Last updated on 2020-05-26
As Black Hawk home values, if not the homes themselves, continue to plummet into the pits of gypsum, Meade county does us the courtesy of posting documents that demonstrate the predictable turn of the narrative: officials knew they were building the Hideaway Hills development on top of holey ground.
On June 18, 2000, landowner Larry Dean Fuss of Black Hawk wrote to the Meade County Planning Board to say his platting was taking longer than expected because the project was “beyond my level of expertise. Therefore, I’ve taken on the help of a local, very reputable developer….” Fuss appeared before Meade County Planning on July 17, 2000, with developer Keith Kuchenbecker, engineer Doug Sperlich, and attorney Dale Hansen to present their plan to plunk 150 mobile homes onto the land. Their prospectus noted gypsum mining on the site as recently as the 1980s and promised to check for cavities:
The board unanimously approved Fuss’s sketch plan and said approval of the final plan continged on addressing sewer, drainage, and road issues. Board members present who read this proposal and said o.k. included Wayne Gutzmer, Carl Bruch, Bob Powles, and District 31 Representative Dayle Hammock. Absent from the July 17 meeting were board members Bob Mallow and then-director of equalization, now District 29 Representative Kirk Chaffee.
Chaffee, Hammock, and the rest of the planning board received and set some conditions on a more detailed plan for the development from Kuchenbecker at their August 18, 2002, meeting, and unanimously approved a final plat on September 16, 2002.
On August 18, 2003, Kuchenbecker brought a plat for Phase 2 of the development to Meade County Planning and received approval. On September 2, 2003, Phase 2 received approval from the Meade County Commission, which then included Hammock, Mallow, Curtis Nupen, Jim Schroeder, and future Speaker of the House Dean Wink.
Hammock and Chaffee missed the September 20, 2004, meeting where Meade County Planning approved a preliminary plat for Kuchenbecker’s Phase 4, but they were present October 18, 2004, to okee-dokee the final plat.
Two years later, Chafee was present with Meade County Planning when “there was discussion about a road issue in Hideaway Hills #1“:
The original developers want to close off part of Daisy Drive because it is caving into the old underground mine. They want to use private driveways for the emergency turnarounds where the road will end. They have tried to repair the road, but it is still sinking. The planning board told Mr. McNaboe to tell his clients to fix the road properly because they will not approve the closing of Daisy Drive [Meade County Planning Board, minutes, 2006.06.19].
Meade County Planning nonetheless unanimously approved the final plat for the Hideaway Hills #2 plat presented that day, June 19, 2006, by Kale McNaboe and John Ogdon.
Meade County officials knew about the gypsum mining that had taken place in Black Hawk from the beginning of the Hideaway Hills development twenty years ago. They saw ground caving in and damaging Daisy Drive in 2006 and just said, Fix it!
But who needs oversight when the good anaracho-libertarians of Black Hawk can count on government to bail them out?
Over the past several months we have received inquiries from several regions and states about the eligibility of mitigation associated with sinkholes. FEMA has determined that the acquisition and relocation or demolition of property (residential or non-residential) for the purpose of open space for structures subject to sinkhole hazards is an eligible activity under the Hazard Mitigation Grant Program (HMGP) and the Pre-Disaster Mitigation (PDM) program. This policy clarification will apply to HMGP for major disasters declared on or after the date of this e-memo. It will also apply for PDM for which the application period is open on or after the date of this memo. This activity is only applicable for structures that show signs of damage that are determined to have been caused by sinkhole activity, or for structures that have already descended or have begun to descend into a sinkhole.
…Structures that show signs of damage that are determined to have been caused by sinkhole activity, or for structures that have moved or have begun to move downward into a sinkhole, will be eligible for consideration of acquisition under HMGP and PDM [Meade County, Black Hawk/Hideaway Hills sinkhole resource page, retrieved 2020.05.15].
If Meade County scores this federal bailout, it will be able to buy out sinkholed homes at 75% of their pre-doomsday appraised value, which is much better treatment than they will get from their angry god, the free market.
As I said before, everyone who was local or knew someone who was local knew about the problems in this area. I lived in Rapid City at the time of the first platting in the 2000-2001 time frame. I remember discussing this proposed development with Nancy Hilding, who lives up West Elm in Black Hawk. As I recall, she thought they would not let them develop in the gypsum area, and that gyp area would be park land, but apparently that did not happen because that would not provide the most bucks to the developer who was about to sell what passes for swamp land in South Dakota. Also, it would not provide as much tax money to Meade County. Greed is good, for some. For the poor folks who have property that’s worth little to nothing, greed is not so good.
Like most things in South Dakota, problems that are well known get minimized if someone with connections and cash gets involved, and that’s what happened. All the “fix its” in the world get said, and then no one checks to see if anything is actually fixed right. Something like this can’t be fixed at all. It should never have happened, but then it wouldn’t be South Dakota if things were done right.
