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UPDATED: Looks like Superlative is SOL

As you know, I have been trying to find out why Superlative’s contract with the city was terminated early (They did the market analysis for naming rights on the new EC).

I finally was able to attain the original contract with the city, and from all accounts, while I disagree with the city for terminating their contract early, I don’t see that the city did anything wrong by this early termination.

SECTION TEN of the contract is pretty clear;

While Superlative has a right to be upset about the early termination, after all the work they performed for the city, they also got paid very well to perform this work. And hey, at the end of the day, who cares if Legends or Superlative announce the ‘S’ word Events Center?

UPDATE: I received this email today from SF Finance Director, Tracy Turbak about the bond sale;

Scott –

The City raised $102 million of the $115 million needed for the Events Center Project through a tax-exempt bond sale on March 13th.  The bonds were sold by the City through a competitive bid process.  There were eight bidders and the bid that resulted in the lowest overall cost to the City was submitted by a syndicate of 22 investment firms led by Robert W. Baird & Co.  This syndicate, or group of investment firms, purchased the entire bond issue at an overall interest rate of 3.21%.  These investment firms, called underwriters, then re-sell the bonds to either institutional or retail investors.  The bond holders are free to trade the bonds on the open market, but that secondary market trading does not involve or impact the City in any way.

The balance of funds needed for the Events Center Project will be raised by a taxable bond sale later this year – the exact sale date has not yet been established.  This second and final bond sale will raise $12.5 million for the project ($.5 million is being funded with City cash on hand) through the same competitive sale process.

Let me know if you have any further questions.

Thanks,
Tracy

A closer look at the termination of the Superlative naming rights contract

Over the past few days, I have found the more information that I have uncovered, the more questions I have.

First I advise you to watch this informational meeting dated April 20,2012. There is PDF documentation on Superlative’s presentation and the city’s goals for naming rights.

This what we know right now;

Superlative’s contract was terminated early. Superlative did receive $65,000 for the market study they conducted, but they were looking to handle the naming rights. They were aware they were in competition with other firms, but by all accounts it would only make sense that the company that was doing your market study would help you with the naming rights. This did not happen which resulted in terminating their contract with the city early. This was the city’s decision.

Councilor Kermit Staggers has requested a copy of the contract. He is still waiting to receive it.

The city chose Legends Marketing. Not sure how much you know about Legends, but this story about them makes me a bit uneasy;

SANTA CLARA (KCBS) — As more seats go on sale Monday for the new 49ers Santa Clara Stadium, interested buyers are noticing most tickets are double the cost of a similar seat at Candlestick Park.

Aside from the cost of the 50,000 reserved seats that go on sale next week, the tickets require a one-time license fee between $2,000 and $12,000 for upper deck, end zone and top of the lower bowl seats.

Al Guido vice president of sales and services at Legends Sales & Marketing, the firm selling the packages for the stadium authority, said the cheapest seats will be $85 per game compared to Candlestick’s $39.

I don’t know about you, but most people in Sioux Falls cannot afford higher ticket prices. If this is the ultimate goal in building a new facility, we might just get ourselves a $180 million dollar echo chamber.

What is puzzling is that Legends was picked out of the four competitors, with Superlative (the market consultant) coming in 4th place.

Will the public be allowed to see the grading sheets? How did they come to this decision?

I do know that the city was advised to ask for at least $600,000 for 20 years on a naming rights deal. But that was a starting point. And it is no secret that Sanford and First Premier have been rumored to be interested sponsors (interior and exterior).

So how do you get that kind of money if you only have two interested parties?

Anybody in the Naming rights business will tell you that competition is what will drive up the naming rights price. Just look at Superlative’s track record on this;

Has raised over $500 million in Naming Rights

• 95%success rate in meeting and exceeding Naming Rights goals for arenas

• 100% on ballparks and stadiums

How can any naming rights company compete with that? Was Legends chosen over Superlative because they can help bring in competing bids? Or were they brought in to bring the appearance of competition?

I don’t think anyone will be shocked if Sanford and First Premier seal the deal, but it will be disappointing if this deal was struck without competition.

If this happens, will the public be allowed to see the list of competitors and their offers? Or like the naming of the Rosa Parks school, will that information be shredded?

In Myles Gallagher’s June 20, 2011 presentation to the city council, he said this;

“We represent the taxpayer – that’s our credo.”

