Did San Marcos City Council Just Give Local Business Owner A Dixie Cream Sweetheart Of A Deal?

The San Marcos City Council passed a motion Tuesday to waive $11,054.78 in delinquent lease payments from 2013-2016 and reduced property rent for 2017 for a local business…

By, Melissa Jewett, Publisher

The San Marcos City Council passed a motion Tuesday to waive $11,054.78 in delinquent lease payments from 2013-2016 and reduce the property rent for 2017 for a local business.

Ruben Becerra purchased Dixie Cream Donuts from Daniel “Dan-Dan the Donut man” Anderson in 2015 and is currently running for Hays County Judge against former Hays County Commissioner, Will Conley.

According to Kaitlyn Anderson, the daughter of Daniel Anderson, former owner of Dixie Cream, she still holds the ‘Note’ for the building, equipment and Dixie Cream Donuts; Becerra is current on his financial obligations to Anderson.

“I just found out yesterday (Monday) that Mr. Becerra is in arrears with the land leases with City of San Marcos and Union Pacific. I am stunned that the city is moving forward with making a lease agreement with Miss Molina, aka Sunose & Rezo LLC. (Yogurt in Love) on a building they do not own,” said Anderson.

Ms. Anderson spoke during the Citizens Comment Period and requested that the council “table this until [she] can come to a legal agreement with Mr. Becerra regarding this issue.”

On February 16, Dixie Cream announced on its Facebook page that it would temporarily close the iconic San Marcos location while looking for a new home throughout Buda, Kyle and San Marcos.

Yogurt in Love, which was previously located on Wonder World Drive, recently announced on their Facebook Page they will be moving into the former home of Dixie Cream Donuts and is scheduled to hold a ribbon cutting May 10.

In September 2017, Becerra announced on Dixie Cream’s Facebook Page that 100 percent of Dixie Cream’s profits were going to be donated to local organizations and charities.

During Tuesday night’s City Council meeting, city council considered the following:

Agenda Item #18 “Consider approval, by motion, of the following matters pertaining to the lease of property located at 201 South LBJ (the site of the former Dixie Cream Donut Shop):

  1. Approving the acceptance of an amount in settlement of rent due under an existing lease of real property located at 201 South LBJ.
  2. Approving the termination of the existing lease
  3. Approving a new Lease Agreement of the property with Suenos & Rezo, LLC for the operation of a frozen yogurt shop and authorizing the City Manager to execute the Lease Agreement

After the agenda item was read into the record, Councilmember Jane Hughson made a motion for council to take the item into executive session for further discussion.

After three hours of deliberation, council members returned to the Dais, and all were visually upset.

Mayor John Thomaides refused to read the motion council had written in executive session; however, Council Member Melissa Derrick read it out loud for the record.

New motion

The new motion stated the following:

  • The city will waive $11,054.78 in rent from 2013-2016.
  • Becerra will be required to pay $2063.21 for 2017.
  • He will also be required to sign a document acknowledging a lease agreement for 2018 for a total of $3,446.68; the lease’s first payment of $861.67 will be due within ten days of the lease being signed.
  • Becerra will also be required to make three equal payments of the same amount, $861.67, on “the first of the month of each of the months thereafter.”

Council passed 18A with a 5-2 vote with Mayor Thomaides and Councilmember Scott Gregson voting no.

On 18B, Council postponed the termination of the existing lease indefinitely 6-1 with Thomaides voting no.

A motion to postpone 18C indefinitely passed 5-2 with Thomaides and Gregson voting no.

When Becerra purchased Dixie Cream, Mr. Anderson was outstanding on the lease payments for 2013 and 2014.

A source close to the situation told Corridor News that the city staff, former city manager, Jared Miller (2014-2017), and city council had known about the outstanding balance delinquency.

However, nothing had been done to collect the past due amounts until recently when City Manager Bert Lumbreras sent Becerra a letter.

For Yogurt in Love to move into the building at 201 S LBJ Dr., the city of San Marcos would require a new lease agreement with the owner of the building.

A simple breakdown of a complicated financial matter

  • The city as owner/ landlord of real property (land only) located at 201 S. LBJ (Dixie Cream Donuts) overlooked the fact that the tenant, (San Marcos resident, Ruben Becerra) had not made a lease payment in three years and from Mr. Anderson for the two years prior, for five years in total.

 

  • According to one of our sources, the city council has known about this specific issue since at least the summer of 2016.

