Do Record Building Permits really matter?

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The smoke machine at city hall is in full burn this afternoon;

Today, City officials announced a fifth consecutive record-breaking year of construction values. The construction valuation for building permits issued by Building Services in 2017 reached $720,369,333 by 3:30 p.m. on Wednesday, December 13. Last year’s record (2016) was $701.9 million, and the previous record set in 2015 was $676.3 million. 2014’s total was $619.5 million, and the total in 2013 was $588.2 million.

“The confidence, the momentum and yes, the record breakers just keep growing, and I can’t thank the builders, investors and dreamers enough for making it happen. Look what you’re accomplishing, Sioux Falls!” says Mayor Mike Huether.

But does it really matter, at least for the rest of us working stiffs? Think about it. In the last five years while the records keep breaking (obviously due to population growth) what does it mean for us?

Like the lie Washington DC tries to sell us every year since Reagan was president, trickle down economics just doesn’t work. Since this was first proposed by Ronnie, wages have stagnated, unions continue to disintegrate, the gap between rich and poor grows wider, poverty is at an all time high and the middle class will be gone within a decade or sooner.

Why doesn’t it work? Besides the mountains of evidence, the facts remain the same. The rich don’t re-invest their savings in taxes and tax incentives into jobs or higher wages, they simply just stuff it away.

But let’s look at this locally. While city hall has gone into ramrod mode with TIF’s, tax incentives and handouts to local developers (because they are suffering so much, just look at the building records we are breaking each year) has it really affected ‘growth’ in our pocket books? Nope. Because whether you look nationally or locally, trickle down does not work.

1. Wages are still low in Sioux Falls. Wage collusion runs amuck.

2. Food Banks continue to grow at a record rate.

3. Besides drug crimes, domestic violence continues to soar in Sioux Falls. One of the number one things couples argue about? Money.

4. Even with a new events center, sales tax revenue continues to be stagnate.

5. Even with all the record building in housing, affordable and even working class housing continues to elude us.

So while I am glad developers, builders, investors (which include our mayor) and banksters are making oodles of money, it really isn’t reflective of our total economic picture in Sioux Falls. But let’s not talk about it, because that would be negative and sinister.

*Over $40 Million in permits were city projects (public). I have often questioned whether city/public projects should count.

Parking Ramp passes but not without a little dust

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As predicted the parking ramp passed by 6 votes tonight. Stehly voted NO and Pat Starr abstained by saying ‘Present’ during the vote. Which put the Mayor in a tizzy. It was determined by the city clerk and city attorney that he could not abstain unless he left the room before the vote. So Starr walked out. Council chair Kiley went out after him but Starr refused to return until all the items were voted on concerning the ramp. The mayor, of course, took the opportunity to shame Starr for not playing the reindeer games. I applaud Starr for taking a stand and not participating in this fiasco. In fact several of us clapped during the meeting.

Starr I believe was frustrated because the mayor cut off public testimony after an hour in which Starr asked for more time and the mayor denied it.

The discussion was actually very interesting, besides the President of DTSF and a pastry chef that owns a downtown business nobody else testifying thought it was a good idea. In fact a couple of the people even mentioned if the developer was paying more towards the project they would support it.

Three of us raised concerns about Legacy and the Hultgren construction connection. I said it was a liability. Stogeez and Eastwold Smokeshop owner Tim Kant said he is embrawled in a possible lawsuit against Legacy over his building being torn down and an attorney representing Emily Fodness warned about doing business with Legacy due to liabilities also.

Besides Stehly offering an amendment about the 2nd penny there was ZERO discussion from the rest of the council before voting on it.

This was a very shameful night by the council, they let a developer with a bad reputation take the taxpayers to the cleaners.

Sadly, I don’t think this is over. I have a feeling there will be repercussions for the city, which means we will all be paying for the very bad decision made tonight.

