Entries Tagged 'Event Center' ↓

How much does The Denty contribute to it’s mortgage payment? Very Little.

Did you know that the mortgage payment on The Denty is around $10 million a year? Did you also know we pay that debt service out of one of our 3 pennies our city takes in for revenue? We pay debt service on all of our bonds out of the 2nd penny, money originally set aside a long time ago by city commissioner Loila Hunking for ROADS and other infrastructure.

Of course, if The Denty is contributing to that 2nd penny, it does with help with the mortgage payment – we will get to that contribution shortly.

We heard it just about a month ago, Garth Brooks sucked $7 million in ticket sales out of our town straight into his pocket. The news today, the Foo Fighters (which I contributed to) had record ticket sales, guess where? At The Denty where they sucked a record $1,018,273 out of town, FROM ONE CONCERT! That is an average $93 per person. Guess how much we garnered for the 2nd penny on the Foo Fighters show from ticket sales? $10,182. Woot! Woot!

While I have been asking for numbers from the city for awhile about how much money we are making from The Denty (that could contribute to the mortgage payment) I haven’t gotten very far, but I did get a small breakthrough today.

According to the City’s Finance Director The Denty collected $1,824,710.19 in tax revenue for 2016. If you break out the 3 pennies we get (The state gets 4.5 pennies) we took in $729,884 and if you break it down to single pennies, since the 2nd penny is the only one we use to pay debt, it comes to $243,295, hardly a ‘dent’ (excuse the pun) in the mortgage payment.

Yes it is true besides the taxes that The Denty collects, their is an economic impact. My guess is at the highest it would probably be about 3x what The Denty brings in. You have to figure that half already live in Sioux Falls and the other half probably spends a majority of their money at The Denty since we built the facility along the interstate and not in the center of an entertainment district, visitors drive straight there, spend there money there, then drive straight home.

But the almighty Finance Director also fills us in on some other interesting information. Doesn’t the city get a share of the profits SMG makes off of the The Denty?

Ah, not really. Here is how he explained it in a recent email to council;

Revenues generated for SMG as a private sector company are limited to the fees paid to SMG as set out in their contract with the City: a base fee and, if earned, an incentive fee.  These fees are how SMG makes its money as a business.

Revenues generated from the operation of the City’s facilities (DSPC, Convention Center, Arena, Orpheum Theater) are revenues to the Operating Account managed on the City’s behalf by SMG.  Revenues to the Operating Account include rental fees, charges for additional services provided to guests that rent the facilities, ancillary revenues (food & beverage commissions, novelty sales, parking charges, suite cleaning, facility fees, etc.) and marketing & sponsorships (advertising, naming rights, suite leases, loge box leases, club seat fees).  All revenues generated from these sources are deposited into the Operating Account and are used to pay the costs of running the facilities (payroll, utilities, cleaning & maintaining the facilities, SMG’s management fees, internet/telephone, office supplies, insurance, etc.)

In small man’s word’s, any money The Denty makes that isn’t collected tax revenue goes straight back into a fund to support the building. In other words, while SMG and it’s management make money and are able to pay the light and garbage bill, they are contributing NOTHING to the mortgage payment. Zilch. SMG is essentially making a profit and paying rent.

I’ve said all along, The Denty wasn’t built for you and me, it was built to make a bunch of bond investors and construction company owners a lot of money. You have to realize out of the $180 million dollar payoff $65 million is interest payments. That’s $65 million that won’t be spent on our roads and handed directly over to private bond investors.

I still think we could have built The Denty with a combination of private investors and money from the state’s investment funds (that we would pay back in no interest or very low interest payments). Instead we decided to go it alone, built it in the wrong location, an don’t require the profits from the facility to pay off the debt.

The f’cked up siding is one thing, but the finances of this place are a total disaster. And the mayor calls himself a ‘banker’. LMFAO!

Lincoln’s Pinnacle has the same ‘visually interesting’ siding as The Denty

Lincoln got that good old oil can feeling to.

As we pointed out on DaCola over 2 years ago, the Pinnacle built by Mortenson shortly before building our EC, put the same dented up oil canning siding on their building to.

Perry Groton did a preview of a story he is doing tonight.

I just watched what Perry Groton dug up on the similarities.

He first talked about it’s success. The difference is that the Pinnacle was built in an area that could support an entertainment district, ours was built in the middle of an industrial park.

Of course the GM of the Pinnacle (An SMG employee) said he ‘expected’ it too look the way it does because of the curve of the building.


You don’t put flat panels on a curved building, you put curved panels on a curved building.

I think since the Pinnacle didn’t complain about the dented siding Mortenson somehow convinced the administration (I think the mayor ok’d it) to put up the same stuff.

Just look at this statement from Mortenson in reference to these two buildings;

“The Denny Sanford PREMIER Center in Sioux Falls and Pinnacle Bank Arena in Lincoln, Neb. are unique facilities that both use architectural metal panels as a part of their exterior designs. The variation in the appearance of these panels is intended and anticipated, and akin to the look of metal panel exteriors of other iconic venues.”
–Derek Cunz, senior vice-president at Mortenson


Oh, but it gets better,

The Pinnacle Bank Arena management also sent us the original renderings for the building as further proof that the paneling turned out as intended.  You can look at the renderings, and decide for yourself, by clicking here.

