Sunday, April 27, 2008
Cloud Cliff Forced to Close
By Raam Wong
Journal Northern Bureau
SANTA FE The owner of Cloud Cliff Bakery and Cafe says Santa Fe's living wage law, coupled with soaring wheat prices, has forced him to close.
A Santa Fe institution for a quarter century, Cloud Cliff will close its doors Sunday with a farewell brunch for employees, Willem Malten told the Journal last week.
Malten said Santa Fe's minimum wage law now set at $9.50 an hour has made Cloud Cliff's wholesale bread business less competitive around New Mexico and eroded his profit margin.
"I have not been able to pay the rent here for over a year," Malten, 52, said.
The loss of Cloud Cliff is likely to revive the debate over the city's landmark law, enacted nearly four years ago.
In a 2004 editorial in the Journal, Malten was among the business owners who predicted the city's economy would suffer under the wage hike.
Since then, Malten said the law has increased his operating costs, already high because of Cloud Cliff's emphasis on buying locally grown and organic produce.
Malten said the higher wages now earned by servers and busers also has left him with little money to pay for skilled employees to run the business.
Mayor David Coss responded to Malten's comments Saturday, saying he had met with Malten last year and that Malten had asked that the minimum wage not go up to $10.50 on Jan. 1, 2008, as it was slated to do.
The City Council agreed. "We reached a compromise with the business community," Coss said.
That compromise backed by union leaders, business groups and a unanimous vote of the City Council kept the wage at $9.50, while broadening the ordinance.
The law originally only applied to businesses with 25 or more workers. The compromise requires businesses of all sizes to pay the minimum wage, with yearly increases tied to inflation beginning next January.
A preliminary study released last fall found Santa Fe's minimum wage the highest in the country hadn't increased unemployment or slowed economic growth.
Malten disagrees. He said the ordinance had made his bread business less competitive around northern New Mexico. Revenue has shrunk from as much as $900,000 several years ago to between $300,000 and $400,000 today.
The "casualties" of the ordinance, he said, include jobs, investment, and, as the result of Cloud Cliff's closure, local farmers.
At first blush, Malten would appear to be an unlikely critic of the law. Over the years, Cloud Cliff has become a gathering place for liberal activists, with anti-nuke murals out front and visitors like Ralph Nader.
Malten said it's not that he doesn't support a living wage. But he said it should be implemented statewide, instead of creating an uneven playing field for Santa Fe businesses.
The state Legislature last year raised New Mexico's minimum wage to $6.50, set to increase to $7.50 in January 2009.
Malten says it was Santa Fe's well-to-do who pushed for the law, either out of a sense of guilt or self-interest. Wealthy property owners benefit from the law because workers can afford to pay higher rents, he said, while middle-class business owners are socked with the higher labor costs. "There is a very subtle class war going on," Malten said.
Coss responded: "That's his economic formulation, not mine." The mayor noted the broad coalition of labor, business and other groups backing the ordinance and agreed that the cost of wheat and other factors were likely to blame for the loss of Cloud Cliff.
"I'll miss Cloud Cliff," Coss said.
Rise and fall
Malten moved to Santa Fe in the early 1980s from San Francisco, where he had learned to bake bread at the Tassajara Buddhist monastery's bakery.
He began by selling heavy round sourdough loaves from a little bakery located in a garage behind the house of a Tibetan monk.
In 1988, Malten moved Cloud Cliff into an old concrete brick warehouse on Second Street, adding an oak floor made from recycled wood from a local gymnasium.
The new cafe, bakery and art space heralded the transformation of the neighborhood from rundown buildings and vacant lots to the hip community of lofts, artists' studios and restaurants it is today.
Malten later helped found the Northern New Mexico Organic Wheat project, a rural revitalization program for small farmers.
Today, Cloud Cliff bakes as many as 700 loaves daily, producing a sweet, yeasty smell that wafts through the neighborhood.
But the soaring price of grain in recent months has hit the cafe hard, with the cost of a 50-pound bag of organic flour increasing from $18 six months ago to $34 today, Malten said.
"This is the worst time to be in the baking business that I've ever seen," he said.
Malten said the nation needs to wake up to the food crisis roiling the world, driven by drought, increasing demand, rising energy prices and the growing biofuels industry.
"Right now there's food riots all over the world," Malten said. "Eighteen thousand children die daily from malnutrition. Twenty-eight million people on food stamps. That sounds like a loud alarm to me."
'No more resources'
Malten said he's tried to shoulder the increased costs by cutting his staff nearly in half, installing energy-saving fluorescent lights and not taking a salary since last year. But, he said, "I have no more resources to keep people at work."
Malten hinted that Cloud Cliff could endure if someone introduces a different business model that would keep the restaurant open for dinner. But a breakfast-and-lunch bakery just can't cut it in today's economy, he said.
Tell that to the lunch-time crowd who sipped coffee and nibbled on scones and blueberry muffins Friday. Malten greeted old friends at one table, while a few feet away sat one-time Green Party gubernatorial candidate David Bacon.
Customers would have to be willing to pay higher prices say, $12 for breakfast to keep the restaurant afloat, Malten said.
But the economy is faltering, he explained. People are eating out less, and the customers who once drank lattes now order coffee instead.