Hesston foundation downsizing $20M grocery store plan conceived by indicted businessman

Denise Goevert, a Hesston resident and chair of the Beneficient Heartland Foundation's board of directors, says plans for construction in Hesston of a grocery store advocated by former Beneficient founder Brad Heppner, will be downsized to reduce costs. The store is a project started by Heppner, who is under indictment for financial fraud for allegedly siphoning $150 million from a now-bankrupt company. (Kansas Reflector screen capture from Kansas Legislature's YouTube channel)

TOPEKA — Texas businessman Brad Heppner’s insistence on construction of a grandiose $20 million grocery store in Hesston proved too complicated for the project to get off the ground before the unsealing of an indictment alleging he orchestrated a $150 million financial fraud.

Federal charges against Heppner, who was CEO of the Beneficient company in Dallas and a founder of the Beneficient Heartland Foundation in Hesston, were revealed days before an interim committee of the Kansas Legislature convened to review activities tied to Beneficient. The Legislature several years ago ordered state regulators to issue a unique bank charter to fuel Beneficient’s business catering to wealthy investors trying to unload illiquid assets. In exchange, Heppner promised to fund rural economic development in Kansas.

The House-Senate oversight committee was keen to hear from Beneficient executives after Heppner’s indictment for purportedly pilfering $150 million from a now-defunct company. Officials say the cash was funneled through Beneficient into other business entities for Heppner’s personal use. The U.S. Department of Justice gave no indication the alleged malfeasance involved the Heartland Foundation.

The bipartisan legislative committee also was eager for an update on the effort to deliver on Heppner’s 2022 promise to build a grocery store in Hesston, where he grew up. Hesston has 3,400 residents and has been without a grocery store since 2018.

Financing for the downtown grocery store would be derived from the Heartland Foundation. It was established with an initial donation of about $6.5 million from Heppner and his wife, Aurelia. Cash or stock generated by Beneficient’s asset-management business would be sent to the foundation.

Denise Goevert, chair of the board of directors of Beneficient Heartland Foundation, told state legislators that Heppner’s absence from the grocery store conversation in Hesston would allow community members to take the lead. It should clear the path for a more basic store costing less than $10 million, she said.

“You guys get rid of the stupid underground parking garage?” asked Rep. Nick Hoheisel, a Wichita Republican and chairman of the interim committee.

“Thank you, yes, and no tunnel,” said Goevert, eliciting a few chuckles in the Capitol meeting room.

“I call it like I see it guys,” Hoheisel said.

Climate-controlled parking

Heppner’s plan called for a “climate-controlled, weather-friendly garage that keeps shoppers out of the elements.” There would be golf carts with free battery chargers, but also parking capacity “exceeding town ordinances.” Heppner pushed for a store of 18,000 to 20,000 square feet of space at street level, a delicatessen-style restaurant, a bakery, an on-site butcher, locally sourced produce and German food specialties.

Sen. Stephen Owens, a Hesston Republican and a member of the interim legislative committee, said Heppner’s vision was “quite ostentatious.”

Owens was a member of the foundation board for more than one year but stepped down because he concluded that role could be viewed as a conflict of interest. He said the grocery project was important to Hesston’s future.

At the outset of planning for a grocery store in 2022, Heppner said his vision for the foundation was to demonstrate how Beneficient and rural Kansas communities could be “ambitious and work together.”

“My success today is built on a strong foundation of community and values, a reflection of the place where I grew up,” Heppner said at the time.

Heppner said during presentations to committees of the House and Senate hat he was inspired to pursue the grocery store idea because his mother expressed frustration Hesston didn’t have a market in town. Heppner resigned from Beneficient in June.

Meanwhile, Kansas banking commissioner David Herndon, who has limited jurisdiction over Beneficient’s activities in Kansas, told legislators the Office of State Bank Commissioner had information indicating the limited liability company formed by the Heartland Foundation to handle the grocery project “forfeited its standing in Kansas for failure to file its annual report with the secretary of state” by a July 15 deadline.

Goevert said she would check with the foundation’s accounting firm to determine why the LLC filing wasn’t made on time.

Overhaul grocery plan

In the legislative committee briefing, Goevert said Hesston community leaders involved with the foundation could sell as much as $1 million in real estate acquired by the foundation. That cash could be poured into a more reasonably sized grocery store, she said.

Goevert said the foundation also must find a way to reduce the amount of capital required to construct the store. Instead of relocating a Hesston lending institution and blending that vacant structure into a grocery store, she said, it might be possible to find an alternate site along Main Street that wouldn’t require expensive structural demolition or utility upgrades.

“With the change in leadership at Beneficient, we’ve taken a step back as a board to evaluate our initial plan,” she said. “This has been a challenge, and especially within the last several months.”

Goevert, a former Hesston school teacher, owns The Nest, a store near Main Street occupying retail space made possible by the foundation.

The new grocery store must be large enough serve needs of local residents doing their grocery shopping and help drive prosperity in nearby businesses, she said.

“We need a sustainable grocery store,” Goevert said. “As a board, we are focused on simplifying and streamlining the grocery store project.”

Optimistically, she said, the right-sized project in proximity to Main Street could come to fruition in 2027. White’s Foodliner, which operates grocery stores in Kingman, Linsborg, Lyons and other Kansas communities, remains committed to managing a new store in Hesston, she said.

“We know there is a desire for visible activity,” she said. “We need to be moving forward at a a faster pace.”