Lehman Leaves Spearfish; Eagle Creek Stiffs Vermillion; Fortune 500 Prefer Twin Cities

Governor Daugaard drops the microphone,” said the GOP spin blog earlier this week, as if Black Hills Corporation’s decision to build a new corporate headquarters in Rapid City (with money gained from the Black Hills Power rate hike?) to replace the five buildings it currently uses around town somehow puts an end to debate about the merits of South Dakota’s approach to economic development.

I’m still waiting for the Governor to pick the mic back up and explain why South Dakota’s job creation lags behind other states.

I’m waiting to hear why the Governor didn’t detour up to Spearfish after the BHC announcement and explain why Champion Investments is closing the Lehman Trikes facility in Spearfish instead of moving here from its home base in California.

I’m waiting to hear why Eagle Creek software reneged on a deal to set up shop in a new facility built by the Vermillion Area Chamber and Development Corporation* for over $4 million dollars. Back in 2013, Eagle Creek promised to bring maybe 1,000 jobs to Vermillion. Last September, Eagle Creek said they were close to opening in Vermillion. Last November, the Vermillion Chamber sued Eagle Creek for four months of unpaid rent on the empty building. Now that lawsuit is asking for $154,000 in past rent and $3.1 million future rent to make up for Eagle Creek’s apparent breakage of its long-term lease on a building custom-designed for Eagle Creek’s needs. Eagle Creek contends that the Governor’s Office of Economic Development made fraudulent promises of corporate welfare.

I’m waiting to hear why, despite all the the great business rankings cited in GOED’s 2014 Annual Report, not one of the 19 Fortune 500 companies with headquarters in the Twin Cities has said, “Hey! ALEC says business is better in South Dakota—let’s move to that new building in Vermillion!”

Pick up the microphone, Governor. We’d all like to hear what you have to say.

Related Reading: Read Slate’s January 2013 history of the mic drop, and tell me if a white, middle-aged realtor’s application of the meme to a building announcement by a Governor officially puts the meme over the hill.

*Update 12:12 CDT: A well-informed Vermillion reader corrects me: it was the Chamber, not the city, that built the Eagle Creek building.


10 Responses to Lehman Leaves Spearfish; Eagle Creek Stiffs Vermillion; Fortune 500 Prefer Twin Cities

  1. Roger Elgersma

    Between Eagle Creek and NBP, this state may not only not have good economic development, we may also get a bad name in the business community. The truth eventually comes out. Attitude about oneself is not the most important point. Reality is more important than attitude.

  2. Dennis Daugaard and his (and Rounds’) appointees are at best, amateurish.

    They are lost in the wilderness of no ideas.

  3. I can see some differences here between NBP and Eagle Creek. NBP clearly benefited from state help, made millions of dollars of public and private investment disappear, and then collapsed. Eagle Creek is chugging along as a private company with occasional help from the state and locals, but in Vermillion, Eagle Creek did not take ownership or gain any benefit from the building the Chamber built for it. Eagle Creek just backed out, stiffing the Chamber on rent and leaving them holding an empty building. Interesting;y, Eagle Creek says the problem here is that GOED did not give them the gifts they expected. Something odd is up here, but given the details available so far, it doesn’t smell like corruption on the Daugaard GOED’s part; it smells more like getting taken by bad private-sector actors.

  4. Lehman got $800,000.00 in loans to stay in Spearfish the article says. $500,000.00 in one dab and $300,000.00 in another trip at the buffet table. Kind of like the buffet table of the EB-5 that Rounds, Benda, Bolleen and Daugaard liked to eat at with their Chinese marks, $500,000.00 is a magic number to politicians. It makes their wicked hearts glow.

  5. Don’t count on Daugaard for anything like that Owen. He is to damn busy going to Mall of America to tell the good folks there of his prowess here in the Sunshine State. One thing about Daugaard, if not for the Chinese money, he, Rounds, Bolleen and Benda disappeared , there would not be any kind of economic activity in our state. He is thinking how he could make another economic tsunami with EB-5 moolah like his hero did here. He may have to learn Mandarin in Aberdeen to get the job done as anyone else that tries that approach had better stay away from shotguns.

  6. Has there ever been an independent audit of the Governor’s Office of Economic Development and their investment of South Dakotan’s tax payer funding?

    We’re getting our butts kicked by surrounding states and they seem to be more worried about the pomp and less concerned about the circumstance. They do well on the celebration, but the end circumstance isn’t always good.

  7. An independent audit of GOED? Isn’t that what Auditor General Marty Guindon produced last year?

    http://legislativeaudit.sd.gov/Reports/State/Legislative%20Audit%20of%20GOED-February%2012,%202014.pdf

  8. Deb Geelsdottir

    The reasons have been enumerated many times before. There is nothing Daugard, Rounds, and their corrupt corporate cronies don’t know. The question is, why is it that the SD cartel does not want genuine economic development in the state they control?

    I’m serious about my question. A search for the answer when dealing with a situation like this always begins with “Follow the money.”

  9. Ryan Housh

    Hello.

    I was a fellow Eagle Creek employee and they were a bit shady as a company.

    When I first joined the company, I was just out of college and was the only job that I could fine, but there was a contention for my employment. I had to sign a 2 year agreement that if I had left before had I would had to pay a prorated amount for their “training”. I didn’t receive much since I knew most of the information they were training me anyway.

    The state subsidized the cost for Eagle Creek to train their employees since it would get jobs in South Dakota, but only when there were large classes. Great in theory, but terrible in practice since the trainers were never there most of the time and the employees would have to train themselves. I was one of the few that had to help retrain them. This caused great stress for me and my coworkers that would soon quit and find a new job.

    I was told by Jeff Brusseau that Eagle Creek was fighting back because he felt that the state was poaching on its employees. To me, this doesn’t make sense because there aren’t many computer jobs in South Dakota and thus the disgruntled employees were forced to work for the state in order to stay in state with their families.

    I left there April this year because I was fed up with the stupid management. My letter of resignation went into great detail to why I quit and Eagle Creek was about to head into a bad storm willingly.

    If you have any more questions, don’t hesitate to email me.