$200 a day rent for Downtown Sioux Falls Loft Apartment

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Yes, that is the daily rent, for the month it will cost you $5,950. I purchased my home 20 years ago, before I bought the house the rent I paid for a nice 1-bedroom behind U-Haul in Pettigrew Heights was $350 a month which included gas and garbage service. For $5,950 a month you could pay a mortgage on a 1 million dollar home. You can rent a decent hotel room in Sioux Falls for about $100 a night. Heck even Hotel Phillips only 2 blocks from this loft charges between $140-$220 a night. An VRBO or Air BNB is even cheaper. This 3 bedroom short term rental in McKennan Park will run you about $162 a night. Even if you had 3 people renting the loft, they would still have to pay $2,000 a month in rent. In fact what you would pay for rent in a year for this place ($70K+) was more then the original purchase price of my home.

Normally I wouldn’t give two rips about what a wealthy property owner/developer in DTSF charges for rent, I’m a free market person and if they can get that kind of ‘rent’ money, good for you. Where I take issue is that this building received a facade easement grant* (basically the city gives private developers money to fix up their historical facades with little oversight). I asked a councilor recently if the half-Inch faux brick that they glued on the front of Lucky’s facade was considered historic? Faux brick has been a trend lately, but I still think it looks fake. I thought one of the requirements of historic restoration was for it to be actually historic, you know, like the fiberglass bulstrades on the Pavilion’s new roof.

Besides the atrocious monthly rent, this really doesn’t make the city look very good when they are handing out TIFs for condo parking ramps and facade grants DTSF but on the other hand are promoting(?) affordable and accessible housing.

*The facade easement program was mysteriously and suddenly re-instated by the urging of Central District Councilor Curt Soehl. No surprise the 1st recipients for the grants were the former campaign treasurer for Soehl (for the 9th and Grange coffee shop that he is restoring) and the investment group that owns the Lucky’s loft who has given thousands of dollars in campaign contributions to Mayor TenHaken and his various supported candidates. The program is nothing but a pay to play payback to these campaign contributors. The program was originally ended because there really is NO need for taxpayers to be propping up these private developers.

The city really needs to get out of the wealthy developer welfare program business and start incentivizing affordable housing DTSF with programs that help build housing density while focusing on the individual property and small rental owners. Instead the city’s solution is to build slab on grade tract homes in a cornfield in Southern Brandon. Even a chicken playing tic-tac-toe is smarter than that.

UPDATE: In 2017 Rapid City used a very small TIF to support affordable housing (H/T Mike Zitterich). It was 5 years ago, but for a $26,500 TIF the developer was able to build 5 Town Homes – the cheapest with the price tag of $109K. Even with inflationary adjustments, that same place would only be about $130-150K today. It was built on a blighted empty lot.

We could legally do this in the core of the city, and we could do it for multiple properties.

Here is a video of the project;

Posted in: Affordable Housing, Air BNB, Curt Soehl, Downtown Sioux Falls, Mayor TenHaken, SF City Council, Sioux Falls, TIFs

Bunker Ramp Developer Proposals need to be made public

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The Anti-Transparent government running city hall wants to move forward on the failed Bunker Ramp project with even less transparency than what got us in this pickle to begin with;

Powers and chief of staff Erica Beck also have updated the City Council multiple times, answered questions and solicited feedback.

“It’s important to note that some of the interest is because of the confidence we’ve been able to share with the industry and because of the collaboration between the administration and council,” Beck said. “We’ve been transparent that we’re conveying the questions, concerns and comments … and I think that will lead to a process and ultimately applications that may be more than what we first thought we might receive. We’ve received a lot of good feedback both internal and external of the city and state for that matter.”

The city plans to use a negotiated sale process to either sell or lease all or part of the site, including potentially the ramp itself.

A committee of city and community representatives will lead the evaluation process and make a recommendation. The team will start reviewing submissions in January, but there’s no hard deadline yet.

While there is certainly nothing wrong with an initial review process to boot out the ridiculous, underfunded and impossible, serious finalists and contenders need to present their proposals publicly to the city council during a special informational meeting as long as they meet investment criteria (a little problem we had the first time around).

It certainly sounds like to me a process has been set in place that will make the final decision of who takes over the property up to the non-elected planning staff, the non-elected mayor’s staff, the mayor himself and handed over to the council for rubber stamp approval.

And who can resist a property that has PLUMP utilities;

I would challenge the city council to demand that at least 3 finalists need to present publicly their plans to the council, and allow the council to have an up or down vote on those proposals.

As of right now, it would be like going to the shoe store and asking to see all of their running shoes they have in size 8, and the salesperson bringing out one pair from the store room stating, “These are our best shoes sir, you don’t need to worry about what else is in stock.”

One of the biggest reasons corruption and bad decisions are made not just locally but nationally is because those decisions are made in the dark with very little if any input from the public. Bring the public along this time and it could be less complicated.

As I have predicted, the developer will probably be a usual suspect that will get all the handouts and goodies anticipated with a deal like this. There will either be a much lower purchase price or lease agreement negotiated(?) and a tax break or TIF to boot. No developer in their right mind wouldn’t go after this opportunity WITHOUT asking for the full reach around from the city, and they will quickly oblige, heck it is even mentioned in the proposal online;

For property that is being considered for sale, the value of the property is established by a market value appraisal prepared by an independent appraiser hired and compensated by the City. Projects that will provide tangible public benefits may be eligible for various forms of financial assistance, such as tax increment financing (TIF) and property tax reduction. Consideration of the purchase/lease price, incentive request, or other request of the proposer will be weighed to determine the best project and offer to the City

In other words ‘just ask’ and you may get what you want.

