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| With the CIty Council’s acceptance of the stipulations for settlement and a completed back nine appraisal, a settlement of suits and countersuits regarding the golf course may be on the horizon. Star file photo by Brett Nachtigall |
Stipulations accepted by council; Required back-nine appraisal comes in at just over a million dollars
HOT SPRINGS – On Tuesday, Feb. 19, the Hot Springs City Council agreed, with a 7-1 vote, to accept the latest stipulations for settlement with the developers of the back nine of the Southern Hills Golf Course.
The approval begins the process of settling the lawsuit brought by the city in December of 2006 and subsequent counter-suits filed by the defendants in the case, Steve and Carla Simunek and Kelvin Lorenz, who does business as Black Hills Hardscapes, Inc.
The latest change in the stipulations involved the transfer of property in the subdivision around the golf course from rural service district to urban service. The rural service district was created in the memorandum of agreement signed in 2002 between the city and the developers.
City Attorney Pat Ginsbach said that the language in the stipulations now reads “Any transfer of any parcel of land from a rural service district to the urban service district shall be in compliance with SDCL 9-21A-10.”
“The Simunek’s attorney, Mr. (E. James) Hood has a different interpretation of the statute than I do,” Ginsbach said. “We contacted Jeff Hallum in the Attorney General’s office and he said that we should state the transfer will follow the statute.”
The memorandum of agreement stated property would transfer from rural to urban when it was sold and this process has been ongoing on lots sold in the development. SDCL 9-21A-10 states, “when a property is platted, in whole or in part, and whenever a building permit is issued, the property will be transferred from rural service to urban.
Rural service districts are taxed at a lower rate than urban service districts.
Other stipulations come with certain contingencies, including appraisals on the land involved in an exchange between the city and the developers, an appraisal of the back nine at the golf course, and the city’s ability to obtain a loan for the $625,000 lump-sum payment to the Simuneks.
One of those contingencies has been realized, as Ginsbach said THK and Associates of Aurora, Colo., has completed the appraisal of the back nine at the golf course and arrived at a value of just over a million dollars.
“They (THK) based their appraisal on three areas,” Ginsbach said, ”costs of construction, market analysis and income, and arrived at a value of $1,150,500 for the back nine.” A contingency of the settlement is that the back nine would need to appraise for more than the $625,000 lump-sum payment.
Ginsbach also said that he expects to have a motion at the next council meeting to formally hire David Nichol to do the appraisal for the land involved in the exchange, based on June 1, 2002, values of the properties. “Mr. Nichol has received approval to do the work and is prepared to start right away,” Ginsbach said.
Councilman Don Patitz was the lone vote against accepting the stipulations.
Patitz had expressed reluctance in approving one stipulation, that the city’s rubble pit and transfer station would be moved or closed, respectively, by Dec. 31 of 2010.
Patitz had stated at the Feb. 9 public forum on the golf course that the city’s poor record of finishing projects by a deadline kept him from supporting the agreement.
Earlier in the meeting Patitz made a motion to use some of the undesignated Bed, Board and Booze tax money to pay for a new heat pump for the Mueller Civic Center. The low bid for the pump was submitted by D&R Service of Rapid City in the amount of $17,500.
Part of Patitz’s motion was that the remainder of the undesignated BBB money - $2,675 – would go to the Chamber of Commerce. At an earlier meeting, Chamber president Dave Batchelor had requested that the city disperse the more than $20,000 in undesignated funds to the Chamber to fund ongoing projects such as the Cowboy Poetry Rodeo, the Artoberfest Art-Walk and the Visitor’s Center at the Depot.
In other action, the council:
• Approved a job description for the city’s Building Inspector.
• Accepted the low bid of $66,950 from Franklin Miller of Livingston, N.J., for a auger/grinder system for the wastewater treatment plant.
• Gave first reading to, and set a second reading and public hearing for March 17 at 7:10 p.m. for an ordinance to change zoning on property on the south side of town, bordered by the truck bypass and Galveston Avenue.
• Set a use permit hearing date of March 17 at 7:15 p.m. for an in-home child care center at 2046 Minnekahta for Jennifer Campbell.
• Appointed Greg Barnier of Rapid City to do legal work in a lawsuit with Metro North. Barnier has agreed to represent the city as Ginsbach has a conflict of interest in the matter. Barnier will bill the city $115 per hour.