I never did have a good feeling about the project and told several city councilors that the hotel will never be completed, then I hear this;

“The NMTC is a highly competitive economic development program, which incents private investments in the poorest rural and urban communities in America,” Rapoza said in a statement. “To receive NMTC allocation from the Department of Treasury and participate in the program, community development organizations demonstrate a record of financing dynamic projects that improve services such as health care, or create jobs and opportunity in communities where capital is difficult to obtain from conventional lenders.”

Low paying hospitality jobs is hardly a good reason to give such a project tax incentives. This deal was doomed from the beginning and any city official/employee who supported this, worked on this or voted for this should be ashamed and should resign.

We have all heard the story tonight, and Detroit Lewis saw this coming. I predicted early on “There will never be a hotel built at that site.” Trust me, I hate being the ‘I told you so’ guy, but this was obvious from the beginning. I will leave you with my public scolding tonight at the city council meeting.

UPDATE: The city just sent this out;

CLARIFICATION: The City of Sioux Falls has not ruled out private development at this site in the future. At this time, we are focused on the completion of the parking ramp portion of the project.

Today, the City of Sioux Falls provided the Village River Group (VRG) with a notice of termination of their development agreement and ground lease for the Village on the River project.

On December 29, 2017, the City entered into a development agreement for construction of a mixed-use development including a public parking ramp and private hotel with leasable retail space.

The City has invested significant time and resources working with VRG in furtherance of performance of the development agreement.

On April 1, 2019, the City notified VRG that it was in default on the Village on the River project. In accordance with the development agreement, VRG had 30 calendar days to cure multiple defaults. VRG has failed to cure these defaults within the development agreement’s cure period or at any time thereafter.

The project can and will proceed as a stand-alone parking ramp which will alleviate parking challenges within downtown Sioux Falls.

Consistent with protecting taxpayer interests, the City has reserved any and all of its legal remedies available to it under the terms of the development agreement.

In other news, at the Informational meeting, councilor Brekke read her letter to the editor that Cory Myers, News Director of the Argus Leader refused to publish;

May 6, 2019

Letter to the Editor

From: City Councilmember Janet Brekke

I am writing in response to the recent letter to the Editor by Former Councilmember Rex Rolfing and the May 5th Argus Leader Editorial. In my opinion both articles missed the point.

In today’s environment of good versus evil, winners versus losers, or us versus them, frameworks it is plain to see that the Sioux Falls City Council is suffering from the same ultra-polarization that is immobilizing our Federal Government.

The problem that arose with the City Council’s hiring of an Internal Audit Manager has very little to do with the candidate that was ultimately selected. Ultimately the failed discussions and subsequent actions are symptoms of a larger problem.  The larger problem is the City Council’s inability to discuss any divisive problem in a deliberative open minded manner.

Since I joined the City Council last year I have tried to promote and adhere to good government procedures and practice: Decorum, Ethics, Roberts Rules of Order, Open Meetings and Open Records laws. So why does process matter? I believe good process matters because solving complex problems calls for creativity and collaboration, in ways that us versus them, winners versus losers, and good versus evil, do not. In a political context the idea that the good need to simply destroy the evil as we were taught in the movies of our childhood simply does not apply. Affixing blame and demonizing individual councilmembers is counterproductive.

We all have a role to play in our dysfunction. Ron Brownstien, CNN Sr. Political Analyst spoke at the National League of Cities about Congressional polarization on the health care issue. He said both sides claimed they could not talk about the issue because they were too far apart.   Brownstein’s suggestion, “Being far apart on an issue is not a reason to refuse to discuss an issue. Rather being far apart on an issue is the very reason you begin discussions.”  The City Council needs to engage in a deliberative process where we interact and listen to each other. I believe each of us has a valuable perspective to bring to the discussion. We need to work on our ability to collaborate and compromise. If we cannot take the time and effort to work to achieve consensus on hiring an Internal Audit Manager how can we expect to solve the complex problems facing the City. This us versus them mentality serves no one well, least of all the residents of Sioux Falls.

What amazes me is that our soul daily in town had to come after the only councilor (besides Starr) to oppose the parking ramp. The chickens are coming home to roost.

It seems some things will never change at city hall, no matter who is at the helm; Developers Run our city and have the keys to the cookie jar.

The assumption is that in tomorrow’s press conference we will be told everything is hunky-dory with the downtown parking ramp because Lamont has now taken control. While I don’t have an issue with Lamont building a hotel or that Journey is building that hotel and parking ramp, it doesn’t change how we got here and how the plan in itself is a bad one.

