GEDC talks Alcalde loan, 130-foot flagpole

GONZALES — At Monday’s regular meeting of the Gonzales Economic Development Corporation (GEDC), several action items concerned amendments to previously approved loan agreements. Mainly they dealt with changes in the scope of the business as set out by the owners, which led them back before the board to tweak their agreements.

One amendment that caught the eye of board members was from the Alcalde Hotel and Grill, which looked to restructure its loan agreement in light of decreased business at the location.

The owner had requested a six-month reprieve from paying down their GEDC loan, asking to only pay the interest on the loan for that period. It was said that although the Alcalde had been late on several previous loan payments, they were current on their note as of this month.

Board member Larry Wehde questioned why the establishment was requesting the change. Board member Dennis Nesser replied that the downturn in the oilfield industry had severely hurt occupancy at the hotel. In the meantime, the owner was trying to structure a tourism deal for home-schooled students and their families to stay at the hotel while they visit Gonzales, thus the six-month change would allow them to put money toward the experiment.

Wehde noted that the original loan agreement between the Alcalde and the GEDC stated that both the hotel and restaurant in the Alcalde had to remain open for the terms of the loan to remain valid. In addition, the Alcalde must retain 15 full-time employees. Wehde said that the restaurant has since closed and there were not 15 full-time employees on their payroll. 

“How in danger are we of the operation closing?” Wehde asked.

He said that he did not want the GEDC to get into the habit of running businesses, like they are doing for the Lynn Theatre.

Board member Tommy Cox requested that GEDC CEO Genora Young obtain a full financial report from the Alcalde Hotel and Grill so that they could see if the terms of the loan were being faithfully respected.

After wondering for a bit exactly what it would take for the business to go into default on its loan, Board President Crissy O’Neal read the original agreement, covering the requirements that the Alcalde must meet, including both the hotel and restaurant remaining open and the 15-employee benchmark. 

She said that the terms of the loan said that once the agreement had been broken by the Alcalde, the business would have 30 days to cure the default, be it by hiring the required amount of employees, re-opening part of the business or becoming current on a missed payment.

“I guess it’s time to start whipping up defaults,” said Cox.

The motion was made to grant the Alcalde Hotel and Grill the six-month amendment and the item passed with both Wehde and Cox voting against.

Members also heard a report on the proposed flagpole in Texas Heroes Square that would act as a beacon, drawing travelers off of US 183 into the downtown district.

Cox reported that the flagpole committee had met and considered two quotes for the project. The committee recommended installing a 130-foot flagpole from US Flag and Flagpole in the amount of $38,425. It would include the pole, 4,000 watts of lighting and three 30-by-60 foot flags. The flags would be the American, Texas and Come and Take It banners. Only one flag would fly at a time.

Cox said that the proposal was now awaiting final approval from the Gonzales City Council.

Board member Hector Porras asked what the maintenance would be on the completed project. Cox replied that the pole would not need maintenance once installed but the flags each would need to be replaced after 5-7 months of flying and at considerable cost. He explained that the flags could also withstand a 90-mph wind.

Nesser requested clarification that GEDC funds could be used for the flagpole project. Young said that it could if the flags and pole were used as a promotional or marketing tool for a city. A pole of this magnitude would fall under that guideline where a smaller pole would not.

The board now awaits Tuesday’s city council meeting for a final say on whether the flagpole will be flying Gonzales’ most famous flag once the traveling Vietnam Veterans Memorial and Museum comes to town March 23-26.