Events Center Muddle Shows Why Democrats Shouldn’t Miss Mike

Hey, Democrats! Need another reason to be glad Mike Huether won’t be our party’s candidate for Governor in 2018? Read the seething horsehockey that is the deal Mayor Huether signed with the shoddy Premier Center contractors, tried to keep secret, and lied about publicly.

As Jonathan Ellis and Joe Sneve explain, the Mayor’s claim two years ago that the city received one million dollars from its substandard contractors to “scrutinize” and “use wisely” (KELO-TV’s words in 2015) was at best creative writing and certainly not a clear, accurate description of how Mayor Mike and the contractors kept themselves and the taxpayers out of court. Huether spoke with approximate factuality when he said two years ago that the value of the settlement was one million dollars; however, the city actually paid out more cash than the contractors. Here are the actual numbers:

  • Contractors paid Sioux Falls $443,719.
  • The city paid contractors $495,000.
  • Contractors released Sioux Falls from $580,909.18 in debt and liens.
  • Contractors and the city reduced the amount slated for a construction manager’s contingency fund (described by knowledgeable watcher fo the Events Center mess Scott Ehrisman as a bonus fund for one contractor) by $514,996.
  • Net gain in the city’s books: $1,044,624.18.

Now maybe it doesn’t matter if the million-and-change settlement was actual new cash or just the jiggering of ledger lines.

What clearly matters is that Mayor Mike Huether felt the need to keep these simple financial details, which by themselves appear to convey no more culpatory information than the summary statement of the million-dollar-settlement, secret from the people, the press, and his own council. Mayor Huether wrote his desire for secrecy into a contract, ended up in court, and lost.

It’s bad enough the Huether pushed a huge public investment on an event center with his old employer’s name on it and got shoddy workmanship. He iced that sloppy cake with his administrative arrogance in keeping the settlement with the contractors secret instead of simply leveling with taxpayers and their elected representatives on how the contractors would make their errors right.

We Democrats will have a hard enough time winning the 2018 governor’s race with an honest candidate. We’d have struggled even more with Mike Huether atop our ticket.

21 Responses to Events Center Muddle Shows Why Democrats Shouldn’t Miss Mike

  1. Darin Larson

    Cory, what is this the outrage of the week?

    The settlement was reported to be for $1,000,000. The city received $1,044,624. Did you expect each defendant to write the city a check and then the city write a check for the money owed to each of the contractors? That is not how a legal settlement works in practice. It is a global settlement of all issues and amounts owed. They are netted out. The city rightfully retained money that was owed to the contractors, pending satisfaction of their claim for the defects in the siding and/or installation of the siding. The city still owed that money to the contractors and it had to be accounted for in the settlement. But the bottom line is the city was compensated in an amount over $1,000,000 because of the settlement of the siding issue.

    Legal settlements like this often contain confidentiality provisions that defendants demand to have so as to soften the blow to their reputation and probably so they can deflect blame. You act like Mike Huether tried to keep this information confidential for his own purposes when it was undoubtedly the defendant contactors who wanted the terms kept confidential. The city of Sioux Falls was bound by the terms of the settlement agreement to keep it confidential. There is no mention of this in your article.

    Cory, I’m disappointed you are taking a form over substance approach to this story. This is much ado about nothing. Congratulations to the city for getting a substantial settlement for what could have been argued was a minor aesthetic imperfection.

    You go on to say, “It’s bad enough the [sic] Huether pushed a huge public investment on an event center with his old employer’s name on it and got shoddy workmanship.”

    Go ahead and alienate another portion of the electorate for Democrats why don’t you. You were just talking about courting the Chamber of Commerce vote a day or two ago and now you are talking about denigrating the establishment of the Premier Center which was backed by the Chamber crowd and a whole lot of other folks who want to see Sioux Falls move forward.

    You sound like the folks who were dead set against Sioux Falls getting an events center for a good 20-25 years past when we should have had a replacement for the old Arena. Prior to this mayor getting the Denny built, we were sending our money and citizens to Omaha, the Twin Cities, and even Sioux City and Des Moines for quality concerts and events. The same people who were against the Premier Center are now the biggest critics of a settlement on siding the place.

    If you are going to alienate the Chamber of Commerce voting electorate in Sioux Falls, good luck getting a Democrat elected governor.

  2. I’m with Darin on this. The settlement looks like a lot of legal settlements. Confidentiality clauses are common. The resolution of the case saved a lot of time and money for all parties and generated over $1 million net gain for the city and its taxpayers.

