Entries Tagged 'Development' ↓

What is really going on with the Riverline District?

GeoTek surveying the Riverline District Property • 2/7/23 (H/T to a South DaCola Foot Soldier for providing me the links)

That is an excellent question with few answers and a whole lot of speculation.

If you do a little research on the Minnehaha County GIS you will see where the current SD Social Services building is sitting. That property is NOT owned by the state but an LLC called ‘State Partners LLC’. The listed business address for the LLC is 101 South Reid Street, Suite 201 which is the exact same office address of Lloyd Companies in Downtown Sioux Falls.

While the information I provided above is factual, the rest of the story is purely speculative.

So why would a developer who already owns a huge chunk of this property (there are other individual owners for the smaller parcels) want to sell it to the city which passes it back to the development foundation and potentially SECOG then turns around and pitches it to the very developers who sold it to the city to begin with?

I know, baffling, but you know there has got to be a catch.

Now for the speculation; It could be that the developer is going to make money on both ends – current LLC sells high to the City; new LLC controlled by developer buys cheap from SF Development Foundation, after one or both suck TIF money for the project (and various other grants and tax rebates they can conjure up).

The other reason for city involvement could be in order to facilitate a land trade – offer city park and greenway property in exchange for land on which a stadium and parking would be placed (sound familiar)?

I really have no idea what path this project is taking, but we have to keep a close eye on the players and the conflicts of interest if taxpayer capital is involved. Just like the Bunker Bridge the council will probably only have a couple of hours to decide on this project.

The Riverline District needs to be housing, and that’s it.

I will agree this will be a prime piece of land for development but not without many challenges.

The one thing it doesn’t need to be is another play palace or baseball stadium. This city has plenty of recreation opportunities. Heck, right across the street (Fairfax) there is a swimming pool and a future skatepark. I would even suggest we build a playground in the Northwest corner of Nelson Park.

As for ‘amenities’ does this area really need more restaurants, bars and shopping opportunities? Not at all, it is surrounded by dozens of restaurants and only a short distance from a grocery store and Lewis Drug.

I would suggest filling the area with affordable and workforce housing constructing hundreds of units that are studios, 1-bedrooms and 2-bedroom flats for younger folks just getting started in the workforce.

But it will need to be propped up;

TenHaken said it is “very likely” the city will ultimately purchase the land, though, and will then decide on negotiating sales or leases to private developers.

That is not his decision to make alone. While he certainly can negotiate (we saw how well that went with the 6th street Bunker bridge) the ultimate decision comes to the council. I know I will regret saying this, but this would be a great place to have a TIF instead of just a buyout from the city. The city could come in and use the TIF to build up all the infrastructure needed to put in such a large housing project, or take an even more daring approach and skip the TIF all together and just budget for the infrastructure taking out the tax rebate equation all together. If Riverline gets the investors and proves they are secure the city can hold up their end of the bargain by preparing the property with sewer, water, roads and other utilities without expensive TIFs and land purchases it would simply be a line item in the budget.

When we pay our 2nd penny in Sioux Falls it should be going towards infrastructure. There is absolutely NO reason the city needs to get into the real estate or tax rebate business on this one. It could be a lot easier then concocting deals. We provide the infrastructure the private investors provide the housing.

Often when there is development in Sioux Falls, anywhere, I ask ‘What is the benefit to the average citizen?’ We are often told that new development helps build up the tax base, but every year we continue to raise the property taxes on 3 levels (county, city and school). If all this development is increasing our tax base, why do we continue to raise taxes? Because of all the play palaces we are subsidizing.

There is ONE benefit to taxpayers, especially those who live in the area (I live 4 blocks away) if any kind of housing is to be put in this area it will border one of the most active and LOUDEST train tracks in the city. The trains are going nowhere. We would need to build a quiet zone in this area in order to make the housing work. I should know, I hear the train whistles all hours of the night since this is the most active thoroughfare.

While Riverline has challenges the city could make this very easy and painless by simply getting out of the way after building up the infrastructure. Of course that isn’t as sexy as having press conferences and talking about complicated land swaps and baseball stadiums that we DON’T need. Sometimes the best thing government can do with projects like this is get the f’ck out of the way and let the private sector offer a solution.

As I have said in the past, most smaller developers and contractors in this city take NO city subsidies. How is it that the little guy has figured out how to make a buck but the big guys are always begging at the trough?

If the city moves forward with a land purchase deal I would suggest the voters of Sioux Falls refer it to a public vote and break this cycle of waste and bureaucracy.

