Councilor Stehly speaks out after city terminates Village River Group agreement

SIOUX FALLS, S.D. (KSFY) - Tuesday, the City of Sioux Falls ended its development agreement with 'Village River Group' (VRG) on the planned 'Village on the River' project downtown.

The project was to have been a mixed-use parking ramp/hotel complex, but that hotel part is now at a stand still. The city isn't saying much about the project Wednesday, but one city councilor opposed to the project is now speaking her mind.

The project was going to be one of the largest public-private partnerships in Sioux Falls history.

When this all started Theresa Stehly made post cards letting Sioux Falls voters know why she disagreed.

"It's just the deal fell through and we shouldn't of been involved with the deal to start with," Stehly said.

At the end of 2017, the city entered into an agreement for the 'Village on the River' project. Former mayor Mike Huether and the city council signed off on the project, but from the beginning there were concerns about the project's viability and if the city was taking too much of a risk with this partnership plan.

"The problem here is that the city council let the citizens down we should have stopped this project but we didn't. We ramrodded it through and so now we're left with this huge quagmire of problems and legal fees and god knows what," Stehly said.

The city said ‘Village River Group fell behind on several key parts of the partnership agreement, including defaults on specific scheduled payments to the city. Multiple council members told KSFY News they have been advised by the city attorney not to talk about the project.

Stehly said she is worried that VRG’s financial obligations that weren't met will have to be paid for by the city and its residents.

"But right now we have to pay back a $21,000,000 bond payment and I don’t want to see this go on the backs of shoppers, employees and employers downtown," Stehly said.

Many of the same people involved with 'Village River Group' were also involved in the remodeling of the ‘Copper Lounge’ in downtown Sioux Falls; it collapsed in December of 2016 and Stehly said she believes the city should have learned something from that incident.

"So when we found out that this was the partners that were partnering the citizens with some of us said no let's back away from this, this isn't right," Stehly said.

In a statement, Downtown Sioux Falls President, Joe Batcheller told KSFY, "Downtown businesses eagerly anticipated the new hotels that were to be part of this development. while the news of the deal falling through is disappointing, many are optimistic that a new development partner can still make a mixed-use project for the site work."

The city has not ruled out working with another private developer, but for now, the city is focused on finishing the parking ramp.