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Panera lets people pay what they can

Restaurant helps those in need, but students take advantage
by: CHRISTOPHER ONSTOTT With cash in hand, Cheri Hyde orders lunch at the Hollywood Panera before placing cash in the donation box. This location is one of three nonprofit Panera Cares cafes in the country asking customers to pay what they can afford.

Odds are slim that Pat Tippett and Jennifer would be eating lunch this Monday afternoon at the same restaurant, a few feet away from each other. But they are.

North Portland resident Tippett is having soup with friend Cheri Hyde. Jennifer, who asked that her last name not be used, is getting a much needed break from the downtown women's warming shelter, where she lives, and a cup of soup and turkey sandwich for a dollar.

Tippett paid full price and an extra 60 cents for her meal.

The women are among the dozens of customers at the lively Panera Cares café in Hollywood. The nearly full restaurant is part of an experiment by the national Panera chain of bakeries. In look and in menu, this café and two others nationally are indistinguishable from the hundreds of Paneras around the country. The food is the same, the low-key ambiance just as inviting.

But at Panera Cares, customers don't pay a set price for their meals. Instead, they decide how much, if anything, they wish to pay as a donation. Just to make sure nobody feels pressured, customers do not make cash payments at the register, but instead drop their money in a donation box.

The idea here, and at the Panera Cares cafés in St. Louis and Detroit, is to create a community café that can serve those who can't afford a restaurant meal by getting the customers who can to pay a little extra. Panera says it will keep these three restaurants open as long as they are self-sustaining.

The café is a refuge for 60-year-old Jennifer, never homeless until she lost her job at Portland State University in September and her home two months ago. Most of her meals of late have been at free soup kitchens, where she says she has to practically guard her food.

Since discovering the café, Jennifer has been coming in once a week. One especially cold afternoon, she sat with her back to the fireplace in what she calls 'total luxury.' When she can, she pays a dollar for her meal. When she can't, she works an hour, per the café's policy, helping clean up, as payment for her meal.

Adding a little extra

Jennifer is well-dressed, and the people around her probably think she is just as well off as Tippett and Hyde, a fact that adds to her comfort.

'Here, it's like a restaurant,' she says. 'You don't know who has paid and who hasn't, so that's a good thing.'

For her part, Tippett says that when she came into the café she didn't realize it had been transformed into its new, nonprofit model. Previously it had been run as a standard Panera café. Next time, she says, she will add 20 percent to the suggested price of her meal - what she would have tipped for service.

Irvington resident Carl von Rohr came in for a bowl of potato soup and a cup of coffee and paid an extra dollar over the suggested donation price (which represents the old retail price).

'I'm willing to give this concept a try,' von Rohr says. 'You walk (outside) and there are a number of people asking for money and you never know what they're going to do with it. You put in the extra money here and you know they're feeding people with basically healthy food.'

The critical question, von Rohr acknowledges, is whether people are putting in a little extra and how many people are paying less than cost. He wonders if the two will balance out, allowing the café to stay open.

Von Rohr guesses that the café is taking in 95 percent of the old retail revenue.

'I would assume most people around here are like me, that they would feel that conscience,' he says.

At a table against a back wall Simone Willis and Timothy Kelly, two Portland Community College students with not a lot of money between them, are enjoying their potato soup and orange juice and a broccoli cheddar bread bowl with iced green tea.

Kelly says when the café was a traditional Panera restaurant he would come in occasionally. Since it adopted the 'pay what you want' model, he comes in more often, taking MAX from his downtown apartment almost every day.

'I love the food,' Kelly says, adding that this is probably the one healthy meal he eats regularly.

Kelly says he pays what he can, but is not looking for free food. Today the suggested donation for their meal was $16, and the couple paid $12.

'I don't think there are any other restaurants where you can say, 'I'll pay part of it,' ' Kelly says.

David Milholland, president of the Oregon Cultural Heritage Commission, has taken a loaf of bread to go and paid a dollar less than retail.

'I'm quite aware that I didn't pay full price,' Milholland says. 'I don't think I ripped the system off by doing it one time.'

Milholland says someday when he's feeling flush, he will likely put that extra dollar back in.

Neighborhood resident Milholland calls the Panera concept 'a noble experiment,' especially for a large corporation. He hopes it succeeds. But he's not sure.

'It's a pretty loony thing to do,' he says.

Thomas Doyle is bussing tables and sweeping up. Doyle, 19, is a Vancouver resident who works at a standard Panera there, for pay, and comes to the Hollywood nonprofit Panera on his days off.

He volunteers for an hour, and eats.

'For some reason something just draws me down here to help out,' Doyle says.

Ready for the student rush

The café has been busy all afternoon, but past 3 p.m. it gets crowded as students from nearby Grant High School arrive. As many as 25 or 30 descend on the café for drinks and snacks. Few pay full price, many opting to donate a dollar or two for tabs that can run as much as $8 or $9 retail.

Staff at the restaurant prepare themselves, from the cashiers who take credit cards to the greeter near the entryway who explains the café's concept to newcomers. The question of whether the Panera Cares experiment is going to succeed has met its biggest challenge.

According to Kate Anonacci, Panera Bread's national spokeswoman, the chain's nonprofit cafe in St. Louis, which opened in May 2010, takes in about 80 percent to 85 percent of retail, serving close to 4,000 customers a week. At that rate, the café's revenue exceeds its costs. The surplus income funds a job training program for local youth.

The second nonprofit Panera opened in Detroit last November with similar sustainable results.

Portland being Portland, the Hollywood Panera is bringing in more customers who are paying more than retail than the cafés in St. Louis and Detroit, according to General Manager Michelle Singler.

But the Hollywood Panera, which opened Jan. 16, is serving more people who cannot or do not pay than the St. Louis and Detroit cafes. The bulk of those people, says Singler, are not homeless, but high school kids.

Overall, receipts at the Hollywood Panera are about 65 percent of retail, much lower than in Detroit or St. Louis.

Singler has talked to administrators at Grant about the situation. Customers who have overheard kids bragging about the sandwich they bought for 10 cents wrote to the high school. E-mails have gone out to Grant families.

Singler and her staff are searching for a solution, looking for the right words the greeter can offer the kids to help them understand what the café is about, and how what they do affects other customers, especially those in need of meals. But, the general manager says, part of the idea behind the nonprofit Panera is to treat everyone equally. And that includes kids.

'You don't want to assume someone is homeless or assume someone can afford to pay extra. We really can't judge,' she says.

Also, Singler says it would be a mistake to judge the Hollywood Panera by its 65 percent of retail revenue.

'I don't think it's a failure that we're in the 60s,' she says. 'It's not a failure, it's a success.'

It's also a challenge. From Panera's Boston corporate offices Antonacci says, 'We're saying, 'OK, Portland, Hollywood community, you want us to stay here and view us as an asset to your community. You have to step up and do the right thing. And the right thing for each person is different.' '