Bunker Ramp Developer Proposals need to be made public

The Anti-Transparent government running city hall wants to move forward on the failed Bunker Ramp project with even less transparency than what got us in this pickle to begin with;

Powers and chief of staff Erica Beck also have updated the City Council multiple times, answered questions and solicited feedback.

“It’s important to note that some of the interest is because of the confidence we’ve been able to share with the industry and because of the collaboration between the administration and council,” Beck said. “We’ve been transparent that we’re conveying the questions, concerns and comments … and I think that will lead to a process and ultimately applications that may be more than what we first thought we might receive. We’ve received a lot of good feedback both internal and external of the city and state for that matter.”

The city plans to use a negotiated sale process to either sell or lease all or part of the site, including potentially the ramp itself.

A committee of city and community representatives will lead the evaluation process and make a recommendation. The team will start reviewing submissions in January, but there’s no hard deadline yet.

While there is certainly nothing wrong with an initial review process to boot out the ridiculous, underfunded and impossible, serious finalists and contenders need to present their proposals publicly to the city council during a special informational meeting as long as they meet investment criteria (a little problem we had the first time around).

It certainly sounds like to me a process has been set in place that will make the final decision of who takes over the property up to the non-elected planning staff, the non-elected mayor’s staff, the mayor himself and handed over to the council for rubber stamp approval.

And who can resist a property that has PLUMP utilities;

I would challenge the city council to demand that at least 3 finalists need to present publicly their plans to the council, and allow the council to have an up or down vote on those proposals.

As of right now, it would be like going to the shoe store and asking to see all of their running shoes they have in size 8, and the salesperson bringing out one pair from the store room stating, “These are our best shoes sir, you don’t need to worry about what else is in stock.”

One of the biggest reasons corruption and bad decisions are made not just locally but nationally is because those decisions are made in the dark with very little if any input from the public. Bring the public along this time and it could be less complicated.

As I have predicted, the developer will probably be a usual suspect that will get all the handouts and goodies anticipated with a deal like this. There will either be a much lower purchase price or lease agreement negotiated(?) and a tax break or TIF to boot. No developer in their right mind wouldn’t go after this opportunity WITHOUT asking for the full reach around from the city, and they will quickly oblige, heck it is even mentioned in the proposal online;

For property that is being considered for sale, the value of the property is established by a market value appraisal prepared by an independent appraiser hired and compensated by the City. Projects that will provide tangible public benefits may be eligible for various forms of financial assistance, such as tax increment financing (TIF) and property tax reduction. Consideration of the purchase/lease price, incentive request, or other request of the proposer will be weighed to determine the best project and offer to the City

In other words ‘just ask’ and you may get what you want.

But what about our original stink?

Ms. Schwan asks the obvious question when it comes to the ballot initiative, ‘What about Smithfield’s?’

Second, my biggest issue with the initiative as written is that it allows Smithfield to continuing expanding downtown.

Not long ago, I stood on the top floor of the new 10-story Bancorp building at Cherapa Place and looked out at Smithfield in the distance. If we’re going to have a conversation about the suitability of certain locations for meat processing, my hope is that we also can talk about how we might persuade Smithfield to build somewhere else – or even partner with Wholestone, as Hormel did. That conversation can and will never happen if Smithfield’s only option is to expand downtown. The company owns enough land to do so, and by passing this initiative, our community will ensure that’s the only place Smithfield’s growth will occur.

This has been my issue with the petition to begin with. If we are going to ban these kind of operations, we need to ban all of them in the city limits.

I wish the community didn’t have to vote on this at all and that those opposed could have worked with Wholestone to ensure the highest possible mitigation of any environmental factors of concern. That’s typically how we do things in this community.

Yes, prior to Shape Places, the council would have been all over this.

This is why local government matters, because if you don’t pay attention to the baby steps you miss Bigfoot stepping on your head.

Sioux Falls Housing Permits up, but is it affordable?

Something sadly missing from the stats of record building permits;

There’s more than a billion dollars of construction happening in Sioux Falls but where in all that money does affordable or workforce housing fit in?

It doesn’t so far.

“I just looked at the projects and we’re adding over 3,000 (housing) units,” said Jill Madsen, the president of the South Dakota Multi-Housing Association (SDHA). “From what I see I don’t see low income or workforce. I don’t see any tax credit housing and that has been workforce housing.”

It seems the permit values have risen because builders are building more expensive homes;

“There is still a lot of building going on but it’s more expensive houses that are being built,” Ingle said. “The (permit) valuations are going up because we are building more expensive homes.”