Posted in: Bunker Ramp, Developers, Development, Downtown Sioux Falls, SF City Council, Sioux Falls

Sioux Falls City Councilor Selberg should recuse himself from Bunker Ramp negotiations

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During the informational this afternoon the council discussed what next to do with the Bunker Ramp;

A public parking ramp that took nearly a decade and more than $20 million to build in downtown Sioux Falls could be sold to a private developer.

During a Tuesday informational meeting at Carnegie Town Hall, city councilors urged Mayor Paul TenHaken’s administration to consider all options when picking a new partner to build at the Mall Avenue and 10th Street site.

And that includes selling the entirety of the seven-story ramp that opened in July 2020 and is equipped to handle up to eight additional stories. The site has gone undeveloped since a mixed-use parking ramp project fell apart in 2019.

I do agree with councilors that they should take the best deal and I also agree with councilor Soehl that we need to use a 3rd party to vet the investors properly. I am also partially in agreement with what councilor Merkouris said;

Rich Merkouris said he’s apprehensive about giving any tax breaks to the eventual buyer unless they use the space to add residential stock downtown.

“For me personally, I would struggle incentivizing anything outside of housing unless it was a part of the bigger package,” he said.

I would go a step further and say there should be NO incentives. Anyone who takes over this property is being given a site in a plum location with an opportunity to do well. The taxpayers have already incentivized this project, there is absolutely NO reason to hand out more candy. Find an honest free market developer who has a solid plan to make it successful, then you don’t need to worry about tax incentives. It was also pointed out it is in an opportunity zone which means there will be some incentives to build there without city tax payers help.

But what what really pissed me off was having councilor Selberg sit in on meetings and negotiations for future use. NO councilor that helped approve this pile of sh!t should be involved. It should either be handed over to a new councilor or Pat Starr who opposed this. It would be like hiring the guy who rear ended your car to fix it. Any councilor who approved this should not be in closed door meetings trying to cover up their mistakes. We need councilors with a clear conscience to negotiate this deal with a focus on hyper transparency.

These knuckleheads learn very little from past mistakes.

Posted in: Bunker Ramp, Curt Soehl, Developers, Development, Downtown Sioux Falls, Marshall Selberg, Patrick Starr, Rich Merkouris, SF City Council, Sioux Falls

Downtown Sioux Falls organization wants to increase the bid tax

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Thank goodness we have a new media source in Sioux Falls covering City Hall, otherwise I would not have had any idea DTSF was planning this;

Downtown Sioux Falls, Inc. (DTSF) this month will ask the Sioux Falls City Council to get behind a proposal to get rid of a decades-old cap on the amount of revenue it can collect on parcels within the boundaries of what’s known as the Main Street Business Improvement District (BID). 

However, not everyone is on board. 

Duff Robinson, owner of a pair of properties in the northern end of downtown, said he’s not opposed to lifting the cap. But he said DTSF could capture additional revenues with a more modest change to the special assessment.

Rather than leaving the base rate of the special assessment at $1.50 per $1,000 of valuation for downtown buildings and adding a 50-cent tax on valuation beyond the $1 million value, Robinson said DTSF could capture additional dollars by lowering the base rate and relying on the overall valuation increases assessed on downtown properties by the county equalization office and a reduced base rate for the BID.

“With an 18 percent increase in valuations, they’re going to get an increase anyway even if they don’t approve this,” Robinson said, referring to average assessment increases placed on downtown properties in 2021. “I’ve come to terms with removing the cap, but I just think they should flatten it out.”

Here’s a better idea, STOP HANDING OUT $50 MILLION DOLLAR TIFS FOR PARKING RAMPS DOWNTOWN.

Isn’t it ironic that DTSF is the first to hit the podium at Carnegie talking about all the TIFilicious benefits of Tax Increment Financing then turns around and asks for a tax increase to fund its organization. Make the organization DTSF and its employees a division of the city and fund it thru the general fund and parking fund.

When disgruntled, angry developers and bondsters look me straight in the face and tell me I am lying when I point out TIFs only raise taxes on the rest of us I gladly point to this proposed increase which is a prime example of how we give massive tax cuts to very top developments downtown then turn around and increase taxes on everyone else.

Duff is correct, the increase in valuations on properties over $1 million could cover the spread, if only they were paying 100% of property taxes on day one instead of 20 years down the road.

Just further proof that TIFs don’t spur true economic development just higher taxes for the rest of us.

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

Another Bunker Ramp update. Let me guess, we have winner!

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It has only been a couple of weeks since we were told they were going put lipstick on that gigantic concrete pig, now we are getting another update;

• Downtown Parking Ramp Update by Erica Beck, Chief of Staff

More than likely this is an update with the mural selection process, but you never know, they may have an interested party. A few months ago I heard a rumor that Councilor Neitzert was telling some constituents he wanted to do an investigation into how the Bunker Ramp got so messed up. I almost died laughing. I told this person we could save a lot of time if we just handed Greg a mirror.

They will also be amending the Shape Places;

• Shape Places Ordinance & Proposed Amendments by Jason Bieber, Senior Planner

I find the expedited timeline of getting these changes in place interesting. This means many of them have been in the works for months without the knowledge of the public or council.

Posted in: Bunker Ramp, Downtown Sioux Falls, Planning Commission, SF City Council, Sioux Falls