Premier Center settlement: City did not get $1M in cash

Mayor Mike Huether and top city officials told taxpayers that contractors responsible for warped exterior panels on the Denny Sanford Premier Center agreed to a $1 million settlement with the city.

The settlement funds, they said during a Sept. 18, 2015 press conference, would be deposited into an Events Center Construction Fund and used to pay for "future fan enhancements" and "facility improvements."

“I am pleased to announce that the contribution to the settlement is in the amount of $1 million,” Huether said during the press conference.

More: Supreme Court: City must release $1 million Premier Center contract

But the details of a once-secret contract negotiated by the parties show that the settlement was more complex than taxpayers were led to believe. The city did not receive $1 million in cash, and in fact, the agreement called for the city to pay out hundreds of thousands of dollars that officials didn't disclose when the settlement was announced.

The city released the contract one day after the South Dakota Supreme Court ruled that it was a public document under the state's open record laws. Argus Leader Media filed suit in 2015 to win the release of the document after the city declared it confidential.

The parties of the contract were the city, M.A. Mortenson Co., Sink Combs Dethlefs, Koch Hazard, M.J. Dalsin and Innovative Metals Co.

The agreement called for the companies to pay a total of $443,719 into an escrow account, which was payable to Sioux Falls.

But the agreement also called for Sioux Falls to pay $440,445 to Mortenson, which was in turn paid to Dalsin. Dalsin agreed to discharge a lien filed against the building in the amount of $452,277.

Settlement: Read the document below

Another provision called for the city to pay Dalsin $54,555. In return, Dalsin agreed to discharge another lien in the amount of $87,346.

The difference between what Sioux Falls paid and the lien amounts resulted in $44,623 savings for the city. The city saved an additional $41,285 that it owed to Sink Combs Dethlefs that the agreement forgave.

The single largest item in the agreement called for Mortenson, which served as the construction manager at risk, to reduce the contractor's contingency fund for the project by $514,996.

"We all thought we got a million dollars and it was going to be reinvested," former City Councilor Greg Jamison said Friday after learning the details of the settlement.

The secret contract also contained language that specifically sought to limit information that would be given to the Sioux Falls City Council.

The settlement allowed the contractors to review any press releases or statements that would be made to the public or the City Council.

The only information that was to be released to the public and City Council was that a $1 million settlement had been reached.

"Each party to this settlement agreement warrants and represents that except for disclosure of the global amount of the settlement in the amount of $1,000,000, and all details of this settlement, and the consideration paid therefor, including individual contribution amounts, shall remain confidential and shall not be disclosed to any person," the settlement said.

The document also called for limiting information to the city's elected representatives. As a result, city councilors were not given details about who paid what.

"We were not informed of that," said former Councilor Dean Karsky. "We were just informed there was a settlement and that it would be confidential by the request of the parties involved in the settlement."

Karsky said councilors were led to believe that the parties all contributed something to the settlement.

Said Jamison: "Everybody's perception is we got a $1 million check for poor work."

The city said it needed more time to respond to questions from Argus Leader Media about the settlement.

Read the document below.