A pioneering small-business incubator in Chicago is stuck in red tape. The incubator is a shared kitchen that’s housed dozens of fledgling companies. The facility is state-of-the-art, and the city says it’s sanitary. But, last week, health officials shut the kitchen down over a licensing issue and threw out hundreds of pounds of food. On Monday, inspectors returned and dumped even more. Now some tenants are wondering whether they’d be better off relocating to the suburbs. We report from our West Side bureau.

Alexis Leverenz is watching a couple Chicago health inspectors work their way through stacks of food from a walk-in cooler.

LEVERENZ: Some dough from Hey Sugar, some butter cream from Foiled Cupcakes, some eggs from Bangerang Bake Shop…

To Leverenz’s disgust, the inspectors begin tossing everything in the garbage, including aluminum trays filled with 200 servings of beef ravioli.

Ambi: Trays opened.

LEVERENZ: The inspectors are using my knives, my bleach and my garbage bags to destroy all of our clients’ food.

Leverenz launched Kitchen Chicago five years ago. It’s a cooking facility for small businesses ranging from caterers to bakers to cooking teachers. The tenants share everything from sinks to pastry tables. In the beginning, Leverenz says, the city encouraged her.

LEVERENZ: And then our first client went down to get her business license and they declined her and said, ‘You can’t have more than one license per location.’ I went downtown and I tried to talk to somebody at Health and they said it wasn’t a health issue; it’s a licensing issue. I went to Licensing and they said, ‘It’s not a licensing issue; that’s a health and zoning issue.’ I went to Zoning, who then turned me back to Health.

Last fall, Leverenz moved the kitchen to the city’s West Town area. She got a license for the new facility and assumed it would cover her 11 current tenants. That assumption has proven wrong.

Ambi: Freezer opens.

LEVERENZ: We’re in the walk-in freezer. And this is where Flora had her frozen fruit purees that were destroyed on Thursday.

Leverenz is talking about Flora Lazar. She’s a candymaker who applied for her own license. Now Lazar is wondering whether applying put her in the city’s crosshairs. She’s confused because she passed her inspection but still lost her purees.

LAZAR: My specific question regards fruit that was delivered here directly from a farm that remains in the cooler…

Lazar gets some answers from Frances Guichard, the food protection director at the Chicago Department of the Public Health.

GUICHARD: Basically, just looking at your food-safety practices and where you’re getting your product from, you just always want to make sure you always have your receipts and maintain those receipts.

Guichard says the paperwork would help her department track down the source of any food that caused illness.

But Leverenz says forcing each of her tenants to apply for a $660 license and unleashing the inspectors each time could backfire. Many of the tenants started their business at home. Leverenz says the red tape might drive them back underground.

LEVERENZ: I have three cats at home and a baby. And if they were to know that I was making cupcakes and selling them to you with three cats and a baby, they’d probably be upset.
MITCHELL: A baby that needs diapers changed.
LEVERENZ: Exactly.

Leverenz also worries about losing tenants to places with simpler rules. Just north of Chicago, Evanston allows its sole shared kitchen to run with a single license. Carl Caneva manages Evanston’s environmental health program.

CANEVA: We’re protecting public health by holding the owner of the establishment completely responsible for food-borne illness or any gross violations.

Chicago officials say the prospect of losing small businesses to a place like Evanston isn’t their top concern. Public health is.

Leverenz, for her part, hopes city regulators will sit down with her to figure out another way to handle shared kitchens.