I still don’t understand what the end goal is with housing concerning city leadership? If you were to look at it from a distance as an outsider you would think city leaders are trying to push poorer residents out of our community, not just with permanent housing but with rentals also. I have said it is unsustainable in comparison to the workforce we will need.

Sioux Falls Mayor TenHaken taps former Thune and Rounds staffer for Housing Development Manager

Logan Penfield was tapped 2 months ago according to his profile. He does have educational and professional government experience (unlike some of Paul’s past appointments) but I found it interesting that the circles Mr. Penfield runs in probably contributed to his appointment.

When I think of affordable and accessible housing advocacy, the Republican Party usually doesn’t rank high on that list. (FF 9:40 to hear is introduction);

Sioux Falls City Councilor Selberg should recuse himself from Bunker Ramp negotiations

During the informational this afternoon the council discussed what next to do with the Bunker Ramp;

A public parking ramp that took nearly a decade and more than $20 million to build in downtown Sioux Falls could be sold to a private developer.

During a Tuesday informational meeting at Carnegie Town Hall, city councilors urged Mayor Paul TenHaken’s administration to consider all options when picking a new partner to build at the Mall Avenue and 10th Street site.

And that includes selling the entirety of the seven-story ramp that opened in July 2020 and is equipped to handle up to eight additional stories. The site has gone undeveloped since a mixed-use parking ramp project fell apart in 2019.

I do agree with councilors that they should take the best deal and I also agree with councilor Soehl that we need to use a 3rd party to vet the investors properly. I am also partially in agreement with what councilor Merkouris said;

Rich Merkouris said he’s apprehensive about giving any tax breaks to the eventual buyer unless they use the space to add residential stock downtown.

“For me personally, I would struggle incentivizing anything outside of housing unless it was a part of the bigger package,” he said.

I would go a step further and say there should be NO incentives. Anyone who takes over this property is being given a site in a plum location with an opportunity to do well. The taxpayers have already incentivized this project, there is absolutely NO reason to hand out more candy. Find an honest free market developer who has a solid plan to make it successful, then you don’t need to worry about tax incentives. It was also pointed out it is in an opportunity zone which means there will be some incentives to build there without city tax payers help.

But what what really pissed me off was having councilor Selberg sit in on meetings and negotiations for future use. NO councilor that helped approve this pile of sh!t should be involved. It should either be handed over to a new councilor or Pat Starr who opposed this. It would be like hiring the guy who rear ended your car to fix it. Any councilor who approved this should not be in closed door meetings trying to cover up their mistakes. We need councilors with a clear conscience to negotiate this deal with a focus on hyper transparency.

These knuckleheads learn very little from past mistakes.

The Sioux Falls City Council could have stopped Wholestone Foods

A group filed paperwork today in opposition to the Wholestone Foods ballot initiative. But all of this legal wrangling could have been avoided.

The mayor and council have stated several times there is nothing they can do to stop WF from building a slaughterhouse, but that isn’t true.

As I have mentioned in the past, after Shape Places passed both the council and voter’s muster it was set in ordinance (city charter law) but that doesn’t mean the city council can’t amend it. They have already amended it several times when it comes to signage and building codes.

As it stands right now, the power of the council to either accept or reject conditional use permits for large projects like this was eliminated in Shape Places.

BUT, after the ballot initiative signature drive started the council could have easily amended Shape Places within 30 days and brought back conditional use permits for projects of this nature. They could have rejected most of the permits, especially when it comes to water usage.

The mayor and council are telling you they are powerless to stop this train, but that isn’t true.

Top Down approach to affordable housing is a ruse

Ever since the Reagan administration introduced trickle-down economics governments across our country have experimented with it. It simply doesn’t work. The concept is that if you give tax breaks to the very top it somehow will help the ones below in better jobs and housing. In fact it has done the opposite, expanding the wealth gap.

The cat was let out of the bag during this interview yesterday that the TIF sponsored housing development in SW Brandon was depending on the tired old broken system of trickle-down;

Meanwhile, Karl Fulmer, the executive director of Affordable Housing Solutions in Sioux Falls, told DNN that these TIF-paid city developments are an effective way of addressing affordable housing.

“The benefit of just building more houses in the $250,000 to $400,000 range still provides the unit, and you can see the transition out of more affordable units from those who might make enough to buy homes in that price range”, Fulmer said.

In other words, these new houses in new “accessible housing” developments actually are not for those most struggling to find affordable housing the most. They are far those who bought smaller, older “starter houses” in town that cost less than $250,000 and are ready to move out of them.

The true affordable housing comes in those starter houses. And the more new “accessible” houses funded by city TIFs that are built, the more those older, smaller houses become available to lower income people.

