The Pekoe Sip House café at the University of Colorado Boulder closed in August after the university didn’t grant the café a new lease, a decision Pekoe owners said CU handled poorly and may result in their entire business shutting down.

Pekoe has been selling coffee, tea and food on the CU Boulder campus since 2009. Boulder business owners Jeff Rommel and Alisha Mason took ownership of Pekoe in 2020, obtaining the CU Boulder café and a location in Boulder.

According to email correspondence, CU Boulder told Rommel on July 17 that Pekoe would not be closing at the end of the month. But, on July 31, the day the lease expired, CU Boulder told Rommel that Pekoe would not get a new lease and had to vacate the space.

Rommel said the decision came as a shock. The CU Boulder café was the most successful location, and without it, Pekoe might not be able to keep its Boulder location,1225 Alpine Ave, alive due to high rent prices and debt they accrued during the pandemic.

“We don’t know how we’re going to survive financially,” Mason said.

Rommel said the entire matter was “handled atrociously” by CU Boulder.

“It’s the way it was handled, the brutality of it and the senseless non-caring,” Rommel said. “There was no reason. It’s not like we were delinquent. It’s not like we were not paying our rent. It wasn’t like we were putting out bad product and people hated us and we were a problem child or anything. We were completely the opposite of all of those things.”

Pekoe was located in a café space at the ATLAS Institute, 1125 18th St, a building at CU Boulder that houses creative technology degree programs including labs, classrooms and study spaces.

“ATLAS made a business decision to enter into an agreement with an alternative vendor to operate in the space following the expiration of Pekoe’s lease,” CU Boulder spokesperson Nicole Mueksch wrote in an email.

“CU Boulder strictly adhered to the lease parameters in the case of Pekoe, and is reviewing opportunities for refinement of its practices to ensure clear vendor expectations and communication,” Mueksch wrote. “At the same time, the university expects all vendors to understand the terms and conditions of their respective contracts.”

Timeline

Rommel provided the Daily Camera with emails between him and CU Boulder officials regarding the lease.

Nick Feathers, a real estate specialist for CU Boulder, emailed Rommel on July 15 saying that the ATLAS “building has informed us that they would like to pursue other café options for the space” and asked if Pekoe would like to be considered. Rommel responded yes, and asked to know what was going on.

Sara Preston, finance and accounting manager at the ATLAS Institute, sent Rommel an email on July 17.

“… Terminating the lease as of 7/31 is not what any of us want,” Preston wrote. “Please tell Ann, etc that Pekoe will not be closing at the end of the month.”

Rommel said he sent multiple emails in the weeks following asking questions about the lease and what might happen, to which he got no response until July 31, the day the lease expired.

“We are writing to inform you that after careful consideration, the University and ATLAS have decided not to renew the lease for Pekoe’s space in the Roser ATLAS Center,” an email from CU Boulder’s Real Estate Services read. “The lease expires today, 7/31/24, and after today, Pekoe is no longer permitted to operate the ATLAS café. Pekoe will have until 8/15/24 to vacate the café space in ATLAS.”

CU Boulder Real Estate Services manages 13 properties on the main and east campuses. It provides oversight on leases and other real estate contracts.

On Aug. 1, the day after Real Estate Services notified Pekoe, Rommel and Mason laid off their staff of 14 students. Some of those students now work for the new tenant.

On Aug. 5, Rommel received another email from Real Estate Services informing him Pekoe actually had until Aug. 31 to vacate, not Aug. 15.

“Pekoe is otherwise on notice that the University intends to lease this space to another party and its failure to timely vacate may be construed as willful interference with those arrangements,” the email read.

Mueksch said Real Estate Services has updated their lease procedures which will be posted on its website soon.

“Real Estate Services has updated their procedures for café vendors on campus and communicated those updates to our vendors,” Mueksch wrote. “They will be posted to the Real Estate Services website.”

The procedures include guidelines for drafting the lease, lease management, lease renewals and termination procedures.

Finances

CU Boulder senior and former Pekoe employee Emma Groenevelt said she’s had many conversations with students and CU Boulder employees who are upset about its absence.

Helena Fox-Mills, also a student and former employee, said Pekoe was popular and well-liked on campus.

“Basically everyone who came in were regulars,” Fox-Mills said, adding, “Even though it was hundreds of people, it was familiar faces every day.”

Fox-Mills, while working on homework near the location after it closed, noticed people kept walking in toward the café, looking sad and walking out. If you’re a customer, she said, you could tell it was a successful business so there was a lot of confusion about why it was gone.

“I think it was kind of a shock to everyone,” she said.

Pekoe’s CU Boulder café was seeing improved financial numbers each year, Rommel said, and the café was serving 500 to 600 students, faculty and staff daily.

Rommel said he tried to explain to CU Boulder officials that the decision to close their café on campus would devastate Pekoe financially.

“They don’t realize what we did financially to try to get ready for the semester, for the year.” he said, adding, “When you take away something with that much impact financially on your goals every year, it’s a hard thing to recover from. It really is.”

Mueksch said CU Boulder is committed to working with vendors and supporting those vendors’ successes.

“In the case of Pekoe, CU Boulder and ATLAS remained flexible as business operations fluctuated throughout the COVID-19 pandemic and renewed the vendor contract for three years afterwards,” she wrote. “ATLAS remained patient even when rent wasn’t always paid in a timely manner.”

Rommel said Pekoe always paid rent on time, but in the beginning, there were issues with the addresses they were told to mail the checks. Later, he said, Pekoe directly gave the checks to someone at CU Boulder and the checks would be held for months at a time without being cashed.

Groenevelt said the new tenant for the café space came to Pekoe before the lease expired. The new tenant, she said, told Pekoe’s manager that she wanted to hire the staff, and everyone was confused because nobody at Pekoe had been told a new tenant was taking over the space.

“I was definitely upset and distressed,” Groenevelt said, adding, “It was really short notice and I felt for Jeff and Alisha. That was a huge boom to their business and the way that it happened felt very violating to them and lacked respect for their business.”

Fox-Mills said she loved working at Pekoe and that it had great leadership in Mason and Rommel.

“I was really sad because I worked there for so long and it was a huge part of my life at school,” she said. “It was a nice family there.”

Mason wrote an open letter to CU Boulder and created a GoFundMe to raise money for the business.

“I’m just crushed. I’ve been through a lot in my life but I’m just trying to find how to keep going because this is all I have and every day is just a struggle,” Mason said. “This is everything, and I just lost my faith in humanity. How can people be this cruel and not care? We haven’t done anything wrong.”

Rommel said the new tenant in the café space is friends with a faculty member in the ATLAS Institute, and he believes that’s why Pekoe is gone.

“It’s something I don’t think should be pushed under the rug and moved on with,” Rommel said. “I’ve been doing business a long time in my life and this is the first time I’ve ever worked so hard to build something up to just, on a nepotism call, have it all taken away in a matter of weeks.”

Mueksch said CU Boulder was considering multiple vendors for the café space.

“An ATLAS faculty member recommended several vendors who submitted proposals, including Fen’s Café,” she said. “That faculty member did not serve on the vendor decision committee.”

Rommel said losing the CU Boulder location was “a death punch in the face.” He, Mason and one other employee are working from 7 a.m. to 7 p.m. six days a week to keep the Boulder location running, as they figure out how to move forward.

“We don’t know what our future holds right now,” he said.