Remember when they told us the reason they are only paying $1 a year for rent is because they were going to take care of the renovations . . . just not all of them (Item #6, Sub Item #16);*

Centralized Facilities Improvements – Milwaukee Depot Dock Renovation; To award a bid, 605 Companies, $202K

I did remember there was something in the lease that said they would only be responsible for interior renovations, but that seems like an awful lot of money to turn a loading dock into a patio. Do they sell gold plated decking?

I remember reading this caveat in the contract and thought to myself, “This is gonna cost us.” It didn’t take long for them to come to the feeding trough.

We should have made this into another overnight homeless shelter, probably would have cost us less.

*I also like their attempt in burying this as the last item on the consent and calling the building by it’s historical name. Sneaky.

UPDATE: If you looked at the finance reports I posted a link to earlier in the week you will see that Matt Paulson and Craig Lloyd were the top two donors to candidates. Heck, even Councilor Nutzert donated a $1,000 to a candidate to challenge incumbent Brekke. Which I find strange considering 1) Janet has more qualifications than anyone sitting on the council and 2) Has voted with the rubber stampers 99% of the time. As I have mentioned in the past, this is why you can’t get regular people to run, because the money elite will donate to the rubber stampers that will do their bidding. Also notice there is a lot of talk from Paulson when it comes to remodeling the new building, but once again nothing in writing and only days after council approval the dollar amount they were floating around has suddenly disappeared from the discussion;

Earlier this week, the Sioux Falls City Council approved a deal that will allow Startup Sioux Falls to move into the former Parks and Recreation Department building at Sixth Street and Phillips Avenue. The agreement provides a 10-year lease for Startup Sioux Falls at the rate of $1 per year. The space will be completely renovated at Startup Sioux Falls’ expense, creating offices for its staff, a modern co-working space and an event space for startup community events. This move will place the center of activity for new business formation directly in the heart of downtown.

As usual, follow the money, the rich give out their tokens and they receive the goodies from the taxpayers.

I had no doubt the city council would vote 8-0 to approve the new Zeal/Startup Center last night, but it didn’t stop me from testifying about the lack of transparency in the contract that should mandate they HAVE to spend $1 million or more on the remodel.

Of course several board members walked to the podium (after I testified) and talked about all the wonderful things . . . blah, blah, blah, but none of them, any city employees or councilors counterpointed what I said about having it in the contract in writing.

One councilor asked the finance director about the naming rights deal in the contract. Shawn admitted that the remodel plans haven’t been drawn up yet so they don’t have a price tag yet (even though they are fine with renting the facility for $1 a year). Then he explains that the money needed for the remodel will be likely generated by naming rights. In other words, there is the possibility Matt Paulson will likely front the money for the remodel in return for hanging his MarketBeat sign on the building.

I don’t care what kind of charitable giving people do in their personal and business lives, but it always pisses me off when that gift has strings attached when it involves public/private partnerships. Can’t these people just write a check and be done with it? Of course not, they need something in return, as if the $1 a year lease for 10 years isn’t enough? I understand naming rights when it comes to the Events Center and other facilities like that, but now we are doing it in parks and buildings that we should just liquidate. Why does the public have to be involved with this very scrupulous deal to begin with?

When Shawn said that the council ‘Will have to approve any naming rights.’ I just laughed, as if they would vote anything down at this point. What a bunch of Clowncilors.

Once again, another handout with the taxpayers holding the bag.

Before we dive into the current proposed agreement (Item #18) watch these videos from 2018 (FF to 9:30 in the first Q & A and listen to the Mayor’s answer about personal guarantee);

So why do I bring this up? The deal that took place back than echoes what is going on with ZEAL.

Let me make this clear, I SUPPORT, Zeal & StartUp Sioux Falls moving to this building, I support their vision for the facility, I even kind of support the $1 a year lease. But let’s face it, most people in this city are worried about where their next paycheck and meal is coming from and not starting a business so there is absolutely NO reason the taxpayers need to partner with them. In fact DTSF has several private properties available for a facility like this without the city needing to get involved.

