Council OKs loan to assist Deep Roots : News-Record.com : Greensboro & the Triad's most trusted source for local news and analysis

GREENSBORO — Deep Roots Market is one step closer to moving downtown.

On Tuesday night, the City Council approved a $100,000 loan to developer North Eugene Partners to help build a $1.95 million downtown location for the grocer.

The city will forgive the no-interest loan after 20 years if the North Eugene Street site continues to operate as a co-op grocery store.

“I am delighted that this is finally going to come to light,” Councilwoman Yvonne Johnson said. “This grocery store will do exceedingly well in this area as more people are wanting to live downtown.”

Deep Roots will create five full-time jobs when it moves to this new, 10,000-square-foot location, according to John Shoffner, the city’s economic development manager.

The loan money cannot be used to pay developers’ fees, according to the city staff.

The new store would have to be built by the end of this year.

Councilwoman Trudy Wade was the only council member to vote against the loan.

“If this is going to be such a great place for a store, we should let the market decide,” Wade said. “That’s government interfering with the free market.”

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com

katei

January 17, 2012 - 11:32 pm EST

score one for the good guys!

there are so many things bustling downtown these days. I don't think I've ever been more excited about a council decision.

squirrels will scurry come spring!

Traveler

January 17, 2012 - 11:48 pm EST

Taxpayers are giving a developer $100,000. That transactions will help a food store move from an area of town where it is the only food store to downtown, where it will be the only food store.

Robbie got his way. There will be many more "gifts" to developers.

It was a done deal from the start, decided in backdoor "small group" sessions.

Just like the ill-fated loan to Brady and Black (later noted as a loan to their corporate entity) to run their hockey team a dozen years ago, there is little assurance the taxpayers will get anything for their money.

multigrain

January 18, 2012 - 8:57 pm EST

You are exactly right about the ill-fated loan to Brady and Black. You might be interested in this article written by the N&R on March 31, 2005.

HOCKEY TEAM DEBT ON ICE - CITY STUCK GREENSBORO PROBABLY WON'T EVER COLLECT ON THE DEBT OWED BY A COMPANY FORMED BY FIVE LOCAL BUSINESSMEN.
Greensboro News & Record (NC) - Thursday, March 31, 2005
Author: MATT WILLIAMS Staff Writer
A group that tried to keep the now-defunct Greensboro General s hockey team afloat acknowledged this month that it owes taxpayers $200,000.

But neither the group's signed admission nor a court order means the city will ever collect on the debt.

The company, formed by five prominent Greensboro businessmen, promised the money as payment for the city's management of the team's daily operations. The city-run Greensboro Coliseum lost $259,187 running the minor-league franchise for the 2003-04 season.

That loss was subsidized by tax dollars.

Matt Brown, managing director of the coliseum, managed the team during the season, and coach Rick Adduono was made a city employee. The city was responsible for paying the team's expenses and collected all its revenue.

The president of the ownership group, car dealership owner Bill Black, signed a court document called a confession of judgment last month that said the group owed the money but was unable to raise the money "for reasons beyond its control."

On March 3, a state court ordered the group to pay that amount.

Deputy City Attorney Terry Wood said that despite winning the judgment, he doesn't expect the company to pay its debt. Wood said the company was already insolvent.

"I don't know that it will ever be paid," Wood said.

The ownership group, known as the Generals Brigade, was formed in 2003 by Black and four other businessmen who were former owners of the defunct Greensboro Monarchs hockey team.

According to company documents, the other investors were Don Brady, president of Brady Trane; Willard Tucker, president of Tucker Enterprises; Ken Conrad , president of Libby Hill Seafood; and Porter Thompson, president of Leads Corp .

Each was reported to have invested at least $5,000 in the company.

During the 2003-2004 season, the Generals Brigade planned to recruit additional investors to keep the financially failing team in the city.

In a letter to the city, the group said fund raising was stymied when the News & Record reported that the coliseum was running the team. The Generals Brigade then became entangled in a lawsuit brought by the team's former coach, Jeffrey Brubaker.

