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Will the city's licensing laws catch up with new food business models in time to save Zina Murray's Logan Square Kitchen?

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Zina Murray was, as she put it later, "verklempt."

On the morning of September 14, Murray, owner of the shared-use Logan Square Kitchen, set out banana bread and cinnamon buns for her friends and neighbors, who were coming to the storefront at 2333 N. Milwaukee to celebrate an achievement more than two years in the making: LEED gold certification for her business.

LEED stands for Leadership in Energy and Environmental Design—a system developed by the U.S. Green Building Council to encourage and rate the incorporation of energy-saving technologies and sustainable practices into the design, construction, and operation of a building. As Murray pointed out to the crowd of about two dozen, there are only 129 LEED-certified buildings in Chicago. Only about half of those are rated gold or platinum, and few are as small as the 6,125-square-foot Logan Square Kitchen, which features energy-efficient lighting, low-flow toilets, and woodwork made from doors salvaged from a Wicker Park teardown.

As she prepared to unveil the LEED plaque, Murray thanked her architects, her mechanical engineers, her loan officer, her general contractor, and her parents. "They taught me a wonderful love of hard work, and second only to the sin of laziness was the sin of complaining," she said, choking up a little. "I was taught very early on that you don't complain about problems, you solve them. And this kitchen was really designed to solve the problems of the economy in my neighborhood—the empty storefronts that were here, the lack of places where food entrepreneurs can get started."

Since Logan Square Kitchen opened just over a year ago, the kitchen has attracted a handful of regular clients, mostly pastry chefs and confectioners. The events space has been home to weddings and a pastry market, and this past spring, before she opened Girl and the Goat, Top Chef winner Stephanie Izard teamed up with Boka's Giuseppe Tentori and Rick Gresh from David Burke's Primehouse to host two private dinners there. Table 52's Art Smith did some corporate R&D in the kitchen. And chefs Jason Hammel and Bill Kim, from Lula and Urban Belly respectively, collaborated on a pop-up restaurant there in July, during the Milwaukee Avenue Arts Festival.

In May Logan Square Kitchen was presented with a "Good Neighbor Award" by the Chicago Association of Realtors, and was honored by Christine Raguso, the Department of Community Development's acting commissioner, on the city's website. "We are proud of their efforts at creating sustainable buildings that add to the character and diversity of our neighborhoods," she wrote.

As Murray took questions from the group about her million-dollar rehab and extensive certification process, her alderman, Rey Colon, stood up in the back of the room.

"Zina, I want to thank you for your vision," said Colon. "I see you in your role at the farmer's market, really concerned about healthy living, healthy eating, healthy lifestyle, and your business personifies all those things. And so, the reason I'm here today is I'm just very, very proud of the work you've done and the effort that you've put into it, and Logan Square. It's just a wonderful life, living here."

Logan Square Kitchen during the Milwaukee Avenue Arts Festival
  • christina noël
  • Logan Square Kitchen during the Milwaukee Avenue Arts Festival

Everyone clapped. Murray beamed.

She's convinced, she'd told me a week earlier, that she'll be out of business by January.

Shared-use kitchens are a relatively new concept, designed to meet the needs of a food scene increasingly geared toward locally sourced products and small-batch production. Access to a commercial kitchen is a significant barrier to entry for a food business. Commercial kitchens are big, complicated, and expensive to run—monthly overhead for Logan Square Kitchen, with utilities, pest control, waste pickup, janitorial services, insurance, etc, is about $10,000. Shared-use kitchens allow small-food artisans and other entrepreneurs to ramp up legally with a minimum of risk. Also known as contract kitchens, they're fully equipped and licensed spaces available for rent on an hourly basis to caterers, bakers, confectioners, and others who either can't afford their own kitchen or simply don't need a full-time workspace.

Logan Square Kitchen is one of three such kitchens in the city—the others are Kitchen Chicago, in West Town, and Splice Kitchen, in Lincoln Park. The oldest, Kitchen Chicago, has been plugging along quietly for the last five years, helping start-ups like Hoosier Mama Pie Company and Floriole Bakery grow into full-fledged businesses, but it flared on the public's radar in February of this year, when a city health inspector confiscated and, over two visits, destroyed $9,500 worth of perfectly good food product belonging to nine different businesses.