The main issue with the deal is the handshake promise that they will spend $1 million remodeling the building. It is true that in the contract they will be responsible for general maintenance and have to carry insurance, but like the Bunker Ramp deal there is NOTHING in writing that they must spend this money, even though the city promises to reimburse them if they break the lease. The mayor also has authority of what improvements can be made, which is good. But like the deal with Jeff Lamont that was based on a flimsy piece of paper that he was ‘good for the money’ ZEAL has NOTHING in writing they will spend the $1 million.

Did we learn nothing from the $26 million dollar pile of cement?

What baffles me is that while this mayor and the past one claim they are running the city like a business, NO ONE in the private sector would sign a contract like this if the promises were not in writing and approved by their legal counsel.

This is just another handshake deal between the mayor and his rich buddies with NO (legal) accountability, and while it frustrates me these backroom deals persist, I think for the most part the massive conflicts of interest sadden me when we could have just done better. I know the mayor shares a deep friendship with some of the individuals involved, but this isn’t the mayor personally borrowing his lawn mower to a buddy, this is a tax payer owned asset and we must dot the I’s and cross the T’s to protect OUR asset NOT the mayor’s friend’s asses.

Some may argue that this is NOT like the Bunker Ramp deal, which when it comes to value, they are correct. But when it comes to a private/public partnership almost everything is identical, including nothing in writing. We just don’t seem to learn from (recent) history when it comes to contracts with these partnerships like the cost overruns and shoddy work with the Pavilion, Admin Building, Events Center, Midco Aquatic Center and Bunker Ramp. I have even heard there are now millions in cost overruns with the Water Treatment and Public Safety facilities that are not even completed yet.

I don’t expect my council and mayor to be geniuses when it comes to these negotiations, but at least look at history and rely on your 6-Figure a year staff to give top notch advice and draw up contracts that value accountability.

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.


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;


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 🙂

SIOUX FALLS, SD – The Zeal Center for Entrepreneurship has added Kurt Loudenback, Matthew Paulson and Karla Santi to its 11-member board of directors.

Loudenback is the owner and CEO of Grand Prairie Foods Inc., a Sioux Falls-based provider of cuisine to national hospitality businesses and private-label clients and the maker of its own branded products. Loudenback and his wife, Valerie, bought the company in 2003 and have grown it from 15 to 150 employees. He previously spent almost 20 years with Purina Mills Inc., including time as business group director, before becoming president of Pipestone Family Farms.

Paulson is an entrepreneur, author and angel investor. He is the founder of MarketBeat, which empowers retail investors to make better trading decisions by providing real-time financial information and objective market research. Paulson has authored eight books on personal finance and has invested in more than 40 early-stage, high-growth companies as an angel investor. He chairs Falls Angel Fund, a regional angel fund that invests in businesses based in South Dakota and surrounding states.

Santi is CEO and founding partner at Blend Interactive, a firm that helps institutions and agencies tackle complicated web and content problems. She serves on the Sioux Falls Area Chamber of Commerce board of directors and is the chair of the chamber’s Business Leadership Council. She is an active mentor through EmBe’s Women’s Leadership Program and strives to encourage young women to explore STEM programs and pursue careers in technology.

“Our new board members bring a wealth of knowledge and experience to Zeal,” said Rich Naser, Zeal’s president. “We are fortunate to be able to draw on their expertise as we continue to enhance the resources we can provide to the Sioux Falls entrepreneurial community.”

In addition, the following board members have been elected to serve as officers: Paul Ten Haken, chair; Mike Vetter, vice chair; and Chad Hatch, secretary-treasurer. 

The other members of the Zeal board are Jason Ball, Will Bushee, Laurie Knutson and Steve Statz. The future Sioux Falls Development Foundation leader also will become a member of the board.

Zeal at 2329 N. Career Ave. offers services for entrepreneurs at every stage of business ownership, including co-working space, incubator and accelerator programs, and affiliate memberships. Zeal companies collectively have secured more than $172 million in equity financing and hold 65 patents.