IOWA CITY — After confirming earlier this month plans to replace the Java House in four locations across its sprawling campus, the University of Iowa Hospitals and Clinics on Wednesday unveiled the Iowa City-based Bread Garden Market as its soon-to-be successor.
Bread Garden, owned by local businessman Jim Mondanaro, will begin serving UIHC patients and visitors in four kiosk locations Nov. 1. It beat out six other bidders, including locally owned and operated Java House, which started serving customers in the hospital system 14 years ago.
Other vendors that vied for the contract include Capanna Coffee & Gelato, which has a location in North Liberty; Press Coffee Company in Coralville; and Scooter’s Coffee, which has a franchise in Cedar Rapids.
Java House owner Tara Cronbaugh, who grew her business from a class project as a UI student in 1993 to one with nine locations across the community, told The Gazette she was disappointed the university opted to replace her business — even after she offered to share more of its revenue.
Java House, per UIHC request, recently opened a fourth location in its new Stead Family Children’s Hospital — in time for a November 2016 open house — only to watch it sit idle without customers for months when the hospital’s opening was delayed.
Cronbaugh said her business took a hit on equipment it bought for that fourth UIHC site — equipment it’s stuck with now that the university has asked it to leave.
But Tom Moore — a spokesman for UIHC, which has been going through fiscal challenges of its own with shifting health care headwinds and changes in federal law — told The Gazette that organization leadership is responsible for ensuring it’s “operating in the most cost-efficient manner possible.”
“From time to time, they review the arrangements with our vendors that are currently in place,” Moore said. “In some cases, they begin a public competitive bid process to determine if a different vendor could offer a more cost-effective solution for our patients, visitors, faculty and staff.”
According to the two-year UIHC contract with Bread Garden Market, the enterprise will pay more than $58,000 in annual rent and share 18 percent of any revenue up to $1 million, 19 percent of revenue up to $2 million, 20 percent of revenue up to $3 million, and 22 percent of revenue above that amount.
Two of its four locations, including the general hospital location, will be closed on the weekends, according to the contract.
The previous Java House contract, expiring at the end of October, paid more than $50,000 in annual rent and shared 15 percent of any revenue up to $1 million, 16 percent of revenue up to $1.5 million, and 17 percent of revenue over that. Cronbaugh said her company upped its sharing proposal as part of this rebidding process, and she raised doubts any outside firm could match Java House sales that took more than a decade to achieve.
In a message to UIHC staff Wednesday, hospital executives said Bread Garden has “built an unrivaled reputation for providing high-quality, homemade food and beverages.”
It first opened in downtown Iowa City in 1995 near the corner of Clinton and Burlington streets before moving to the Pedestrian Mall and adding a grocery concept in 2008.
“The review team unanimously recommended accepting Bread Garden Market bid,” according to the staff communication.
One aspect of the Bread Garden bid that set it apart, according to officials, was its “vision for expanding their service and providing a complete range of menu options for patients, visitors and staff.” UIHC also is piloting use of a new automatic single-serve coffee machine in its Compass Express convenient store near the Fountain Dining Room. That equipment is produced by Starbucks.
Java House will continue operating its locations in the UI Pappajohn Biomedical Discovery Building on the health sciences campus and in the Iowa Memorial Union.
But closing its four locations at UIHC will nearly half its nine total locations and affect 35 employees — although Cronbaugh said she's looking to accommodate them elsewhere and through attrition. Java House also is expanding in The Eastern Iowa Airport when its new terminal opens in March.
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