Entries Tagged 'State Theater' ↓

Mayor TenHaken brags about giving taxpayer money away to private non-profit

As I said last week, I had no doubt this would pass, but I am baffled that a public official would brag about spending our taxdollars this way, especially after the county and school district just had opt-outs and we have a 38% reserve in the city, and we are planning to bond $30 million for a fire/police training center (that we selfishly won’t allow other communities and law enforcement entities help us with because we want ‘control’). Something is out of whack folks.

Sioux Falls City Council’s most baffling vote rears it head

Last April (2018) the city council decided to deny a beer and wine license to West Mall 7. All eight councilors voted against it, which I felt was one of the most ignorant moments in council history, and proved to me that the council (and planning commission) only approves things for the rich, powerful and well-connected in Sioux Falls.

Fast forward to the State Theatre wanting a license and some on the council still defend their vote saying there wasn’t a sufficient security plan. WTF?

Frager had planned to sell alcoholic beverages at a different space than the regular concession area and require folks to present identification to prove they’re of age. They’d also have to wear a wristband so staff could tell if someone holding a beer or wine had their IDs checked.

You know, the same security plan ALL city owned entertainment venues have right now. As I said at the time of the vote, what is stopping me from handing a drink to a minor at the EC, the Pavilion or the Levitt after I legally buy it? At least councilor Starr has realized it was a stupid vote (that and the fact that I chide him about it weekly.) I also find it ironic that the same members of the RS5 (Neitzert and Erickson) defend their ignorant votes on the WM7 issue that same as they defend the votes on the DT Parking Ramp. True Trumpists, when caught in a F’up, double-down on the F’up.

Now that the city council has kept minors safe from the dangers of Coors Light, let’s go throw some axes while throwing back some beers! No safety issues there!

Sioux Falls taxpayers shouldn’t be giving gifts based on the whims of one man

As I have talked about, I find it a little irritating that we are gifting the State Theatre $1.5 million based on the request of Denny Sanford.

Here are FOUR reasons we should say NO to this request;

SANFORD MADE MOST OF HIS FORTUNE BY PREYING ON PEOPLE WITH BAD CREDIT

And the Feds responded with major changes to the credit card laws;

The Credit CARD Act of 2009 prohibits upfront fees from totaling more than 25 percent of the card’s total available credit in the first year, and the rules that take effect in October provide greater detail on what that means. Specifically, the new rules expand the definition of “upfront fees” to include fees charged before the account is opened (for example, an application fee), not just those charged after it is opened.

Not only was Sanford involved, but our last mayor was the VP of Marketing for this subprime scheme.

UNIVERSITY OF MINNESOTA SAID ‘NO’ TO A LARGE SANFORD DONATION

While Sanford has maintained it was the University’s fault this didn’t go through, the University says otherwise;

Then, in 2002, he reached out to his alma mater, the University of Minnesota. He offered $35 million for the construction of a new football stadium. Your idea of what happened next depends a lot on your loyalties. The University claimed Sanford wanted “too much control” over the project, and the two parties failed to reach an agreement. Sanford alleges the University got greedy, more than doubling the projected cost of the stadium, trying to coax a few extra millions out of Sanford’s pockets. He pulled out, feathers ruffled.

The other story was that Sanford wanted his name on the building to.

MINNESOTA ATTORNEY GENERAL PREVENTS SANFORD MERGER

Minnesota State Lawmakers got a little nervous about the merger;

Why did Sanford pull out of the talks? The prospect of the two $3 billion hospital systems merging alarmed some Minnesota leaders. The Minnesota Attorney General, Lori Swanson, called a press conference in late March to express concerns about Fairview assets remaining in Minnesota after a merger, and speculated about the future of the University of Minnesota’s teaching hospital, operated by Fairview, after a merger with an out-of-state entity. She convened a public hearing on short notice, on a Sunday in early April, and promised additional inquiry into the proposed merger. Two Minnesota state legislators introduced a bill to slow or stop the merger. Facing public suspicion and politicians intent on slowing, if not stopping, the merger, Sanford Health decided to cease merger discussions.

I met and spoke with AG Swanson shortly after this happened at a political event in Minneapolis. She basically told me that once their office started digging around on Sanford, the more concerned they got.

SANFORD HOSPITAL IS BEING INVESTIGATED FOR MEDICARE FRAUD

This of course is still going through the courts and investigation mode, but if found guilty there could be HUGE repercussions for the entire community;

Two doctors employed by Sanford Health are suing the company and one of its neurosurgeons, accusing them of defrauding the federal government and harming patients by performing unnecessary surgeries. Dustin Bechtold and Bryan Wellman filed the lawsuit in 2016, and a federal judge unsealed it Thursday. The complaint says Sanford Health has been buying medical devices from a company owned by Dr. Wilson Asfora, and that the surgeon uses those devices in unnecessary spine surgeries. The suit says this violates anti-kickback laws. The suit also says Sanford and Asfora billed Medicare and other programs for care that was never provided.

