Sioux Falls

Zeal lease contract with the City of Sioux Falls is based on empty promises

l3wis January 7, 2022 26Comments

Before we dive into the current proposed agreement (Item #18) watch these videos from 2018 (FF to 9:30 in the first Q & A and listen to the Mayor’s answer about personal guarantee);

So why do I bring this up? The deal that took place back than echoes what is going on with ZEAL.

Let me make this clear, I SUPPORT, Zeal & StartUp Sioux Falls moving to this building, I support their vision for the facility, I even kind of support the $1 a year lease. But let’s face it, most people in this city are worried about where their next paycheck and meal is coming from and not starting a business so there is absolutely NO reason the taxpayers need to partner with them. In fact DTSF has several private properties available for a facility like this without the city needing to get involved.

The main issue with the deal is the handshake promise that they will spend $1 million remodeling the building. It is true that in the contract they will be responsible for general maintenance and have to carry insurance, but like the Bunker Ramp deal there is NOTHING in writing that they must spend this money, even though the city promises to reimburse them if they break the lease. The mayor also has authority of what improvements can be made, which is good. But like the deal with Jeff Lamont that was based on a flimsy piece of paper that he was ‘good for the money’ ZEAL has NOTHING in writing they will spend the $1 million.

Did we learn nothing from the $26 million dollar pile of cement?

What baffles me is that while this mayor and the past one claim they are running the city like a business, NO ONE in the private sector would sign a contract like this if the promises were not in writing and approved by their legal counsel.

This is just another handshake deal between the mayor and his rich buddies with NO (legal) accountability, and while it frustrates me these backroom deals persist, I think for the most part the massive conflicts of interest sadden me when we could have just done better. I know the mayor shares a deep friendship with some of the individuals involved, but this isn’t the mayor personally borrowing his lawn mower to a buddy, this is a tax payer owned asset and we must dot the I’s and cross the T’s to protect OUR asset NOT the mayor’s friend’s asses.

Some may argue that this is NOT like the Bunker Ramp deal, which when it comes to value, they are correct. But when it comes to a private/public partnership almost everything is identical, including nothing in writing. We just don’t seem to learn from (recent) history when it comes to contracts with these partnerships like the cost overruns and shoddy work with the Pavilion, Admin Building, Events Center, Midco Aquatic Center and Bunker Ramp. I have even heard there are now millions in cost overruns with the Water Treatment and Public Safety facilities that are not even completed yet.

I don’t expect my council and mayor to be geniuses when it comes to these negotiations, but at least look at history and rely on your 6-Figure a year staff to give top notch advice and draw up contracts that value accountability.