UPDATE II: Legacy certainly has a Legacy

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Guest post by Bruce Danielson;

UPDATE II: Seems a Legacy development got denied a state loan, and nobody is talking;

Seldom does this happen.

But, earlier this month, it did.

The credit committee for the South Dakota Board of Economic Development recommended a loan be made to a company.

Eight days later, the full board refused it.

When I emailed Erickson, who is board chairman, to ask about the loan denial, Erickson referred me to Stern.

When I talked with Stern on the telephone Wednesday, Stern said he was limited on what he could publicly say.

This post lays out several points I would like you to consider following the Wednesday December 27, 2017 press conference. This press conference was the first time the citizens of Sioux Falls actually were able to ask question of two city employees deeply involved in the parking ramp project. It now appears more employees should be brought forward to answer  questions. Here is the press conference link for you to watch:

I recently filed my 5th Board of Ethics complaint, I may be filing a few more shortly.

The Sioux Falls parking ramp proposal is a very curious proposal and so is the connection to Les Kinstad, Norm Drake, Larry Canfield as business partners. To calm the fears of a great many Sioux Falls citizens, there is a belief a grand jury investigation is needed into the building collapse. There seems to be a pattern of getting things done without permits and going until caught. This Board of Historic Preservation meeting is another time this group pushed the legal and ethical limits to just get something done. I guess this is what we do just to get things done or make it look like it. Now we have a dead worker and a missing downtown building. Once the parking ramp is under way, what’s to stop the guarantors from changing the work orders they gave their contractor when putting their building up with of our parking ramp?

BTW, during the construction of the hotel, will the ramp be open for public use? There is a growing concern around the country about issues related to parking ramp or building construction when connecting them together. Here are some results:

https://www.youtube.com/watch?v=tLiHsIk1RNQ

https://www.youtube.com/watch?v=uQdtqVe1Rpc

https://www.youtube.com/watch?v=BONh6oMN13k

https://www.youtube.com/watch?v=03ldg-M8jUc

https://www.youtube.com/watch?v=2aQMuhGleNA

https://www.youtube.com/watch?v=A2P1zCqbmKU

https://www.youtube.com/watch?v=XPe7c3Gpl7c

https://www.youtube.com/watch?v=3Y5nYkrti3A

Are these videos enough to question anything about our current concerns?

Think about this situation (PDF DOC: bohp_minutes_041311):

Norm Drake and Les Kinstad went to a Board of Historic Preservation after Ron Bell issued a Stop Work on the Security Building in 2011. They were just pushing ahead without approvals required. Work until they are stopped.

 Security National Bank Renovation

Les Kinstad, Scott Abdallah, and Norm Drake presented detailed information about renovation work at the Security National Bank building located at 101 S. Main Avenue. Interior building permits were granted prior to the start of construction but no exterior

building permits have been pulled even though work has begun on exterior window replacement. Because of this, Building Services placed a Stop-work Order on the project until the Board reviews the project and Building Services can review structural plans.

The Security Bank project representatives presented the Board members with some visuals of the building as originally built, to show what the exterior windows used to look like. The owner intends on replacing the window areas with something very similar. Keith Thompson made a motion to approve the work as presented and then to have the Board review the project again as it relates to the façade easement agreement, when the project is complete. Dixie Hieb seconded the motion. Motion passed with five members voting in favor of the motion and Anita Kealey abstaining.

So what is the full connection between all of these boards, people and events? I record these meetings so they can be studied and used for further proceedings. Sioux Falls city government has stopped the Council, boards and commissions from taking detailed minutes to limit the exposure, this appears to be why the administration fought so hard to prevent public recordings. There are several members of the public and press who are watching your actions, the administration processes and the curious connections with several outside entities.

As a side note, Norm Drake discussed his displeasure having to follow rules when building downtown Sioux Falls during this 2016-11-29 – Downtown Design Standards presentation I recorded.

On December 2, 2016 at 10:33 a.m. less than 60 hours after Mr. Drake was complaining about standards we lost a man and a historic building with a SiouxFalls owned façade easement. This happened one day after a curious property transfer happened and now we have their confession of insolvency. The Federal EPA has the ability to fine previous property owners for criminal wrong doing. Sioux Falls appears to say, let’s just get it done and damn the consequences. Remember, we lost a man and a historic building with a SiouxFalls owned façade easement.

What’s wrong with this? There is a reason for ethics. There is proper process. Where are the ethics and open process we must have to not let these things happen again. Why does the city continue to do the same thing over and over again thinking they will never be caught?

