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Dethroned (Part 3): Decatur says Steel City Pops treated like other local companies

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Dethroned (Part 3): Decatur says Steel City Pops treated like other local companies

Steel City Pops' production kitchen and store in downtown Decatur. Photo by Dan Whisenhunt
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A Decaturish investigation that included a review of more than 400 public records and numerous interviews showed that the city of Decatur actively promoted one popsicle company – Steel City Pops – over its Atlanta-based rival, King of Pops. This is the third part of a three-part series examining the city’s role in promoting Steel City Pops.

Other stories in this series:

Dethroned (Part 1): Behind Decatur’s push to ‘kick King of Pops off the Square’

Dethroned (Part 2): King of Pops lost festival business while Decatur promoted Steel City Pops

Decatur officials say they go the extra mile for local businesses and that Steel City Pops is but one of many examples.

That’s what the city says it was doing when it gave Steel City Pops the rights to vend on the Decatur Square while blocking King of Pops from that spot. Decatur’s efforts on behalf of Steel City Pops also included asking festivals to select the company as a vendor

“My concern is taking basically one side of a string of emails and making an inference from those that we have worked for one vendor,” Assistant City Manager Lyn Menne said, responding to what Decaturish uncovered in a records request. “We do this for all of our businesses.”

The city’s policy is to favor local businesses, Menne says. A Decaturish investigation revealed that policy saying the city will favor local businesses was never put in writing.

Records reveal that Steel City Pops building is owned by a member of the city’s Development Authority. City officials and the property owner say this had no bearing on the city’s actions on behalf of Steel City Pops.

Steel City Pops, which is based in Birmingham, put its Atlanta production kitchen and retail store in a building off Church Street behind City Hall, near Raging Burrito and Victory Sandwich Bar.

For years, the spot was slated to be a new restaurant, Big Boss Chinese, but those plans never materialized. Steel City opened its doors in late 2017, selling pops out of its new 3,000 Square foot production facility.

Steel City Pops declined comment to for this story.

Brick and mortar

The building itself is owned by Fisher Paty, a member of the Downtown and Decatur Development Authority boards. He was a member of the board when Steel City Pops opened.

Image produced by Dan Whisenhunt

 

The Downtown Development Authority and the Decatur Development Authority focus on economic development in the city of Decatur.

Menne, who is paid by the city, staffs both boards.

Board members are required to have business interest in the city, City Manager Andrea Arnold noted.

As assistant city manager in charge of Community and Economic Development, Menne was involved in many of the city’s decisions related to Steel City Pops. Records reveal that she also receives a financial benefit from the DDA.

The DDA is funded by city property taxes. Menne’s annual $135,616 salary is paid by the city, not the DDA. However, the DDA does contribute to Menne’s retirement through an arrangement that exists at the DDA’s discretion that can be discontinued at any time.

Arnold explained why the DDA contributes to Menne’s retirement.

“Lyn Menne was hired by the DDA in 1983,” Arnold said. “DDA did not provide a retirement benefit at that time. In 1996, DDA created a 401 defined benefit program and began contributing 6 percent of Lyn Menne’s salary into the plan. In 1999, Ms. Menne became a city of Decatur employee and began participating in the city of Decatur’s retirement plan and the DDA’s contribution to the 401-plan ceased. The DDA contribution was reinstated by the DDA Board in 2014 to make up for the 13 years during which there was no retirement benefit provided.”

Catherine Lee, who previously worked downtown development manager for the city of Decatur, was involved in many of the discussions about Steel City and King of Pops. When she worked at the city, she was paid by the DDA, Arnold said. Shirley Baylis, the city’s Downtown Program Manager, is the other city official involved with many of the discussions about Steel City Pops. She is paid by the city, Arnold said. When Lee was employed by the DDA, she reported to Menne and Baylis reports to her now, Menne said.

Lee did not return messages seeking comment for this story.

The emails show Paty introduced Steel City to Menne. Jack Roberson, with Steel City, emailed Menne in March of 2017.

“I received your contact information from our landlord, Fisher Paty, and he said you would be a great contact to have in Decatur,” he wrote. “Would you be available in the coming weeks to meet with us to learn more about our business and connect us with other leaders in Decatur?”

Menne replied.

“Hi Jack: Fisher told us you were coming and we couldn’t be more excited,” Menne said. “We are thrilled that you selected downtown Decatur and can’t wait for you to join our downtown Decatur family. I’ve copied Catherine Lee, our downtown development manager. She can work with you to find a date that works for all of us. We will be happy to introduce you and get you plugged in to our retail and restaurant group and the Decatur Business Association.”