That incident, as reported by the Tribune's Monica Eng, escalated an existing struggle over how to define and license shared-use kitchens and their clients—a struggle that continues to this day, even as a shared-use kitchen ordinance makes its way at a crawl through City Hall.

The minutiae of this licensing confusion are mind numbing. In a nutshell, here's the problem: the city has told the proprietors of shared-use kitchens that every business using their facilities needs to have its own retail food establishment license—the basic license that covers all spaces used for food prep, service, and sales. But initially when these businesses tried to apply for that license, they were told they couldn't get one because a license already existed for that address: namely, the one held by the shared kitchen's proprietors.

After the Kitchen Chicago fiasco, the city changed its policy to allow multiple business licenses at one address. But each new license is still tied to that address, costs $660 up front for two years, and triggers a new inspection of the space, something Murray notes is immensely time consuming: a typical restaurant gets inspected on average once a year; since February, Logan Square Kitchen has been inspected six times, the busier Kitchen Chicago 27 times.

The draft shared-kitchen ordinance (PDF), for which Murray, Kitchen Chicago owner Alexis Leverenz, and Splice Kitchen's Tonia Ojuluwayo have been lobbying the city for months, would create a new shared-kitchen operator's license and allow clients to purchase cheaper short- or long-term licenses that aren't site-specific.

Murray and her cohort are cheered by this new development. In a recent blog post Leverenz described the draft ordinance as "an important step in creating an environment with clearer definitions."

But over in a different regulatory gray zone, Murray's business model continues to befuddle the city.

Logan Square Kitchen differs from Kitchen Chicago and Splice Kitchen in that the shared-use kitchen, in the rear, is married to an events space in the front. From the get-go, Murray says, she's envisioned the events space as a means of subsidizing the kitchen and keeping rental rates affordable. At $25 an hour for the two pastry stations and $35 an hour for the hot/savory line, her place already costs slightly more than other shared kitchens, but the rentals still can't cover the costs of rehabbing the space to LEED standards in any reasonable amount of time.

Logan Square Kitchen interior

Murray says almost all her early discussion of this business model with the city was verbal. But her former lawyer details the nature of her plans in a January 2010 letter to zoning commissioner Patricia Scudiero: "The chefs using the kitchen will use the front area to serve food to the public—as would occur in a restaurant. Two regular planned activities are: a Saturday morning pastry cafe, and a Monday and Tuesday night dinner service by various chefs. On occasion the first floor could be used by third parties to host events. . . . [but] such a use is not intended as the predominant use."

Before they gutted the vacant, foreclosed former furniture store, Murray and her architect, Jean Dufresne, worked with the buildings department's Green Permit program to secure the necessary approvals for its rehab. "We did that very early on," Dufresne says. "Zina explained the scope of her business, and that hasn't changed from day one. We all—Brad [Roback], Sophie [Martinez], Erik [Olsen], Zina and I—agreed it was a restaurant." At press time Roback and Olsen, who are no longer in the department, hadn't responded to requests for comment, and Martinez, the current Green Permit projects administrator, had declined. [UPDATE: After we went to press Olsen called back, but said he didn't remember specifics of the project.]

The zoning department signed off on the construction plans twice—once preliminarily, in March 2008, and once on the finished plans, in January 2009. A March 2008 e-mail from Roback confirmed that the business as described in correspondence with Dufresne and Murray should be classified as a restaurant, or more broadly, a "retail food establishment," and that with less than 4,000 square feet of dining space it was exempt from any requirement to provide off-street parking. A written description sent to Roback makes note of a dining room for "Private Events [to] seat up to 70."

According to a chronology provided by Murray's license expediter, Jenifer Godfrey, in June 2009 she met with Florence Hardy of the Department of Business Affairs and then-city general counsel Gregory Steadman to discuss the business model. Based on their recommendations, she applied for a retail food license on July 1 and, shortly after that, a liquor license and public place of amusement (PPA) license.

The PPA isn't necessary for the sorts of events Murray's hosted so far because they've been for fewer than 100 people and/or there was no door charge. But "the PPA gives you a very broad operating platform," she says. "It's a way to maximize the kinds of opportunities for what creative culinary people can do in the space." She'd need a PPA, for instance, if a group wanted to host a charity fund-raiser, or if she wanted to host a beer tasting and charge a $5 cover.

