EDC to Buy Downtown Shop, Renovate it for Restaurant Space

The La Grange Economic Development Corporation (EDC) approved a contract to purchase the old D&G Business Machines property at 256 W. Colorado St.

The EDC plans to remodel the property on the northwest corner of the Courthouse Square to house one or possibly two restaurants. Once remodeled, the EDC plans to lease the property to tenants, according to City Manager Jack Thompson.

The property itself will cost the EDC $389,000 plus closing costs. La Grange City Council approved a budget amendment for the EDC Monday night, May 13. Thompson said he will bring another budget amendment to the Council at a later date for renovation costs.

The development marks a shift in how the EDC uses its tax dollars, which come from a special sales tax collected within the City Limits. Traditionally, the EDC has assisted the City with infrastructure projects and provided funding to assist business startups and expansion.

Many years ago the EDC purchased property on Reynolds St. to develop an industrial park. Some of those spaces are leased to private businesses. Nonprofits such as the AMEN Food Pantry and Second Chance Emporium also utilize those properties.

Former La Grange Mayor Janet Moerbe, who currently serves on the EDC, told the Record that this is the first time she can recall the EDC purchasing and renovating property to lease to a restaurant.

“This came about really quickly,” said Thompson.

“The building came up for sale. I’ve been eyeballing some opportunities on the Square. One of the biggest things I’ve heard since I got here as City Manager is the requests for more restaurants and retail. The Square offers a unique opportunity to bring in some good restaurants … We want to beef up our quality of life from a shopping and eating perspective, and also ramp up our sales tax.”

Thompson said the property includes two separate buildings: one at 256 W. Colorado and another around the corner at 226 N. Main St.

“We could turn that into two restaurants,” Thompson said. “We definitely want a restaurant at the one on Colorado. The one on North Main could be a restaurant or a retail space. We’re going to aggressively market those opportunities.”

The EDC would be the landlord, Thompson said.

“This is an economic development corporation project, which is much different than the City,” Thompson said. “An economic development corporation, by law, can buy and sell properties like any private business. And it’s a different pot of money. People might wonder, why is the City spending money on that? Well, that’s what an economic development corporation funds can go for.”

Thompson said the goal behind the project is to increase sales tax revenue for the City and EDC.

“But beyond that, the cry for restaurants has been so strong,” he said. “This is a way for us to answer that call.”

The Record asked Thompson whether it’s a proper role for municipal government to pick and chose what kind of businesses should occupy the commercial property in town.

“That’s a very good question,” Thompson said. “For the most part, I’m (in favor) of letting the private sector do it. But sometimes, the private sector is not willing to take the risk yet. They’re thinking, ‘I don’t know if that’s something I want to do or can do.’ So sometimes, we have to be the trailblazer. We have to show that, yes, a profitable business can come in here and do this and be successful. And then, what happens is there is enough of a feeling of success that private sector can take over. At that point in time, you step aside. That’s how I view these things.”

“With restaurants, there’s so much upfront cost,” he added. “The private sector sometimes looks at things very much short-term … They may work with a restaurant or they may not. We need to prove that this market can support restaurants, because frankly, we don’t have that many. As a city, we can be a little more patient. We don’t have to make the return on investment for buying the property so much, because we get residual benefits like sales tax. We get a robust business that’s doing well. Once it proves it can make it, that opens up other opportunities for property owners who are trying to sell.”

Thompson said he wants La Grange to compete with nearby towns like Columbus and Smithville that have a more robust market for dining and nightlife.

Thompson said the EDC does not plan to own the property in perpetuity.

“Once it’s up and running, we’re out,” he said. “It’s not meant to be a long-term play on our part. This is meant to kickstart and show the market is viable, it will work, and the private sector will take over at that point. Eventually, we’ll probably sell the building and be completely divested from it.”

Mystery Event Space?

In other business at Monday’s meeting, the Council met for about an hour in closed executive session to “discuss and/or consider the acquisition of real property.” Thompson said this item was unrelated to the Colorado St. purchase. He said he could not disclose the location of the property under consideration. He described it as a “public event space.” Upon return to open session, the Council voted unanimously to authorize Thompson to negotiate for the purchase of the property. Thompson said details about this property purchase would be made at a later date.