I sent a note to the Mayor and all all Austin City Council Members regarding the Las Manitas loan. I’m including their unedited response below. I will post other responses as I get them. Your comments are welcome.
Sent: Tuesday, June 05, 2007 5:51 PM
To: CityPio, Pio; McCracken, Brewster; Kim, Jennifer; Martinez, Mike [Council Member]; Leffingwell, Lee; Dunkerley, Betty; Wynn, Will; Cole, Sheryl
Subject: Submitted from City Council web site – Las Manitas
Date/Time Submitted: 1750 hours
Subject: Las Manitas
I am concerned about the city basically gifting $750,000 to Las Manitas. I have run my own business within the city limits for over 18 years. I have had to compete on an even footing with all other businesses. I lease my space, and trust me my lease costs are tremendous. I have moved my business multiple times in the last few years as landlords have changed, buildings have been repurposed or a landlord has decided to use his/her building for some other purpose. I have always done so at my cost. Can you please explain the rationale for gifting that much money to a restaurant? Restaraunts do not provide high paying jobs; there is no hope that we will ever recover the money based on additional tax base. Just a few months ago the city council and the city manager were telling us that there is a $24 million dollar deficit in the budget. There are roads within the city limits that need to be fixed. There are improvements that need to be made to our schools. Wouldn’t that be a better use of our money?
As much as I like their food, this is just a restaurant; this is not a vital community service like a hospital, a school, or a road. I strongly oppose this gift.
From : Dunkerley, Betty <Betty.Dunkerley@ci.austin.tx.us>
Sent : Wednesday, June 6, 2007 4:41 PM
Subject : RE: Submitted from City Council web site – Las Manitas
The money used for the program is coming from some of the unbudgeted fees paid by the owners of the very tall new buildings downtown. These funds will continue to accumulate from other high rise buildings as well as the interest and principal payments from this loan so that other retail businesses on Congress and 6th Street who meet the criteria can use the funds. If you are a retail business in the 6th and Congress area, you may be eligible. This program resulted from studies done in this area that showed the need for assistance to increase and maintain retail, since many buildings in the area are historic and very difficult and expensive to update. We have enough bars in the area. Additionally, the City will have a first lien on this property and if owners do not meet strict monthly guidelines, the loan will not be forgiven. bd
Jennifer Kim’s Response – Recieved 6/18/2007
Thank you for your recent letter expressing your opposition to the loan for Las Manitas.
I understand your frustration regarding this action, and I want to explain to you my thought process in reaching my decision. I believe that small business is the backbone of Austin, and that we, as a city, must take action to preserve the small businesses that are a vital part of our community. As a previous small business owner, I understand some of the challenges faced by these businesses.
While I do understand that citizen’s opinions about this loan vary widely, I believe that it is important for the City to help small businesses to remain on Congress Avenue. The Council created a revolving loan fund for small businesses. The funding for this loan program is from private developer’s fees from projects on Congress Avenue, including the Marriott hotel, and not from taxpayer dollars. The repayments from the Las Manitas loan will total $269,000 over the next five years, paid in monthly installments of $4500 – that amount is not forgivable. I specifically pushed for the repayments and to ensure that accumulated funds would be accessible to other small businesses in the future.
Another consideration was the alley access that the owners of Las Manitas had, but that was needed by the developers of the Marriott hotel. Without the City stepping in to help save Las Manitas, the builders of the Marriott may not have gotten the alley right-of-way that they need to develop the hotel. The hotel will help Austin to win bigger and more profitable conventions. This generates jobs, more sales tax and more hotel tax for arts funding. I was looking for a win-win, and I believe this compromise accomplishes that.
Your feedback is important to me and helps me to serve you better as your council member. Please do not hesitate to contact me or my office if I can be of further assistance.
Jennifer L. Kim
Austin City Council Member, Place 3