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FOX 13 Investigates: Why two Utah cities gave six-figure pandemic relief to big business

Posted at 9:52 PM, Mar 31, 2022
and last updated 2022-03-31 23:52:18-04

HERRIMAN, Utah — EDITOR’S NOTE: This story was first reported by Brooklyn Critchley and Lucas Welk last fall when they were in the investigative reporting class at the University of Utah. Their instructor was FOX 13 investigative reporter Nate Carlisle.

The coupons issued by Herriman in 2020 were a big help to Terri Rummel and her family.

“I love the Herriman Bucks,” Rummel said this month in the parking lot of the Smith’s grocery store in Herriman, “I hope they do it again this year. We spent all ours right here, here at Smith’s.”

Herriman Bucks, also known as the Shop Around program, sent coupons to Herriman residents that they could redeem at participating businesses. The businesses could then submit the coupons to the city for reimbursement.

The money came from the CARES Act – the relief Congress passed to aid Americans, their businesses and local government as the pandemic was starting. An analysis by FOX 13 News and students in the investigative reporting class at the University of Utah found most of the Herriman Bucks went to big retailers.

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Meanwhile, in Salt Lake City, the largest single chunks of pandemic relief went to real estate developers, FOX 13 News and the students found.

Herriman spent $985,476 on Shop Around, according to records. Of that, $489,160 went to the town’s Smith’s.

It’s owned by Cincinnati-based Kroger, which reported a profit of $2.6 billion in fiscal year 2020.

The next biggest chunk went to the Herriman Walmart. It received $220,900.

Arkansas-based Walmart reported a profit of almost $15 billion in fiscal year 2020.

Herriman Bucks offered discounts such as $10 off a $20 purchase. Tami Moody, a spokeswoman for Herriman municipal government, said the program was popular with both residents and businesses.

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Moody said there was a discussion within the city of whether to include the big retailers, and legal counsel said it would be best to open Herriman Bucks to any business that wanted to participate.

“We really wanted to include [Smith’s and Walmart] because we knew that several residents were also having hardships,” Moody said. “They provide groceries and groceries were a real need.”

Smith’s and Walmart were the only grocers who participated.

American Burgers received $31,230.

“It helped us keep employees that we had,” said Mary Manousakis, whose family owns American Burgers, on a recent afternoon where the grill was sizzling and hamburgers were being passed to customers over the counter and out the drive-thru window.

Manousakis, though, says the money would have meant more to businesses like hers rather than the corporations with “deep pockets.”

Of the 53 businesses listed as participating in Herriman Bucks, some received only a few hundred dollars. At least two have closed.

“I think that if [Shop Around] was tailored more toward the small businesses,” Manousakis said, “and more of the revenue was brought into the small businesses, it would have helped some that did close stay open.”

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Moody points out that Herriman also provided businesses with PPE and other types of support during the pandemic.

Salt Lake City received more than $100 million in pandemic relief. Most of that was designated for the airport, which was still under renovation as the pandemic started and lost travelers and the taxes they generate. Other money was used to give businesses PPE and emergency loans.

But the city also set aside money to support businesses that had contracts with Salt Lake City’s redevelopment agency. Of that, the two biggest recipients were real estate firms who each received $100,000.

One of them was a subsidiary of the firm owned by Dell Loy Hansen, the former owner of Real Salt Lake. His representatives did not return messages seeking comment.

The other $100,000 recipient was the owner of the office tower at State Street and 300 South. The tower has an assessed market value of $54 million.

One of the building’s owners, Illinois-based Hamilton Partners, said in an email to FOX 13 News that it leases the adjoining parking garage from the city. With fewer people coming downtown, $79,000 was used to offset parking losses. The company said it gave the remaining $21,000 to one of its tenants, the Copper Common restaurant.

“The goal is to keep payroll and to keep operations going, especially when people stopped coming downtown,” said Anna Valdemoros, who represents downtown on the Salt Lake City Council and was vice chair of the redevelopment board in 2020.

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Valdemoros said the council set the parameters for the pandemic relief; it was up to staff to distribute it.

“Downtown was particularly hard hit by the pandemic,” said Dee Brewer, executive director of Salt Lake City’s Downtown Alliance.

Brewer wasn’t familiar with how Salt Lake City allocated its federal relief dollars, but said the city was responsive to businesses. It created programs to tip wait staff and closed main street to accommodate outdoor dining.

“They acted very quickly to move money through to businesses,” Brewer said.

At one point, Salt Lake City also gave $100,000 to the Marriott on Gallivan Plaza. The hotel returned the money.

The city instead used it to pay firefighters, according to a spokesperson for the redevelopment agency.

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