Corruption and incompetence haunts South Dakota like the plague, or COVID.
We should allow the free market to work — especially the free market as espoused in Meade County and Black Hawk. Let the lawsuits fly. Fix responsibility. Bailing out Meade County, Black Hawk, banks, developers, real estate agents, and even the home owners is as egregious as was bailing out the Wall Street banks in the 2008/9 mortgage crisis they put themselves in.
Given the apparently presented public record of the gypsum mine — it would be a high burden proclaiming the parties conducted due diligence. They may as well as developed, permitted, and built in Marion Rounds floodplain – then, gosh, blame someone else or a (foreseeable) act of god. It’s past the time for South Dakota society to grow up and accept adult responsibilities.
Not to hijack this thread, John, but after that 2008-9 debacle Dems passed serious legislation to prevent that from happening again and wingnuts removed all those regulations against big banks, etc. Back to the status quo that caused the that recession.
I sort of agree with John. Everyone involved should pay for their part in this cluster****. I think homeowners have a small bit of responsibility, but the developers, real estate agents, insurers banks, engineers and especially Meade County are more responsible. All this could be worked out in court, but homeowners should get something up front to get on with their lives.
In the end, I think holding Meade County responsible for 75% would make these government agency a bit more responsible.
Everyone but the home owners comes off like a bunch of buffoons. Building on top of an abandoned mine where a road is sinking?! Where are the Marx Brothers when they’re needed?
And now we, the taxpayers, are going to have to foot the bill to check out I-90 for the potential of collapse and possibly “fix it” too.
I am “one of the home owners” that has a home on Daisy Drive, we are not one of the families that have and my driveway is cracking daily.
I had no idea that my home was over a mine and even in my paperwork when we bought our home it is asked if “property is on a mining site” the box is checked “no”.
We bought our home in 2018, in a nice neighborhood, in a great location, beautiful back yard. We did our homework: we checked out the schools, had a home inspection, we did radon testing, talked with the people that lived around us, even got the lab tests on the water…. It was the perfect home….
“1. Donald Pay— I sort of agree with John. Everyone involved should pay for their part in this cluster****. I think homeowners have a small bit of responsibility, but the developers, real estate agents, insurers banks, engineers and especially Meade County are more responsible. All this could be worked out in court, but homeowners should get something up front to get on with their lives.
In the end, I think holding Meade County responsible for 75% would make these government agency a bit more responsible.”
Sir why should I be held at all responsible for this? It was not an “act of god” or anything that is even something people think of. Sir when you bought your home did you get the ground probed to make sure that there was no mine under it? Or did you notice that it is in a nice neighborhood and how could a mine even be a possibility? Also when I bought my home and I had to pay for 100% of my home… why should I have to settle to uproot my family and take 75% of when we put into my home. Not to mention this is the home my 2 year old son took his first steps in, the home I brought my six month old daughter home to. This was our forever home… now I am scared to play with my children in my yard, I am scared to pull into my driveway. I drive over a crack in the road and hold my breath scared never knowing if you or your home is going to fall through the ground.
Homeowners got hoodwinked. The hoodwinkers should pay. But South Dakota does a terrible job of holding bad actors accountable, especially when the hoodwinkers support the establishment’s propaganda about low regulation and laissez-faire economics. Black Hawk has built its fortunes on promising an escape from oversight. Why should taxpayers from more responsible communities and states pay for that local choice to not govern effectively?
Cory, your great reporting is visible in the Rapid City Journal. That legwork you did, is impressive and it shows with its reproduction there and here. Thanks for all you do.
1. Katie Burns, You and the rest of the families that purchased those properties in good faith…well ya got taken. The bunch of outlaws knew full well that your property was built over mine shafts. How it was allowed to be done is a matter for the courts. The developer and the county need to step up and make you whole and then some. Clearly, you have equity in your home and that needs addressed as well. Lawyer up and shake the tree and see how many monkeys drop. 75% is a joke in this case, a bad one for you folks. Can anyone say class action?
Katie, I wouldn’t have bought property there because I knew what was there, and so did a lot of people. It wasn’t a secret.
I understand that someone who didn’t know the history, and especially if it wasn’t disclosed before or at closing, which it should have been, shouldn’t be held responsible for any part of this. So, I’m on your side. What is Meade County’s defense? They don’t really have one, and neither do the developers and engineers and lawyers and real estate agents. But they, mainly their attorneys, will figure out a way to point fingers at everyone else.
I’ve seen this rodeo before when I lived in South Dakota. You are about to find out why I moved away.
Innocent buyers in Black Hawk may now find the depths wingnuts in the lege are willing to go to protect real estate businesses and others from liability. Homeowners undoubtedly should have been warned and weren’t.