 

  • In September 2017, Becerra stated 100 percent of Dixie Cream Donuts’ profits from that moment forward would go directly to local organizations and charities.

 

  • In February 2018, Dixie Cream announced on their Facebook Page they were “temporarily closing” to look for a new home in Buda, Kyle or San Marcos… If the business relocates to Buda or Kyle, the city of San Marcos will lose sales tax dollars.

 

  • In March 2018, Yogurt in Love announced they will be the new tenants of 201 S. LBJ.

 

  • With Yogurt in Love’s announcement, Katie Anderson, who owns the note for the building at 201 S LBJ Dr., the equipment and Dixie Cream Donuts, may never see another penny.

 

  • April 30, 2018, Ms. Anderson is notified that Becerra, who is buying her father’s business, is now five years in arrears on the property lease payments, approximately totaling $13,117.99.

 

  • On May 1, 2018, the city council went on record and forgave unpaid lease payments from Becerra, a settlement deal of $2,063.21 for 2017 and $0.00 for 2013-2016—even though Becerra could move Dixie Cream to Buda or Kyle.

 

  • May 1, 2018, the citizens of San Marcos were notified that city council just set a precedence of allowing their citizens to make settlements on outstanding monies owed.

Corridor News has received/heard several comments from residents, who feel the City Council’s decision on Agenda Item 18 was a “Financial Contribution to the Democratic nominee for Hays County Judge.”


 

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5 Comments

    1. Staff

      Citizen,
      We don’t think KXAN’s story is in contrast; as a matter of fact we shared their video with several people….. it was kinda nice that we broke the story before KXAN, which wasn’t the first time and it won’t be the last. However, there will be times they beat us to the punch as well.
      It still hits the fact the business owner received a sweetheart of a deal and the council forgot they work for ALL its citizens, not just a select few.
      Thanks for sharing

      Reply
  1. Alexandra

    Let’s just throw out a few questions

    1) If you outright use something that legally belongs to someone else, shouldn’t they be compensated some way or how?

    2) Aren’t most renters required to take care of and keep their rental property clean and if they do they get free rent?…. Anyone find that strange?

    3) Wouldn’t it benefit your business to keep the grass mowed and property clean?… Just saying.

    4) Wouldn’t it be considered squatting? According to dictionary.com “squatting” means: “To settle on or occupy property, especially otherwise unoccupied property, without any title, right, or payment of rent.”…… Just saying.

    5) If you pay taxes in San Marcos, wouldn’t you be concerned that this is how the city takes care of its citizen’s treasures or the decisions they make?…. Anyone find that strange?

    6) Just exactly how many business owners do any of us know who can actually take ALL/100% of their profits and donate them to local organizations or nonprofits (on their business FB Page)….Anyone find this strange?

    7) A business announces (on their business FB Page) in February with two days’ notice, that they are closing “temporarily” to look for property in two other cities besides San Marcos…..and they are still closed….3 months later….. Anyone find that strange?

    8) If you sold your business and someone was making payments to you as you still held the note (on the building, equipment and the name), and that person went out & found another business to move into your building that you still hold the note on…… Anyone find that strange?

    9) The council agenda states and I’m quoting “Approving the acceptance of an amount in settlement of rent due under an EXISTING LEASE of real property”. Why would the city council and staff list it on a legal and binding Agenda if there wasn’t a lease…..anyone find that strange?

    10) Why would the city settle at all? If it was for a lack of $$ by the business, why not just set up a long term payment plan?

    11) If you were a business owner in San Marcos and pushed the city to finally sign a legal and binding lease and the city billed you for back rent $28K and you paid it (Stokes Construction)……How would you feel? Maybe like you had the worst luck in the world or the council was playing favorites?

    I could go on and on, but I won’t….I just have one more question…

    12) Who do we blame? The business? The city council?

    BOTH, the business was extremely unethical and because the council just gave away money that should be going into the city coffers…definitely not sound financial judgment from either party as far as I’m concerned.

    Maybe that’s why the city’s debt is way too high.

    This kinda sounds like a cheap con artist movie. 🙂 Just saying….

    Reply
  2. Me

    Common sense is officially out the window!
    Kinda like 300k for the neighborhood studies. Nothing but good things for the studies, BUT 300k? Cock house outside reno 225k? Is there a money tree that cant die out there?
    At the same time we are/have issued bonds for renovations/repairs in the city as we do not have the cash.

    Reply

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