Huether channels Patrick Lalley (Argus Leader) but doesn’t credit him, “This may not be San Antonio, but it is the best little city in America.”

I attended the ribbon cutting of the River Greenway project this afternoon. The one thing that stuck out was all the back patting of local business people who helped contribute to this project, but not once were the citizens of Sioux Falls thanked for funding this project, a project that benefits DT business owners especially the owner of Cherapa Place, Jeff S. Oh, he was thanked for his $100,000 contribution (that he milked out of his buddies).

But what a kickass deal for him? He throws in $100,000 and in return he gets this awesome facade valued at over $12 million paid for by me and you.

This is always something that has stuck in my craw. We love to thank local businessmen for their two-bit contributions (even though Jeff had a backroom contract deal with Munson that if the bridge and facade was not built, he would sue), yet when it comes to our contributions as tax payers we are the gum under the table. If anything, this ribbon cutting should have been about us as citizens, not DT businesses getting a sweet-ass deal.

23 Thoughts on “The city fails to thank TAX PAYERS for funding 95% of the River Greenway project

  1. testor15 on June 8, 2012 at 8:21 pm said:

    It swan’t the Phillips Ave businesses thanked, it was the ones with the most to take in this deal. The 100 grand given is amazing return on investment.

    It just adds to the edifice complex of city officials and developers. Just something more to add to their obits. His name is on this building and this set of steps, so we will remember he, she or it existed. Forget to remember the 99% existed or paid for it, standard operating procedure.

  2. testor15 on June 8, 2012 at 8:22 pm said:

    swan’t = wasn’t

  3. Pathloss on June 9, 2012 at 4:13 am said:

    Steps will be entertainment watching homeless slip into the toxic river. There’s ongoing expense for a fence and goose shit cleaners.

  4. l3wis on June 9, 2012 at 8:15 am said:

    I give it about 2 years, a couple of drownings or injuries, and it will be surrounded by a gigantic chainlink fence like Covell Lake.

  5. anominous on June 9, 2012 at 10:21 am said:

    It’ll all make sense once they get the toddler catcher installed out in the water. Kind of a big coin operated claw.

  6. l3wis on June 9, 2012 at 1:06 pm said:

    Thanks for writing my next cartoon 🙂

  7. Tom H. on June 9, 2012 at 5:02 pm said:

    I’m still a big fan of this project. Infrastructure improvements by their very nature financially help those in close proximity to them. Having two interstates pass near Sioux Falls probably gave us a better return on investment than Jeff S.’s $100k : $12M, yet I don’t see you harping on that subsidy.

    Downtown will always have the highest rate of infrastructure investment, because it has the highest return on investment of any neighborhood in the city. Pot-stirring can be fun (I know), but I think you’re misguided here.

  8. l3wis on June 9, 2012 at 5:13 pm said:

    I would agree, but I also think that we could have saved millions by doing modest landscaping etc. There is no need for that pavilion or steps (which are a safety hazard).

    As for Cherapa and Jeff S., those wheels were set in motion when Munson was mayor and they signed a behind closed doors contract to do this project, and Jeff threatened to sue if it did not happen. Munson’s signature was on the deal. So when they congratulate Jeff for giving $100M towards a multi-million dollar taxpayer funded project, I want to puke. I would have actually loved to bring down a boom box and replay the audio when he said in a public meeting he would sue if he did not get what he wanted. Building a facade for a private business at taxpayer expense is assanine.

  9. Tom H. on June 10, 2012 at 7:46 am said:

    In that case, I fully expect an upcoming post from you regarding the idiocy of the Downtown Facade Easement program.

  10. l3wis on June 10, 2012 at 10:32 am said:

    I have blogged about it, I don’t have a problem with the program, but I think it should be like community development loans (low or no interest) but not a giveaway, because it is unfair to other business owners in town.

  11. testor15 on June 11, 2012 at 10:18 am said:

    The Downtown Easement tax was to directly benefit those who paid it. If other business owners want a special tax for their district to help with upkeep, they should talk to the city.

    The DFE saved downtown when the banks and city were pushing for demolition of those crappy old buildings nobody would want to go into. I had friends back in the 70’s & 80’s who had to fight the / Metli to save the buildings they loved.

  12. testor15 on June 11, 2012 at 10:21 am said:

    Sorry…. “/ Metli” should have been “City / Metli”

    He did more damage to Sioux Falls than we could ever imagine.

  13. l3wis on June 11, 2012 at 10:30 am said:

    As I understand the tax, it is for general beautification (like flower pots, bump-outs, etc., it should not being a handout to a specific property owner. It should benefit ALL of the DT property owners. Obviously, someone’s facade looking nice is beneficial to DT, but I am still worrisome about handouts. If you choose to restore a DT property, you should be doing it because you want to create an opportunity for yourself not because you can angle some handout. Like I said, do I think they deserve low or no interest loans to fix up the buildings? Definately. But no handouts.

  14. My main problem with this whole situation is simple – unless you are one of a handful of people in this town, as a business owner you are constantly fighting and spending money to comply with the ever-changing decisions of the code enforcers. Angel Jeff gets tons of not only expensive landmarks but free publicity that guarantees he’ll never go out of business. Any other business owner is made to feel he shouldn’t even bother expanding or upgrading his company.

  15. rufusx on June 11, 2012 at 5:07 pm said:

    OMG!! Life is competitive! Who would have known? NO ONE taught me this in school!!

