The demise of a barbecue joint in the Legends somehow yields few lessons for the Unified Government

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How did the Unified Government of Wyandotte County/Kansas City, Kansas, know it had paid reasonable prices when it made $3 million available to a restaurateur to festoon a barbecue outlet at the Legends at Village West with high-priced accoutrements such as custom motorcycles?

And how did the UG know whether it was reselling those items for reasonable prices when it auctioned them off this past summer, two years after that venture — Backfire BBQ — went belly up?

No one seems to know, and it doesn’t appear as though it was anyone’s job to find out.

Those questions went unanswered two weeks ago during a UG Board of Commissioners special meeting to address public concerns about how it handled the liquidation of all that pricey memorabilia — tax-funded acquisitions — inside Backfire BBQ.

The restaurant’s developers used $3 million worth of proceeds from STAR Bonds to furnish the place, lavishing much of that cash on vintage and contemporary motorcycles to suggest an Orange County Choppers theme. STAR Bonds are sold by governments in Kansas and bought by investors, who are repaid over time through local and state sales taxes generated by a development project. They’re a powerful inducement, and they’ve been used to develop not only the Legends at Village West but the neighboring Kansas Speedway and Sporting Park.

Backfire lasted little more than three years. The development already had two barbecue restaurants in business when Backfire opened. When it went out of business, in 2013, UG officials rounded up all of the items purchased with STAR Bonds. It had a chance to recover some of what was lost with an auction this past June in the basement of Memorial Hall, in downtown KCK.

But of the $3 million, the UG recovered only $174,000 from the auction. And that total even includes $80,000 that the UG spent on items for itself, mostly kitchen equipment that doesn’t sell well secondhand.

Back when the UG let Backfire’s developers — Schussler Creative and RED Development — make use of $3 million in STAR Bond proceeds, it hired a real estate consultant named Kirk Sherman to oversee the purchase of the business’s decorative memorabilia. Sherman showed up at the October 29 UG Commission special meeting to explain how things had gone down. He verified that invoices for expenses, such as motorcycles, matched receipts.

“Was it part of your responsibility, or do you know if it was part of anyone’s responsibility, to verify the legitimacy of those values?” asked 7th District UG Commissioner Jim Walters.

“It was not our scope of work,” Sherman replied.

It might have helped to have someone evaluate those prices, a reality that occurred to some UG commissioners.

“I was told those [motorcycles] were worth a lot more than what they went for,” said 5th District Commissioner Mike Kane. “And there are people from Wyandotte County, believe it or not, that have money.”

You wouldn’t guess that by looking over the winning bids for some of that memorabilia.

One of the vehicles that the UG bought in 2009 was an Orange County Choppers–style motorcycle, for $285,000. It’s a custom motorcycle, so it’s difficult to know what was done to it to merit a six-figure purchase price. But whatever dazzlements were included in the price didn’t impress its latest buyer. The motorcycle sold for $6,000.

Another Orange County–themed motorcycle that sold at the June 19 auction was a 2009 model, which fetched the opening-bid price of $5,300. Was that a good return? According to the database assembled by the National Automobile Dealers Association: yup. It lists a new 2009 Orange Choppers motorcycle for the base price of $38,900. (And that doesn’t take into account that the motorcycles at Backfire hung from a ceiling — hardly the same depreciation one might expect from riding it around town.)

Ann Murguia, a 3rd District UG commissioner, expressed a healthy dose of skepticism about how the auction was handled.

“Let’s say we paid $500,000 for an antique car. And if we were willing to pay that amount of money to put it in a store, then why isn’t there anybody else out there that’s willing to pay $500,000?” Murguia said. “And if there isn’t, then I’m concerned about what we’re willing to pay.”

Other commissioners expressed concern about how well the auction was publicized.

“A lot of people I encountered afterwards said, ‘Man, I wish I had known about that auction. I would have loved to have been there,'” Walters said.

Marty Higgenbotham, the auctioneer hired by the UG to sell Backfire’s booty, said he contacted motorcycle dealers.

Advertising invoices obtained by The Pitch show that Higgenbotham spent $11,462 of a $15,000 budget on advertising, including three ads in The Kansas City Star, another three in Thrifty Nickel and a variety of spots on Fox News and Cumulus Radio stations.

Auction records show that 164 bidders showed up for the auction, both in-person and online.

“I think the sale was a huge success,” Higgenbotham told commissioners. “As far as what it brought, it brought every nickel that it was worth.”

Higgenbotham has a weird sense of what constitutes “a huge success.” The auction’s $174,000 net constituted half the value that Higgenbotham had established ahead of time.

UG County Administrator Doug Bach downplayed the auction’s “success.” “Do I wish we could have gotten more out the auction process?” Bach said. “Yes, I do.”

But Bach added that the $3 million in STAR Bonds spent on Backfire is less than 1 percent of the outlay in Village West.

UG Mayor Mark Holland appeared similarly sanguine about the Backfire affair. He said at the meeting that the success of T-Rex Café, a dinosaur-themed restaurant (which cooks, Holland added, the best hamburger he has ever tasted), more than makes up for Backfire’s loss. (T-Rex is a concept created by the same people who came up with Backfire.)

“They didn’t bring us a line-item budget to us and say, ‘We’re going to buy a motorcycle for this much,’ because if you look at these custom motorcycles, I would have said this is ridiculous for a motorcycle,” Holland said. “We bought into a concept to draw people to the Legends, and the concept didn’t work, and we lost money.”

More than one commissioner during the meeting expressed a desire to learn a lesson from Backfire. Here’s one for the public: Pay closer attention when you see a Thrifty Nickel ad for a UG liquidation auction.