    I think the siding on the Premier Center looks good, and I agree with the city’s decision not to replace it. It functions as intended – keeping the weather out. The siding may not have turned out exactly as envisioned, but the look is a feature – not a flaw.

  3. “a minor aesthetic imperfection.”

    You both obviously haven’t looked at it up close, it is structurally deficient. I told someone I could care less what it looks like, it just has too many holes in it to stand the test of time.

    But let’s go back to the money argument. There are many interpretations. But what I read was HALF of the settlement is shorting the CMAR a little over a half a million. This is still money we borrowed and have to pay back.

    The administration lied about it, period. It still amazes me that 7 years into this fiasco of a mayor people continue to justify and defend the lies. Unbelievable.

  4. Darin Larson

    People who are not lawyers and not structural engineers sure have a lot of opinions based upon conjecture and conspiracy theories on this subject. But jumping to conclusions and throwing baseless accusations around is the order of the day. Carry on.

  5. Darin Larson

    PS Yes, the city still has to pay for the building as per the contract. You don’t get the building for free because the siding was screwed up. You get the damages in dollars necessary to fix the problem. That is what the city received.

  6. Wrong again. My opinion on the siding is based on my past experience working in construction business and talking to other people in the industry who have looked at it, including people from the company who REFUSED to do the job (hopefully they will speak up this week). No conspiracy or conjecture. They had no choice but to take this (FAUX) settlement because it would have cost several millions to actually FIX it.

    And I’m sorry, shorting the CMAR their bonus (contingency) is not a settlement. That Half-Million should have come out of their pockets.

  7. Darin Larson

    So, the defendants write a bigger check to the city, rather than offset the contingency . Then the city writes a bigger check to the contractor to pay the contingency as per the building contract. It is six in one and half dozen in the other.

    Why did the city have to take this settlement if it would cost “several millions” to fix it? If this was, as you say, an open and shut case of defective materials and workmanship in the several millions of dollars, why did the city settle for less? Bring on the conspiracy theory.

    Or was it more likely the case that it was not an open and shut case of defective materials and workmanship? Was it more likely that the siding was functional, but the bowing was not aesthetically pleasing to some people?

  8. Without the Premier Center we wouldn’t have gotten that Darth Wookie guy from Star Wars to come to Sioux Falls for so many musical shows. People seem to like that sort of entertainment, or so I’m told. Think of how many chicken wings with sauce were sold to people before and after those shows. The tax money from this place is much greater than any tax money we might eventually collect from some developer 20 years from now when their TIF expires.

  9. “If this was, as you say, an open and shut case of defective materials and workmanship in the several millions of dollars, why did the city settle for less?”

    When did you start following this story? Last Thursday? The original plan was to fix the siding, but when they all realized it was too expensive they concocted to this story from some mysterious engineer from Minneapolis that the siding was all of a sudden “Structurally Sound” so they decided that they would only pay us because the siding didn’t “look good”. It was a scam from the beginning and once we now can see the settlement, it proves it.

  10. Darin Larson

    I will wait with baited breath for the Premier Center to fall down in a heap of rubble under the stress from the defective siding. In the mean time, I think I better get tickets to the next concert coming up fast.

    “mysterious engineer”, concocted story, scam, guy I talked to in a dark alley told me . . . . No, no conspiracy theory here!

  11. You would think with the millions that were put into this event center that it wouldn’t look like a big warped grain bin. There should have been a full replacement that had a nicer looking exterior. Maybe T Denny should open his checkbook and make it look like a Premier Center.

  12. Ben Cerwinkse

    I’m not sure where I stand here. I do know that the quality of the Premier Center, or lack thereof, didn’t stop Garth Brooks from having 9 concerts and the WWE having a nationally televised show there, all in the same month.

  13. Wrestling? Live on TV? From Sioux Falls? Well, that doesn’t directly improve my quality of life, but it certainly speaks to the money-making opportunities this poorly sided can has opened for Sioux Falls.

  14. Note, Darin, that my critique above isn’t really about the events center itself. It’s about Huether’s unnecessary desire for secrecy, not just from the public but from his own council members. As Ror notes, confidentiality is common practice in settlements, but when you do business with the public, you have to expect a higher degree of public scrutiny. What part of the now-released settlement really needed to be kept secret? What information about the exact dollar figures and sources does any harm to any participant in the settlement?

  15. Darin Larson

    You say your critique “isn’t really about the events center itself.” I guess you could have fooled me when you stated, “It’s bad enough the (sic) Huether pushed a huge public investment on an event center with his old employer’s name on it and got shoddy workmanship.”

