Downtown Parking Ramp hammer about to drop?

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Rumor has it that Sioux Falls city council has been put on notice; contract negotiations between the city and the parking ramp developer (Legacy) is almost complete, and they are going to ask the council to approve that contract this month, but will they?

Only two councilors so far have been vocal about a NO vote, Stehly and Starr. Stehly takes issue with Legacy’s close relationship with Hultgren Construction and the lack of transparency when it comes to investors (rumor is that Legacy doesn’t have any yet) and Starr takes issue with the corporate welfare aspect, handing over $17 million to a private developer who will provide us very little in return.

Really, anyway you look at it, the deal stinks, really bad. Even on a really windy day when JM’s is in full kill, the stink isn’t as bad as this deal. So what baffles me and many others in the community, why would possibly 6 councilors be on board with this? I don’t know. As one city official said to me today, “Where is the outrage from the public?” or more importantly what do we have to do to get the outrage?

This has to be possibly the WORST deal the city has ever cut since they gave $27 million for about $2 million dollars worth of land to the Railroad, and the trains are still running through downtown. A Boondoggle that didn’t solve the original problem, train traffic downtown.

Maybe that is why this deal will probably be struck, because the citizens really don’t care. They proved this with the RR deal, the indoor pool and the administration building (at least the public took a stab at that one).

I’m hoping the other 6 councilors wake up, or at least 4 of them to make the deal veto proof. I’m not holding my breath.

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

The Sioux Falls City Council needs to KILL the downtown parking ramp before we blow anymore money

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There is already suspect of how trustworthy the developer is, and a horrible location. The council needs to stop anymore funding right now;

While the parking ramp is an effort City Hall is committed to, the same can’t be said for some on the City Council.

Councilor Pat Starr, who last fall led a successful effort last year to cut the bulk of the project funding from the 2017 budget until more specific costs could be determined, said with every contract that’s approved the Council is being put deeper in a corner where it becomes increasingly difficult to say no to borrowing money for the project.

“It feels like we’re putting the cart before the horse here,” Starr said. “We haven’t even agreed to build it yet.”

To his point, during discussions and debate regarding the planned city administration building, proponents of the new building like Mayor Mike Huether and his staff repeatedly said dollars invested in the planning process would be wasted if the project stalled.

“It’s not a given that we’re all going to vote for the project so I’m just concerned that if you spend $231,000 … and then we say no to it. At that point the argument can be made that we’ve already invested so much money we have to move forward with it,” Councilor Theresa Stehly said of the parking Ramp.

Of course Erpenbach doesn’t see a problem with spending the money because it comes from the sky, apparently;

For Councilor Michelle Erpenbach, it’s worth noting that whether it’s engineering, consulting or construction, taxpayers aren’t the ones footing the bill for the parking ramp project. Rather, the city’s enterprise parking fund, fueled with user fees like parking tickets and meter and lease revenues, will cover project costs and bond payments.

“It’s all paid by people who actually use the parking facilities,” Erpenbach said.

Hey, and guess who most of those people are Michelle? The good taxpayers of Sioux Falls. You can call it a ‘fee’ all you want, but it really is a parking ‘tax’.

Posted in: Downtown Sioux Falls, Sioux Falls

UPDATE: I told you so! Downtown Sioux Falls Parking Ramp mixed use – BAD IDEA!

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UPDATE: So now everyone is back peddling like crazy. Village on the River went over to the ‘Safe Room’ to tell their side of the story to a content marketing website. I’m actually surprised they didn’t take out some google ads. But even if the deal is to be saved, it’s NOT going to turn out well for the taxpayers;

“Adjustments to the design and size of the hotel/retail structure have been analyzed by the project team to ensure that it is the best possible project,” Village River Group said in a statement.

“Once approved by the city, the group will finalize the design details and related construction, architecture and bond requirements and move forward with construction.”

Here lies the problem, the design was ALREADY approved, heck, the most important part, the parking structure and it’s foundation is near completion. Shouldn’t these design changes have taken place before ground was even broken? It would be like building a one-story house and telling your builder after he finishes the roof that you want a second floor. But besides over building the foundation (which taxpayers put in around $6 million for) they want an even bigger incentive;

Village River Group has looked at multiple funding options to offset its private investment, it said. That included use of city tax increment financing and new market tax credits, but those incentives “did not materialize,” it said.

So now that is the fault of the city and taxpayers who upheld their part of the deal?

The project is planned to be funded privately, and “the city has offered the project BID tax rebate incentives and a real estate tax reduction incentive,” Village River Group said.

How is this any different then a TIF? It isn’t, it’s just packaged differently. More HUGE tax breaks and developer welfare for a project that now is smaller? You have got to be F’ing kidding me!

According to its development agreement with the city, a second development fee payment and performance bond are due to the city when phase one of the private improvements begin, the developers said.

Which was pretty much ‘yesterday’ in lack of a better term. The developer broke a promise with the taxpayers of Sioux Falls and it is time to shut down the building site and find a NEW partner and sue the pants of the one that screwed us over.

Here is a link to several blog posts about this topic; LINK.

From the beginning, the warning signs were there;

Bad location

Not enough spaces

Expensive spaces (to offset foundation costs)

Using 2nd Penny as collateral

Investing with a developer (still) being investigated by the Feds for the Copper Lounge collapse

And now we have a whole new set of problems;

However, the city says a start-date for construction on the private portion of the project hasn’t been determined. That’s because the city has yet to receive proof of a performance bond and a $350,000 fee spelled out in the development agreement.

City officials repeatedly did not answer whether the developers are in default of their contract on the project.

I find it ironic, that a former city councilor who supported this project would be chastising councilor Stehly for being negative when she was virtually a one-person army fighting this project. The height of negativity would be supporting this ignoramus project.

On top of all this, it seems the city council will be appropriating another $50K in legal fees for the project Tuesday night in the contract approvals.

I often talk about ‘common sense’ government. Nothing about this project made any sense, and at the end of the day the citizens may be holding the bag. I think any current city councilor that voted for this project should resign in shame. It’s one thing to make a bad decision (like voting against a movie theater beer license or approving ax throwing in bars) but this decision by a majority of councilors and BOTH mayors to move forward is beyond a ‘bad decision’ – it’s gross negligence and they should be removed from office.

 

 

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