While Sanford has been very generous with his giving, there is certainly NO reason the Mayor or the City Council need to give money because he says so. We can say ‘NO’ to the whims of billionaires, other’s have. We just lack the courage.

Sioux Falls City Council RS5 members put on some great theater over the State Theatre

I decided to watch from home tonight, I have no doubt the funding will pass even though only 6 members will be voting on it next week. I guess there is even a part of me that is still kind of neutral on the topic, since I do support it’s opening soon and have helped in the past with private fundraisers. I do understand the economic impact of the State Theatre would eventually pay itself back in the form of entertainment taxes (one of the few smart things I have ever heard Kiley say).

The money isn’t the big issue. As councilor Starr pointed out, we could easily take it out of the enormous reserve fund and it wouldn’t even make a blip. 

My issues are;

• We shouldn’t take it out of Entertainment tax fund, it does set a precedent.

• 1st Reading was done without a completed contract (the finance director said it won’t be completed until Thursday and the council won’t be able to make any changes – or only minor ones). This is also a precedent because we had a 1st reading before we had a completed contract (still completely baffled by this).

• We are doing this on the whim of a Billionaire, and that is what torques me off the most. We should be making these gifting decisions based on what citizens want, and to be honest with you, besides the administration, the city council, the board members of the State Theatre and a handful of DT business owners I haven’t heard one single citizen tell me they are ok with giving this money, in fact most don’t even know or care.

But what was most fun (disgusting) to watch was the performance of three of the members of the RS5, and their ‘I was against this before I was for it.’ Yeah right.

Theresa tried to get it deferred for two weeks because she was going to be gone next week and she wanted time to look over the contract. Soehl, in his true clown car sort of way, informed Theresa that he would be gone next week to, and it didn’t matter, because the city’s business needs to keep moving (like this is some kind of emergency – the project has been farting around for almost 25 years, an extra week isn’t going to kill it). But what was even more funny is Soehl said he supported the gift even though he has never been in the building.

Besides Kiley making a good point about the economic impact he told one of his sappy stories that no one gives Two Sh*ts about.

Like I said, the train is already down the tracks and if I was the State Theatre board, I would have cracked the champagne bottle tonight, because there is nothing the RS5 won’t refuse, especially if it keeps their heads well mounted up Denny’s butt.

Hopefully they will play my favorite comedy of all time, “Coming to America.”

Rev. Brow: “If loving the Lord is wrong, then I don’t wanna be right!”

UPDATE II: TenHaken Administration moving FAST & HARD on the State Theatre funding

UPDATE II: This is actually councilor Pat Starr’s amendment below. As I understand it to, the State Theatre folks have to prove they have raised $2.5 million before Denny or the City will give the money. Like I said, we need more questions answered;

As if we already forgot about the tactics of the last administration of Secret, Secret, Secret, RAMROD! The TenHaken team of perpetual intellectuals have decided they would pull a Bucktooth & Bowlcut move with the funding of the State Theatre.

If you look at the 1st Reading of the ordinance to fund the State, you will see there is ONLY a short ordinance (Item #16). There is NO contract attachment.

I asked a couple of city folks yesterday where the contract was that the council was supposedly helping to ‘tweak’. The administration’s answer? (or at least I think it is coming from one of them) is that they would work on that between the 1st and 2nd reading.

WTF?!

Aren’t these ‘minor’ details supposed to be worked out before you put something on the official agenda? And how is it that the administration is putting a budgetary expense on the agenda and NOT the council? There are many questions that need to be answered by the State Theatre folks before this money is handed over. It would be nice if everyone just cooled their jets before we get all the facts of the deal and an actual agreed upon contract. Trust me, we haven’t forgotten about the tactics of the last dude, so don’t even go there.

Common Sense left the room at Carnegie Hall yesterday

Yesterday’s Sioux Falls City Council informational meeting was one for the books. By the time I got to give my public input, the first thing I could say was watching the meeting was ‘painful’.

As we know, the council in it’s current state is extremely dysfunctional, they displayed this dysfunction yesterday when they discussed their travel budget for well over 45 minutes. Besides the fact the staffer who is in charge of this is disorganized and lacks the initiative to put this together properly I found it an exercise in ignorance that never accomplished anything.

