Iowa City's Capanna to close after failing to meet financial obligations

BY NICK HASSETT | APRIL 19, 2013 5:00 AM

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A coffee shop that has been in Iowa City since 2006 will close its doors in May, but one of the owners says he hopes to allow coffee to stay in its place.

Capanna Coffee & Gelato, 136 S. Dubuque St., is in the process of being evicted from its space in the Iowa City Public Library building after failing to meet certain financial obligations with the city, according to city documents.

“They [weren’t paying] rental payments, property tax payments, a little bit of everything,” Assistant City Attorney Eric Goers said. “They could fight the eviction if they choose; it’s entirely up to them.”

However, Mike McCain, one of the Capanna owners, said they weren’t planning on taking that route.

“There is no reason to take this to court since all parties have been working for several months together for a smooth, seamless transition out of that location where all parties [including customers] benefit,” he wrote in an email.

The library building commercial space was planned for future use of the library but is currently leased out to private businesses. The area was originally used by N.Y. Deli, which sublet half of the space to Capanna.

In 2008, the Iowa City City Council approved the assignment of the entire area to Capanna, which sublet approximately half of the commercial area to the Wedge Downtown. The Wedge now plans to take over the entire 4,580-square-foot space.

The Wedge declined to comment.

Despite its neighbor’s troubles, the Wedge kept up with its financial obligations to the city, and Goers said he wasn’t concerned about the takeover of Capanna’s business.

“We’re less worried about that,” he said. “The Wedge has been ongoing in another location and successful in the portion they’ve occupied. They’re a pre-established, proven business model.”

The Wedge also has a location at 517 S. Riverside Drive.

Goers said Capanna had until May 10 to leave the space, and that the owners expressed a desire to pay the city back.

“We’re hoping for a smooth transition earlier, May 1 ideally,” he said. “The legal procedure can be time-consuming.”

City staff members will submit two leases for approval by the City Council. The interim lease agreement will cover the space currently sublet by the Wedge until Capanna vacates its property.

The interim lease would cost the Wedge $3,345.37 per month in rent, as well as utility costs.

The following lease agreement would then cover the entire commercial space for three years.

According to the lease agreement, the Wedge intends to operate a restaurant and coffee shop in the whole space.

McCain said Capanna spoke to the Wedge about working together in “allowing coffee to stay in this location.”

The three-year lease would cost the Wedge $6,266.84 per month plus utilities.

As for Capanna, McCain said a new store wasn’t out of the picture.

“We are constantly looking at opportunity and consider all viable options,” he said.

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