Local Business Leaders Wonder How Much More Taxpayer Money Will Be Spent Without Proper Due Diligence

KENNEDALE, TX, February 25, 2020 /24-7PressRelease/ — Build it and they will come may sound good, but it doesn’t usually apply to commercial and retail real estate development. “It’s great to envision a Southlake Town Center in Kennedale, but Kennedale is a city of industry, and proud of it,” according to Kennedale Alliance of Business Owners Executive Director Joe Palmer.

Palmer says, “It’s clear that whatever was intended, taxpayers have spent a lot of money on a big beautiful downtown building, and it hasn’t rented.” Kennedale embarked on the vision some years back and has been funneling money into its Economic Development Corp to buy properties in Kennedale for some years now. Almost all the holdings by the Corp are just holdings. The City of Kennedale hopes to force certain types of development by selling only to a party who will build what the city wants.

“It sounds good,” Palmer says, “but it’s terribly expensive, and the reality is that government should not be in the business of trying to change the economics and development of a city. They should influence that development with their master plan and leave the private investors to bring the money.”

At a recent zoning hearing, a local land use attorney said, “City staff members go away to their retreats and see all these fancy developments, and then come home with their vision for the city, which just isn’t practical.”

In Kennedale’s case, Palmer contends that very few of the voters believe in that vision, especially when it raises taxes and taxes infrastructure, but Kennedale’s leaders send out biased surveys, ignoring what they don’t want to hear, and they work very hard to make their personal vision for the city appear to be what the voters want. “KABO wants to make sure the city’s voters understand what is happening. We want to encourage city leaders to embrace a different, more affordable and less disruptive vision that will benefit everyone involved,” said Palmer.

Ron Sturgeon, a KABO member and a commercial real estate developer who owns the retail center behind Albertsons on Sublet at US287, says “Developers should never build a large anchor without first having tenants. It’s just not the smart way to do business.”

“My center at 287 was originally built on speculation by a group of investors who had no tenants and they lost millions when it stood vacant for years and when it was finally foreclosed,” said Sturgeon.

Kennedale’s Town Center is no different, except the taxpayers continue to prop it up with tax dollars,” said Sturgeon. “The broker for the property is offering below-market rates and still can’t get or keep tenants. Below market rents drive the value of the building. If the Kennedale Town Center were investor owned, it would have already had its value written down and already been foreclosed on unless the investor could come up with more money.”

The city has announced that it wants to build more retail and subsidize or build apartments or condos in the area to further support the town center. Millions of dollars in subsidies, tax abatements, and infrastructure improvements are being proposed, at a time when Standard and Poor’s has already warned the city that it does not have enough cash on hand and put the city’s credit rating on a watch for downgrades.

“The largely empty Town Center and misguided plans to spend more to prop it up are going to come home to roost in the form of higher taxes for Kennedale residents and the businesses in Kennedale,” said Palmer.

KABO’s members believe the economics of development should be driven by private investors, and the city should be encouraging more development and industry that fits the character of Kennedale as a city of industry. “Rather than closing business, down zoning properties to bring new supposedly more desirable types of businesses like putt putts, the city should be trying to create a business-friendly climate for the types of businesses that it does have,” said Palmer.

Palmer says, “In the southern part of the city, Kennedale city leaders have forced Kennedale’s only Fortune 500 company, LKQ, to close. They have said they intend to downzone Speed Fab Crete, which will make it non-conforming and prevent it from growing.”

Palmer says that the members of KABO want residents to consider closely the actions of councilmembers, as the May 2020 city elections draw near. Councilmembers Chris Pugh and Linda Rhodes, along with Mayor Brian Johnson, will be up for re-election.

About Kennedale Alliance of Business Owners

KABO’s mission is to give members of Kennedale’s business community and residents an advocate in dealing with the city and to keep businesses informed about issues that affect them. Anyone who owns a business in Kennedale or works for one is eligible to join. Dues are $20 annually and membership is confidential. To join or to learn more about KABO’s mission, contact Executive Director Joe Palmer at (682)-774-5167 or email [email protected]. Visit the group’s Facebook Page at https://www.facebook.com/Kennedale-Alliance-of-Business-Owners-110704046932655/.


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