The operator of a local fitness club isn’t impressed with the City of St. Albert’s plan to operate a Starbucks Coffee location at Servus Credit Union Place.
Sturgeon Valley Athletic Club, located a few blocks away in Campbell Business Park, offers complimentary Starbucks coffee to its patrons.
Adding complimentary coffee was part of the club’s strategy to reposition itself when Servus Place opened “so that we could better distinguish our private health club from the public recreation centre,” said general manager Christine Rasmussen.
“Now that Servus Place has decided that they also want to have Starbucks, it does diminish the cachet of having Starbucks at our location,” she said.
Earlier this week, city council voted in favour of putting $280,000 from city reserves toward a Starbucks license, equipment and renovations to the kiosk outside the aquatic centre at Servus Place. The arrangement will see the city own the location and operate it according to Starbucks’ standards.
The city will hire two full-time employees as well as casual staff.
Financials prepared by the city, with guidance from Starbucks officials, suggest the site will generate net revenue of $90,000 a year, which will be applied to the facility’s annual deficit — typically in the $700,000 range.
Couns. Malcolm Parker and Cam MacKay opposed the move, saying it was inappropriate for a city to take on a business risk and compete with the private sector.
Tim Hortons owner Chad Jenkins, who is building a new location just a block south of the leisure centre, said it’s strange for a municipality to be getting into the coffee shop business, but he isn’t concerned about losing customers.
“Starbucks is a little bit higher end, a little more higher prices. It’s two different segments of the population … so it’s not necessarily direct competition,” he said. “I’m not overly worried.”
Mayor Nolan Crouse said he’s received several negative emails from business people about council’s decision and is now questioning his own vote in favour of the venture.
He voted in favour of the Starbucks move because of the financial benefits for Servus Place, even though he’s philosophically uncomfortable with the idea of the city getting into business, he said.
“When I voted, I let the money trump the philosophical point,” he said. “I’m questioning my decision.”
He has asked for more information about the contract and will see on Monday whether he wants to bring the issue back to council, he said.
Servus Place patron John Lemaire, a former realtor, thought the Starbucks location would probably do OK, but it’s not guaranteed.
“People think, just because it’s a franchise, it’s going to make money. That’s not the case,” he said.
“If it doesn’t make a profit … are they going to raise taxes again?” he wondered.
Patron Nadine Trenchard of Morinville said she doesn’t see the need for fancy coffee.
“What’s there is fine, I think,” she said.