Maybe this is why they were not chosen?

City Government Transparency?

Transcript of Public Testimony last night:

My name is Bruce Danielson, a resident of Sioux Falls and chairman of Citizens for Integrity.

I am here tonight to report on the two ballot advocational meetings held so far, sponsored by the City of Sioux Falls. These biased presentations are designed to confuse the voters and harm the Initiative and Referendum process.

Prior to the first video last night, city director Don Kearney read a statement attributed to the city attorney. The statement reiterated the s approval of the video presentations.

After the first video was completed, I read a statement for those in attendance to explain why we disagree with the presentations and to ensure an open dialogue.

After the ending of the presentations last night I was approached by a city employee, Shawna Goldammer. I was informed my disclaimer would be addressed. I took it as “accommodated and silenced”.

We are partaking in the citizen’s debate on issues citizens worked very hard to bring before the voters. We will continue and will not be silenced.

We are suspicious of the city involvement in the ballot measures just as we have been suspicious of the Events Center naming. The EC naming has been a curious process. It has many different aspects never made clear. On SouthDacola.com last night the timeline became clearer why we the people have not been able to trust the word of this city government.

Prior June 12, 2012: The city doesn’t renew their naming contract with Superlative.

June 12, 2012: Director Smith Talks about hiring Legends to help secure a title sponsor in a council informational meeting.

July 12, 2012: Sanford Health BUYS the domain: DENNYSANFORDPREMIERCENTER.COM

July 24, 2012: Director Smith tells the council in an informational he is to having a title sponsor, and will bring it to the council..

August 2, 2012: EC title sponsor announced, city council is told 30 minutes before the announcement.

t have transparency on this The mayor used to work for First Premier, and people in the community are closely associated with Sanford. Maybe we really got a good ll never know because we never had any ”

We would like to know why this council has not taken their legislative responsibilities to heart and let your constituents know why this curious process was allowed to happen.

We question the motives behind the activities bringing the ballot issues to the people. The issues we have before us are based on our ability to question motives and directives. We have a voice in this election and its aftermath and we are here to stay involved.

The interesting Events Center Naming Rights timeline

Okay, we have known all along the EC was going to be named after T. Denny, but we were never given the proof that these negotiations were going on, probably even before the vote. So let’s lay it out;

June 12, 2012: Director Smith Talks about hiring Legends to help secure a title sponsor. July 12, 2012: Sanford Health BUYS the domain: DENNYSANFORDPREMIERCENTER.COM

tdepc

July 24, 2012: Director Smith says he is ‘close’ to having a title sponsor, and will bring it to the council soon.

August 2, 2012: EC title sponsor announced.

I don’t know about you, but that is breakneck speed if you ask me. You hire your naming rights firm and in one month, they are so sure they have a buyer, they purchase a domain. And within a couple of weeks they announce. One might say, Legends is good at what they do, but doesn’t anyone find it a bit suspicious that a deal like this is inked in 30 days of hiring a naming rights contractor? Apparently they are so good, they had a title sponsorship in the works BEFORE they were even hired by the city. So let’s go to the SF City Council informational meeting, June 12, 2012 (FF: 54:00)

darrinlying

Advancing? It’s almost like Smith had to hire a naming rights contractor so it didn’t look like it was already a done deal with Sanford. Gee, I wonder why they fired this company? Now, jump to the July 24, 2012 informational meeting (FF: 21:00) Still no done deals.

titel

Oh, but it gets better, Dave Knudson says this during the August 7, 2012 informational about the naming rights (FF: 14:00);

kingdave

So while everyone ‘seemed’ so surprised, it was evident. Superlative was fired because the city wanted to ink a deal with T. Denny (Sanford Health) and they wanted to do it before a replacement company was hired (Legends). I guess I could say a lot of things about the misleading and blatant lies fed to us, but Kermit says it best in the Argus Leader article;

“We don’t have transparency on this at all,” Councilor Kermit Staggers said. “The mayor used to work for First Premier, and people in the community are closely associated with Sanford. We should have had openness … Maybe we really got a good deal, maybe we will. But we’ll never know because we never had any bidding going on out in the open.”