Menne said Paty’s position on the DDA was not a factor in her actions regarding Steel City Pops and King of Pops.

“There were emails to and from Fisher, but at no time did he pressure me, Catherine or Shirley on this matter or on any other matter for that matter,” Menne said. “To imply that we acted inappropriately because he serves on the DDA board implies unethical behavior that did not occur.

“I have never felt threatened by a city commissioner, DDA board member or property owner in my 36 years of service. … A review of emails from me or any members of my department would illustrate hundreds of examples of ways we have supported, advocated and responded to a wide variety of local businesses and local business property owners as well. That is our fundamental mission.”

In a statement, Paty agreed with Menne’s assessment.

Paty said he, “did not, in any capacity, whether directly or indirectly, instruct Catherine Lee, Shirley Baylis, Evelyn Menne, or any other city official for the city of Decatur …to help his tenant with respect to the Vendor Cart Pilot Program.”

Parking complaints

The city has dealt with complaints about parking in recent years, with some businesses saying a lack of parking caused them to leave town.

When it came to Steel City Pops’ parking situation, the emails show the city tried to help the company.

In October 2017, Lee emailed parking management company SP+ to discuss giving a designated spot to the new business.

She mentioned that Steel City Pops asked for a designated spot and learned it would cost $700 a month.

“I know that lot is in high demand, but that seems really high,” Lee wrote. “Is there any way to give them a discount? They’re not a full-service restaurant like Victory and Cakes & Ale and don’t have the same kinds of money margins as restaurants that serve alcohol.”

Jason Spoeth with SP+ replied there was nothing he could do.

“We have contractual obligations to the site tenants that preclude us from being able to designate any further reserved spaces in the lot,” he wrote. “Otherwise, I’d love to help. I told Fisher even if we were able to, which we can’t, it would be really expensive, which is where that number came from.”

Spoeth did not return a message seeking comment for this story.

In emails, Menne mentioned that the city wanted to have King of Pops relocate to Decatur, but the company decided against it.

Steven Carse, cofounder of King of Pops, said they searched around for a new headquarters and decided to stay close to home.

“We spent a few years looking for a new headquarters,” Carse said. “We ended up purchasing a building less than a mile from where we started. It is in Old Fourth Ward.”

The company’s address in Old Fourth Ward is 552 Decatur Street.

Mixed reviews

Menne said that the city’s actions on behalf of Steel City Pops illustrate how the city advocates for all local businesses.

The local business community had mixed opinions about how much the city has helped them.

In May 2017, Rebecca Hadaway – who owned Splash of Olive at the time – emailed Menne about the upcoming Book Festival, asking if there was any way her company would have a presence there. She asked for permission to place signs on the Square advertising her business. The Book Festival would include olive oil vendors from out of town, she noted.

Menne emailed Daren Wang, the Executive Director of the Book Festival at the time, and said she’d rather give Splash of Olive a booth.

“I am open to any suggestion and totally understand that we have to be careful not to open up a pandora’s box for all local business requests,” Menne wrote to Wang.

In a recent interview, Hadaway said she thought the city treated her fairly and said Baylis was particularly responsive to her concerns.

“I think they were helpful. They weren’t unhelpful to me,” Hadaway said. “I don’t think they went way out of their way. They invited me to the wine festival when we first opened, which was very nice.”

Robin DeVos, who owned Cookin’ Up a Storm in Decatur and closed the business in December, said the city wasn’t responsive to her concerns.

“As far as helping, I really can’t say that there was a whole lot of anything really offered to me,” DeVos said.

She recalled requesting a 15-minute parking sign for her business and waiting months to receive it.

“It took me six months to get a parking place,” DeVos said. “And I was told so many different things. I had to be so persistent. Finally, one day when I pulled up, they were putting the sign up. If I weren’t so persistent, I wouldn’t have gotten it.”

Michael Lo, co-owner of the Taiyo Ramen in downtown Decatur and Son of a Bear restaurant in Oakhurst, said the city is more involved than any other city he’s dealt with.

“I do think the downtown Decatur economic development team is very hands on, very involved in trying to promote local businesses and trying to help them in any way they can,” Lo said.

Elissa Pichulik, whose family owns several buildings in Decatur, agreed that the city is responsive to her requests.

“I think that the city of Decatur is one of the more progressive cities that we work with,” she said. “They do try to help [our] tenants.”

Jenny Levison, owner of Souper Jenny restaurant which recently closed its Decatur location, said that was not her experience.

“No one from the city reached out and asked if they could help us in any way as a small business,” Levison said.

