Last summer I was told about a building sale downtown Sioux Falls. The seller, Mayor Paul TenHaken, the buyer, Lloyd Companies.
The building to the left is the Rock Island building Mayor TenHaken used to own and sold to Lloyd Companies, the tall apartment building, I coined the ‘Good Times Building’ because it reminds me of the buildings in the intro of the classic TV show, is owned also by Lloyd Companies, and they own the building to the far right, the street in the middle is the 7th Street Cul-de-sac slated for improvements by the city.
It is no secret that elected officials in all capacities in our community either have business ventures or real estate investments, not all of them, but some. Serving as an elected official YOU can LEGALLY and ETHICALLY have real estate investments in our community, where it gets real sticky is using your position of power to sweeten those deals. Not only is that ethically and morally wrong, there are Federal rules when it comes to how Federal subsidies, like ARPA, work, and in no way shape of form can an elected official benefit from those monies.
This is what we know.
Lloyd purchased the property on December 31, 2020 (I know, odd day to complete a closing) thru one of their multiple LLC’s, Cheney Lake, LLC. I was told developers setup multiple LLC’s so they can get different tax breaks and rebates on housing and other rental property. I also know that Cheney Lake, LLC is registered to Lloyd, because like all of their LLC registrations, they are registered at Lloyd’s main corporate offices.
The mayor’s Chief of Staff was a former executive staffer of Lloyd companies. Did she have any hands in brokering this deal?
Paul also owned the building under an LLC, called Phillips to the Falls LLC, which was dissolved because of inactivity (the state will dissolve your account after a period of inactivity, but why didn’t Paul just dissolve it in advance?)
Also, how did Paul acquire the building? If you look up the LLC on the SOS website (type in ‘Phillips to the Falls LLC) you will see it was created in 1998, Paul would have still been in high school, so did Paul acquire the building, other assets and liabilities of the previous owner? In other words did he purchase the building in a straight up property purchase or was there some kind of bank closing on the property? Ted Thoms was the person who originally created the LLC.
Shortly after the purchase at the end of 2020, in August of 2021 (item #49) the council provided supplemental appropriations from ARPA funds. $1.25 million was going towards the reconstruction of the 7th street cul-de-sac that Lloyd now owns three adjoining properties.
The suspicious purchase price has many people scratching their heads. Notice on graphic below how much the assessment jumped in just 2 years. Is it because Lloyd paid above and beyond for the property knowing improvements to the area were coming from the city?
I was told that Lloyd paid $1 million above and beyond appraisal. I certainly don’t have the appraisal, but you can make some assumptions from looking at the tax valuations.
The building was assessed a year later for $2.9 million, taxes are $53K, but if you look at what it was assessed before shortly after the purchase, $33K in taxes, and you extrapolate that from the current taxes, it would have been valued at $1.8 million or less at the time of purchase. So did Lloyd pay a million above and beyond for the property with a promise of ARPA money making improvements to the streetscape around the properties they own?
Well isn’t that the million dollar question?
UPDATE: Also, since the property in question went up so much in assessed value, that means the properties around this building will all be re-assessed and likely go up in value also.
In conclusion, this is troublesome for several reasons, including that probably very few, if any, councilors were in on the back deal. There is also the question of getting paid a million over appraisal while you are a sitting mayor, and of course the ARPA federal dollars being funneled into the project. I also am pretty astonished that you can basically pay double for a property and the county doesn’t even blink an eye and just puts down the new assessment and value like it is no big deal (the valuation jumped around 90%).
This needs to be investigated by the city council and the ethics commission. It’s ethically and morally wrong and possibly criminal.
*I would like to thank several people who helped me with this post, including three sources that were invaluable.
A lot of land transactions conveniently happen on December 31st. It’s for tax reasons, especially for land swaps. Although, this was not a “swap”, but maybe a part of a “swamp”.
I love your picture, too. Notice the Arcs in the background, which are like a gateway to the Land of Cherapa and the $20 million bridge. While the cul-de-sac symbolizes a circling of interests, which most of us cannot relate to, nor afford.
‘Good Times’, indeed. But does this mean the rent will be going up, too?….:
https://www.youtube.com/watch?v=f87dBXqtocw&list=PLCOKuC0UqqKVX-TZEUHQ-sevAzK2G7YHZ
( and Woodstock adds: “Dyn-O-Mite!!”…. “Say, did you guys know that Jimmie’s real name was “James Carter Walker” and all of his fame was going on, too, during President Carter’s dominant presence on the American political scene back in the mid and late 70s?”…. #SomeKindOfOmenIThink(?) )
i’m looking forward to mike z explaining why this is ok and ethical.
“i’m looking forward to mike z explaining why this is ok and ethical.”
With correct punctuation and spelling please. Paragraphs in the long dissertation would be a bonus.
wohhh wohhh those are some nice properties
Mike, “cul-de-sac” is French for a planning reality where all of the structures sit around a street that is round in existence, but it does have one channel that pierces it so commerce can enter into its existence.
( and Woodstock adds: “Say, I would have loved to have been a mouse in the corner the first time someone from a planning department recommended a rotary for an intersection…. ( …. “You want the cars to do what?….. And how?….. 🙁 ))
Devious if not Tenfold criminal. However, there’s more property tax that reaches the general population. What’s sad is these buildings become condos that nobody can afford and eventually become subsidized low income tenements. Remember this con when TenHaken runs for higher office.
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