"Every effort was made by the Brigade to comply with its written agreement with the City of Greensboro; however, adverse publicity by the News & Record and the resulting fallout from the lawsuit filed by Jeff Brubaker prevented the Brigade from achieving its goal," the letter said.

The attorney for the ownership group, Howard Williams, declined to comment on the judgment.

Wood said the city could not legally collect the debt from any of the five owners because they are not personally liable. But if the company comes into money in the future, the city would be in a position to collect, he said.

In June, the City Council voted to stop operating the hockey team after the loss.

The team was then dissolved by the East Coast Hockey League.
Contact Matt Williams at 373-7004 or
Memo: NEWS & RECORD EXCLUSIVE
Greensboro and Rockingham editions: page B1; High Point edition: page B2.
UPDATE

So far: The city-run Greensboro Coliseum lost $259,187 managing the Greensboro Generals hockey team.

The latest: The ownership group, the Generals Brigade, acknowledged in a court filing that it owed $200,000 that would have made up much of that loss.

What's next: Lawyers for the city doubt the money will be repaid, given that the ownership group no longer has any assets.
Edition: ALL
Section: GENERAL NEWS
Page: A1
Dateline: GREENSBORO
Record Number: 0503310291
Copyright (c) 2005 Greensboro News & Record

January 18, 2012 - 12:48 am EST

Pay attention folks. This is only the beginning. This is a meeting worth watching again. Small group meetings and back room deals. Traveler, you are right - "there is little assurance the taxpayers will get anything for their money".

citywatcher

January 18, 2012 - 8:02 am EST

Its very ironic that Trudy Wade would complain about back room deals when she was a part of them with Bill Knight, Danny Thompson and Mary Rakestraw in regards to the landfill and a number of other issues. It seems that back room deals are ok as long as it involves getting your own way.

January 18, 2012 - 10:14 am EST

I agree that Knight and the conservatives made backroom deals. That was wrong. That's one of the main reasons Knight and the conservatives lost.

Backroom deals were wrong then and they are wrong now.

We should have open debate and transparency about who gets what. We need to make sure the taxpayer's interest are protected.

Robbie is a developer. Developers use OPM (other people's money). Robbie is not a banker or accountant. Bankers and accountants look at the pluses, minuses, balance sheets, etc.

fedupgso

January 18, 2012 - 10:40 am EST

Come on...this has been going on for years. For anyone to ACCUSE one person of backroom deals...check out DBS and the acting person as the City Manager-Denise and the connections with Brad Miller and their monetary back room deals and meetings. Denise worked for Brad Miller. This City has the most corrupt name in the state...capping it off with the majority of the town council that was re-elected during the police debacle that the lawyer fees keep coming in.... and the taxpayers pay for this mess. Ole Keith is into the Carolina Theatre and old movies. FACE the facts...there are plenty of vacant building in downtown GSO that someone could rejuvenate vs building and keep it historical with the old buildings. Someone is in the deal here, but we have to sit and let them do it, cause they are the judge and jury now. Come on DBS and Yvonne-have a heart and speak up-the store is expensive and an elite store-I thought you cared about the common folk...

Neo Starr

January 18, 2012 - 2:55 pm EST

I want to see a video of the meeting before the meeting.

sanders

January 18, 2012 - 5:10 am EST

if this is such a good deal/location,why didnt a harris teeter ,food lion or walmart step up? why is taxpayer money being given away?

capadodo

January 18, 2012 - 9:29 am EST

HT,FL, or Walmart would not move downtown because it is not economically feasible. They would need 40k-100k square feet for their building, plus an enormous parking lot. There is no way they would ever spend the money to be downtown. when they can go 2 miles up the road and get the same area for a third of the cost. The only feasible business model for a downtown area is a smaller 10-15k area. So, i see this as a great chance for a small local business to be able to grow and thrive. This is a win for the downtown, and the city of Greensboro!