Logan Square Kitchen's retail food license was issued last August, and the first client fired up the ovens on September 1, 2009. That, says Murray, "was when the wheels came off."

The city has a vested interest in ensuring that the activity taking place at a given business location matches the activity on record. When a field inspector came out to Logan Square Kitchen in September, she didn't like what she saw. Efrat Stein, spokesperson for the Department of Business Affairs and Consumer Protection, says "the business activity provided on [Murray's] application did not match up with what the inspector found."

The architectural drawings stamped by the city in 2008 include an array of round tables in the event space. When the inspector came out, the tables were in the basement there were no tables in the space.

Logan Square Kitchen wasn't a restaurant, the department decided. It was a banquet hall, and as such was required to provide parking. This zoning rule, says Stein, is designed to accommodate the convergence of large numbers of people on an area at a given time; a restaurant, she says out, has "a flow of traffic over a given period of time." Murray says she's gotten different figures from different people in the zoning department, but it seems Logan Square Kitchen, capacity 70, has to provide anywhere from four to 15 parking spots (city code says 10 percent, which would be seven spots). Revolution Brewing, down the street, with a capacity of 150 at any given time? No parking required.

Revolution owner Josh Deth—who has a master's in urban planning and is the former head of the Logan Square chamber of commerce—explained in an e-mail that before he started the building-permit process, he got the zoning on his parcel changed to a classification called C1-5. "In this zoning classification, restaurants under 20,000 square feet do not need to provide parking," he wrote, describing it as "a creative solution to the parking issue that I discovered because I'm an urban planning geek."

"For the record," he added, "I think the city's parking requirements hurt pedestrian-friendly neighborhoods like Logan Square by making it harder to repurpose all our old buildings."

Murray's application for a liquor license was approved in October 2009—contingent on her securing a PPA licenseparking. Her application for a PPA license was rejected: until she secured parking, she was SOL.

Since then she's met with numerous city representatives, pleading with them to reclassify her business as a restaurant. So far, it hasn't happened. She's worked Milwaukee Avenue up and down, looking for a lot to rent to no avail. There's no space to add parking on her property: after she determined she wouldn't need parking, the building was designed lot line to lot line.

At a meeting in October 2009 with Steadman and business affairs assistant director Alethea Cotton, says Murray, "I thought that Steadman asked a lot of good questions and seemed to be a fair-minded guy. He said, 'OK, well, if you are willing to sign an affidavit that says you are going to operate your business as you've described it, I don't have a problem with you.' . . ." The affidavit, which Murray provided, "says my primary function is a shared-use kitchen, and the events space is an accessory that subsidizes the kitchen, so that rents are accessible for people. But day in, day out, the kitchen is what's active."

Meanwhile, she's paying liability premiums for a liquor license she doesn't have, and a mortgage and utilities on a space she says she's been unable to aggressively market to clients because between her own zoning issues and the larger, ongoing battle over shared-use kitchens, "I've just had a first year of being tied up in bureaucratic knots."

"She's doing something no one quite knows how to categorize," says her architect, Dufresne. The zoning code is old, he points out, and as new business models evolve, the city has to scramble to adapt. As an example from outside the world of food, he cites the case of children's play spaces like Gymboree and the Little Gym, which are neither day care centers nor gymnasiums. John Edel's plans for a vertical farm and aquaponics facility in Back of the Yards, which Mike Sula wrote about for the Reader in August, are another example: currently the agricultural uses Edel has in mind are not allowed within city limits, and he's been working with the city to try and adapt the zoning code.

"You could have thousands of business categories in the code," Dufresne says, "but at a certain point you have to distill it down. It's really about figuring out which of several categories you are closest to and then doing what you need to do to fit into it—and the closest category for us was 'restaurant.'"

In their preliminary conversations with the city in 2008, he says, the question of classifying Logan Square Kitchen as a banquet hall never came up. "Not once."

In 2000, after 16 years in advertising, Murray was flattened by what she describes as a "multiple systems collapse." She was diagnosed with Graves' Disease—an autoimmune disorder that affects the thyroid—as well as sinusitis, allergies, and a host of other chronic ailments and spent the next few years running the gauntlet of the medical profession. But she didn't start to get better, she says, until she abandoned traditional medicine in favor of a holistic, lifestyle-based cure.