RELATED STORIES

Legacy gets sued by Irish Franchise;

Dublin-based Epcon, a condominium builder with 127 franchisees in 29 states, sued a Sioux Falls, S.D., franchisee whose projects never gained ground despite plans to build in one of the fastest-growing cities in the Plains states. Epcon said the owners, Norman Drake, Lynn Hinckley, Lester Kinstad, Bryant Soberg and Darrel Viereck failed to make scheduled franchise payments. It is asking a federal court to award it $200,000 in back payments and interest.

There was also a very familiar proposed parking ramp project in Rapid City, in 2009 (DOC: 0727_July27SpC)

UPDATE: This is what was used to stop Harsma Construction from further contracts with the city this past year. Pay attention to point 8 below and see how Legacy can be doing further business with the city?

GENERAL CONDITIONS FOR PUBLIC IMPROVEMENTS

Section 2. Bidding Requirements and Conditions

 2.10 DISQUALIFICATION OF BIDDERS:

The following reasons will be considered sufficient for disqualifying a bidder and rejecting the proposal or proposals:

A.    Submittal of more than one proposal for the same work from an individual, partnership, limited liability company, firm, corporation, or joint venture by the bidder or its affiliates.

B.    Evidence of collusion among bidders. Participants in collusion will not receive recognition as bidders for future work with the City until they are reinstated as a responsible qualified bidder.

C.   The bidder has been determined to be a non-responsible bidder by the City. A bidder may be determined to be a non-responsible bidder for any one or more of the following reasons:

1.    The bidder has inadequate experience, lack of organization resources, or technical resources to complete the project;

2.    The bidder or its affiliates have other incomplete projects which the City believes may hinder or prevent prompt completion of the project;

3.    The bidder or its affiliates are in default of contracts for previous or other current projects;

4.    The bidder or its affiliates have not satisfactorily performed, for the City or other owners, previous projects or other current projects including, but not limited to, the items listed below in this paragraph. Determinations of unsatisfactory performance on work for other owners will be based on written documentation unless the other owner is associated with the project to be awarded.

a.    Noncompliance with project requirements or the directives of the owner or its agents;

b.    Repeated or substantial failure to complete projects on time;

c.    Substantial corrective work required prior to final acceptance or during the warranty period;

d.    Instances of work or materials that failed to meet the specifications of the contracts but were accepted by the City with a price adjustment;

e.    Failure to provide adequate safety measures or appropriate traffic control measures that endangered the safety of the workforce or the public;

f.     Submitted false documents or misrepresented the quality or quantity of materials used or work performed in the bid or on other projects.

5.    Subcontractor or supplier claims against the payment and performance bond and/or the project proceeds on bidder’s or its affiliates’ other current or previous projects that may impede the ability of the bidder to complete the project to be awarded.

6.    Any other facts or circumstances showing a reasonable likelihood of the bidder’s inability to properly complete the project in accordance with the contract requirements.

7.    The bidder, its affiliates or their respective officers, directors, members, partners, shareholders, or resident general managers in arrears to the City in excess of 90 days, including any situation where the bidder was a party to a joint venture and the joint venture failed to reimburse the City for monies owed.

8.    The bidder, its affiliates, or their respective officers, directors, members, partners, shareholders, or resident general managers has violated Environmental Laws of any state or the United States (as defined above in General Conditions) which violation has resulted in a fine of $10,000 or more or has had any permit or contract revoked based on the Environmental Laws of any state or the United States.

Posted in: Developers, Development, Downtown Sioux Falls, Legacy Developments, SF City Council, Sioux Falls

Huether to make an announcement ‘soon’ on his political future

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During his latest Shut Up and Listen session on Wednesday addressing a group of Chamber leadership peeps, MMM says he will be making an announcement soon on his political future. He says he has been considering many options which include running for senate or for governor or for mayor again in 4 years. He said he has considered all of them.

My bet is still on that he will run for governor as an independent. I just don’t think he will sit around for another 2-4 years. As a person who is constantly trying to re-invent the wheel, he isn’t going to just sit around and do nothing for that period of time.

During the session he also bragged about the city’s growth during his tenure. What he failed to mention is that most of the growth has come from people in our city making babies. The explosive growth in our school system is proof of this.

One of his sessions of course can’t go by without telling a few lies. He went on a rant about how NONE of the mayoral candidates or council candidates in the latest municipal race have taken a stance on the Parking Ramp before the vote. While I’m not sure if most them have or have not taken a stance, I do know that Jolene did. When asked by Lalley last week on his show Jolene said she did support the project. The only concern she had was the lack of transparency. But she was very firm on the fact she supports downtown development.