January 18, 2012 - 10:15 am EST

Maybe, maybe not. Time will tell.

luvmylabs

January 18, 2012 - 1:10 pm EST

This is a rippoff for the actual taxpayers! Another total waste of my hard earned money stolen from me by the goobernment!

Ozymandias

January 18, 2012 - 1:34 pm EST

Ya. So, since Trader Joe's stores average between 8,000 and 12,000 sq ft, I guess maybe they just think Friendly Center is cooler than downtown.

Y'reckon?

January 18, 2012 - 5:00 pm EST

More likely there's a better chance to make more money at Friendly. Way more upper income shoppers.

InventorNC

January 18, 2012 - 10:25 pm EST

Like so many hundreds of thousands of people I left NYS because of this kind of suspect dealing. DANG!
(Our upstate Mayflower mover had not moved anyone into NYS in three years, back in 1991.)

Are the locals in the market for Deep Roots' type of expensive merchandise? Huh, huh, huh???

Will the impovrished locals walk half a mile or more to take bags of seeds and and organic foods to their apartments?

Will the rest of us brave downtown traffic to go grocery shopping? For obscure kinds of grain and never-heard-of roots and slimy stuff in cans? YEAH, RIGHT!

Kiss your and my money good bye...

luvdowntowngso

January 18, 2012 - 7:36 am EST

Get this thing built! I'm ready to go grocery shopping!

January 18, 2012 - 9:18 am EST

Give me a break. I agree-why are not the big name stores coming downtown? Because of the crime and lack of business. Go figure...they checked the facts. Who do you think that you are giving my tax dollars to a store that charges triple amount for anything-but I have seen the owners in Costco buying produce. Let's put that one down...and the poverished two blocks down the street are not going to come in and buy tomatoes at 5 bucks each-and call them "Hydroponic". What a joke. Robbie and the girl council probably can afford them. Go ahead Yvonne-we are watching you and your home on White Street-you could have had millions coming in, but you girls went ahead and caused the organic stink-perhaps Robbie and his band of merry girls could freely give the money-out of their own pockets and not the City tax dollars. Hyrdoponic-plant a garden over the White Street Landfill.

January 18, 2012 - 1:37 pm EST

Personally I like Yvonne. Robbie also. The problem I have with them is that they are too quick to give away taxpayer's money.

I know Robbie was on the council a dozen or so years ago when the Black/Brady deal went down. I think Yvonne was also. Reminds me of this deal.

Don Brady and Bill Black were majority owners of our local hockey team. The coliseum wanted a team as tenant after the Hurricans left (yes, we had a major league sports team here for one year). Brady and Black came up with the proposal that the city "lend" around $200,000 to operate the local team for a year. Brady and Black would sell the team and pay back the money. The coliseum would get the team and big revenue from people coming to the games. It was billed as a win-win, can't lose. Well, attendance was bad. The team didn't get sold. When it came time to pay the taxpayer's back Brady and Black argued that the loan was to the corporate entity (which had no money), not to them personally. I don't think any money was ever repaid. This deal has a lot of problems. Yet, it is being billed as win-win, can't lose by the same people who cost the taxpayer's $200,000 or so a decade ago.

Yvonne and Robbie are nice people personally. I wish they would learn from their past mistakes and stop being so willing to give away OPM, the taxpayer's money.

RandolphBloke

January 18, 2012 - 3:01 pm EST

You really think that's why big name stores aren't in downtown? You think it has anything at all to do with parking issues for the stores of the size they require now when built? You realize that even in the most crime free urban zones in the country the big box stores aren't typically located there due to size requirements and parking issues?

retiree

January 18, 2012 - 9:27 am EST

Amanda, why don't you do some investigation into who are the owners of this store. While you're at it, check the registered voter rolls to check their political affiliation. Could it be they are Democrats and have given campaign donations to elected officials? This is an example of the boutique thinking of this Council and if the business plan was a viable option, then why didn't they have investors instead of seeking public support? Sounds like another Solyndra to me. Also, wondering how much of a salary the owners will pay themselves now that their loan has gone through? Or bonuses?

