The developers behind a $50 million parking ramp and hotel project in downtown Sioux Falls did not have enough money to pay a $20,000 fine for illegally dumping asbestos in the Sioux Falls Regional Landfill.

Norm Drake and Aaron Hultgren are both personal guarantors of the $50 million project known as Village on the River that the Sioux Falls City Council approved earlier this month. Both were also key players in last year’s Copper Lounge building collapse.

Following the Dec. 2, 2016, collapse, the South Dakota Department of Environment and Natural Resources levied a fine of $20,151 against Hultgren Construction and the Drake-managed investment group that owned the building.

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The department accused the companies of illegally removing asbestos from the Copper Lounge, trucking it through town and then dumping it among common construction debris.

But Hultgren Construction and the company managed by Drake “demonstrated to DENR an inability to pay all or part of the penalty amount,” according to the settlement agreement the companies reached with the department in May.

Rather than pay the penalty, the companies were required to comply with asbestos laws in the future.

At the same time the companies were demonstrating an inability to pay the fine, Aaron Hultgren and Drake were negotiating with the city to build Village on the River.

The 13-story building will be built adjacent to where the Copper Lounge stood. Drake and Hultgren were both listed as personal guarantors for the project, which calls for using more than $21 million in public money to build the parking ramp portion of the project.

The revelation that Hultgren and Drake's companies were unable to pay a $20,000 fine raises questions about their guarantee for the Village on the River project, which the City Council approved earlier this month at the request of Mayor Mike Huether’s administration.

Meanwhile, the Department of Justice has opened a criminal investigation into the Copper Lounge collapse, which claimed the life of Hultgren Construction employee Ethan McMahon.

That investigation comes on top of a separate investigation by the Occupational Health and Safety Administration that resulted in nearly two dozen fines totaling more than $200,000 against Hultgren Construction.

Hultgren Construction appealed the OSHA fines, but that appeal has been postponed pending the outcome of the criminal investigation.

This story has been updated from its original version.

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