Represents first project funded from initial $15 million endowment for reinvestment initiatives in Kansas contributed to the Foundation under the TEFFI Act
Additional updates include presentation of the Foundation’s audited financial statements and execution of an MOU among the City of Hesston, grocery store operator White’s Foodliner and the Foundation outlining specific remaining steps to complete the grocery store project
HESSTON, Kan.–(BUSINESS WIRE)–Today the Beneficient Heartland Foundation (the “Foundation”) and Brad Heppner, Founder and Chief Executive Officer of The Beneficient Company Group, L.P. (“Beneficient”), announced the achievement of significant milestones in the Foundation’s efforts to bring a grocery store to downtown Hesston, Kansas, which has been without one since 2018. The Foundation primarily focuses on reinvestment in rural Kansas communities with populations of fewer than 5,000 residents, as well as additional funding initiatives identified in the Technology-Enabled Fiduciary Financial Institutions Act (“TEFFI Act”).
At the Foundation’s first board meeting held on April 13, 2022, it was determined that the Foundation’s focus for its initial $15 million endowment (the “Initial Contribution”) would be establishing a grocery store to be located in Hesston’s Main Street shopping district to re-invigorate the center of Hesston, originally founded in 1886. The board also formed a subcommittee (“Subcommittee”) to lead this initiative. The Foundation’s decision to initially focus on a Hesston grocery store was prompted by a request to do so by the Hesston Chamber of Commerce – which itself had previously been tasked by city leaders with bringing a grocery store to Hesston.
Since the first board meeting, the Subcommittee has been focused on a number of fronts critical to establishing a grocery store, including site selection, real estate acquisition, store operator due diligence and city planning – and has made substantial progress on each of these items. The Foundation is pleased to announce that it has selected a new building, with approximately 33,000 square feet spanning two above-ground floors and will be located on the east side of Main Street in downtown Hesston, part of which will be used for the grocery store. The grocery store will be 18,000 square feet and located on the main floor with the potential to drive 2,500 unique customers through the doors each week, which would add significant foot traffic that would benefit surrounding businesses, a key rural economic development objective of the Foundation. The concept design for the grocery store includes a main street appearance in keeping with the original midwestern vernacular of 10 separate buildings in the area, many of which were originally constructed over 100 years ago and previously burned. It is expected that the store will ultimately employ approximately 25 full-time individuals.
Additionally, on December 15, 2022, the Foundation hosted an informational session at its Hesston offices on the site of the planned grocery store for the benefit of a broad array of community leaders and stakeholders to provide updates on its activities, including that the Foundation had:
Conducted an evaluation of various state-wide grocery operators and successfully secured a Memorandum of Understanding (“MOU”) executed by and among the City of Hesston, White’s Kingco, Inc. (“White’s Foodliner”), and the Foundation, setting out the exact terms and expectations regarding the buildout and ongoing operations of the grocery store following its opening
- White’s Foodliner is a world-class family business and highly regarded grocery store operator run by Kansas-based Pat White and his son, Jordan. White’s Foodliner also operates grocery stores in Lindsborg, Lyons, Kingman and three other Kansas communities
- Notably, White’s Foodliner has already been closely involved in a number of facets of the store’s development
- The MOU was fully executed on December 14, 2022
- Studied five potential sites and selected the optimal grocery store location for the Hesston community
- Entered into contracts or is negotiating agreements for the acquisition of the four separate properties necessary to combine for the grocery store buildout and the relocation of those existing business within the Main Street shopping district
- Designed a concept plan in keeping with the 1886-1930 original architecture and vernacular of the town while also introducing certain contemporary elements
- Contributions made possible through Beneficient’s TEFFI Act operations, including the Initial Contribution and any future contributions, will serve as the capital used to finance the construction of the grocery store
Mr. Heppner stated, “Beneficient is a mission-driven company, and we are resolutely focused on delivering contributions made possible through our TEFFI Act operations to the Foundation for the benefit for rural Kansas communities like my hometown of Hesston and Harvey County. I am incredibly excited at the progress the Foundation has made on bringing a grocery store to Hesston, which I am confident will improve the lives of residents. I look forward to continuing to create a new center for alternative assets in Kansas and ensuring that residents directly see both near-term and long-term value from our work with the Foundation.”
Looking ahead, the Foundation’s objective is to collaborate and work with White’s Foodliner to develop a long‐term profitable grocery store business model, which would provide Hesston residents with the following features:
- Clean, easy access facilities for all ages
- Full array of affordable groceries
- Wide‐ranging variety of fresh produce, meats and seafood
- Garden market deli restaurant
- Sit-down Bratwurstgarten
- Harvey County gardeners and farmers market center in a space designed to resemble Hesston’s original 1886 train depot
- Cooking classrooms
- Local specialty ethnic selections
- Indoor and outdoor seating areas
- Community gathering spaces
Dave Kaufman, the Mayor of Hesston and a board member of the Foundation, said, “Like so many other rural communities across Kansas, Hesston has been without a local grocery and market for many years now. We are incredibly pleased that through the efforts of the Foundation and the contributions from Beneficient’s TEFFI Act operations – as well as the state politicians who have supported the TEFFI Act – we will soon once again have a vital component of our community returned to us. Further, the location is truly ideal, as is the fact that the store will be operated by a Kansas company that local Hesston residents know and trust. We look forward to the opening of the store and to the next projects that the Foundation will support to benefit our town and rural Kansas.”
On December 20, 2022, the Foundation’s task force met and determined that the Foundation will be seeking proposals for an owner’s representative to represent the Foundation, as well as a construction manager and a general contractor with the goal of transitioning the task force responsibilities over to an operational team to execute on the construction and delivery of the planned grocery market to be operated by White’s Foodliner. The Foundation expects the store to be open in 2025.
The Foundation and Trust’s Audited Financials
As previously announced, through Beneficient’s TEFFI Act operations, its customers funded the Foundation with an initial contribution of over $13 million for economic development within Hesston and Harvey County as outlined in the TEFFI legislation. Beneficient also facilitated a distribution to the Kansas Department of Commerce of nearly $3 million to support rural communities across the state. The vast majority of those funds – $2.7 million – were used to fund the Strategic Economic Expansion and Development (SEED) program administered by the Kansas Department of Commerce, which recently named grant recipients in numerous rural Kansas communities, including Hesston’s neighbor, Halstead. This level of funding exceeds by more than $1 million what the TEFFI Act requires. The assets for the benefit of Hesston and Harvey County are administered by the Foundation and the Kansas TEFFI Economic Growth Trust (the “Trust”), which is overseen by an independent trustee.
At the November 14, 2022, Hesston City Council meeting, Mr. Heppner publicly presented a summary prepared by an independent third-party auditor of both the Foundation’s and the Trust’s audited financials, in the form of a balance sheet listing the total assets of the combined entities. The financials reflect $15 million of capital, the substantial majority of which is dedicated to the construction of the new grocery store in Hesston, as promised when the TEFFI legislation was passed. Fully audited financial reports were submitted to the Department of Commerce in December.
Mr. Heppner added, “At Beneficient we are committed to transparency, trust and regulatory compliance – highlighted by the fact that we are the only fully regulated fiduciary financial institution operating in our sector of alternative assets and hold a charter from the State of Kansas.”
About the Beneficient Heartland Foundation
The Foundation was launched on January 20, 2022, in connection with the Kansas-based operations of Beneficient, a technology-enabled platform providing liquidity, data, custody and trust services to holders of alternative assets. The Foundation’s initial focus is on reinvestment in Hesston, Kansas, a community identified by Beneficient as the first economic growth zone under the TEFFI Act.