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State Selling Two Juvenile Corrections Facilities: Plankinton $1.02M, Custer $2.34M

The state Board of Appraisal met for a mere thirteen minutes yesterday to assign dollar values to two former juvenile corrections facilities that the state has decided to sell.

State government’s Board of Appraisal put dollar values Friday on the Star Academy property near Custer and the Aurora Plains Academy property at Plankinton.

The two campuses will be sold during October. The Plankinton auction will be Oct. 4 at 11 a.m. CST. Star Academy will be sold Oct. 18 at 11 a.m. MDT. Each of the auctions will be held at the local courthouse.

…They accepted the appraised value for the Star Academy property at $2,340,000. There are 27 buildings on 173.66 acres of land four miles south of Custer along US Highway 385.

…The appraised value for the 82-acre juvenile campus at Plankinton is $1,022,489.50.

The appraisal for Plankinton reflects a deduction for work that is needed on some buildings [Bob Mercer, “State Board Sets Values for Two Juvenile Centers,” Watertown Public Opinion, 2017.08.25].

The state is proposing to do $335,510.50 of demolition and repairs on the Plankinton property, so the starting appraised value is actually $1,358,000.

The Legislature authorized the Governor and the Commissioner of School and Public Lands to sell these properties last winter. House Bill 1206, authorizing the sale of the Plankinton property, passed the House and Senate unanimously. House Bill 1209, authorizing the sale of the Custer property, failed on its first vote in the House, passed on reconsideration, and then survived the Senate on a 20–15 vote.

Opposition to HB 1209 appeared to center around some legislators’ desire to keep the Custer facility, which Governor Dennis Daugaard closed just last year, in state hands and put it to good public use.

My concern reviewing the appraised values comes down to the three key words of real estate: location, location, location. The Plankinton facility is a good spot for a pheasant hunting lodge and not much else. It’s 25 miles from the Corn Palace, 48 miles from the Missouri River, and well over an hour away from any other strong year-round attractions. The Custer facility is in the southern Black Hills on Highway 385, the concrete north-south artery through South Dakota’s best tourist attraction. It’s less than a mile from the Mickelson Trail, nine miles from the west entrance to Custer State Park (the most visited state park in South Dakota), ten miles from Crazy Horse, 12 miles from Sylvan Lake, 25 miles from Mount Rushmore, 27 miles from Hot Springs, 55 miles from the Rapid City airport, 61 miles from Deadwood, and 65 miles from Sturgis.

The Custer property is a prime location, yet the state thinks it should offer that Black Hills location for only 8% more per acre than the Plankinton site. (Custer per-acre appraisal: $13,472. Plankinton per-acre appraisal: $12,469. Work from the pre-demolition/repair value of $1,358,000, and the state is saying the Plankinton property is actually worth more than the Custer property, $16,561 per acre.)

Around Custer, the bare former Pizza Hut site, 3.88 acres with city water and sewer, is asking $189,900. The defunct National Museum of Woodcarving west on U.S. 16 offers 4.72 acres with three main buildings, a 32,000-square-foot paved parking lot, and room for expanded camping or cabins for $425,000.

Meanwhile around Plankinton, the city is listing some bare residential development property next to the Fish Lake Country Club five miles east of town for $10,000 an acre.

The Plankinton property may have an advantage among industrial developers. A major manufacturer looking to take advantage of South Dakota’s cheap labor and non-regulatory state government would likely prefer a site two miles from the easy trucking of I-90 than an hour and several curves and hills away from the nearest freeway access. But the state isn’t looking around for a commercial developer or a pheasant lodger: School and Public Lands Commission Ryan Brunner said yesterday Aurora Plains Academy, the private juvenile corrections operator which currently leases the Plankinton facility, will likely buy the site.

Even if we didn’t already have Aurora in the chute, the galaxy of all potential buyers, including residential developers and resort builders, is likely more than 8% bigger for Custer than for Plankinton, and the money to be made on a scenic U.S. highway in the Black Hills is likely more than 8% greater than the potential take on a country corner a mile from a state highway. Acre for acre, the state thus seems to be either overvaluing its Plankinton property or undervaluing its Custer property.

22 Comments

  1. Mark Young 2017-08-26 12:22

    Gov. Daugaard missed the boat on incorporating Star Academy into the State Park system as a fifth Black Hills lodge, this one as a meeting and retreat oriented site. Why Black Hills legislators never saw this potential is beyond me.

  2. Porter Lansing 2017-08-26 12:47

    Whew … I can finally relax. Plankinton never got me, as was predicted in the 60’s. LOL

  3. Roger Elgersma 2017-08-26 15:05

    So where did the juvenile delinquent kids go? Are they being taken care of in different ways, or better ways.

