Thursday, April 28, 2011

The Elephant is Still in the Room

The mayor's consultants gave their reports to the City Council on Monday, April 25th. They gave the mayor the green light he needed to complete his vision for an Event Center located at the Arena/Convention Center site. He will make his recommendation to the City Council on May 2nd.

After May 2nd, it will be up to the City Council to sort through the information and come to a decision on what to do about the proposed location, the financial cost estimate, what the ballot will look like and if this entire project will be put on a ballot for a vote of the citizens of Sioux Falls. They have a very serious decision to make – one that will impact the economic future of this city for decades to come.

There was a question and answer session held after the presentation to the City Council, whereby the public was given the opportunity to ask questions of the City's consultants. I would be remiss if I didn't first mention the rude tone set forth by the moderator who clearly did not demonstrate a respectful manner toward private citizens who just wanted to be heard and have their questions answered. After all, isn't that what a public question and answer session is supposed to be?

A couple of things stood out in my mind and/or raised questions for me based on what was presented and what was said at that Consultant question and answer session after the City Council Information Meeting.

1.    Don Dethlefs, Sink Combs Dethlefs, stated that the Arena/Convention Center Site and the Cherapa Site were two great sites and both can work as an event center. He stated it just depends on how much money the city wants to spend. He stated both sites can accommodate the traffic generated by an Event Center.

2.    Greg Huber, Mortenson Construction (Construction Manager for the EC Project) showed the results of the Site Selection Cost Analysis. The consultant stated the buildings would cost the same at both sites.

The report says the results of the analysis show that the Cherapa Place site is a relatively more expensive site on which to build. This is driven primarily by the cost of providing additional parking plus land acquisition.

·        The total cost results for Cherapa: $12,680,000
Parking Structure: $9,766,000
                           Street Improvements: $1,066,000
                           Utilities: $982,000
                           Land: $866,000

·        The total cost results for Arena/Convention Center: $6,532,000
Parking-Surface: $2,705,000
                                Street Improvements: $667,000
Utilities (Rock, Sewer): $3,160,000
Land: City Owned

When asked if he (Huber) had approached the folks associated with McCart Fields or the Park Board, he stated no. He said no one was approached whether there was support for taking these fields for parking. In addition, replacement costs associated with the McCart fields have not yet been identified. The consultant uses these fields in his cost analysis yet has done no background investigation to determine the plausibility of his cost estimates.

When asked what would be done about parking if McCart fields were not available, the answer was a parking structure (ramp) would need to be built at the Arena/Convention Center Site. Think about this: all that money spent for taking out McCart fields for a surface parking lot that will sit empty most of the time and will not generate any additional revenue. Let’s not forget all the youth that will be displaced when these fields are turned into asphalt and the $400,000 + the city already spent to upgrade these fields.  Then think about surface parking or a parking structure in the downtown area that could have daily rental revenue from the businesses located downtown, thereby serving a dual purpose. 

If McCart fields cannot be used at the Arena site for parking and a parking ramp needs to be constructed out there, then the costs between both EC sites will be a wash.  

3.    David Stone, AECOM Technical Services, Inc. provided the Economic and Development Impact Analysis Report. He reported the potential for spin off development and other tax revenue comparison as follows:

·        Downtown total valuation: $51,100,00
·        Arena/Convention Center total valuation: $6,700,00

The disparity between the two sites spin off development/revenue potential is basically dismissed because of the cost comparisons to build the Event Center. Someone said the decisions regarding this project will be based on politics, not on a solid business plan model. It looks like that might be may be case.

4.    When asked about financing the project, the City's Finance Director stated the funding plan has not been developed yet. It was a conceptual plan.  It is quite hard to comprehend that at this late planning stage, we only have a conceptual finance plan.

The Youth Slowpitch Softball Association Home page has a link titled: Save McCart Fields. Click on the link on their home page and go to "Save McCart Fields." This group is not in support of doing away with these softball fields. We have yet to hear from the Parks and Recreation Board as to whether they will recommend giving up McCart softball fields to this project. We do not know yet if the City Council will approve destroying McCart Park as we know it today.

