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Kooiker Questions Economic Development Plans: Hooray for Public Oversight!

Rapid City Mayor Sam Kooiker's inquiries into the President's Plaza development are ruffling some financial feathers. Mayor Kooiker is asking questions about funding sources for the project, which exists thanks to taxpayer largesse via a tax increment finance district and New Market Tax Credits. Mayor Kooiker has the crazy idea that when taxpayers bankroll a private project, he has an obligation to oversee the project. Developers Hani Shafai and Pat Hall don't want the mayor asking investors questions. Mayor Kooiker says nuts to that:

"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 Americas, 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 [John Lee McLaughlin, "President's Plaza Developers Issue Gag Order on Mayor, City Officials," Rapid City Journal, 2013.12.30].

City attorney Joel Landeen expands on Mayor Kooiker's civic reasoning, noting that even when one of the publics in the public-private partnership is the federal government, local officials still have a right and duty to ask questions and demand accountability:

New Market Tax Credits are paid for by the tax payers. Dakotas America, and every other Community Development Fund, is given responsibility by the federal government to ensure that millions of dollars in taxpayer money is spent for the purpose it was intended. In addition to the millions of dollars in tax credits your clients are receiving, they are also receiving millions of dollars in City funds. It is galling to suggest the Mayor cannot ask questions regarding a project for which the City has made a multi-million dollar commitment, or seek unbiased opinions from the representative of an entity that is responsible for distributing public funds [Joel Landeen; city attorney, Rapid City, South Dakota; letter to Ed Carpenter, 2013.12.26].

Mayor Kooiker sees an economic development project made possible in part by a federal program. His city is putting skin the the game. Mayor Kooiker thinks he has a right to ask questions about that project.

That logic is so simple that even Pat Powers agrees with Mayor Kooiker's assertion of duty and authority:

I think there’s an easy response to all of this. Tell them to answer, pledge not to interfere, and to not send letters like that, or to build it without taxpayer assistance [Pat Powers, "Rapid City in Middle of Battle with Developer...," Dakota War College, 2013.12.30].

It's nice to see Pat Powers is coming around to my way of thinking. I look forward to his application of that same thinking to the EB-5 visa program and Northern Beef Packers. Powers has previously claimed that South Dakota can't investigate how the South Dakota EB-5 program used South Dakota money in South Dakota economic development projects, because the feds authorized EB-5. Mayor Kooiker's due diligence on the President's Plaza suggests Powers really doesn't believe his own EB-5 smokescreen.

So maybe the New Year offers hope for responsible government. Maybe Mayor Kooiker and Rapid City will lead the way in holding economic developers accountable. And maybe Pat Powers will get back to consistently upholding the public interest.


  1. Nick Nemec 2013.12.30

    Don't expect logical consistency from Pat Powers.

  2. interested party 2013.12.31

    Hani Shafai reminds me of Gus Fring.

  3. interested party 2013.12.31

    DD could appoint Shafai to the seat from which Stan just resigned.

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