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January 08, 2018 09:54 PM

Lingering Questions About Legacy

Sioux Falls, SD

Our KELOLAND News investigation first brought you inspection pictures from inside the Copper Lounge, after the collapse, of asbestos-lined pipes and other material that was "suspected" of containing asbestos. 

These pictures were included in a State Department of Environment and Natural Resources asbestos inspection report four days after the building fell down. 

Several photos show the pipes. Another shows "suspect paper" meaning it could contain asbestos, above metal ductwork.  

That's when the state also found that Hultgren Construction had not removed and disposed of asbestos properly while remodeling the building. 

The city of Sioux Falls has been under scrutiny for what it knew about the investigation and when, as well as the controversy over the mixed-used city parking ramp project that includes the same developers who owned and worked on the Copper Lounge building.

The State Department of Environment and Natural Resources was working with City of Sioux Falls employees running the landfill on its investigation into improper asbestos removal and disposal by Hultgren Construction.  But leaders at City Hall say they were not in the loop. 

Angela Kennecke: Should they have reported that to City Hall? Should City officials have known?  And maybe that's a question for you… (Referring to Mayor Mike Huether).
Director of Public Works Mark Cotter: I think it's fair. It's a lesson learned that we really had to try to open up communication. But in general we weren't in charge of that investigation. 

"Government isn't perfect, just like all other entities in life. But if you learn from mistakes," Huether said. 

What city leaders also didn't know was that Norm Drake and Aaron Hultgren settled with the state on behalf of their companies. That happened May 3, but the state tells KELOLAND News that it did not notify the city of the settlement. 

Drake runs Legacy Developments and he is a guarantor on the city's new mixed-use parking ramp.  Hultgren was also on the contract until he was taken off last week following news that Hultgren Construction was the subject of a federal criminal investigation into the building collapse.  The city says it didn't ask for Hultgren's name to be replaced. 

Community Development Director Daren Ketchum:
The developer came to us.
Kennecke: And did they tell you why?
Ketchum: You know what; I did not ask why they wanted to do it.  They proposed Mr. Lamont would join the team and this new company would be formed and he would take the place as guarantor along with Paul Cink, Norm Drake and Larry Canfield.

Jeff Lamont is the manager of the new LLC, Village River Group, whose investors are not disclosed, even to the city. 

 Isn't it important that we know everybody that the public is doing business with?
Ketchum: We try to let private business run private businesses and we worry about what we can deliver for the taxpayers in an effective an efficient way.

The $50 million city mixed-use parking ramp project was approved by the City Council last week after Hultgren's name was taken off the contract. But it wasn't without its dissenters.  Huether says that's been the case in every big project the city has undertaken during his tenure.

Huether: This is what happens in real life.  In real life, not everyone is going to agree--but ultimately you do make tough decisions and then you move forward and tackle other issues that come our way and the same thing is going to happen here, Angela. 
Kennecke: The other issues though didn't involve a building collapse, a criminal investigation and removing asbestos improperly.  
Huether: And Angela again, you've probably tried to relay that at least three times now in the last three minutes and I get that, but again the process is one where whether it be people on the RFP committee, City council members--they are really making tough decisions as objectively as they can to try to do the right thing for the city as a whole.  
Kennecke:   Whose decision ultimately is it?  The city continues to proceed with these same players. 
Huether:  The process is one where it has to go through all kinds of steps to get to the next step.  
Kennecke: I'm just asking you as leader of this city?
Huether: And I’m giving you my answer. It may not be the answer you want.  

Ketchum says there is no reason for the public not to have confidence in the developers and builders of this new multi-million dollar, taxpayer-funded project. 

"Our agreement with the private developer spells out they have to use same structural engineer as the city, the same designer as the city. They have to use the same contractor as the city. I think that should give everybody the confidence that we are going to have a really high-quality product," Ketchum said. 

The city points out it has every assurance the project's developers are able to come through financially, saying they've already made non-refundable deposit of $150,000 and must pay another $350,000 before the groundbreaking of the mixed-use parking ramp. 

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