Grocer may get a helping hand

Paul Sorenson, a man about town, set the tone Tuesday for county commissioners to discuss what may occur in the months ahead with G&W’s plans to build a grocery in Iola.
“I want to encourage you and others to help G&W,” Sorenson said. “I support (the store’s construction) and I hope all three of you will as well. If the store went down, it would be a real blow.”
An hour later commissioners said they would enter negotiations to help G&W overcome a $500,000 difference, announced in Monday’s Register, between what the company budgeted for the store’s construction and the initial bid.
Iola Industries will be financial partner with the county in negotiations, although limits of what the county and the economic development group might contribute were not made public. Comment on support limits occurred during two executive sessions covering 25 minutes, protected under provisions of discussing “trade secrets of a corporation.”
In open session, Commissioner Tom Williams said he was not eager to give anymore support, “unless absolutely necessary. I’m very reluctant.” He also wanted all discussions in open session, but later deferred to requests for secret consideration of how county and Iola Industries might proceed.
The county sold a parcel of land on the old Allen County Hospital site to G&W for $20,000, after it had spent between $250,000 and $300,000 to maintain the structure while efforts were made to sell or lease it, and then to have it razed and land leveled.
All three commissioners — Jerry Daniels and Jim Talkington in addition to Williams — said they had received numerous telephone calls after a story in Monday’s Register left some doubt about G&W’s path forward. That’s when the company announced the $500,000 over-budget bid for construction.
Daniels said most of his calls favored the county lending a financial hand. Talkington said his were split, about 12-to-12 on the issue of tax money being used to encourage G&W any further.
Daniels also put to rest an argument that the hospital was razed specifically for G&W. “Not true,” he said. “We were spending $125,000 a year for utilities, insurance and maintenance.”
“You tried for two years to get rid of it,” said David Toland, Thrive Allen County executive director. “It was an albatross when you finally demolished it.”
He also pointed out that G&W was in the habit of buying older stores and remodeling them, which presented a different dynamic than building from scratch as was the plan for Iola, and caught the company off-guard.
“We all know if you remodel a bathroom, by the time you’re done it’s going to cost more than you planned for,” Toland laid out. “The same was true of Eastgate (the apartment complex built on the north edge of the ACH property). It came in 35 percent over budget and had to be cut back.”
John Masterson, president of Allen Community College, mentioned similar occurrences at the college, and said construction in rural areas was notorious for costing more than expected, largely because of less competition than for metropolitan projects.
“It’s been a learning curve (in local construction costs),” Toland added. “G&W was surprised; we were surprised.”
He pointed out that to be competitive in the market for new business and industry, a community had to accept financial facts of life in the wooing process. “Chanute provided $5.1 million in incentives for Orizon (Aerostructures), and $196,000 for the travel center,” at the south edge of Chanute along U.S. 169.
Toland also cited a professional study that showed Iola shoppers and those living within four miles, which includes Gas, were spending $9.7 million a year for groceries outside of Iola. “Part of that is going to Moon’s in Humboldt, which is good, but a big chunk is leaving Allen County,” mainly to Chanute.
“I shop at G&W in Chanute and Moon’s in Humboldt and also do some in Kansas City,” Helen Ambler volunteered. “Women like choices.” Ambler said her shopping habits took her out of town after too often finding something that was at Iola’s Walmart one week wasn’t there the next, and “brands always seem to be changing. Now, I just buy Band-Aids and aspirin there.
Having a G&W store here will have “massive economic impact,” Toland said. “It will bring 35 jobs and reverse the trend” that has seen stores closing downtown, and may be a catalyst for other development. “We have 12 new apartments on the site and G&W is the last piece of the puzzle.”
After listening to comments, Williams said, “I have no problem in giving some help. They (G&W) have us over a barrel,” with Iola Industries having invested in the apartments in part as a result of G&W announcing a new store.
“My first reaction was, ‘Hell no,’” Talkington said, with concern about spending tax dollars for a private business, and whether that will be precedent-setting “if other businesses want to come to town. But G&W is in the catbird seat.”
Jim Gilpin of Community National Bank reiterated that G&W abandoning its business model of remodeling older stores with a new one in Iola “was a leap of faith” on its part. “We have to be visionary.” The store “will increase sales tax (collections) and will be paying property taxes in 10 years. Look at Russell Stover, it’s paying $500,000 a year in property and personal property taxes.”
“People aren’t lined up to come to rural areas and I see this as a springboard” for economic development in Allen County, said Bill Maness, Thrive’s new economic development director. “The residual effect could be profound. Anytime you talk development, the word grocery store comes up.”