Um, those are photos of a finished building, not renderings. They do know the difference? Right?

Here are the renderings. Uh, no dents there.

Here is another picture, Uh, no dents there.

Proposed Contract with Siding Inspector

Here is a copy of the unsigned contract (DOC: siding-contract)

As you can see the inspection will cost us $25,000 with possible change orders. The council will approve the contract on Tuesday during the consent agenda portion of the meeting.

Here are some ‘interesting’ points I found in the contract;

• All work shall be performed by or under the direct supervision of a professional Engineer licensed to practice in South Dakota.

• Should there be any destructive or intrusive testing by the Engineeer, the Engineer acknowledges the City has no stockpile of the panels and the Engineer will use due care to maintain the building in the same condition as it was prior to initiating testing. Engineer will restore the site to the same condition as it was prior to such testing at its own expense.

• Consult with the City Engineer or his designee to obtain available data for review and coordinate access to the site with SMG, the City’s operator of the building, as needed. This will include site security (including exterior barriers or fencing if needed) and protection from interference with testing.

• The Engineer shall not sublet or assign any part of the independent review under this Agreement without written authority from the City. Further, if the Engineer hires a subcontractor for repair due to damage from the independent review, the Engineer must provide at least 72 hours’ advance notice as to the date, time, and method of repair and allow the City to make modifications to the proposed methods for such repair, if necessary, and to inspect the repair work.

• The City may at any time by written order make changes within the general scope of this Agreement in the work and services to be performed by the Engineer.

• The City agrees to pay the Engineer a fixed fee in an amount not to exceed $20,000 (hereinafter the “Fixed Fee”) plus reimbursable expenses not to exceed $5,000. Additional compensation will not be made for expenses exceeding the Maximum Fee unless the requirements as set forth in Section 5.4 of this Agreement are satisfied.

It seems there will be a designated or city engineer present during the inspections, which is fine, but I hope it doesn’t tamper in anyway having a fair assessment.

At least one mayoral candidate agrees, too much money going out the door from The Denty

Listen to what Jolene says about the EC and it’s visitors;

Maximize Our Investment

A full house for our City of HOPportunity: Jolene Loetscher for Mayor event! Tonight, believers in tomorrow from across Sioux Falls came together to learn about our plan and vision for the future of our city, including maximizing our investment in the Denny Sanford PREMIER Center to build an entertainment district and utilizing housing solutions to build stronger neighborhoods. This is the Sioux Falls of tomorrow. A city of solutions, innovation and opportunity for all.Special thanks to the incredible Maddie Todd for performing!#letsgojo #siouxfalls #cityofopportunity #mayor2018

Posted by Jolene Loetscher – Sioux Falls Mayor 2018 on Wednesday, November 15, 2017

I have been saying for awhile, besides the tax revenue from ticket sales, the Events Center is acting as a vacuum with money going out of our city.

Speaking of Jolene, here is a fundraiser she is having;

Art museums are supposed to be ‘Art’ friendly NOT ‘Kid’ friendly

Should have seen this coming a mile away when you put a youth pastor cartoonist in charge of a fine arts center. To that in a moment.

Last night at the council meeting they only had three resolutions on the agenda. It was 5 year contract renewals for SMG, Ovations & the Washington Pavilion.

I suggested that SMG promote more of their own shows to make the city coffers a little money. After the meeting, Argus Leader reporter Joe Sneve told me it may be difficult for the Denty to promote their own shows because they signed a contract with Live Nation. I said, “Well that was stupid.” Joe then asked Turbak who was standing there if that was true and like the grump toad mayor he just stood there and glared at me. Joe said to me, “You just aren’t happy about anything Scott” and chuckled. I responded, “We are running a concert hall not a church hall.”

When the resolution for the Pavilion came up, I suggested to the council that they look at audits and financials more thoroughly before okaying these contracts. I also suggested they amend the contract so that the visual arts center is free to all for local and regional exhibits. Councilor Starr called up Darrin Smith and asked him about the VAC. Smith said they are going to be making ‘great changes’ over the next couple of years in the VAC to make it better, including making the arts center more ‘kid’ friendly.


Arts centers should concentrate on ART. Visual art no matter the style has a wide appeal to all ages, that’s what makes it great. If there is a challenging exhibit to younger tikes – this is a great opportunity for parents to talk to their young ins about the topic and start a conversation. Art museums are not playlands, they are there to inspire emotion, influence creativity and are supposed to make you think. If kids want to play, they can play in the Science Center.

As for the VAC being FREE, there are two reasons why it is important. First off, it brings people into the Pavilion that normally wouldn’t visit an arts center, but more importantly it is a nice service to the public who help fund the facility. The city subsidizes the Pavilion for over a million a year. Besides FREE Tuesdays and First Fridays, the only other thing in the entire building that is FREE is the Sioux Falls black history cases (that few people know about because it is buried on a back hallway.)

