UPDATE II: I had a chance to read the contract and a few things stick out. I will first make something very clear, this ‘DEAL’ should have been vetted through the council and it’s staff. The mayor has NO authority on a lease or even selling the building without the consent of the council. Now he could have opposed it and had his staff deny helping with any proposals but that could only drag out for so long. I am still of the opinion that this building could be sold and that the city shouldn’t be investing or hanging onto real estate (unless it contributes to society as a whole like roads, parks and water plants), and we certainly should NOT be leasing for $1 a year a historic building. I still wonder if there is a reason why the city isn’t falling over backwards to sell this property, maybe the answer will come out Tuesday night.
While I certainly support the ZEAL center’s mission and being DTSF is a great idea, it is NOT the responsibility of taxpayers to hold up this stool.
FINDINGS IN THE CONTRACT;
PAGE 3, Section 6, While we are only charging a $1 a year for the building, it seems the city will be leasing the parking from Raven, so we will be losing money on that part of the deal. I also question any contract agreements we may have with Raven since their recent sale has been approved. I would think any agreements we have with Raven before they sold should be renegotiated with the new owners (especially if it has something to do with selling the building.)
PAGE 3, Section 8, ZEAL will have the opportunity to Sub-lease office space while only paying $1 a year in rent (also on PAGE 5 in section 12 they will be able to sell naming rights. A revenue source for ZEAL.)
PAGE 4, Section 10, I question the Mayor’s sole authority of approving or NOT approving alterations. While it is mentioned that rent will be $1 per year there is NO dollar value in the entire contract of what ZEAL will be expected to spend. The number being thrown around is $1 Million to remodel but it just seems to be a handshake deal. I think a commitment of $1 million or more SHOULD be in the contract. What if ZEAL finds out that it will cost a lot more and wants to back out? What are our safeguards?
There is also the glaring conflict of interest the Mayor has because he once sat on the ZEAL board. Oh, nevermind, his COS also used to be an executive for a developer that seems to be getting all the TIFs in town so it all good and ethical.
While I have many more opinions on how this deal was cut I will await the discussion on Tuesday night and the 1st reading.
UPDATE: Item #39 covers the deal at Tuesday’s City Council Meeting;
1st Reading: AN ORDINANCE OF THE CITY OF SIOUX FALLS, SD, AUTHORIZING THE MAYOR TO ENTER INTO A LEASE BETWEEN THE CITY OF SIOUX FALLS AND ZEAL D/B/A STARTUP SIOUX FALLS.
I haven’t done a serious read into the 17 page lease agreement, but there was some interesting things that stuck out to me like the parking agreement and how easy it will be for them to break the lease. Feel free to read the contract and let me know what you think; HERE.
Some ZEAL members have been telling people they are planning to bring a proposal forward at next weeks’ council meeting in which they will abandon their property by SE Tech (rent it to SE) and plan to rent the old Sioux Falls Parks and Rec building by the intersection of 6th & Phillips for $1 a year for 10 years while investing their own money in remodeling the building (Est. $1 million).
In my opinion the city should just sell the building to ZEAL or whoever. Why hang onto the property? Weren’t we told that we had to build a new administration building for new space? Now that we have it why do we need to keep an old building that the SFPD only uses once a week to train dogs (rumor)? Also, I agree ZEAL should be DTSF and this would be a great investment for them.
We just sold a parking lot that was being used for a rock bottom price of a half-million, why not sell this property and put it to good private use?
Just another handout to a group that doesn’t need it. I would suggest the city council amends this before it hits the agenda and put the building up for sale and give the option to ZEAL to put in the first bid.
While generally I am against most private/public partnerships, this one stinks of high heaven. There is NO reason why the taxpayers need to subsidize this. Local government is simple, and instead of putting ourselves in some stupid complicated contract over 10 years, just make it simple and draw up a bill of sale.
The idiocy and general laziness at Carnegie and City Hall is so immense these days I am surprised our city hasn’t imploded from stupid. Of course that would require someone to show up to light the fuse 🙂