  4. Cory Allen Heidelberger Post author | 2017-08-26 15:13

    Mark, tell me if I’m missing some events, but I get the impression that the state prefers to direct meetings up toward Deadwood, where they can squeeze some extra revenue out of their visitors at the casinos.

    Roger E., fewer juveniles in detention is part of the Governor’s criminal justice reforms. The Governor has recognized that incarcerating juveniles far from home may not be the best way to help those kids get back on the right track. I’m fine with maintaining fewer jail cells for young and old. I’m open to the argument that the state may need to keep and maintain Custer and Plankinton for some other purpose (and perhaps we should feel some concern over the privatization of juvenile detention/rehab to the Aurora Plains people). But if we get rid of those facilities, we should make sure we get top market value for them.

  5. John 2017-08-26 15:42

    Apparently the Pierre learning curve is flatter than the James River valley.
    The Pierre, charitably, morons, learned NOTHING from their park proposal fiasco valuing Black Hills lands as equivalent to prairie lands.

    It’s a windfall if a Star-bidder gets by with the minimum price. Mark is right about that. Yet, unless turned into a park in its own right; we should disfavor the state from occupying the commercial resort field as it’s not an inherent government activity for a state to mimic commercial resorts.

    Cory, I heard from impeccable authority that Deadwood’s motel visitation is down, yet gambling receipts are generally on course. Reasons include: cost, too little else to do (especially for non-gamers). Similar to the Sturgis rally, some greedy bastards price themselves out of the market.

    Yes, the governor’s criminal justice reform is a huge step in the right direction – reducing the incarceration of juvenile offenders while ramping up their rehabilitation and diversion programs. It’s so imperative in a state where too many parents work 2 to 3 jobs to support a family and schools inadequately support student needs and development. The most dangerous thing in the world is an angry, hungry young man with a gun. Our village does an inadequate job addressing the reasons behind the anger and hunger. Once we do, the problems reduce. https://www.washingtonpost.com/national/the-white-flight-of-derek-black/2016/10/15/ed5f906a-8f3b-11e6-a6a3-d50061aa9fae_story.html?utm_term=.161c30e6f30a https://www.nytimes.com/2017/08/22/podcasts/the-daily-transcript-derek-black.html

  6. Darin Larson 2017-08-26 15:50

    Cory, there are so many variables that go into the equations of valuing these two properties, it is tough to consider all of them and weight them properly without a professional opinion. Even then, it is an educated guess because the professional appraiser is not privy to all of the information that informs the opinion of potential buyers. With that said, however, the public auctions will set the price ultimately paid to the state and that should be the fairest way to establish their value.

  7. Rorschach 2017-08-26 18:30

    The Star Academy would make a great compound for another one of those Warren Jeffs splinter groups.

  8. Jk 2017-08-26 19:34

    At one of the cracker barrel sessions last winter in Rapid City it was asked if the legislature might entertain turning the Custer facility into a mental health care treatment center. Shortly before this Rapid City Regional Hospital had chosen to deny mental health care to those people with autism,dementia and Alzheimers. It seemed a good choice however the legislators present pooh-poohed the idea out of hand. Obviously, to them it was far more imperative to milk tourist dollars with a new hotel facility than it was to help west river South Dakotans in need of mental health care.

  9. Porter Lansing 2017-08-26 19:48

    @jk … That’s a highly disturbing anecdote.

  10. Curt 2017-08-27 02:14

    STAR needed to be closed because with fewer juveniles in the pipeline to populate both the private operations and state facilities, the private group homes and other programs were starving. Remember where DD came from – Children’s Home. His old pals in the biz squeezed him and convinced him the state should not be competing with their operations. Besides, the state could sell the property for a resort development and all live happily ever after.
    Except that I watched STAR do excellent work (after it was no longer a ‘boot camp’) and kids are not receiving better care now that it is closed. Oh well, not Daugaard’s biggest scandal.

  11. grudznick 2017-08-27 10:26

    That Mr. Goodwin fellow from the district 32 where the Star place is is located is always hollering here in cracker barrels about smaller government. Then when government tries to put some property back into private ownership for taxes and economic development he hollers out the other side of his mouth. These wack job wingnuts are insaner than most. Mr. Goodwin is a noted overgodder so maybe he’d be OK if our government kept that facility and turned into a government run bible thumper camp.

  12. grudznick 2017-08-27 10:29

    Mr. Rorschach is righter than right. We must be vigilant that the fellows just down the road there by Pringle do not buy this up and expand their compound. It would be fine if those people worked in the real world and it was growth for Custer City’s workforce development but those people just dig in their own yard and get their money through unknown means.