    I think the Premier Center is a fantastic facility for Sioux Falls and I think it looks sharp as well. Check out the pictures on facebook:

    It galls me that the people who never wanted the city to build an events center in the first place are the ones complaining about the looks of the facility. Those of us that thought the facility was long overdue are generally very pleased with its looks and function. It also galls me that the people on the city council that drug their feet so much that the SF School District had to go ahead with the improvements to Howard Wood, when the city should have purchased Howard Wood to facilitate parking for the Premier Center, Convention Center and Arena.

    Cory asks what part of the settlement needs to be kept confidential. It is the defendants that typically want the terms kept confidential for obvious reasons. The reputation of the defendants is an issue and their relative faults, if any, are at issue. If the settlement agreement is kept confidential, they all can “talk down” their culpability and maintain their reputation to a greater degree than if everyone knows the terms and they are of public record. How is this hard to understand?

    Ascribing some nefarious intent to Mayor Huether based upon the fact it is a confidential settlement agreement when many, if not most, settlement agreements are confidential is asinine.

  16. Darin, you really don’t understand the concept of doing work with the public? Do you? This wasn’t a settlement between Mike’s private money and the Contractor’s private money. They weren’t building Mike’s Lake Home. They were building a $115 million dollar facility funded by taxpayers that taxpayers approved (in a non-legal advisory vote – because if they would have actually voted on a bond sale, the EC would have failed, that needs a 60% threshold). We have a right to know because it is the PUBLIC’s building. Not Mike’s, Not Garth’s and Not SMG.

    As for the engineering consultant’s report, that was shredded and the council and the public never got to see it. My assumption is that there was something in there that didn’t fit the needs of the CMAR and the timeline of the mayor. No conspiracies here, that’s the facts. A study was conducted, than shredded, and we will never know why.

  17. Darin Larson

    South DaCola, I’m not arguing that the public shouldn’t know the details. I’m arguing that the defendants had an interest in making it confidential, that this is common in settlements like this, and that there is nothing nefarious inherent in the city agreeing to the confidential settlement. What should have been important to the citizens–the amount of the settlement–was contractually agreed to be disclosed and it was disclosed.

    You have gone beyond the idea that the public should have a right to know. You have gone on to conspiracy theories asserting Huether tried to hide the facts and that there was nefarious activity here.

    Let’s go down your rabbit hole for a moment. What did Huether get out of the deal if his motivation was to hide the details? Why would Huether not want to get a fair settlement for the city? Why would Huether not want to have the Premier Center fixed if the siding panels were structurally deficient? Why would Huether want to have a substandard building named for and by his friends, Denny Sanford and First Premier?

  18. That’s easy, he wanted the building completely finished for grand opening and he wanted it to come in under budget. I don’t think he cares that future generations will have to fix it.

    “there is nothing nefarious inherent in the city agreeing to the confidential settlement.”

    Except for the fact that it violates open records laws and that is why the SD Supreme Court ruled in favor of the Argus Leader.

    I get where you are coming from, like Mr. Huether your believe there are certain things that should be kept from the public for the greater good. But nothing positive or good comes from keeping secrets. We disagree on that point. I hope you never run for public office.

  19. South DaCola has Huether Derangement Syndrome.

    Mike Huether has been the best mayor Sioux Falls has had in as long as I can remember. He moves Sioux Falls forward. He gets things done. Has he done everything the way that I would have preferred? Nope. But a great mayor all the same.

    And Darin, I hope you do run for public office.

  20. Here’s my advice to Mike Huether. When you’re done being mayor next year don’t run for anything right away. Take a few years off during which all but your most fervent detractors will be done squawking about the insignificant complaints that nobody else will remember by then. When you do run in 2020 or 2022, you will be able to point to your many accomplishments as mayor that will still be there for all to see.

  21. Mike has done a good job as a cheerleader and representative for Sioux Falls, and a horrible job for standing up for money spent by Sioux Falls residents. And he’s a grandstanding, two faced goober. Be it twisting Ben Nesselhuffs arm in a profane rant to speak at a McGovern day Dinner years ago, or his lack of loyalty to continue dancing with the date that brought him to his position, he’s in it, generally, for Mike. But overall, I’d give him a 70 on his performance, which is a hell of a lot better than the increasingly ineffectual Ol’ boy, country club republicans that made Sioux Falls ridiculously stagnant for 20 plus years.