    SARC

  16. rufusx on June 11, 2012 at 5:10 pm said:

    And people lie and cheat and steal ideas and distort stuff too???? Okay then. I guess it IS like High School.

  17. l3wis on June 11, 2012 at 5:14 pm said:

    “Life is competitive!”

    Exactly. Competition is what creates a good business. The strong survive because they have figured out what works. Providing a good service at a reasonable price. Instead certain businesses game the system with behind closed door contract signings and favors.

  18. The Greenway has helped spur nearly $100 million in new development to date. TIF’s and all this City is doing quite well with this project and Jeff S. isn’t the villian here. The City had an agreement with him and he held their feet to the fire, you applaud most people that do the saame. Go back to my first sentance and you can see he was correct.

    BTW, as I’ve stated before, Jeff S. is about the furthest thing from the “evil developer” stereotype as you can get. He sells insurance, and he built a landmark building that has raised the bar for the area. He also gives a shitload of time and $$ to good causes in this town, most of the time without fanfare.

    Think of it like this, what’s one of best ways to raise the value of your property, besides of course installing a shitload of tile & stone? Answer: Landscaping. You take the best feature of your site and you accentuate it. The Greenway is the same principle, just on a City-wide scale.

  19. l3wis on June 11, 2012 at 5:38 pm said:

    “The Greenway has helped spur nearly $100 million in new development to date.”

    And how has this helped the average SF taxpayer? Seriously, I am not being sarcastic. It may have helped developers DT, but what impact has it had on the average citizen’s bottom line. What are we getting for the millions spent on the river greenway besides a pretty thing to look at and a new bike trail.

    “The City had an agreement with him and he held their feet to the fire”

    Yes, as I have mentioned, a backdoor deal with Munson.

    “He also gives a shitload of time and $$ to good causes in this town”

    GOOD! The wealthy should.

  20. rufusx on June 11, 2012 at 10:47 pm said:

    lewis,

    That $100MM represents money SPENT in the city – in the form of materials, wages, insurance, design, etc. – not just the raw value of the property to the developer. How does it helo the avaregae tax payer that $100MM is spent on development? You really need to ask?

    #1 – Jobs, you know, the #1ssue in the country today?

    The wages paid and materials purchased, etc. for the construction that was done turns over that good old standard average 7 times. That represents $700MM injected into the local economy. But – what good is that? you ask.

    #2 – the ongoing taxes collected from the lifetime oif that development. (Lasts long after the TIF expires BTW) But – what good is that? you ask.

    #3 – the ability of additional businesses (more jobs, etc.) or the expansion of existing businesses. But – what good is that? you ask.

    If you stop stirring the pot for a few seconds, I believe you’ll see the meat in the stew.

  21. Tom H. on June 12, 2012 at 11:01 am said:

    The real question is:

    Has the Greenway project generated enough new revenues for the City to cover the City’s costs? If so, it was a good investment. If not, it is an unsustainable investment. I believe it has been a good investment.

    The life-cycle of this project is likely around 30 years. The total cost of the project to the City is $12M. If we assume that the true amount of new development spurred by this project is $50M (half the estimate given in the article). Almost all of this money will be subject to City sales tax, either through the purchase of construction materials or through construction worker spending. At 6%, this amounts to $3M into city coffers.

    Of course, $50M in new development also increases city property tax revenues. I couldn’t find the commercial property tax rate, so I’ll make a conservative estimate of 0.5% (i.e. $500 per $100k). That amounts to $250K per year, which, over 30 years, amounts to $7.5M.

    Thus, the city recoups $10.5M on its $12M investment, using these very conservative assumptions. Assuming the full $100M number, and a 1% property tax rate, the new city revenues come to $36M. The true value is likely somewhere in between, but it seems likely (to me, at least) that this will be a cashflow-positive investment for the City.

    If anybody knows the correct property tax numbers, feel free to correct me.

  22. I like the way some of you do your math. Sounds a lot like the members of the euro zone who are in so much trouble. But never mind, we will soon be there. You forget that all the public monies and tax deals to get the work done in the downtown area come out of the pockets of taxpayers. The other assumption is that these businesses would not have built in other locations or moved out of the city if they could not locate in the downtown area. Businesses expand because of their business acumen and their desire to grow. They are not fools. They will often choose to locate where they get the most favorable tax treatment, which you and I are subsidizing. I wish I could get that kind of a subsidy when choosing where to live in Sioux Falls.

  23. LG – There are benefits to buying a home in ‘central proper’ I may be saying this wrong, but I believe it is the area from Russell to 41st and Kiwanis to Cleveland, but don’t quote me on that. If you buy a home in that region you can get an interest free downpayment that you can either pay off in 5 years or pay when you sell. You can also apply for a community development loan at low interest. I got one at 2%. I think these are great ways to develop growth DT. And I think people who choose to buy home in DT and fix them up should get TIF’s also. I’m not against encouraging growth and development DT, but if private businesses get these kind of perks, homeowners should get them to. I will restate what I have already said, I think the original $5 million to be spent on the River Greenway was a good idea, the bike trails and landscaping needed to be reworked. I just don’t see all the extras like fountains and pavilion’s as something that would either hurt or help development DT. City’s that build ammenities around their citizens (like bike trails) succeed in getting back more on their investments. Nicer trails bring more people DT. I think that sometimes we go overboard. If your car needs one new tire, do you buy 4? No. The river greenway needed sprucing up, but it didn’t need quartzite pavilions.

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