Entries Tagged 'Legacy Developments' ↓

UPDATE on Unresponsive Bidders

On the Sioux Falls City Council agenda, Item#2 for Tuesday’s meeting has more details on what disqualifies bidders. Here is the full Doc; BID-Dis

I highlighted the items that ‘could’ apply to Legacy and Hultgren;

Who isn’t suing Legacy?

The hits keep coming;

In the lawsuit, IJK, LLC, a limited liability company managed by Kant, alleges that he was forced out of Eastwold in violation of the terms of the lease. The lease agreement that Kant signed with CLP Investments, the company that bought the Copper Lounge, allowed the building owner to terminate the lease in the event Eastwold was damaged, but only if 75 percent of the premises was untenantable.

I wondered when this suit was coming. As I understand it there was little damage to the Eastwold building after the collapse. The Eastwold building is actually a separate building from the building that collapsed.

The news coverage of Legacy has been ‘Negative and Inaccurate’?

Wow, it doesn’t get more RICH than this;

“Despite these facts, the media coverage gave the public a false impression that Legacy owned the property, hired the contractor, was culpable in the collapse and at fault for the death and injuries that followed, and should be punished for the same.”

Really? Legacy owned the property right up until the building collapse;

Minnehaha County records show that an entity called Boomerang Investments bought the Copper Lounge from CLP Investments. The transfer fee was recorded one day before the building collapsed.

Both entities share addresses at 101 S. Main Ave., Suite 400 in Sioux Falls, which is the same address of Legacy Development. Both also listed Norm Drake as their sole manager and president. Drake is also Legacy’s CEO.

Hultgren Construction, which was remodeling the Copper Lounge at the time of the collapse, was run by Aaron Hultgren. He was Legacy’s director of development and operations.

If I were a judge, I would MAKE SURE the trial was held in Sioux Falls. There are false allegations, and than there are facts. It seems the ‘facts’ in this case are pretty clear. And if so many ‘false allegations’ were made, why didn’t Legacy sue for libel?

If it Smells Bad and Looks Bad, it is probably Bad.

This is exactly what I told the city council last week in reference to doing business with Legacy Development for the Downtown Parking Ramp PPP.

Today it was announced that the piling on continues;

A lawsuit was filed on behalf of Emily, Mike and Chris Fodness on Tuesday.  The defendants named in the court filing include Legacy Development & Consulting Company, LLC; Aaron Hultgren; Hultgren Construction, LLC.; Boomerang Investments, LLC; CLP Investments, LLC; Olympia Real Estate Holdings, LLC; and RISE Structural Associates, Inc.

Besides the McMahon and Fodness families suing, the Federal Government and OSHA are still investigating, those charges could be coming very soon.

Many in the public continue to ask the question; Why would a majority of the council support this project? What do they know? Many feel there is some kind of underlying corruption going on. Makes you wonder, and if there is what could it be?

Let’s look at what we know for sure;

We know that for some strange reason the city agreed to pay for ALL of the foundation costs which basically doubled the price of the parking ramp.

We also know that the hotel got one heck of a deal on the lease without a proper appraisal.

So what would happen if the bonds (around $21 million) are taken out in April and the deal with Legacy or Lamont falls through before a shovel goes in the ground? This means the city would have this money sitting in an account to use for almost anything. Why? Because the bonds will be taken out with the 2nd Penny as collateral. Like the $9.1 million mortgage payment on the Denty per year and the $1.1 million mortgage we pay on the administration building we would have to pay an additional $1 million out of this fund, which is supposed to be for road repair.

When this deal was struck many directors and councilors claimed that we would never have to worry about that because the parking department’s enterprise fund produces enough revenue to make the mortgage payment. No way. The revenue basically covers wages and maintenance now, and not much left over for bond payments. Those fees will have to be raised significantly to cover that payment. Let’s face it, it was no accident that the 2nd penny was used as collateral, because it will have to make this payment. No getting around it.

So is this just a scam to get our hands on $21 million for something else? Not sure. But the whole deal stinks really, really bad. I guess we will have to wait, once again, on the courts to open the books.

Stehly’s 2nd attempt to repeal downtown parking ramp may not happen

Stehly tried to get another councilor to sign onto the repeal, but so far has been unsuccessful;


The city attorney’s office has said that Stehly has the legal right to propose the repeal.

