Slow and Low defaults on taxpayer guaranteed loans, bank seizes $425,000 of city of Elk Grove's deposits
Elk Grove city manager Jason Behrmann discussing the default of a $500,000 taxpayer-guaranteed loan to a failed Old Town Elk Grove restaura...
https://www.elkgrovenews.net/2025/04/slow-and-low-defaults-on-taxpayer.html
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| Elk Grove city manager Jason Behrmann discussing the default of a $500,000 taxpayer-guaranteed loan to a failed Old Town Elk Grove restaurant. | |
To those who monitored the ballyhooed Slow and Low restaurant saga in Old Town Elk Grove, its December 31 closure was no surprise. Beleaguered by poor reviews and questionable products, the restaurant that was the cornerstone of Mayor Bobbie Singh-Allen's plan to transform the special planning area into a tourist destination comparable to San Diego's Gaslamp Quarter closed after only six months.
Singh-Allen, her city council, and Elk Grove's economic development director, Darrell Doan, provided most of the hyperbole about the barbeque restaurant. The hype and confidence came from their collective decision to provide Slow and Low restauranteur David Hargis with a $500,000 Elk Grove taxpayer loan guarantee.
At tonight's Elk Grove City Council meeting, city manager Jason Behrmann announced that Hargis had defaulted on the loan. Consequently, River City Bank has seized $425,000 of Elk Grove taxpayer money on deposit there.
Before Behrmann gave his report, Elk Grove city government watchdog Lynn Wheat spoke during public comment on non-agenda items. In her comments, Wheat noted that Behrmann had responded on April 8 to an email she sent inquiring about the loan's status.
After thanking Behrmann for his response, Wheat pivoted from the Hargis loan debacle and said it should remind the city of the risk it is taking with constructing the $300 million Elk Grove Sacramento Zoo. Wheat noted that the city claims that the zoo operator, Sacramento Zoological Society, has raised over $17 million, but in actuality, just over $2 million in cash of their $50 million commitment has been transferred to the city.
"When we discuss the zoo, I'd like to to be fully transparent," Wheat said. "So, 15 years from now, when there is a problem, the people understand where the problem began and who created it."
During his brief presentation on the seizure of taxpayer money, Behrmann, as he usually does, read his administrative report verbatim from a prepared statement. Rattled by Wheat's critique, Behrmann ad-libbed additional comments to defend the actions of the mayor, city council, and city staff that led to the seizure of taxpayers' money.
"One of the things we attempted to do with the Railroad Street was to serve as a catalyst for other activities that is happening in our historic main street," Behrmann said. "We're really proud to see the energy, vibrancy, activities that has occurred as a result of what the city has done."
Behrman noted that the city would start foreclosure proceedings on an empty riverfront parcel on Garden Highway in Sacramento County that Hargis used as collateral. Mr. Doan also indicated in previous loan guarantee presentations to Singh-Allen and the city council in June 2023 that if Mr. Hargis defaulted, the city could also seize restaurant fixtures and equipment.
Interestingly, in early March, the landlord of the Railroad Street building posted a notice to quit or pay rent on the empty restaurant's front door. That notice said Hargis owed $71,534 for "back rent, late fees, and furniture, fixtures, and equipment (FF&E)."
It is unclear whether Elk Grove is the primary or secondary beneficiary of the proceeds from the sale of the furniture, fixtures, and equipment. Behrmann did not provide a timetable of the foreclosure proceeding the city would take against Hargis.
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The City's only remaining economic development strategy is chasing the almighty sales tax dollar, and in terms of the amount of taxpayer dollars that will ultimately be sunk into Old Town--we ain't seen nuthin' yet!
Large under-the-radar real estate transactions, 'red-tagging' of buildings to facilitate demolition , and referring to 'historic' Old Town as some kind of regional historical mecca will cost us dearly in the end--unless their lobbying of Rep. Doris Matsui for 'free money' pays off, or future Rep. Singh-Allen can bring home the bacon!
The master plan for Old Town is already being reworked by the City's Innovation Czar and by the time the plan is released to the public by the end of the year--you can bet the investors will have already put their ducks in place, so save your breath during the public comment period.
Those Old Town residents who posted signs thanking the Mayor for killing the proposed homeless transitional project and "saving Old Town" are going to feel betrayed by the ultimate plan for Old Town. And that "vibrancy" the City Manager speaks of will likely be the rumble of their U-Haul trucks fleeing town. But please, buy or drink something on the way out to help support our budget ok!
As Lynn Wheat said, the $425,000 the city lost in this venture is not big in the grand scheme of things. However, it shows poor judgement on part of the mayor, city council and city staff.
Can they really be trusted on a project that will cost up to $1 billion when it is build out? If this disaster is any gauge, citizens need to need to go Dirty Harry and ask, "Do I feel lucky? Well, do ya, punk?"
Shocker! Lynn Wheat is right. . . AGAIN!
Another example of privatizing profit and socializing risk. It never pays dividends for the average person but for the wealthy, well that's a different story. Well done Madame Mayor.
Yeah, our city leaders continue to make poor decision after poor decision. Each of them waste so much tax payer revenue and yet only Lynn Wheat is there at council meetings to expose it and admonish them. We're lucky to have such a watchdog, a person that cares where our taxes go. Citizens needs to band together and protest all of these wasteful decisions, yet apathy seems to rein.
Juan: I like your analogy. Where's Dirty Harry when you need him? Eye: You're right on!
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