  13. Jk 2017-08-27 12:11

    @Porter Lansing. The anecdote is all true. I was there and I asked the question.

  14. Cory Allen Heidelberger Post author | 2017-08-27 13:29

    Ror, I doubt the FLDS cultists would want to be that close to town, and right on a major highway—too hard to control access to the property.

    Indeed, Darin, we’ll have to count on the public auction to unleash the market forces. Let’s see how many people can bring ambition and cash to that contest.

  15. Cory Allen Heidelberger Post author | 2017-08-27 13:32

    I’m alarmed by Curt’s comment about the state withdrawing from competition with private juvenile detainers and rehabbers. As the state seeks to incarcerate fewer juveniles (which, as John agrees, is a good chane from our over-incarcerating past), are the private outfits still doing as much or more business? Do they cost parents more than public facilities like STAR Academy?

  16. W R Old Guy 2017-08-28 17:10

    I would be surprised at any resort company would buy STAR without planning to demolish most of the main buildings and start over. The place was built in 1911 and upgraded in 1996 for the juvenile program. The upgrades were to meet the required standards for a correctional facility.

    I have been in the main buildings and although they are well maintained, they are still in the basic configuration of years ago. The heat is provided from a central heating plant (the building by the highway and is also the laundry). There is no central air that I am aware of.

    It will cost millions of dollars to update the existing to modern standards and may be cheaper to start over.

    Is there a market for a resort in that area? The grounds would require extensive development along with infrastructure upgrades/replacement.

    It will be interesting to see who buys it.

  17. Cory Allen Heidelberger Post author | 2017-08-28 21:29

    Central air? Who needs central air in the Black Hills, where there’s no East River humidity? :-)

    WROldGuy does make sense in pointing out the serious conversion work needed to create a high-dollar resort. We’ll have a hard time convincing people to come relax at a place that looks like a detention center.

    WR, do you have any sense of how much of the acreage there is open land, ready for new development?

  18. grudznick 2017-08-28 21:30

    Lar and I are running the numbers now. It’s possible we’ll come up with a plan to finance the purchase and do sort of a dinner show thing there. My good friend Bob will run the main stage act during dinner. Lar will have an herbal shop out back. No extensive development or demolition required; no updating needed at all.

  19. grudznick 2017-08-28 22:04

    Mr. H, there is much history there. And I have heard it is haunted. All those New York Libbies would pay a premium to stay in such an architected sanitorium that has ghosts and the yuppies with bikes can ride right from there. My other friend Bill is even already planning for a rental business. Fancy bicycles right up your ally, likes Bill.

  20. Porter Lansing 2017-08-28 23:44

    Excellent, Grudzie. Like a Dakota Catskills. You always have innovative ideas.

  21. W R Old Guy 2017-08-29 10:40

    The site is listed as about 173 acres and the main buildings are on the west side adjacent to the highway. The large buildings and houses are part of the original facility with other buildings added later. The property is bounded by the US Forest Service to the north and a portion of the east. The building on Tantanka Rd is the headquarters for the Tantanka Hot Shots Wildland Fire Crew. There is private property to the south.
    There should be ample room for development but the property is not in the city limits of Custer and is not hooked to Custer water or sewer so the existing systems would have to be upgraded to match the new use. The Mickelson Trail is across the highway to the west and runs adjacent to the highway at the south end of the property.

    Here are links to Google maps and the promotional flyer put out by the state.

    https://www.google.com/maps/@43.7030815,-103.6005196,319m/data=!3m1!1e3

    http://www.sdreadytowork.com/staracademy.aspx

  22. Cory Allen Heidelberger Post author | 2017-08-30 05:39

    Thanks for linking to that state pitch, WR! The state’s phrase “tons of square feet” seems ill-composed, slangily quantifying area in “weight”.

    It would be interesting to read whatever RFIs were submitted in response to that pitch last winter.

    And hey! The Custer site has a biomass fuels boiler!

    The facility is serviced by three boiler systems. The primary system is a biomass fuels boiler. The 400 HP boiler went on-line February 21, 2008. The boiler is automatically fed from a 300 CY/60 dry ton chip bin. A full chip bin provides heat and domestic hot water for approximately four days to two weeks – dependent of course upon the temperature and the domestic hot water use. There are two backup boilers, the 1964 405 HP Kewanee Boiler fueled by fuel oil or propane gas and the 1976 500 HP Cleaver Brooks boiler fueled by fuel oil. Typically fossil fuel costs were about $300,000 per year or $825 per day, whereas chips at the highest use rate is roughly $114,000 per year $325 per day [SDGOED brochure, December 2016].

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