What is frustrating about the Downtown Parking Ramp is the obvious, the developer involved, Legacy is being sued for wrongful death and a whole host of other stuff. Why would the city want to be involved with an entity that is facing such serious charges and fines?

Stehly spoke about it yesterday at the informational, imploring her fellow councilors to repeal the bonds until the legal matters are settled. The only response Stehly got was from councilor Rolfing who offered, “At least the city isn’t be sued.”


And some wonder why such idiotic decisions are made. Just look to the decision makers.

The Downtown Parking Ramp controversy was always about more than just Hultgren

As many critics of the deal pointed out, besides the enormous price-tag and sketchy lease deal, we felt Legacy’s involvement was troublesome. Well so do the families that were affected by the Copper Lounge building collapse;

John J. McMahon, Ethan’s father, and John F. McMahon, his brother, contend in their lawsuits that Hultgren Construction performed its construction and demolition activities “under a trial-by-error mentality.” Besides Hultgren Construction, the lawsuit also names Legacy Developments & Consulting Co., and Rise Structural Associates, the project engineer. Three limited liability companies – Boomerang, CLP and Olympia – that had ownership stakes in the project are also named.

The lawsuits contend that Hultgren Construction and Legacy Developments were closely related entities. Aaron Hultgren, Hultgren Construction’s president, was also the director of development and operations for Legacy.

“By using a captive construction company in Hultgren Construction instead of hiring a reputable, third-party construction contractor, Legacy was able to cut costs and save substantial amounts of money on its development projects,” the lawsuits say.

We have said all along that Legacy and Hultgren were working in tandem on the project. To single out just Aaron Hultgren as the ultimate culprit isn’t right. We had further proof of this when we found out about the illegal asbestos removal.

Why is a majority of the city council and city hall still supporting this project? That is the grand mystery.

The bonds are not set to sell until April. With this recent news I hope the council reconsiders once again if it is a good idea to go into business with this developer on this project or future projects. Taxpayers should not be held hostage by a city government that refuses to take a hard and reasonable look at this situation. It wreaks of corruption.

Hultgren no longer employee with Legacy

So this is interesting, apparently the optics were getting out of control;

We have learned from Legacy Development that it no longer employs Aaron Hultgren. Legacy Development tells us that Hultgren has chosen to pursue other opportunities.

That of course doesn’t mean he still isn’t an investor with the group, but I guess we will never know.

Legacy hires a Public Relations Person

Stacy Jones, PR for Legacy

They are getting serious over at Legacy. Maybe they realized all this LLC moving around, buildings falling over and transporting Cancer causing agents through town needed a little turd polishing, so they went after the best;

Stacy Jones has joined Legacy Developments, overseeing public relations, marketing and community relations. Jones came from Sanford Health, where she spent 13 years, most recently as executive director of marketing for the development and research division overseeing Profile by Sanford, Sanford Health Plan, Sanford Research, Sanford World Clinic and Sanford Health Foundation. She previously spent 10 years at KELO-TV as a news and sports anchor, and reporter.

Twenty-Three years at Stormland-Sanford-TV should prepare Stacy for fixing the public perception of Legacy. I’m sure she is busy with her first assignment of assuring the public Legacy is the best choice for the RR Redevelopment project . . . wait . . . they haven’t announced that yet. My bad. Just as long as the Argus Leader is last to know.

Instead of a PR person, maybe they should have hired a Safety and Quality Control Specialist, just sayin’.

UPDATE: Removing Hultgren’s Name from Parking Ramp guarantors changes nothing

UPDATE: Pat Starr does a good job on Belfrage this morning explaining the games being played by council leadership, especially Erickson and Kiley.

Norm Drake is still involved with a LLC that was created Thursday (Dec 28). One of the ‘Bad Players’ that was involved with the Copper Lounge collapse and asbestos removal, and recently got a state loan denied with a project Drake is involved with at Flopdation Park;

Councilor Christine Erickson asked about a previously unknown limited liability company formed last week called Village River Group, which, according to the Community Development Office, will take the reins from Legacy Developments from this point on.

Village River Group manager Jeffrey Lamont will also replace Hultgren as a contract guarantor for the project. Norm Drake and the names of two other Legacy Developments officials will remain on the contract.

“If something were to not go as planned and there’s an issue at the limited liability company level, we have the ability to go to them as individuals to force the completion of the project,” said Daren Ketcham, Sioux Falls Community Development Director.

Hultgren continues serve as director of operations and development for Legacy Developments.