While they point a finger, three point back. Get bulldog attorney’s and you get the results. Remember, the amount of the screwing will be around 5 million at least for the 12, without lawyer fees. There ain’t a jury in the state that can’t see the wrong committed on these homeowners. That’s a lot of incentive for the bulldogs to bite to make these homeowners whole. They can’t put lipstick on this pig.
“Fix it” indeed.
Just to clarify, Katie reported
If Katie’s report is accurate it is a mistake to say the mine “wasn’t disclosed before or at closing, which it should have been.”
In such a case, this seems to qualify as more than a mere “breach of contract.” An intentional misrepresentation of the character of the property may well qualify as fraud or in SD, deceit, by whoever made such a false statement.
A typical definition of fraud is
The SD Supreme Court has defined “deceit” as
See: Grynberg v. Citation Oil & Gas Corp., which affirms the availability of the tort of fraud or deceit where there was an alleged breach of contract.
https://ujs.sd.gov/Supreme_Court/opiniondetail.aspx?ID=785
Another possibility could be that the seller had no knowledge of the existing mine, which seems to be what SD’s mandatory disclosure statute (SDCL 43-4-44) currently requires, namely, whether “Are you aware of any existing hazardous conditions of the property . . . [with a ox to be checked referencing] “6. Landfill, Mineshaft. . . . ” Under SDCL 43-4-42 one measure of liability would depend upon the actual knowledge of the seller, and can include attorneys fees:
The last phrase of the statute is important as it also seems to open up tort liability for fraud or deceit in an appropriate case, which under SDCL 21-3-2 and Grynberg (if still good law) could include punitive damages.
Good old bcb comes through for DFP, again. bearcreekibat for patron attorney saint of South Dakota.
Slightly way off topic, I’d bet an experienced lawyer of any stripe is in jurisprudence heaven filtering through the US AG’s court shenanigans protecting drumpf and the gamesmanship of Judge Sullivan who is trying to slow down miscarriages of justice. Just a rhetorical guess.
Good work, BCB. Katie, take BCB’s analysis to your lawyer and get ready to take people to court.
Jerry, I see RCJ’s Arielle Zionts did what I did, just read the documents, and then took the extra step of making calls. According to her article this morning, developer Kuchenbecker, engineer Sperlich, engineer McNaboe, and current Meade County deputy director of planning Bill Rich have not returned her calls yet.
Meanwhile, the sinkholes are already gobbling up tax dollars: DOT has hired Rapid City engineers FMG to make sure I-90 isn’t going to fall into the fiery pits of hell.
Gypsum: yup, that’s what a developer will do to buyers if the community doesn’t have proper regulation.
BCB’s analysis may depend on what “mine site” means, and on what “being on” means. Now, in my opinion, hell, yeah, it’s on a mine site. But this was a mine site that was closed down, supposedly reclaimed according to whatever lax laws of South Dakota and whatever insufficient county ordinances were in place. When does a “mine site” turn into some other land classification? My guess it will be argued that the state did not have an active permit issued, and/or the state and county had released the site from the permit. So, even if it was located on a former site where mining occurred below ground, the surface of the land was not mined. This is a huge issue in South Dakota, because there’s a lot of development that has occurred on historic mining sites, and probably a lot more to come. The laws pertaining to this may be insufficiently clear. I don’t know the case law on this.
Katie Burns. Totally agree. I live here too and had no idea we live on a
ticking time bomb. This was our first home. We’ve built a life here.
Have watched both our kids take their 1st steps here, 1st words. Pets
come and go. We were hoodwinked and our peace of mind has been taken.
The value of our homes is probably down to whatever salvage value is.
Years of paying our mortgage and putting extra to the principal is now
probably been futile. All the responsible parties are bracing for a
storm I hope. I’m betting new legislation will be in place after the
dust settles to prevent this again. And in the meantime all of us should
get 100% + of what we have lost. And some of that is irreplaceable.
Being able to show our kids when they grow up their old home, or even
pass it on to them is now lost.
John C
Certainly would think engineers for interstate highway would have known of mine location before building over it.
Wow mfi, now the Federales could be involved. That’s a whole lot of deep pockets to litigate. My advise, settle up and make these folks whole and then some.
bcb – in SD law, if a government official testifies as to the fact of a matter (including making an assertion on a document) without knowing whether it is indeed fact or not – that also amounts to fraud. Katie did not clarify WHO “checked the box”, no. If it was a government official – they are looking at a possible 5 years for felony fraud. Intent to deceive – is NOT the standard where it involves a government official. Only a false swearing – including FAILING to ascertain as to the truth of the fact BEFORE attesting to its factualness.
John C – not sure what any new legislation would fix. The problem is that so many local officials don’t follow EXISTING legislation. The attitude is this; I had a member of my local planning commission assert to me that city ordinances (like zoning ordinances) aren’t “real laws”. And it is exactly that mind set that “permitted” this development in the first place.
You need to send this to the journal or pioneer – hammock is running for re-election as a legislator in Spearfish. So is chafee in meade county.