City Council to Vote on Loan to Save Las Manitas

From the city charter (Article IV):

§ 7. POWER OF RECALL.

The people of the city reserve the power to recall any member of the council and may exercise such power by filing with the city clerk a petition, signed by qualified voters of the city equal in number to at least ten (10) percent of the qualified voters of the city, demanding the removal of a councilmember. The petition shall be signed and verified in the manner required for an initiative petition, shall contain a general statement of the grounds for which the removal is sought, and one of the signers of each petition paper shall make an affidavit that the statements therein made are true.

How progressive. These con artists aren't elected with 10% of the qualified voters, but that's what's required to petition for recall.

OTOH, if we got the signature of every small business owner not getting 6 figure city handouts, that would put the recall on the ballot.

I'm with you on the recall. Winn, Dunkerley, Martinez, Kim and McCracken should go. If anyone wants to take the lead on this I'll volunteer to help.

Time to dig out the charter and research the recall process (do we have that here?). I don't really give a damn that this money is coming from a special shakedown fund (kinda like that other convention center shakedown fund), it is public money, and shouldn't be doled out to private companies on the basis of their owners' skills at sucking up to pols.

Maybe the 5 voting for this grift, I mean gift, should forego their (newly increased) salaries until the "forgiveable" part of the loan is covered.

Katherine Gregor over at the Chronic weighs in with a list of reasons why the loan is a good idea:

http://www.austinchronicle.com/gyrobase/News/?oid=oid%3A481803

The Statesman has a few reasons why it isn't:

http://www.statesman.com/opinion/content/editorial/stories/06/06/6lasmanitas_edit.html

http://www.statesman.com/news/content/news/stories/local/06/07/7lasmanitas.html

I'm starting to agree with Austin Contrarian (and Council Members Cole and Leffingwell) that the loan itself is a good idea, but that making it forgivable doesn't make much sense. Give Las Manitas the money to move and let them pay it back when they can, but don't just hand them a post-dated check for $750k:

http://austinzoning.typepad.com/austincontrarian/2007/06/las_manitas_bla.html#comments

This is a ridiculous, inappropriate use of city funds! Las Manitas is a private business -- with owners who clearly aren't hurting (how many people do you know who can afford to own a building on Congress, just as the Perez sisters do on the same block from their leased location).

This city has libraries with reduced hours and a multi-million dollar budget shortfall -- they are not acting as good stewards of public dollars.

Tell the city council this is a bad move. Send an e-mail to the mayor and council members through the city's website at cityofaustin(dot)org.

And, tell the Las Manitas ladies to reject this deal -- email them through their site at savelasmanitas(dot)org.

I have a problem with the city council giving Las Manitas a loan at all. Could they borrow $750k in the private sector on the merits of their business alone (i.e. free cash flow)? Hell to the no. This is a bad loan. Screw the city council.

You stupid little people, don't you know that the Granola Mafia OWNS the City of Austin? Oy vey...

Free markets are important, but I do believe in a certain amount of governmental intervention in order to preserve certain cultural institutions and artifacts that competition would otherwise run out of town. So, I have no problem with the City giving Las Manitas the loan. BUT, the restaurant should be expected to pay back the loan just as if it were given by a bank. That's fair.

I wonder why the City had to go the extra mile and make the loan partially forgivable? They couldn't just give Las Manitas the loan, straight up? I guess, in the end, no harm is really done here and Las Manitas is saved, but still...this sets a dangerous precedent.

Ryan,

The outstanding balance that will be forgiven in 5 years is $636,746.49 (outstanding principal balance of 20 year, 6% loan after 60 months).

I don't like it, but I wouldn't mind as much if the city was only guaranteeing and/or making the loan (with the real estate as collateral). Giving the Perez sisters the better part (5/8) of a million dollars just so Brewster can get a breakfast taco is criminal.

Wes,

I agree. This seems like a great way to get the developers who are moving in big chains to help keep an very small Austin business open. The whole loan isn't going to be forgiven - they will pay for 5 years - and they have to stay in business and employee at least 15 people at all times.

I can't believe that the city council is considering wasting $750k on a fucking taco shack. I doubt that the entire business is worth that amount.

I think most of you are missing the importance of the owners on Austin as much as the importance of Las Manitas itself. Just like the reason why a woman received hundreds of thousands of dollars for spilling coffee on herself - it didn't have anything to do with her being burned, as much as it did to make a statement to big business. Frome readin everyone's responses, it appears that you'd rather just have chain stores and anyone who can afford to run anyone else out to take over the downtown area. There's enough of that going on already.

Edward,

I agree with your sentiments but it is a little apples and oranges. That is $90,000 not collected on one of the largest events in our city that has a big $38 million dollar impact. I wonder how many breakfast tacos Las Manita's would have to sell to make that kind of annual impact in our city. In addition SXSW brings in a whole lot of tourist/outsider money where the money lost at Las Manitas, will probably just be spent at another restaurant down the street. I guess those buildings aren't historical, but I am more upset about loosing the old buildings than I am Las Manitas, especially since they have another place to live.

There are by far better Mexican food restaurants

in Austin. I could care less if that place stays open. I would much rather see the money help out Escuelita de Alma or Tesoro's.

Wow! I just love that Las Manitas can get money to move half a block to a building that they already own. I just hope that they can still make crap-tacular 'food'. That was sarcasm by the way.

As much as I love Las Manitas, I don't see how this is fair to anyone but Las Manitas. At the same time I do not understand why the city can't say no to condo and hotel developers.

This "forgivable loan" doesn't help Tesoro's or Escuelita de Alma, so I agree it smacks of favoritism. Las M. owns that building (where La Pena is now) so they should pay to relocate like any other private for-profit business.

I *love* Las Manitas and eat lunch there probably 1ce per week. On a selfish level I'm glad it's going to reopen close by, but I have to agree that this is an insane measure by the City.

"Paying a private for-profit business with money that either belongs to the taxpayers or to the companies that afforded the fund is sick."

I couldn't agree more:

http://www.austinist.com/archives/2007/03/12/city_approves_fee_waivers_for_sxsw.php

Anon,

Ha. Thanks. I've walked by there about 12 times in the past month and not ONCE did a realize it was a different hotel brand!

Did the city give the Alamo Drafthouse a forgivable loan when they were forced to move from their existing location? This seems like a bad precedent and reeks of favoritism. I'm sure the other restaurant owners downtown don't appreciate their competition getting a government handout while they struggle to survive.

What's the difference between Las Manitas and every other business in Austin that closes or relocates as a result of redevelopment?

Those other businesses don't get "forgivable" loans, ie free money.

Why is that?

Politicians don't eat their breakfast tacos there.

If I were any small business owner in Austin, I'd be beside myself right now. Or in line to apply for a "business retention and enhancement" loan.

already went away. the cap marriott on 11th is now a sheraton.

Are they planning to close one of the 2 other existing downtown Marriotts when they open this one?

They just built the Courtyard Marriott, so I'm guessing that stays.

Does the Capital Marriott on 11th go away and become something else/demolished?

To me this is one of the most morally reprehensible actions any government could possibly do. Paying a private for-profit business with money that either belongs to the taxpayers or to the companies that afforded the fund is sick. How about the City Council use the "forgivable loan", that term is a joke, to start paying off the gargantuan budget shortfall (-$27.5mil) we discovered last month. What we have downtown is a bunch of small-time fat cats in the City Council who need to be reminded where their cheese comes from.