UPDATE: Proposed Downtown Parking Ramp; A BAD DEAL for taxpayers

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Trust me, I’m still baffled why possibly six city councilors and the mayor support this ramp with so many strikes against it. I am not one least bit surprised though that the development community and their upper crust friends support this, if this passes it will set a precedent paving the way for them to cut the same deals.

The laundry list of issues are obvious; A rock bottom, 80 year lease. Taxpayers covering over $6 million in ‘soft costs’ that should be either shared or paid entirely by the developer. Not enough parking spots (we will only net beween 290-390) for the price we are paying. No clear explanation of rate increases and how the bond will be paid back besides the detrimental idea of using the 2nd Penny as collateral. Not even an inkling of who the hotel franchise might be, the retailers or ‘possible’ private investors – lack of transparency. And lastly, the most egregious, we are possibly signing a contract with the person who is responsible, according to OSHA’s levied fines, for the Copper Lounge collapse making him an obvious legal liability.

But what is even more troublesome is the ‘deal’ we cut for the taxpayers. If we are going into a Private/Public partnership, shouldn’t we be negotiating a good deal for the taxpayers instead of the other way around? Especially after we have spent almost $1 million on engineering, architectural and legal fees, not mention this will be built on OUR land.

This has to be one of the most poorly constructed proposals the city has ever presented in the past decade, and I really mean that. As a councilor, I would be ashamed and embarrassed to vote for such an obvious scam.

If the council thinks they heard a lot of vitriol and rancor from the public before the vote, if they vote for this, I think the second round of frustration will be a lot worse.

Good Luck tonight, you are going to need it.

UPDATE: I just got a tip from someone who works in the hotel/motel industry in SD that the hotel partner will most likely be a ‘select service’ provider (similar to a Homewood Suites). This is NOT considered a FULL SERVICE Hotel. So I asked him if Legacy (and the city) probably knew who that was provider was, and that it was most likely. So I wondered why they have not said who it was yet, and encouraged a city councilor to ask tonight.

So I also asked this person about the lease agreement. They basically said what we have all known for awhile that it was a heckuva a deal and really unheard of (one time payment for 80 years). Like I said, we are getting hosed on this all the way around.

Councilor Erpenbach calls Stehly and her ‘cohort’ liars

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This is possibly a new low by a city councilor. Michelle emailed a constituent over the weekend and said this;

Honestly, I’m disappointed by the direction of the dialogue around this project. You know that a good leader doesn’t cast fear and doubt in his/her constituents’ minds. When citizens say they are seeking transparency in our government officials, they really mean they’re looking for the truth.

To hide the truth under insinuation and flat-out lies is not transparency in government. But that is what is happening with the garbage being spread by Councilor Stehly and her cohort.

Michelle is probably referring to the NOTICE postcard Theresa sent out below. All the facts were verified by Community Development Director Daren Ketchum 2 weeks ago at a city council meeting. If any of this was a false, Ketchum should have said so and clarified with Theresa at the meeting. He told councilors later that ‘he just didn’t want to argue with Theresa’. So when did Daren plan to have the ‘argument’ if none of this was true?

Besides the egregious remarks about Theresa, who is her ‘cohort’? I would assume it is Pat Starr, but it could be a whole host of people? The Argus, Me, Bruce, etc. Seems funny she supports transparency but can’t name this mysterious ‘cohort’.

She continues her mysterious rant;

The facts are:

1.  It is against the code of ethics set in law, and it is against the terms of this specific contract for city employees or elected officials to be investors in a project of this magnitude. Councilor Stehly and local media who quote her are implying that the mayor or other city employees — even Council members — are secret investors in this project. If you believe what she is implying, we are all going to make off big and head for Cancun with our plunder from the parking ramp/hotel project. Honestly, it’s insulting and hurtful. I will say as much on Tuesday.

Michelle, we have learned that we can’t just trust this administration’s ‘word’ on something, that was proven with the siding settlement in which the mayor lied about the settlement amount. Besides, when it comes to our taxdollars the prudent thing to do is put it in writing.

