Parking ramp developers: Let us finish the project or we'll sue

The four men who personally guaranteed a $70 million hotel and parking ramp project in downtown Sioux Falls say they intend to finish the project, even though the city terminated the deal.

In letters sent to Mayor Paul TenHaken and Finance Director Shawn Pritchett on behalf of the guarantors and Legacy Developments, an attorney says the city will be sued if it does not allow his clients to continue what was called the Village on the River project. Legacy and the four guarantors – Norm Drake, Jeff Lamont, Larry Canfield and Paul Cink – formed Village River Group LLC, which signed a contract with the city to build hotel and commercial space around the city’s parking ramp at 110 S. Mall Avenue.

“Legacy was deprived of its rights to enjoy proceeds from the project by the acts and omissions of the city, including termination of the ground lease and the development agreement,” writes Murray Ogborn, a Denver-based lawyer who represents Legacy.

The letters, dated Sept. 26, say the four guarantors have a contractual right to finish the project after the city terminated the deal on May 14.

“The parties intend to enforce this right in court if satisfactory completion of the project cannot be otherwise resolved,” Ogborn wrote.

The city declined to comment on Thursday.

Earlier:City redesigning downtown parking ramp after failed Village on the River project

City officials pulled the plug on the project after Village River Group wanted to downsize the project, which had been promised as a 15-story building wrapped around the city’s 500-stall, seven-story ramp. The city also alleged that Village River Group hadn’t hit contractual milestones like providing evidence that it secured financing to see the project through, obtaining a performance bond and making an installment on a $1 million development fee.

Village River Group countered, saying the city cut off communication in the weeks leading up to its decision to terminate the agreement.

Following termination of the agreement, the city pressed forward with the parking ramp, which is expected to open next year. A large crane that had been brought in to build the private portion of the project was removed in July.

Village River Group LLC filed a separate intent to sue in May.

The latest notices of intent now queue Village River Group, Legacy and the four guarantors with possible legal action against the city. Under state law, government entities can be sued if they are notified with 180 days of an incident causing damages or injury. In this incident, the city’s May 14 termination letter has been cited as the date of injury.