They first complained that they had to ‘VOTE’ on what they wanted, in which they really didn’t have to (they normally don’t vote at informational meetings). I reminded them in the past that the council just had a set dollar amount of $19,000 (I misspoke and said million) for the travel budget and when it came time to book the trip they discussed who would go. Not that complicated. But instead they were making decisions on trips that haven’t even been booked.

Councilor Neitzert felt the public was against these ‘junket trips’ because they were waste of taxpayer dollars, but not a $26 million dollar parking ramp with no tenants that we did not need and built in the wrong spot. But let’s split hairs on $19K.

Councilor Soehl felt these meetings were for staff not councilors. Stehly, Brekke and myself told Soehl that these are meetings for policy makers NOT staff, you know, the people who make policy decisions. His ignorance of the legislative process was shocking, to say the least.

They did however approve a facilatator to help with the council’s goal setting (I feel sorry for that person) and the mayor agreed to help pay for a neighborhood summit this Fall (possibly 2 in 2020) which is a great idea. They want to hold it at the new ministry center at the former school for the deaf because they offered the space for FREE.

But what got very interesting was the discussion over the donation to the State Theatre. They want to essentially give them $1.5 million out of the entertainment tax and have strings attached for 10 years. Councilor Starr pointed out that giving money from the entertainment tax would set up a precedent for other non-profits to ask for that money in the future. I agreed with Starr and said that it really should come out of the CIP as a one time gift.

Councilor Neitzert pointed out he struggled with having the option of the city buying the building if they went belly up over the next ten years, saying that the city owns enough entertainment facilities.

What is even more frustrating is that the council and mayor are doing this all based on a decision Denny Sanford made. I asked the council if this is how policy decisions are made, and if so, it was sad. I also told them that while most of the citizens in this community are excited about it being finished and opened, I have never heard anyone say we should be giving them tax dollars.

What is also troubling is that the State Theatre still has to raise another $2.5 million on their own to complete the project, and then there is the operating and maintenance costs. I’m not sure how they will manage that?

The good news though is that the gifting contract is NOT finished yet, and could be tweaked. I would prefer we don’t give the money, but if we do, it should come from the CIP, be a one-time gift with no strings attached, and if it can’t survive on it’s own it can be sold privately. As Greg said, we have enough entertainment facilities that are publicly funded.

UPDATE: Using Entertainment taxes for private entity setting a bad precedent

I first want to say I support finishing the State Theatre, I have actually helped with some charity fundraisers for the facility through ZombieWalk and SF Roller Dollz. I think it is a worthy cause and I applaud Denny Sanford for giving money to the goal of completion. But I think that is still the direction the theatre should move in, private donations for a private facility.

Using entertainment taxes sets a bad precedent, as I pointed out yesterday, and I will tell you why.

Seven years ago, former city clerk Debra Owen won an open meetings case over how her termination was handled. During the proceedings, City Attorney David Fiddle-Faddle argued his case based on the opinion of a former attorney general. 4 of the 5 attorneys who sat on the Open Meetings Commission contended that an ‘opinion’ of an AG is NOT case law, so it did not apply. When Fiddle continued to argue based on the AG’s opinion, one of the panelists asked David cynically, “You do understand that the opinion of a AG is not the same as case law? Don’t you?” The crowd in attendance let out an audible giggle. The commission determined that you have to base your arguments on tried case law, not opinions.

The City of Sioux Falls is trying to say they can spend the entertainment money on a private entity in the form of promoting the city based on a opinion of the AG in 1984. But there is NO case law. In other words, the city could be sued if they try to set this precedent. Even if I supported giving the State Theatre MORE tax money, which I don’t, it should come out of the CIP not the entertainment tax.

Listen to Allison Weiland talk about the State on Jon Michael’s Forum

In other news, Cameraman Bruce attended a luncheon today talking about open meeting laws, 3 of the panelists were former State Legislator Dave Knudson, Argus reporter Jonathan Ellis and Jon Arneson (Argus attorney). They all contended that the most recent open meeting laws that Knudson helped write, said that if text messaging or emails during a public open meeting are being used, that correspondence can be used in a court case. So council, if you were smart, you would put the phones and email chatting away during the meetings.

UPDATE: Can the entertainment tax be used on the State Theatre?

UPDATE: So here is the justification for using the entertainment tax;

Statute enabling the City to use the Entertainment Tax for promotion.