Transparency, something this administration knows nothing about. I have said all along, the EC should have been called ‘The Citizens Arena’ We are ultimately paying for the construction of it, we approved it, and when the operating costs come up short, we will be subsidizing it. But giving it such a populist name might have shook Sioux Falls to the core, maybe enough to loosen some of the bedrock under the EC so the footings could have been large enough for a 15K seat expansion, instead of a 14K (another lie fed to us). BTW, speaking of surprises . . .

NO EVENTS CENTER TICKET SALES UNTIL AFTER THE ELECTION?

There is a rumor going around that the new EC will not sell tickets for upcoming events until after the election (in case the sales are a flop) but I heard there is plans to announce the opening event before the election. It’s probably a good thing that the EC won’t be selling tickets for awhile, they really need to get their header links fixed first anyway.

header

You would think after owning the DOMAIN for almost 18 months they would have the kinks figured out?

So will the naming rights agreement add up to $600,000 a year for 20 years

We got the shocking news today that Sanford and FP will be the title sponsor. Let’s see if it adds up . . .

Superlative suggested to the city that they have a starting point of $600,000 a year for 20 years. STARTING POINT.

But here is an interesting twist;

Sanford’s strategy, along with First Premier, was to set up an “endowment” that will be used to offset annual operating costs for the facility, helping to ensure that it does not lose money.

“We looked at it as an investment, not a bid,” Krabbenhoft said. “The city’s goal was to try to defray operating costs, so we sat down and figured out how much that was going to be, and we set up an endowment. That fund will create a dividend income every year to go toward paying off annual operating costs.”

In other words, there will not be a ‘set’ amount for a number of years, the title sponsorship is more like a rich uncle throwing you a few bucks each year in case you get in a bind. I wonder how many other companies proposed such a deal? I think we know the answer.

Also, if you saw yesterday’s budget hearing, Tracy Turbak told the Council that they want an additional $180,000 for Legends in 2013 and they are calling it OPERATING EXPENSES! AND THE PLACE HAS NOT EVEN OPENED YET!

Naming rights and Reindeer Games

As I reported about a month ago, there were changes in the naming rights game. But I did leave out a few details, we will get to those in a moment . . .

I asked a city councilor last week when he thought the naming rights would be announced, and he suspected right before the ground breaking in August, I guess, to keep that element of intrigue and surprise with the public. Heck he doesn’t even know, but let’s just say him and the mayor are not real ‘close’.

I am just not sure how ‘surprised’ the public will be when they hear the ‘S’ word for the the 1,000th time. Christ, what some people will do to buy their way into heaven or at least into the pocket books of the sick and dying.

Now, back to the naming rights.

As I reported on June 16, there was a little switcheroo on the naming rights contract. The city decided to terminate their contract with Superlative and hire Legends to help with the naming rights. Which seems odd since the company(s) that want to put their name(s) on the building may have already been chosen.

What I did not tell you is on June 15 I had a very ‘colorful’ talk with Myles Gallagher, owner of Superlative. We had an intriguing 45 minute phone conversation about Sioux Falls, the Events Center, and his ‘disagreements’ with Darrin Smith and Mike Huether. While I would love to share most of the conversation with my South DaCola readers, I cannot.

I can say this, it seems two companies are possibly vying for a naming rights deal in a quasi-partnership.

But does the city have other competitors? Even if they were still going to go with the ‘S’ word in partnership with the ‘F’ word. Wouldn’t it help to drive up the bid?

Is this why Superlative was dropped over Legends? Did Superlative give advice that would be beneficial to the taxpayers? I guess we will have to see if ‘S’ & ‘F’ come in first place and if their offer is golden, that will be tell tale heart.

I’m pretty sure this will not come up at the groundbreaking ceremony, but I’m sure there will be several punch bowls of kool-aid being served.

Why is the city switching consultants on naming rights for the EC?

And what happened to the $60,000 we gave to the Superlative Group (FF to 54:00)? PDF of Presentation: naming

And still, the grand mystery of naming rights;

The city council will also have to make a multi-million dollar decision involving naming rights for the facility.

The city isn’t saying much about that process, only that progress to secure a sponsor is being made.  They hope to have something in place by August, ahead of the groundbreaking.

Like I said above, what happened to Superlative, why are we using Legends now? Kermit asked about the Superlative agreement, and Smith said that they were similiar, but all Superlative did was ‘evaluate’ if our opportunities for naming rights was there – then Legends moves forward on the naming rights.

