The developer of President’s Plaza has issued a demand that Mayor Sam Kooiker stop communicating with potential funding sources for the proposed $50-million project in downtown Rapid City.
In a letter sent to the City Attorney’s Office, the President's Plaza development team, which includes Dream Design International President Hani Shafai and local developer Pat Hall, demanded the mayor "cease and desist" from probing further into the project's financial ventures. The city's Legal and Finance Committee will review the letter on Tuesday.
Kooiker has publicly raised questions about Shafai's efforts to secure up to $25 million in New Market Tax Credits to help finance a 15-story mixed development of retail shops, condos, a parking garage, convention center and hotel at Sixth and St. Joseph streets.
Shafai said the issue is the mayor talking directly to potential funding sources while engaging in a smear campaign to discredit the long-discussed project.
"His continuous negative campaign against this project is not asking questions," Shafai said. "The mayor does not have his facts straight. We don't know what the mayor does and what he does not do. He does a lot of things behind the scenes that we're not aware of."
The city and President's Plaza LLC came to an agreement just two weeks ago at a Dec. 16 council meeting that set new deadlines for the project, which includes a 2016 deadline to break ground on either the current design or a scaled-down version.
The agreement was passed unanimously by the city council despite Kooiker's desire to impose a deadline that would require construction to start in 2015.
"I am puzzled," Kooiker said. "The 4th Addendum has been signed. I was hoping for a tighter time frame and the city council approved a two-year extension. I signed it because it finally gives us a true ticking clock. I'm puzzled by President's Plaza's reaction to simple questions. They're basically saying 'give us the public funding and don't ask questions.'"
Kooiker raised his concerns about the tax credits after questioning a consultant for Dakotas America, a community development entity that receives the federal credits, on the timeline for securing the funds and whether President's Plaza qualifies.
"Asking questions on how the New Market Tax Credit process works is doing due diligence. Let's remember that this is a public, public, public, private partnership," Kooiker said,
The project was first proposed in 2006 and includes $2.8 million in city Vision funds, a downtown lot of city-owned land where the project would sit and a tax increment financing district that the council approved for the project.
"We're talking millions of dollars in taxpayer funding involved in this project," the mayor said Saturday. "I've been on the record many times as a council member and mayor in support of this project. I believe it's my responsibility and it's interesting that such simple questions created such a response. They weren't even tough questions."
Shafai said, however, the questioning and later comments by Kooiker have shed negative light and a lack of support for the project, which could deter Dakotas America and other potential investors.
Shafai has since brought a New Market Tax Credit expert from Denver to the city council who maintained the project does qualify for the funding and the process to secure them can be lengthy.
"There's a big difference in asking questions and sabotaging a project," Shafai said. "The manner (the mayor) is performing is not asking questions. He is behaving in a manner that shows he is trying to kill the project. He says he supports the project but his actions are to the contrary. It not only kills New Market Tax Credits but drives away potential tenants for the project."
While he has no further questions on the tax credits, Kooiker said since the project involves several million dollars in taxpayer funds he has every right to ask further questions about potential funding sources, which includes private organizations outside of New Market Tax Credits.
"Tougher questions may need to be asked," he said. "I reserve the right to ask further questions at any time. I find it troubling that our city council is being told they can't ask questions. This gag order applies to them as well and every city official. That should trouble any official in government and our citizens as well."
Shafai said that would only heighten tension between the developers and Kooiker.
"There are a lot of issues with this mayor, and I think in due time, they will be brought to the surface," he said.