First off, the plan. We are only getting a handful of parking spots for the $20 million we are spending, and the 100 year lease is unheard of.

Now, let’s look at the players. Legacy is the developer who concocted this plan, they are forever tied to it. We can throw out all the accolades we want about Journey or Lamont, doesn’t matter. The taxpayers of Sioux Falls shouldn’t be giving one red cent to a poorly planned project with players that are being investigated for safety violations and a wrongful death.

Mayor TenHaken should have TERMINATED this project, paid whatever penalties and when asked why, he should say, “Why don’t you ask Daren Ketchum, Tracy Turbak and Mike Huether.” Mic drop.

It is hardly a secret that the city council was probably told about what would be presented in the press conference tomorrow in the executive session today. I talked to someone who attended the session. They were very clear with me that they couldn’t tell me what happened or what was said under penalty of law, or even what the topic of conversation was, but they did tell me this, “It didn’t go well.”

It is pretty evident to us local government nerds that there are way to many hold overs from the past administration that need to be given their walking papers, and until that happens, we will continue down the same path; Developers hold the key to the city.

This Legacy Parking ramp / hotel scheme is not like a new thing for most Sioux Falls citizens to comprehend. Many knew this was a scam based on fraud and many people in positions of power decided to look the other way just to get promises fulfilled before they left office. If they took others with in the process, they are collateral damage I guess.

There may be legal liabilities. The six Council members who voted for this project and the previous mayor could be on the hook criminally. They had been told in open City Council testimony (it is recorded and can’t be taken down) there was a connection between the four owners of Legacy and the four owners of Hultgren Construction and the four owners of Boomerang and the parking ramp group. It may not have been on paper, but there was plenty of public testimony to back it up.

Construction manager at risk (CMAR) and guaranteed maximum price (GMP) and RFP and RFQ possible rigging may be examined for years to come. To claim they didn’t know or were unaware, is a poor excuse not holding water. If they did not want to look at the situations because a scheming happy warrior was telling all was OK, then they might be wearing stripes together.

There may have been wire fraud, mail fraud and more involved areas which they are all liable. Look at Daren Ketchum moving over to Legacy after he worked so hard to get this project done before Huether left office. Unspoken quid pro quo is screaming at us, the fix was in. There could still be the asbestos problem and the decision to close down one LLC and give all the assets to another just when the asbestos questions were being raised. Now were talking real criminal conspiracy with real behind bars time to consider.

To now claim this is a Lamont project instead of the cosigners of the guarantees may be just another scam. This will forever be a Legacy project. Does Lamont Co. have signed documents turned over to the City right now saying they are now the sole guarantors?

The threat of lying on bankruptcy filings causing criminal charges made the guarantors come partially clean is little consolation to a dead man’s family or to a city bleeding money on schemes of a past mayoral term.

How can a new mayor who has not fired the “mistake makers” of the past administration now go back to these same individuals (the “mistake makers”) to get a new solution or legal justification everything was done correctly without jeopardizing their pensions and employment?

Mayor TenHaken said it in the KELO.com piece, “As a citizen, I did not like how the previous administration pushed this project so hard with disregard to transparency.” As citizens, we don’t like it either. Anyone who allows this project to move forward could join the others in unpleasant federal criminal conspiracy ramifications.

Will our new mayor do the right thing and kill this project? Kill this project and wash our city hands of it. Take the $1,000,000 guarantee and use it to pay off the bondholder early repayment penalties and the other city costs. We don’t need this parking lot the way it is being proposed or possibly where it is being proposed. Most of  Sioux Falls know this was a bad deal from the start. We need to let Mayor TenHanken know the project is now in his hands and he should kill it before it gets way out of control. A man died for the sins of greed, what’s next? Is this our Legacy to never forget?

So I guess the bonds sold last week at 3.5% interest rate. While the rate isn’t bad, I’m curious why there was NO announcement of the sale. Could it be with all the controversy surrounding Legacy and the pending lawsuits they didn’t want to draw anymore attention to it?

Also remember that the 2nd Penny, CIP road fund is being used as collateral. While they ‘claim’ they will never have to dip into this fund to make payments, some would speculate that is not the case, and the specific reason why that fund is being used as collateral. The enterprise fund for parking isn’t very big, and I can’t imagine they will be able to make that big of a mortgage payment and still be able to maintain salaries and maintenance without either dipping into the CIP or raising fess drastically.

We got duped on many levels with the DT Parking Ramp.