Just another facility the taxpayers subsidize and still have to pay to walk through it’s doors. The Pavilion for years has tried to shake off the stigma they are only for the elite in Sioux Falls, I guess they have just given up that fight and accepted it. Sad.

Foo Fighters at The Denty

Click to Enlarge

This was probably my first ‘official’ concert at the EC. I did see Joan Jett at the opening event and did see the free United Way ‘Heart’ concert (which was amazing). But this was the first PAID event.

I will say the EC is set up nicely for concerts. I would compare it to the Quest in Omaha. The sound and the light show were amazing and the Foo Fighters put on a great show.

I will admit though out of personal preference as to why I don’t go to large arena concerts much (and this isn’t a dig on our EC, just large show in general).

• They are expensive (for the $120 I paid I could have gone to 6-8 club shows (and saw national acts just as good as the Foo Fighters).

• Besides the expensive ticket, $9 for a draft Bud Light or a single shot cocktail is over the top, so were the lines. The bars were extremely under staffed and you could see it in the staff’s faces.

• The bathrooms are way to small (not enough urinals). And if you think the men’s line was long, you should have seen the ladies.

• Finding parking was easy, leaving the event, not much fun.

• Supporting local promoters, venues and even artists helps to recirculate money in our economy. Giving $120 to the Foo Fighters, not so much.

It will probably be a long time before I go to a concert again at the EC. It will have to be someone really legendary. I am a bit bias though. I grew up going to club shows, they are what I know. But I also like the fact I can park a 100 feet away, not stand in line for a drink or bathroom and not get raped on drink prices. I also can stand in front of the stage. Nothing beats the intimacy of a club show either. There’s nothing like standing 8 feet away from one of your favorite artists.

To each there own though I guess. I encourage people to keep going to the EC, we already drain $10 million a year out of our CIP for the place each year on mortgage payments. If people stop going, we will really be in a bind.

Tax Incentives for Economic Development rarely pays off

Let’s look at some recent examples in Sioux Falls.

Uptown II; Taxpayers held the land for over 10 years collecting NO taxes for one developer, sold the land at a discount, gave them another 10-13 year tax break and in return we get an apartment building (that isn’t affordable housing) and a few parking spots for Levitt Pavilion.

Flopdation Park; State, County and City taxpayers will have spent over $30 million in infrastructure with only one tenant so far and NO signed agreements. And an employer that may provide 20 jobs at best for an Iowan Ice Cream factory.

Events Center; The building will cost taxpayers $180 million once paid for. While that may include the mortgage payments, it doesn’t include the yearly maintenance that comes from the same place as the mortgage payments, the CIP, a fund that is supposed to be for roads. While the EC may have a net operating gain, any of that ‘extra’ money doesn’t go to paying for the building or maintenance, it goes into a revolving fund that the management company uses. Than there is the supposed Economic Impact, since the EC has been open, tax revenue in Sioux Falls has actually gone down.

When you watch the latest episode of Last Week notice the part about the Fargo City Commission and how they approved a tax incentive for a company that was already moving there and said they didn’t need the tax incentive, the city commission approves it anyway. Sound familiar Sioux Falls?

But hey, without all these great amenities in Sioux Falls the rich millionaire doctors wouldn’t be moving here and building pools.

Sooper Secret Siding Study RFP Committee selected

And it is so secret we don’t even know who is serving on it. In fact, my City Hall mole tells me that Second in Charge, Fill-In, Uber City Attorney told the council and others that the committee must remain sooper secret until the RFP process is complete.

I guess you could look at that a couple of different ways since city hall’s attorneys like to play word games.

While they are NOT allowed to say who the 2 councilors are on the RFP committee, there is NOTHING banning them from saying who is NOT on the committee.

So much for secrets.


What’s going on with the Siding Inspection RFP?

Well that’s the Million dollar question isn’t it? Or is $444K, I get confused.

As I predicted, the only reason MMM rolled over like an old dog on agreeing to this inspection was if HE could control it. My Man Mikromanager wouldn’t have it any other way.

So has the RFP committee even been chosen yet? Who is on it if it has? If they have met already, what is the criteria of the inspection?

One councilor has asked these questions several times from leadership and the public works office. They have received NO answers.

So the public and the city council has asked for this inspection and the mayor agreed to it, so why isn’t the council being let in on the process?

As I said, if the mayor or anyone in his administration gets to see this report first, it negates the reason for the report to begin with. WE DON’T TRUST THE MAYOR WHEN IT COMES TO THE SIDING ON THE EVENTS CENTER. HE IS A LIAR.

The council must have have first dibs on this report and be the contact for the contractor. The mayor and his administration shouldn’t be able to see it until the council has fully reviewed the report, otherwise this process isn’t worth the toilet paper MMM wipes his butt with in his private morning parks bathroom.

Pink Flamingos