While Erickson and a few others in the room were aware of Village River Group’s formation, dated Dec. 28, 2017, on the South Dakota Secretary of State’s website, Councilor Starr said following the meaning it was a complete surprise to him. He’d never heard of Village River Group before, or that Legacy Developments and the city ever had aspirations to hand the project off.

“I think the solution to a problem is to face it head on and not form another LLC,” said Starr, who co-sponsored the repeal proposal. “I believe (Village River Group) being formed was in reaction to Councilor Stehly and I gaining support to get the project repealed.”

Should more damning information about Legacy Developments officials surface before the project bonds are sold this spring, Starr said the Council could make another attempt at a repeal.

As Sneve points out, Norm Drake and Legacy are still involved, they just changed the name of the LLC. Hultgren still works for Legacy. Nothing has changed but some paperwork. The move by the developer guarantors was about as slimy as you get, and quite frankly, pretty sloppy. But what makes it even more slimy is that 5 city councilors, SELBERG, ERICKSON, KILEY, ERPENBACH AND WALTER ROLFING VOTED AGAINST THE REPEAL. Like I said, it was obvious what they were trying to do, change the perception to the public by removing Hultgren’s name, but if the same people are involved, it changes NOTHING. A group of us laughed out loud when the 5 councilors thought they were pulling the wool over the public’s eyes. Not only did they look arrogant and out of touch, they looked incredibly stupid to think the public has been hoodwinked. I was truly embarrassed by the fact a majority of our council would still go along with this. I guess nothing surprises me anymore from this group who seemed to have lost their way and quite honestly their souls.

UPDATE II: Legacy certainly has a Legacy

Guest post by Bruce Danielson;

UPDATE II: Seems a Legacy development got denied a state loan, and nobody is talking;

Seldom does this happen.

But, earlier this month, it did.

The credit committee for the South Dakota Board of Economic Development recommended a loan be made to a company.

Eight days later, the full board refused it.

When I emailed Erickson, who is board chairman, to ask about the loan denial, Erickson referred me to Stern.

When I talked with Stern on the telephone Wednesday, Stern said he was limited on what he could publicly say.

This post lays out several points I would like you to consider following the Wednesday December 27, 2017 press conference. This press conference was the first time the citizens of Sioux Falls actually were able to ask question of two city employees deeply involved in the parking ramp project. It now appears more employees should be brought forward to answer  questions. Here is the press conference link for you to watch:

I recently filed my 5th Board of Ethics complaint, I may be filing a few more shortly.

The Sioux Falls parking ramp proposal is a very curious proposal and so is the connection to Les Kinstad, Norm Drake, Larry Canfield as business partners. To calm the fears of a great many Sioux Falls citizens, there is a belief a grand jury investigation is needed into the building collapse. There seems to be a pattern of getting things done without permits and going until caught. This Board of Historic Preservation meeting is another time this group pushed the legal and ethical limits to just get something done. I guess this is what we do just to get things done or make it look like it. Now we have a dead worker and a missing downtown building. Once the parking ramp is under way, what’s to stop the guarantors from changing the work orders they gave their contractor when putting their building up with of our parking ramp?

BTW, during the construction of the hotel, will the ramp be open for public use? There is a growing concern around the country about issues related to parking ramp or building construction when connecting them together. Here are some results:









Are these videos enough to question anything about our current concerns?

Think about this situation (PDF DOC: bohp_minutes_041311):

Norm Drake and Les Kinstad went to a Board of Historic Preservation after Ron Bell issued a Stop Work on the Security Building in 2011. They were just pushing ahead without approvals required. Work until they are stopped.

 Security National Bank Renovation

Les Kinstad, Scott Abdallah, and Norm Drake presented detailed information about renovation work at the Security National Bank building located at 101 S. Main Avenue. Interior building permits were granted prior to the start of construction but no exterior

building permits have been pulled even though work has begun on exterior window replacement. Because of this, Building Services placed a Stop-work Order on the project until the Board reviews the project and Building Services can review structural plans.

The Security Bank project representatives presented the Board members with some visuals of the building as originally built, to show what the exterior windows used to look like. The owner intends on replacing the window areas with something very similar. Keith Thompson made a motion to approve the work as presented and then to have the Board review the project again as it relates to the façade easement agreement, when the project is complete. Dixie Hieb seconded the motion. Motion passed with five members voting in favor of the motion and Anita Kealey abstaining.

