s actively looking for another place, and is pursuing two possible alternative locations. She hopes to continue conducting Selma Cafe at her home in the meantime, but she’s not sure how things will play out and it’s unclear whether the breakfasts can continue there.

When asked whether she intends to advocate for changes in zoning so that this kind of event would be allowed, Gottlieb said she didn’t see that as her role, and that she didn’t have the energy to spare for such an effort. However, she said, the idea of changing the zoning is “worth a really thoughtful conversation” with city officials.

Responding to a query from The Chronicle, Rampson indicated that until she receives Gottlieb’s response, it’s premature to speculate on any further actions the city might take.

Relationship with FSEP

Separately, the board of the nonprofit Food System Economic Partnership (FSEP) has decided to terminate its relationship with Repasts Present & Future [Repasts/Selma] – the umbrella organization that operates Selma Cafe.

The original fiscal sponsor was Slow Food Huron Valley, a nonprofit that focuses on supporting local farmers and food artisans “who engage in sustainable agriculture and are committed to the viability of the land,” according to the SFHV website.

SFHV, a volunteer organization, got formally involved as a fiscal sponsor of Selma Cafe in 2009. SFHV’s participation was a way to address concerns raised by Washtenaw County public health officials that Selma Cafe was operating as a “food service establishment” but not complying with the 2005 U.S. Food & Drug Administration’s food code. Among other things, the code prohibits serving food to the public out of a home. The county had determined that if Repasts/Selma were a 501(c)3 nonprofit – or were affiliated with a nonprofit – then that would give them exemption from the definition of “food service establishment.”

As part of that sponsorship, Gottlieb joined SFHV’s leadership team and served as the nonprofit’s secretary. But the relationship lasted only about two years before SFHV transferred the sponsorship to FSEP in 2011. [Kim Bayer of SFHV is also on FSEP's board.] At that time, the bank balance was $12,799, according to documents related to the transfer. Those documents also indicated that in 2009 and 2010, Repasts/Selma had made loans to nine local farmers totaling about $62,800. The purpose of the loans – which ranged from $5,100 to $9,647 – was to build hoop houses. [.pdf of 2011 assets and liabilities]

Gottlieb said that SFHV had wanted more involvement with Selma Cafe than was realistic, including an expectation that Gottlieb would invest more of her own time attending SFHV leadership meetings. Given her full-time job and work organizing Selma Cafe, Gottlieb said it wasn’t possible to make more of a time commitment to SFHV. Gottlieb is a social worker for the Washtenaw County juvenile detention program.

From left: Jennifer Fike, finance manager of the Huron River Watershed Council, and Ginny Trocchio, who manages the city of Ann Arbor’s greenbelt and parkland acquisition programs. Trocchio also serves as chair of the board for the Food System Economic Partnership. Fike is FSEP’s former executive director. Fike attended the April 4, 2013 meeting of the greenbelt advisory commission, where this photo was taken, because of her interest in being appointed to the commission.

In April of 2011, FSEP took over as fiscal sponsor, with terms laid out in a detailed memorandum of understanding (MOU). [.pdf of April 2011 MOU] In a phone interview with The Chronicle, FSEP board chair Ginny Trocchio said the decision to get involved with Selma Cafe was based on FSEP’s mission – which is to support grassroots efforts related to the local food economy. Selma Cafe was a good fit in that regard, she said. FSEP did not provide financial support to Selma Cafe, but served as the “corporate home” for the group, and handled a range of fiduciary activities. Those activities included maintaining a bank account for Repasts/Selma and reporting Repasts/Selma’s financial information in FSEP’s tax documents.

In the spring of 2012, leaders of FSEP and Repasts/Selma could not come to agreement on terms for renewal of the MOU. Gottlieb told The Chronicle that FSEP wanted to add provisions that would allow FSEP to remove her as operations manager at any point, and that would give FSEP the right to distribute assets in the Repasts/Selma bank account, if the fiscal sponsorship were terminated. Gottlieb said those terms were unacceptable to her, and ultimately were deal-breakers for reaching a new agreement with FSEP.

In a letter dated June 11, 2012, Trocchio gave notice of the intent to terminate the MOU, and outlined a transition period during which Repasts/Selma would need to find an alternative fiscal sponsor or obtain its own 501(c)3 nonprofit status.

Although Repasts/Selma is in the process of seeking a 501(c)3 designation, that designation has not yet been secured.

Trocchio told The Chronicle that over the last few weeks, FSEP’s board became aware of certain issues – including the city’s notification of zoning violations – which prompted the board vote to end its fiscal sponsorship. FSEP notified Gottlieb in late March about its decision, and has given Repasts/Selma until May 31 to find another fiscal sponsor. Assets in the Repasts/Selma bank account – over $40,000, according to Trocchio – will not be released to Repasts/Selma until another fiscal sponsor is identified or until nonprofit status is secured. At that point, the assets will be transferred to the new fiscal sponsor, Trocchio said.

On Friday, March 29, FSEP posted this statement on its website:

By decision of the board of directors, as of March 27, 2013 the Food System Economic Partnership (FSEP) will no longer be acting as a non-profit fiscal sponsor for SELMA Café. Unfortunately, significant violations of the terms of our memorandum of understanding have made this termination necessary.

In addition, the scope of SELMA Cafe’s activities and programs have expanded beyond the original intent of the agreement, such that the two organizations’ missions are no longer closely aligned.

Dissolving the relationship between FSEP and SELMA Cafe will make it possible for both organizations to pursue their own programming independently, as each evolves and implements their core missions.

In accordance with our memorandum of understanding, FSEP will transfer the SELMA charitable donations to another accredited non-profit organization once it has been identified by SELMA Café and we wish SELMA well in obtaining their own 501(c)3 in the future.

Gottlieb said that she and Roumel have started the process of obtaining 501(c)3 status for Selma Cafe. That process included forming a board of directors. Co-founder Jeff McCabe, though no longer involved in day-to-day operations at Selma, serves as a board member. The group also now has an EIN (employer identification number) from the U.S. Internal Revenue Service, but has not yet received approval for the 501(c)3. The process has taken longer than anticipated, she said.

Meanwhile, they are looking for another nonprofit that would act as a fiscal sponsor. Gottlieb said there is one nonprofit that might be willing to act in that capacity, but no agreement has been reached yet, although she said it “looks promising.”

Regarding the MOU violations mentioned by FSEP as the reason for terminating its agreement with Repasts/Selma, Gottlieb said that as part of the process of creating the new 501(c)3 for Selma, she and Roumel had set up a separate bank account for the operation. She’d been advised by Roumel that she could transfer funds from the FSEP account to the new account, and did so without first informing FSEP. At that point FSEP froze the remaining assets in the account, she said, without informing her.

Gottlieb said she now realizes that her transfer of funds without informing FSEP violated the MOU, but “the fact is they wanted to be done with us,” she said. Since the assets have been frozen, she said she hasn’t been reimbursed for the $600-$700 that she has expended from her personal checking account each week to pay for Selma-related expenses.

She noted that the May 31 deadline is the point at which FSEP could take the Repasts/Selma assets permanently, under terms of the MOU:

If no Successor is found, after a time deemed reasonable to accomplish these tasks, FSEP may allocate RPF’s assets and liabilities in any manner consistent with applicable tax and charitable trust laws and other obligations.

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