He also said he thought some of the candidates for mayor may push our city backwards. While I may not agree with some of the candidates philosophies, I don’t think ANY of them would go backwards. I think they are all pretty forward thinking, especially when it comes to open government and civil rights. It’s pretty sad he would say this, like he was some kind of great progressive. Spending mommy and daddy’s credit card on play things and producing enormous debt under a veil of secrecy is NOT progressive, it’s actually fiscally regressive.

He also blamed the city council for NOT fixing public transit, saying they can’t make the hard decisions. Funny, coming from the guy who doesn’t let them do things on their own. The Glory House land transfer was a great example of this. Councilor Starr had it handled with the help of the council and Mike had to get his fingers in their and make them pay for some of the land. The council also tried to stop the unnessary spending on the administration building and he vetoed them. He also stopped the districting of the parks board and has bragged that he only needs 2-4 votes to get things done with the council. The mayor has never worked with the council on anything, he only bullied them. No wonder they haven’t done anything with public transit, because any ideas they have would just get stomped down.

He will not be missed, and if he does decide to run for governor, I will do everything in my power to make sure that he does not win.

Posted in: Mayor Grump Toad, Mayor High Crimes, Mayor Hubris, Mayor Pants on Fire, Mayor Subprime Mike Huether, Mike Huether, Sioux Falls

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.

Posted in: Developers, Development, Downtown Sioux Falls, Michelle Erpenbach, SF City Council, Sioux Falls, Theresa Stehly

What is going on with the OSHA investigation of the Copper Lounge collapse?

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As you can see, the OSHA investigation case IS STILL OPEN on the Copper Lounge collapse. The fines are being contested and nothing has been paid yet.

But it still leaves a lot of unanswered questions;

• Did or Will the city conduct their own investigation, and is Hultgren Construction paying for the disaster recovery?

• What have the insurance companies determined and will any claims be paid out? To either the victims and their families or to the city.

• Will there be any reimbursements for Downtown businesses that lost business for over a week due to the collapse.

• What repercussions are there for Legacy Development that was tied to Hultgren construction. What happened to the agreement between Lewis and Legacy to build them a new store downtown?

The public has heard very little from the city, the states attorney’s office and the attorney general about what charges may or may not be brought forth. The only government entity giving us any information is OSHA at this point.

I hate to say it, but like the secret siding settlement on the Denty, it looks like the city is looking to sweep this under the rug, or at least keep it off the radar until they can give a contract to Legacy to build a new parking ramp.

Hopefully the parking ramp contract will be voted down and we can start at square one with justice to the victims of the building collapse.

Posted in: Developers, Development, Downtown Sioux Falls, Sioux Falls

Even with possible civil suit looming, city still in bed with Legacy

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There were two letters to the editor today in the Argus Leader over Legacy’s relationship with the city.

First from a constituent;

Hultgren Construction, co-owned by Aaron Hultgren, was fined by OSHA for work it was doing on the Copper Lounge building at the time of its collapse. Asked whether the city reconsidered partnering with Legacy as a result of these fines, Darren Ketcham, community development manager for the City of Sioux Falls said, “Hultgren Construction is not part of this project.” That statement could be misleading if Legacy is linked financially to Hultgren.

Nevertheless, Legacy Development is ultimately responsible for the safety of everyone living and working on their property and safeguarding the integrity of what was once a contributing building to the Downtown Historical District. It failed at both. How then did they become the city’s choice as its partner in the proposed parking lot and how does the city justify their decision?

Nutty? Right? How does a development company that has ran roughshot over DT development get awarded such a RFQ without greasing some palms?

Councilor Stehly also responds to concerns over Legacy;

This proposal would be a unique collaboration, with tax dollars supporting the parking ramp and a private investor (Legacy Development), building the outside retail structure. We have been told that the city’s share in this could be more than $18 million. We have also been told that it could create 200-300 new parking spaces. This is a very expensive parking proposal. There are questions about who will maintain the structure of this building and what liability the city would have if the private businesses would not be able to support their part.

Even if we did get 300 spaces for public parking, that is 3x more then what a normal parking ramp space costs (Aprox $20K). Even with all the controversy surrounding Legacy, why on earth would taxpayers want to pay $60K per parking space, when the going rate for a stand alone parking ramp is $20K.

The Sioux Falls city council (6 of them) need to wake from their deep sleep and realize this proposal is bad for tax payers in every shape and form. It costs too much, it’s the wrong location, the funding effects our 2nd penny, and the developer may be sued in a wrongful death suit. Any councilor or elected official who would vote for such a horrible plan has to be stark raving mad.

Posted in: Downtown Sioux Falls, Legacy Developments, SF City Council, Sioux Falls