Argentine fast-food restaurant proposal under discussion

The Argentine fast-food restaurant proposal returned to discussion at Monday night’s Unified Government Economic Development and Finance Committee meeting.

The proposal has been under discussion for about two-and-a-half years at the UG level. But it now seems that something – a development agreement – could be forthcoming at the Oct. 29 UG meeting. No vote was taken at the Oct. 1 committee meeting.

UG Commissioner Ann Brandau Murguia, who represents the Argentine area in the 3rd District, participated in the discussion, but this time from the development side of the project, not in her commissioner role. She said she was there to present information, and said this is the fifth informational meeting on it. She said she wanted a development agreement to be presented at the meeting.

She told the commission that she has resigned as executive director from the Argentine Neighborhood Development Association effective Dec. 1 of this year. ANDA had sent some funding to the Argentine Betterment Corp. for this fast-food project. She added she did not receive any financial benefit from the project, but she would have to recuse herself from voting.

Several residents attended the meeting and spoke in favor of the project, including Duane Beth, Henry Sandate and Therese Gardner.

Murguia asked a series of questions to UG Administrator Doug Bach, including questions about why this project didn’t get anywhere for more than two years. The $1.96 million project has a federal grant of about $600,000, and the project is seeking a UG contribution of $400,000.

Murguia told Bach she thought that he should present a development agreement to the UG Commission, with his recommendation, and let the commission decide on it.

Bach said the gap funding from the UG had been controversial when the topic was discussed earlier, and had delayed the project.

“Here we are again, for our fifth informational session, on a very small project, in one of our most impoverished areas in our county, and it was all because we didn’t have a policy around gap funding, and yet we just approved an almost $7 million grant to build a grocery store downtown,” Murguia said. She said she didn’t remember anyone asking questions about a grant policy concerning the downtown grocery contribution, yet there were many commissioner questions about the Argentine project’s $400,000.

Bach said they look at projects individually, and they moved forward with the grocery store project downtown after receiving commission approval. The UG contribution to the grocery store project is about $5.7 million, he said.

He said he had been discussing gap funding policy before the Argentine proposal first was discussed, the project was proposed, then the commission asked him about a policy. After some discussion, the decision was that every project would be looked at individually and evaluated, then they would determine whether it would be funded.

One of the changes made to the Argentine proposal was that Dunkin’ Donuts has dropped out, not wanting to wait, and the proposal is now smaller than the original, according to Murguia. Now the federal grant is estimated at $600,000 instead of the original $1.2 million.

As described by Jon Stephens, UG economic development director, the project’s changes include a 4,000-square-foot Wendy’s-Pizza Hut facility. The developer will get a $967,000 private loan, and the federal grant and UG contribution would be used as closing costs. Sales tax and property tax payments would be used to fund the loan retirement, according to Stephens.

The project would include a 1 percent sales tax add-on as part of a community improvement district during 22 years; a TIF district using revenues over 20 years; dedication of local sales tax revenue back to the project for a 20-year term; the federal grant of $600,000; and the $400,000 economic development project contribution from the UG.

One of the changes made to the proposal was to direct the sales tax back to the project, according to Bach. He said the UG has done this on a small scale before, with the Happy Foods store on Leavenworth Road. He said it would operate the same way as tax-increment financing, except they would have to administer it themselves, which was a concern of his.

Murguia said the $600,000 federal grant, which she sought for the project, and the contributions of developers and lawyers, represents an $800,000 investment in the project. The land for the project was highway easement donated to the UG for the project by former Gov. Sam Brownback, she said, and maintenance by volunteers should be counted as in-kind donations.

Murguia said two of three outstanding issues between the developers and Bach have now been agreed upon.

“I’m confused on how we had two-and-a-half years to resolve these issues and we still can’t get them in writing,” Murguia said. “I get a feeling our staff doesn’t like this project, and therefore doesn’t want to bring it forward.”

She said there could be some commissioners who don’t want to see this project happen. But she said she believes the role of the administrator is to collect deals, package them and bring them to the commission with a recommendation, and let the commission make the decision on whether they are a good deal.

“I don’t think it is our administrator’s job to decide what is a good deal before he signs a development agreement. I believe that’s the commission’s job. If that’s not the commission’s job to make the decision on the final deal, then I don’t know why we’re all here tonight, or why we’re ever here,” she said.

Murguia and others estimated the restaurant project would create around 20 jobs. She said it is not a health grant, but a jobs creation grant for some of the lowest income people in the county. The grant requires a federal auditing team to visit Argentine annually and review that the grant criteria is met, she said. The same process is in effect for the Save-a-Lot grant in Argentine, and the auditors have not found any inappropriate use of funds there, she said.

“I believe as elected officials, we’re elected to do what the people want us to do,” she said. “We work for them.”

She said the UG’s survey contained questions about the Argentine fast-food restaurant, and 74.7 percent of the residents county-wide were in support of it, with 100 percent of the District 3 residents in support of it.

Bach did not put the development agreement on the committee’s agenda for Monday. He said there was no TIF cap, the UG was not consistent with minority and women-owned business requirements, and they were checking to see if the provision about sales tax was legal. It appears they now have worked through these items, he said. It will now will be brought forward at the committee meeting Oct. 29.

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