January 18, 2012 - 9:30 am EST

That would be tough. The owners of deep roots market are democrats, and republicans. And some may have supported the hockey team movement in the past (which unfortuneately was a bust), and some may have not. Deep Root Market is a cooperative. Which means that it has lots of owners. Who would we point the finger at in this instance? I believe i heard there were over 1500 owners of the store.

record2009

January 18, 2012 - 10:00 am EST

If there are 1500 owners, then all each owner had to invest would be about 67 dollars to raise 100,000 dollars. I think that this is one where the owners could have afforded the investment and not burden the taxpayer with this.

January 18, 2012 - 10:31 pm EST

The American, capitalistic way is go to the bank. Go to friends.

Bosco

January 18, 2012 - 10:11 am EST

He asked to check the owners of the building, where the money's going. My question is, if you're building a $1.9 million building, why do you need a measly 5 and a half % from the City to make it work? Are they borrowing the rest? Do they have any equity at risk in the project?

January 18, 2012 - 10:30 am EST

As I understand it, the money is going to the deveoper. The corporate name is given, the individuals behind the corporation are not.

It's the way developers work. As I understand it, they made a first plan to develop the location for a building. They found Deep Roots to be the tenant. When they went back to the original plan, the developer realized they needed more parking. That increased the cost of the development.

They then looked around for OPM (other people's money) to cover the additional cost.

The mayor is a developer who wants to "move some dirt". Robbie believes that Greensboro needs growth. Robbie believes that government has a role to play in attracting that growth.

When the developers, Downtown Greensboro, and other influential citizens approached the City council to help, the city council was willing to give away $100,000 of the taxpayer's money.

Whether or not the project would have gone ahead without the $100,000 is debatable. Whether or not the project will provide healthy food alternatives to those of us who live downtown is debatable. Whether or not the project will give the area "poor" a healthy food alternative that they can afford is debatable.

January 18, 2012 - 1:21 pm EST

Kudos, Traveler, for reading TFA. It says ". . .the City Council approved a $100,000 loan to developer North Eugene Partners to help build a $1.95 million downtown location for the grocer."

And, FWIW: North Eugene Partners registered agent is Robert Isner. Officers are Robert Isner, Milton S Kern, and James B Staton III.

January 18, 2012 - 2:12 pm EST

Milton and the Isner's. I didn't know that. That explains a lot. Like I said, developers love to work with other people's money.

Is there an easy way to find out if the interest free, forgivable loan is to the partnership or to Milton, the Isners, and their partners?

The terms of the loan (as stated in reporting by the news-record) includes Deep Roots employing 5 people at something like $12 per hour with benefits. Deep Roots used to have a lot of volunteers who worked there in exchange for discounts on their purchases. I think it is lighly likely that Deep Roots can use volunteers and not need the 5 employees.

If something like that happens, who is responsible to the taxpayers, North Eugene Partners, or Milton, The Isners, and their partners? Real estate partnerships go bust all of the time.

Is this a repeat of the Brady/Black deal where there is no one to collect from if things go bad, or are the partners personally responsible to pay back the loan if things go bad?

January 18, 2012 - 3:36 pm EST

It would also help to know who the real estate leasing agent is for this deal. If it is Robbie's company, it would look like a serious conflict of interest to me.

In other words, The city gave developers $100,000 to help build a building. The tenant will be Deep Roots. Usually there is an agent who gets something like 3 to 4 % of the monthly rent to match tenant with owner.

To me it would not look good if the city gave developers money and in turn the developers used the mayor's firm to represent them in seeking and obtaining a tenant.

I am not saying that happened. What I am asking is who is the real estate firm who matched Deep Roots to this development?

Cal H

January 18, 2012 - 9:54 am EST

Deep Roots is an expensive store with a limited clientele. Shopping for family groceries there on a regular basis would be prohibitively costly for most of us. This is obviously not a solution to the lack of a grocery store in the downtown area. I suspect that it has much more to do with rewarding Joel Landau's political activity as a Democratic activist than meeting a public interest.

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