River City Bank seizes $425,000 of City of Elk Grove's deposits after Slow and Low defaults on loans

To those who monitored the ballyhooed Slow and Low restaurant saga in Old Town Elk Grove, its December 31 closure was no surprise. Beleaguered by poor reviews and questionable products, the restaurant that was the cornerstone of Mayor Bobbie Singh-Allen's plan to transform the special planning area into a tourist destination comparable to San Diego's Gaslamp Quarter closed after only six months.

Singh-Allen, her city council, and Elk Grove's economic development director, Darrell Doan, provided most of the hyperbole about the barbeque restaurant. The hype and confidence came from their collective decision to provide Slow and Low restauranteur David Hargis with a $500,000 Elk Grove taxpayer loan guarantee. 

At tonight's Elk Grove City Council meeting, city manager Jason Behrmann announced that Hargis had defaulted on the loan. Consequently, River City Bank has seized $425,000 of Elk Grove taxpayer money on deposit there.

Before Behrmann gave his report, Elk Grove city government watchdog Lynn Wheat spoke during public comment on non-agenda items. In her comments, Wheat noted that Behtmann had responded on April 8 to an email she sent inquiring about the loan's status. 

After thanking Behrmann for his response, Wheat pivoted from the Hargis loan debacle and said it should remind the city of the risk it is taking with constructing the $300 million Elk Grove Sacramento Zoo. Wheat noted that the city claims that the zoo operator, Sacramento Zoological Society, has raised over $17 million, but in actuality, just over $2 million in cash of their $50 million commitment has been transferred to the city.  

"When we discuss the zoo, I'd like to to be fully transparent," Wheat said. "So, 15 years from now, when there is a problem, the people understand where the problem began and who created it."

During his brief presentation on the seizure of taxpayer money, Behrmann, as he usually does, read his administrative report verbatim from a prepared statement. Rattled by Wheat's critique, Berhmann ad-libbed additional comments to defend the actions of the mayor, city council, and city staff that led to the seizure of taxpayers' money.

"One of the things we attempted to do with the Railroad Street was to serve as a catalyst for other activities that is happening in our historic main street," Behrmann said. "We're really proud to see the energy, vibrancy, activities that has occurred as a result of what the city has done." 

Berhman noted that the city would start foreclosure proceedings on an empty riverfront parcel on Garden Highway in Sacramento County that Hargis used as collateral. Mr. Doan also indicated in previous loan guarantee presentations to Singh-Allen and the city council in June 2023 that if Mr. Hargis defaulted, the city could also seize restaurant fixtures and equipment. 

Interestingly, in early March, the landlord of the Railroad Street building posted a notice to quit or pay rent on the empty restaurant's front door. That notice said Hargis owed $71,534 for "back rent, late fees, and furniture, fixtures, and equipment (FF&E)."

It is unclear whether Elk Grove is the primary or secondary beneficiary of the proceeds from the sale of the furniture, fixtures, and equipment. Behrmann did not provide a timetable of the foreclosure proceeding the city would take against Hargis.