So what is the full connection between all of these boards, people and events? I record these meetings so they can be studied and used for further proceedings. Sioux Falls city government has stopped the Council, boards and commissions from taking detailed minutes to limit the exposure, this appears to be why the administration fought so hard to prevent public recordings. There are several members of the public and press who are watching your actions, the administration processes and the curious connections with several outside entities.

As a side note, Norm Drake discussed his displeasure having to follow rules when building downtown Sioux Falls during this 2016-11-29 – Downtown Design Standards presentation I recorded.

On December 2, 2016 at 10:33 a.m. less than 60 hours after Mr. Drake was complaining about standards we lost a man and a historic building with a SiouxFalls owned façade easement. This happened one day after a curious property transfer happened and now we have their confession of insolvency. The Federal EPA has the ability to fine previous property owners for criminal wrong doing. Sioux Falls appears to say, let’s just get it done and damn the consequences. Remember, we lost a man and a historic building with a SiouxFalls owned façade easement.

What’s wrong with this? There is a reason for ethics. There is proper process. Where are the ethics and open process we must have to not let these things happen again. Why does the city continue to do the same thing over and over again thinking they will never be caught?


Legacy gets sued by Irish Franchise;

Dublin-based Epcon, a condominium builder with 127 franchisees in 29 states, sued a Sioux Falls, S.D., franchisee whose projects never gained ground despite plans to build in one of the fastest-growing cities in the Plains states. Epcon said the owners, Norman Drake, Lynn Hinckley, Lester Kinstad, Bryant Soberg and Darrel Viereck failed to make scheduled franchise payments. It is asking a federal court to award it $200,000 in back payments and interest.

There was also a very familiar proposed parking ramp project in Rapid City, in 2009 (DOC: 0727_July27SpC)

UPDATE: This is what was used to stop Harsma Construction from further contracts with the city this past year. Pay attention to point 8 below and see how Legacy can be doing further business with the city?


Section 2. Bidding Requirements and Conditions


The following reasons will be considered sufficient for disqualifying a bidder and rejecting the proposal or proposals:

A.    Submittal of more than one proposal for the same work from an individual, partnership, limited liability company, firm, corporation, or joint venture by the bidder or its affiliates.

B.    Evidence of collusion among bidders. Participants in collusion will not receive recognition as bidders for future work with the City until they are reinstated as a responsible qualified bidder.

C.   The bidder has been determined to be a non-responsible bidder by the City. A bidder may be determined to be a non-responsible bidder for any one or more of the following reasons:

1.    The bidder has inadequate experience, lack of organization resources, or technical resources to complete the project;

2.    The bidder or its affiliates have other incomplete projects which the City believes may hinder or prevent prompt completion of the project;

3.    The bidder or its affiliates are in default of contracts for previous or other current projects;

4.    The bidder or its affiliates have not satisfactorily performed, for the City or other owners, previous projects or other current projects including, but not limited to, the items listed below in this paragraph. Determinations of unsatisfactory performance on work for other owners will be based on written documentation unless the other owner is associated with the project to be awarded.

a.    Noncompliance with project requirements or the directives of the owner or its agents;

b.    Repeated or substantial failure to complete projects on time;

c.    Substantial corrective work required prior to final acceptance or during the warranty period;

d.    Instances of work or materials that failed to meet the specifications of the contracts but were accepted by the City with a price adjustment;

e.    Failure to provide adequate safety measures or appropriate traffic control measures that endangered the safety of the workforce or the public;

f.     Submitted false documents or misrepresented the quality or quantity of materials used or work performed in the bid or on other projects.

5.    Subcontractor or supplier claims against the payment and performance bond and/or the project proceeds on bidder’s or its affiliates’ other current or previous projects that may impede the ability of the bidder to complete the project to be awarded.

6.    Any other facts or circumstances showing a reasonable likelihood of the bidder’s inability to properly complete the project in accordance with the contract requirements.

7.    The bidder, its affiliates or their respective officers, directors, members, partners, shareholders, or resident general managers in arrears to the City in excess of 90 days, including any situation where the bidder was a party to a joint venture and the joint venture failed to reimburse the City for monies owed.

8.    The bidder, its affiliates, or their respective officers, directors, members, partners, shareholders, or resident general managers has violated Environmental Laws of any state or the United States (as defined above in General Conditions) which violation has resulted in a fine of $10,000 or more or has had any permit or contract revoked based on the Environmental Laws of any state or the United States.