10-52A-2.   Additional municipal non-ad valorem tax authorized–Rate–Purpose. Any municipality may impose an additional municipal non-ad valorem tax at the rate of one percent upon the gross receipts of all leases or rentals of hotel, motel, campsites, or other lodging accommodations within the municipality for periods of less than twenty-eight consecutive days, or sales of alcoholic beverages as defined in § 35-1-1, or establishments where the public is invited to eat, dine, or purchase and carry out prepared food for immediate consumption, or ticket sales or admissions to places of amusement, athletic, and cultural events, or any combination thereof. The tax shall be levied for the purpose of land acquisition, architectural fees, construction costs, payments for civic center, auditorium, or athletic facility buildings, including the maintenance, staffing, and operations of such facilities and the promotion and advertising of the city, its facilities, attractions, and activities.

Source: SL 2002, ch 68, § 2.

Opinion from Attorney General defining promotion.

 From Opinion of Attorney General Mark V Meierhenry  (235) 1984.

$1.5 million is quite a bit to drop for promotion of a non-profit.

According to the press release about the state theatre, this was stated;

The Mayor has pledged $1.5 million to the Sioux Falls State Theatre Company to finance the exterior and structure of the building, life-safety measures, and accessibility. Paired with the gift from Mr. Sanford for the interior completion of the facility, the State Theatre is expected to reopen in 2020.

Using dollars from the City’s Entertainment Tax Fund, the City’s investment in the State Theatre comes from a pool of dollars restricted for culture and entertainment such as the Washington Pavilion and Denny Sanford PREMIER Center Complex.

But according to the ordinance on the entertainment tax, that can ONLY be used for city owned facilities;

SPECIAL TAX RATES.

   Notwithstanding the rate of tax established in §§ 37.001 and 37.002, from and after March 1, 1992, the rate of tax upon sales of leases or rentals of hotel, motel, campsites or other lodging accommodations within the city for periods of less than 28 consecutive days; sales of alcoholic beverages as defined in SDCL 35-1-1; sales of establishments where the public is invited to eat, dine or purchase and carry out prepared food for immediate consumption; ticket sales or admissions to places of amusement, athletic or cultural events is 3%. Any revenues received from the tax imposed in this section in excess of 2%, but not more than 3%, shall be used only for the purpose of land acquisition, architectural fees, construction costs, zoo maintenance and operational expenses, and payment for an entertainment center and a convention center, including maintenance, staffing and operations of these facilities and the promotion and advertising of the city, its facilities, attractions and activities.
It will be interesting what the city’s legal department will say about using this money for a facility the city doesn’t own. Will the ordinance have to change? Is there some legal case they can fall back on? I wonder if the city council knew they were going to use entertainment tax dollars when this deal was being put together.

As DaCola predicted in March, City to give State Theatre $1.5 Million

I guess my sources gave me the correct numbers, back in March I said this;

I also heard they are looking at $6 million to finish the facility, this is what they are looking for;

3.5 Million from individual private donor
1.5 Million from City (taxpayers)
1 Million from their own Capital campaign

I’m not sure if they will still try to raise the other $1 million on their own, but I was spot on with my numbers;

Sanford will gift $3.5 million while TenHaken, who hinted at potential financial support for the State Theatre in his State of the City Address last month, is committed to setting aside $1.5 million in city dollars for the project.

What great timing by Mayor TenHaken. On Tuesday the MCC votes to raise our taxes, on Wednesday our Mayor decides to give away $1.5 to a non-profit who has struggled to raise ALL the money on their own. Taxpayers to the rescue. Wasn’t it just a couple of weeks ago the mayor asked for citizen’s input on the budget? I’m guessing that the citizenry would say ‘Hell No!’ on this one, but like I said, we really don’t have any input.

I was told back in March that when Paul was negotiating the deal with Sanford, Denny said he wouldn’t give the money unless the city had some skin in the game.

Even after Sioux Falls City Council breaks down budget priorities vote, State Theater still ranks 3rd

One may question how the State Theater ranks 3 out of 6 votes when public safety only gets one vote from the city council (DOC: Work Session Votes Cast Results.pdf)

It would seem to me that Council Leadership is probably ‘whipping the votes’ behind the scenes for the State Theater and the administration, and like the massive proposed TIFs for downtown development, there seems to be some backdoor wrangling going on to make the appearance that these things are important to the public.

I did my usual polling this past weekend of downtowners about funding the Theater with tax dollars. While there was huge praise for the State and it’s redevelopment, most if not all, said it shouldn’t be funded with tax dollars. The most common response was that they have had plenty of time to raise the money.

I was also told that the Henkin family pulled their donation due to the delay in finishing the project (I haven’t had anyone verify that yet).

I think if the administration and certain councilors try to push forward with any significant funding to the project (the number being thrown around is $1.5 million) there will be some backlash from residents) especially with all the issues we have been having with flooding homes and potholes.

I guess we will see how this drama plays out.