She hired a nutritionist and went through a detox program that included a raw-foods diet and juice fast. Since then she's drastically revamped her diet, cutting out most animal protein and almost all processed foods. It was extreme, but she says it worked. "I got sick, and then I got better," she says, "and then I looked around and said, 'What do I need in my neighborhood to stay well in my neighborhood?"

In 2006 she was working part-time in Rey Colon's office, doing communications, when she came across an request for proposals from the city seeking ideas to develop the property that's now home to the MegaMall—the discount indoor market at Milwaukee and Sacramento that the city had recently closed for code violations. That same day, she says, she saw Jeanne Gang's drawing of the Aqua Tower on the cover of the Reader. "I loved her approach and her attitudes about buildings and I just thought, 'I want to work with that person.'"

She quit Colon's office and hired Studio Gang Architects to develop plans for a 39,000-square-foot, LEED-certified indoor food market along the lines of Cleveland's West Side Market. But that project, dubbed the Logan Square Market, foundered on the shoals of neighborhood politics. The MegaMall reopened after one dark year, and though a 2007 fire shut down part of it, it's still in operation. The market proposal remains in limbo, though Murray says that if the right location came up she'd love to revive it.

Out of this effort, however, was born the idea for Logan Square Kitchen.

"Logan Square Kitchen was a really innovative idea that took on a lot of risk just due to what it was," says Murray. "And its business model has a lot of moving parts to make it sustainable." Without a liquor license, she says, the venue is less attractive—caterers and others looking to host events would have to secure their own liability insurance and licensing, which is expensive and time consuming. As a result, she says, she's barely breaking even. For much of this year, it was her husband's job as a commodities trader that kept the gas on.

"Our life savings are just getting bled out," she says.

People I spoke with at the city put the onus on Murray. "What we look at is what you have told us, and if you told us you were building a restaurant then we go and look and see if you actually did that," says Department of Buildings spokesman Bill McCaffrey. If she changed her business plan, he went on, it's really a business affairs issue, not a buildings issue.

"All I can speak to is the zoning," says zoning department spokesman Pete Strazzabosco. "The space and the proposed uses are consistent with use as a banquet hall. It's for special events, it's rented out, it's for large groups of people arriving at the same time, and so it has a parking requirement."

"We haven't changed our business model, or our design of the building," says Murray. "We kept our word, we did what we said we would do, and we fully disclosed it every step of the way. All we want to do is get the determination that we got from zoning—twice—to be reinstated so that we can operate and not go out of business."

Says Dufresne, "Had the [field inspector] seen those tables in place, we wouldn't be talking right now."

"What turned me on to Logan Square Kitchen was how green the space was," says Stephanie Izard. "How the lights turn on when you walk into a room and all that. I thought it was really impressive how much thought went into creating it."

Cooking on the fly, she added, she's worked in many less-than-optimal kitchens. "Having a space like this available, where you have a commercial kitchen and a beautiful empty space you can do anything you want with, is pretty sweet. . . . The space is so gorgeous—you should be able to use it for all sorts of special events."

"There's a big demand for services like this in the neighborhood," says Josh Deth, who's hoping to open an events space in the space above Revolution Brewing next spring. (Thanks to his zoning classification, he says, that won't require parking either.) "And I'm just saying, I thought there was a big demand for a brewpub . . . and there is. You just have to be willing to speak up and stick your neck out—Zina should be rewarded for doing that, for giving the community want it wants and supporting other entrepreneurs."

As I was talking with Murray one morning last month, two well-dressed men poked their heads in the door.

"What is this?" one said, looking around. "This is beautiful!" Murray hopped up to give them an impromptu tour.

"That happens all the time," she said, after sending them off loaded down with informational pamphlets. "The idea of the kitchen really resonates with everybody."

The same day as the LEED celebration, Murray's attorney filed a request to take the parking question before the zoning board of appeals. That, says Murray, would at least get them out of City Hall. They're hoping to get on the November docket.

"When I looked at building this place and I looked at all the risk and all the things that could go wrong, it never, ever occurred to me that the city would be my greatest problem," says Murray. "I thought, 'the City of Chicago's going to love this business. It's green, it helps the economy, it helps the environment—it's a local, long-term person investing in where they live.' How could it get any prettier than that?"

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