Huh? As Kermit said, Why not just use Superlative to do the naming rights since they did the evaluation? Darrin said they changed their minds and chose another firm. Then Erpenbach accused Staggers of ‘asking too many questions.’ WTH? Then she said he asked four questions and no one else asked any questions, then nobody does, except Rolfing making a statement and Jamison making a few comments.

I guess someone overheard Erpenbach telling Staggers after the meeting there is a procedural rule that limits them to two questions. I hope Staggers looks into this, because that is a load of crap.

The best part of the meeting was when Huether came up and told Staggers that he basically needed to play catchup and he could question any of the directors anytime he wanted to (in other words, not in a public meeting). Kermit responded that he felt it was a very good meeting with lots of interaction (in other words, we need to ask these questions in public.)

Who is handling the naming rights of the Events Center?

As you can see from these three documents, the city hired Superlative to handle the naming rights of the Events Center; superlativenr-reportproposal

But are they handling it? I think we paid them around $60,000 to do this for us.

I’ve been told by a source that the Superlative Group was told to only work on naming rights in the interior of the building and the Economic Development office would handle the name on the side of the building. Not sure if this is true, but if it is, it could be why the naming rights search is so secretive.

We were told by Darrin Smith and the Mayor that we had to hire Superlative for their ‘expertise’. So why are we not using these experts?

How is the Economic Development office doing with their search? Rumor in the business community is ‘not so good’.

They may have already disenfranchised one applicant and there may only be one other one on the table, and that table is a little wobbly. I hope this is all rumors and speculation, I would hope we could garner more then just ONE applicant. How do you have a ‘bidding war’ when there is only one country fighting the war? True or not, the bigger question is why so few applicants?

I would like to know;

1) Is Superlative handling the negotiations or is the Economic Development office handling them?

2) And if Superlative is not, WHY!?

 

Bologna! (Updated with letter)

pot_hole_jeep

I find it ironic that just one day after I send a letter to the editor of the Gargoyle Leader about how inefficient our public works department is, the same paper comes out with an editorial praising them and KELO does a story on the Capital improvement money being spent on infrastructure, finally. Do I think it is a conspiracy? Not at all, just a funny coincidence. I can’t post my letter here until it prints, but I pretty much talk about how the Public Works department wastes a lot of time filling the same holes instead of just fixing them correctly the first time;

That’s why it would be fairly easy to miss that Sioux Falls’ Public Works Department has been handling ongoing maintenance fairly well.

Bologna! Seriously! Filling a hole one day with blacktop, then tearing it up the next day and filling it with concrete is f’king assinine. It’s time the AL Ed Board pulls their heads out of the city’s ass.

UPDATE (This is a letter to the editor I sent to the Gargoyle on Monday, I haven’t heard a response from them, so I’m sure the trashed it, so you can read it here):

As a heedful follower of Sioux Falls city politics I had to laugh when city hall boasted to the media we were in superb financial shape. That’s an easy assertion when you only audit half of the city’s finances (an internal city audit only included the operational fund not the capital improvement). It would be like a mechanic informing you your car is road worthy even though two of your tires are flat.  It’s good to see our city bureaucrats have a glass half full mentality, even though that glass is nearly empty and has a crack down the side that is leaking badly. The truth is Sioux Falls is between eighty to hundred million behind on road construction infrastructure and with constant fee, retail, and property tax hikes you wonder who they are fooling with their myths of great fiscal responsibility. If we are in such superlative financial shape why do we keep escalating taxes and fees at such a high inflationary rate? And why aren’t we driving on streets of gold?

Well it doesn’t take the Wizard of Oz to figure that out.

On my way to work each day I drive past the intersection of 41st and Cliff Avenue. This winter a water main broke at that intersection and public works had to fix it. After the repair they filled the hole with gravel and poured black top over it instead of filling it with cement like the original road surface. Since then they have poured black top over the spot and refilled it at least seven times. They tore it up today and started digging an even deeper hole. I suspect though that this may be the final repair because a private contractor was working on it. We can only hope.

I’m starting to think that if this is how we fix all of our roads in Sioux Falls it’s no wonder we are overdue on road maintenance. It takes a great deal of resources to fill a hole seven times instead just fixing it correctly the first time, and God only knows what this is costing us.

It’s time the Sioux Falls public works department takes a course in efficiency and while they are at it, maybe the finance department can share the classroom with them.