Stacy Gunther, owner of Butter & Cream, said she feels like the Decatur Business Association has been helpful to her.

“I think a lot of times the DBA has put us in ads and things, the ‘Come to Decatur’ ads which I found very beneficial,” she said.

What local looks like

Hans Utz, the former deputy Chief Operating Officer for the city of Atlanta who occasionally writes for Decaturish, said the DDA’s contribution to Menne’s retirement, in addition to the lack of a formal process and policy for favoring local businesses, raises conflict of interest questions.

“Is the DDA contribution to Lyn’s retirement made voluntarily, meaning they could choose to end it? That would worry me, because it puts Lyn in a compromised position,” Utz said. “Does she feel empowered to stand up to the DDA if she needs to? It doesn’t matter whether the DDA tried to influence the outcome. Even the appearance of conflict should be avoided.”

Scott Amey, general counsel for the nonpartisan watchdog group Project on Government Oversight, said the building being owned by a member of the DDA raises questions about whether the city is being objective here.

“I do think it raises impartiality questions, because you do have some people that are tied to the city government that have an interest,” he said.

William Perry, with Georgia Ethics Watchdogs, said, “The whole thing just stinks to high Heaven.”

“It definitely all sounds a little too cozy for my liking,” Perry said.

Perry said he had no issue with the city promoting local businesses.

In his view, King of Pops is local.

“I don’t think Decatur can completely thrive on only businesses in Decatur,” Perry said. “It’s not like you’re talking about one from California. You’re talking about one down the street.”

Experts in economic development also weighed in about what the city is doing.

Joseph Parilla, a fellow with the Metropolitan Policy Program at the Brookings Institution, said cities today are under intense pressure to localize wealth creation. He said there’s precedent for city policies that favor local companies, but cities must have “very clear rules.”

“The key to what I’m describing is a policy that has to be passed. It’s oftentimes debated and it’s on the books so it’s on the record about how the city is going to favor certain kinds of companies over others,” he said.

Peter Roberts, a professor of organization and management at Emory University’s Goizueta Business School, said any policy about favoring local businesses needs to be more robust than just limiting opportunities to companies with brick and mortar locations in the city. The city should consider whether a company’s workforce is made up of residents and whether its sourcing benefits other local businesses.

“When one is talking about denying something, you can make the case that the rules for exclusion should be clearer,” Roberts said. “If you’re not going to allow anything that’s not 100 percent from Decatur, that means a few restaurants have to go.”

Great lengths

After the news about the new vending rules first broke, Decatur resident Wardell Castles sent an email to City Commissioners questioning the city’s decision.

Commissioners appeared to take the controversy in stride. Commissioner Kelly Walsh sent an email to her fellow commissioners saying she didn’t know who made the decision regarding Steel City Pops and said, “I hadn’t thought twice about it myself.” She said she hadn’t eaten at King of Pops since “fiasco” involving the company in 2017. She shared a link to a warning letter from the FDA that year that documents violations at the King of Pop’s manufacturing plant in South Carolina.

Mayor Patti Garrett forwarded Walsh’s email to Menne and said, “Thought you might like to see this. 😊”

Castles said in a recent interview he still questions the city’s actions.

“The real question is this: is it legal, what the city did? Whether it’s morally wrong or right to me is irrelevant,” Castles said. “Can they do what they did? Is what they did legal? I can’t answer that.”

Nancy Wall, a Decatur resident, called the city’s actions regarding the popsicle companies “shady.”

“It just smells fishy, the way it was handled,” Wall said. “Maybe it’s because it’s just a bunch of local people running a city and it’s gotten outside of their capacity to govern.”

Decatur resident Heather Gerdes said the city’s decision to remove King of Pops from the Square never made sense to her and said the city was being unfair to the company.

“If they will do this to a popsicle cart, who else are they willing to edge out and for what reason? Whatever policy they’re citing, it seems like it’s being arbitrarily applied, if there’s one at all,” Gerdes said. “This stinks. It really stinks on all levels. If there were a policy in place and it were applied this way, it stinks. But there’s more to it.  … It isn’t what I would expect, especially from the city of Decatur. This is backwoods Georgia kind of behavior. Not the city of Decatur.”

While Menne and other officials have agreed to develop a formal policy specifying a preference for local vendors, they maintain they did the right thing by supporting Steel City.

“As hard as it may be to believe, we genuinely love this city and our commercial districts as well as our Decatur business family,” Menne said. “We go to great lengths to find ways to make business districts attractive and fun and also work hard to support local businesses that have invested in our community.”

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