2.  The cost of the parking ramp is being reported with a twist in the figures. It will cost upwards of $20.6 million to build the city’s share of this project. But that includes far more than just construction costs and it is disingenuous to make people believe the city is paying some ridiculous amount per parking space. I’m not going to try to convince you otherwise. You need to see it for yourself. Please spend some time viewing the truth on this website: http://www.siouxfalls.org/active-projects/active-projects/parking-ramp-project.aspx. All of the information around this project is included there. Please also watch and review the documents from the city council’s Nov. 21 meeting. It is Item 45 on this webpage: http://docs.siouxfalls.org/sirepub/mtgviewer.aspx?meetid=2656&doctype=AGENDA. Again, facts = transparency.

This is not a good value, the numbers you quote above are proof of this. We simply are not getting a significant amount of parking spaces for the money and really are not solving the problem we should be solving. This is a economic development handout, not a parking solution.

3.  This point is the most important for me. I’m incredibly concerned about the dramatic decrease in sales tax revenues for the city of Sioux Falls, and for the entire state of South Dakota. There are two facts behind this financial hole that is only growing deeper: First is the drought and its effect on the ag economy. Farmers don’t shop in Sioux Falls when their incomes are in the tank. Second is the fact that more and more of us aren’t shopping in Sioux Falls either. All of us local shoppers are online, spending hundreds and thousands of dollars without paying sales taxes. But we’re still demanding that our streets be pothole free and plowed curb-to-curb within hours after the last snowflake. These services require tax dollars. A full-service hotel of the magnitude involved in this public/private partnership will help improve our sales tax collections by attracting precious out-of-town visitors. The NCAA tournament structure (for example) requires a specific number of full-service hotels (I think 12 but I have to confirm that) and this is one more on the scorecard. The fact that it is a public private partnership makes it all the more attractive. This means tax dollars that you and I don’t have to provide (unless we choose to stay overnight downtown which is more and more attractive!).

This one is almost hilarious in itself, and pure speculation. One hotel (that will be competing with 4 other DT hotels for business) certainly isn’t going to pull Sioux Falls out of a tax collection hole. The retail isn’t either. As we know now, many DT retail businesses are closing as fast as they are opening. Financial experts across the country are also predicting another recession coming in late Spring.

It’s critical for you to understand the parking ramp will be paid off in 13 years (or less) and it will not be paid with tax dollars. It is a user-funded project. Some people call that a tax of its own. But if it’s a “tax” it’s not something every taxpayer will pay UNLESS they choose to park in a city parking space. There are lots of other options.

This is debatable, as I have already said, paying government for a service is a tax.

Also important to understand is that we’re not inventing some weird, corrupt new wheel here. This model is highly successful in communities across the country. Anyone who travels outside South Dakota has experienced the benefits of projects like this.

Like the Sanford Sports Complex TIF, we are setting a precedent in Sioux Falls, don’t care about other communities. We should be treading very lightly here, and we should be getting the best value for the citizens. I don’t see this here. When setting a precedent in governing we shouldn’t take the ramrod, get R’ done approach we should review this project with a fine tooth comb.

And, finally, providing public parking in Sioux Falls only serves to keep parking rates low. There are far more privately-owned parking spaces in Sioux Falls than public. The per-day/per-month/per-year rate would be far higher if it weren’t for the low-cost competition provided by the city.

Rates will go up, they have to support the payments of the bond.

I’m proudly voting in favor of this project on Tuesday as another step in the positive, progressive growth of this amazing community I call home.

Michelle Erpenbach
Sioux Falls City Council
Central District
merpenbach@siouxfalls.org
(605) 367-8110

It still baffles me that at least 6 councilors and the mayor support this project. I have been following city government closely for 12 years and this appears to be the biggest scam I have seen in a long time. It just shows in the fierce defense of the project in Erpenbach’s email in which she calls Stehly a liar. Kill the messenger is the only line of defense they have because they truly know, when you look at the ‘facts’ of this project, the math just doesn’t add up.