The unresolved issue of McCart fields could have a significant impact on the parking structure-surface costs comparison between both sites. In addition, Dethlefs stated that if just the Event Center were at the Convention Center site, there would be enough parking today. However, with multiple venues holding events at the same time at the Arena/Convention Center site, there would be some need to have additional parking.

The mayor has said that this is not a business decision; it is based on what will be supported by the people. I am wondering how the mayor knows what the good folks of Sioux Falls support exactly because the good folks of Sioux Falls have not voted on anything – not location, not cost, not even if they support this project.

The city got sucked into making a bad decision decades ago when they made the decision to build the Convention Center at the Arena site. The prediction was economic development would follow. It has not.

Nowhere in this discussion have we heard what will be done with the Arena building in terms of updating that facility. What are the cost estimates associated with that venue? Why wasn't the Arena renovation included in the cost analysis by the consultants? The Council is already faced with spending $500,000 for a new scoreboard for the Arena.

The mayor is asking the city council to approve $65,000 for a naming rights study. Take a look at the guest blog written by Dave Syverson on this blog. I remain skeptical about lumping the Zoo and other city facilities in this study request. I am told the Zoo knew nothing about the naming rights study and no one had contacted them. I think its just subterfuge to include all these other entities to get the study approved.

I hope the city council is up to the task of researching this information and asking the hard questions. The economic future of this great city is at stake and we can't afford to build something just for the sake of saying we got it done as cheaply as possible or because the few people who speak up actually speak for the voters in this city.

It's about time for a vote of the good folks of Sioux Falls.  After all, they are the ones that will pay for it for decades to come. A vote in the very beginning would have neutered all this rhetoric.


  1. Good analysis. Can it get 5 votes on the Council? Do we need to sell bonds? When and what do the citizens vote on?

  2. If McCart Field is not available there will be at least a 9+ million dollar expenditure for a parking structure. Thus, any financial advantage to the Arena/Convention Center site from the 34 additional conventions is negated and this now becomes the most expensive site.

  3. Well, then it's a foregone conclusion that McCart Field is going to go away.

  4. Entenmann has a clear conflict as he owns land right across the street from the EC's proposed parking lot. He should recuse himself for any vote involving the Events Center but as we know, he "doesn't care if he has a conflict of interest".

  5. And what about the sacrifices the citizens of Sioux Falls will have to make over the next twenty years? Granted the financing plan is yet to be revealed, but it is looking more and more like most of the cost will have to be bonded. The bonds will have to be paid back out of the second penny sales tax, which is used for capital projects, and the entertainment tax. Despite the Mayor’s promise that bonding for the Events Center will not impact other capital projects, this promise rings hollow. Councilor Brown has been asking this question and I hope the rest of the Council will as well. It will be hard to assess the impact on long term capital projects but these questions need to be asked and answered honestly, not hidden by some budgetary shenanigans.
    Consider what we may have to forgo for the next twenty years– new fire stations; improved streets and new streets for development; replacement of worn out police cars; limited library service on the west side of town; replacement of out of date and unsafe park structures and play equipment to mention just a few things.
    As for the economic impact, will it really be as great as the consultants promise? Given the history and experience of the current Arena, this site will not deliver the promises. But then it seems that the Mayor is not at all interested in what history and experience tell us, so this would seem not to be a factor in his decision-making. A downtown site would seem to fare better in the long run, but even there, I wonder how realistic the estimations are. I’m not opposed to an Events Center, but want us to make decisions based on reality and not hyperbole.

  6. On the McCart Field question does anyone know if that is "Park Land", because I remember something like if the City sells or takes Park Land away it takes a Vote of the Citizens. Might be important to know?

  7. That's why they want to leave some diamonds, even though the Softball Assn. has said that won't work so they might as well take them all.

    If they leave a few they can argue that it's still a park so no change in use. Typical slimey word game tactic this Administration is rapidly becoming the poster children for.

  8. What is going on with the city street departmetn? Last year mayor Mike was all about street and pot hole repair. This year he cut the street repair crews from 4 to 1. And now all the temp summer street dept workers were told they dont have jobs this summer.

    sounds to me like mr. mayor is saving up money for his new event center instead of repairing the streets. And cutting jobs.