[insert laughter]

If you speak with anyone in the real estate business they will tell you that these homes are usually owned by lower income people, families, retired folks or rental property, they are not the Jeffersons moving on up. And even if what he was saying was true, most of the homes being sold in this development will go to NEW homeowners not people looking for a step up. In fact, I have argued that many of the starter homes in the lower price range (mostly in the core of the city) have more square feet and bigger yards (and basements) than what these new homes will have.

A better approach would be addressing the housing crisis we have with the people who are having the crisis;

Pat Starr, who represents the northeast district, also told Dakota News Now on Monday that city government is continuing to “dig a hole” by continuing to dig literal holes to build homes partly funded in part by Tax Increment Financing (TIFs).

“We need to talk about the real causes of the housing issues in our city rather than trying to put a band-aid and build 65 houses, which is what this program will do.” Starr said.”

“It’s not the program I’m concerned as much about as as I am figuring out who we’re trying to help. And, it seems to me we have a wage issue more than we have a housing issue.”

We must be giving a helping hand to those who are at the bottom first to lift the other boats. The city has decades long programs in place including low interest Community Development loans and grants. We also need to upgrade the existing infrastructure in our core such as streets and lighting. We can do all this using existing money in our 2nd penny and Federal dollars.

The president of Sioux Metro Growth Alliance, which helps people with payment on houses in rural and suburban communities surrounding Sioux Falls, disagrees.

“If you look at wage growth around the country and in the Sioux Falls market in the last three years, it’s been astronomical,” Jesse Fonkert said.

While wages have increased in SF, inflation and housing costs have been beyond astronomical and have wiped away any wage increases.

But Fonkert does agree with Starr’s assessment that continuing these city-funded housing projects is not solving the affordable housing crisis.

“It’s a challenging situation, because if you spend too much money on government programming, you’ll have companies that will just hike their prices up,” Fonkert said.

Notice the Sioux Steel District and Cherapa II projects didn’t announce they were building hundreds of units of affordable housing after receiving a combined TIF payout of $50 million. Developers will always go where the money is, and that is how a FREE market system works. But tax rebates for parking ramps attached to condos isn’t fixing anything it’s just making that wealth gap larger.

The water problem with Wholestone’s packing plant

Recently Joe Kirby wrote a post about why another slaughterhouse is NOT a good idea for Sioux Falls;

Slaughterhouses are a horrible fit for our community. Affordable housing and workforce availability are already huge concerns. The idea of adding lots of difficult, low-paying, low-skill jobs, the type that have traditionally been a drag on our progress and success, makes no sense to me. And expanding the presence inside our city of an industry which has long caused pollution problems in our river and air makes no sense. I simply don’t understand why we would want more of this in Sioux Falls.

I agree, I don’t want another slaughterhouse built, but I would much more prefer there was an effort to not only STOP Wholestone but to close down Smithfields.

The issue with this entire fiasco has nothing to do with Wholestone vs. the Citizens vs. the City, it has to do with South Dakota voters, including right here in Sioux Falls who vote against their own interests. When the City Council passed Shape Places, several citizens said this was a bad thing and wanted to see some changes to the zoning ordinances, so they referred it to a vote. The development community along with some councilors said nothing to see here, move along, and the voters ultimately passed the original plan.

The argument then is still the argument today, Shape Places took power away from the council to make conditional use decisions, and when you take power from our citizen representatives, you take power from us.

I think if the council still had that power instead giving total control over to the developers Wholestone would have been denied by the Council or scaled way back and it has little to do with water quality or air quality, it has to do with water supply.

Where do you think WF will get their water? The reason WF is building within the city limits has nothing to do with the labor market, it has to do with using city resources, they will be using a lot.

Besides letting the developers take over almost all branches of city government we have also let them plan this city instead of the government and citizens;

Granted, the city does a lot of planning. It has a parks plan, a capital spending plan, a downtown plan and much more. But I am not aware of any sort of comprehensive plan for our city with direct participation of the mayor and council.  In support of that, some council members and candidates have told me they wished they could be involved in that sort of big-picture, strategic planning. If there was such a plan, I doubt it would have included the phrase, “add more slaughterhouses”.

This is something Janet Brekke stressed in her entire 4 years on the council. Her colleagues on the dais ignored her and did nothing. I think if she would have gotten re-elected and we would have changed a couple of other seats, Brekke would have been successful moving it forward.

Once again, in Sioux Falls and the rest of the state we continue to vote against our own best interests, and until that changes, you will see NO change in the status quo; DEVELOPERS RUN OUR CITY.