Wednesday, January 1, 2014

Hey Rapid City Mayor Kooiker. What's Your Deal With Hani Shafai?

     First off, I totally support Rapid City Mayor Sam Kooiker's  assertion that he has the responsibility to look after the public's interest in pursuit of information about federal tax credits that Rapid City developer Hani Shafai says are needed in order to get the multi-million dollar Presidents Plaza off the ground.  I understand that Rapid City is tossing almost $3 million into the project.  This is public money and my Mayor is rightfully charged with the task of looking after our civic resources.  Though I consider Hani a good friend (I'll never forget the great time we had when traveling through pre-civil war Syria together on a trip arranged by our mutual good friend former U.S. Senator Jim Abourezk in '07.), I think his reaction to Mayor Kooiker's decision to look into the status of those tax credits by going directly to the facilitator instead of going through Hani first is probably off base.  Sending the Mayor a "cease and desist" letter is over the top and certainly opens any disagreements he's had with the Mayor and the City of Rapid City to a public airing.  This kind of spat doesn't merit that much attention and only adds to the hold-up on this long-delayed project, which I support wholeheartedly.
     However, I don't like the tone and the inferences of the letter sent a few days ago by Rapid City's  Attorney Joel Landeen to Hani's lawyer Ed Carpenter, responding to Hani's "cease and desist" request.  (Here's the letter on PDF from the RC Journal website:  Asserting that the Mayor is fully within his rights and responsibilities to seek information about the tax credits independently is one thing.  Calling Hani's character and integrity into question is another.  On those two fronts, I will support my friend Hani unequivocally.
     Two utterly gratuitous sentences in Landeen's letter stand out and have an accusatory implication in them.  The first?  "The Mayor is concerned that the information he has been receiving (my note:  from Hani, presumably) is less than accurate."  In purely rhetorical terms, this isn't the same as calling Hani a liar, but it does raise the question as to why Hani would be passing along inaccurate information about the progress of those critical tax credits.  In my book, the sentence suggests that Hani has a reason for supplying "less than accurate" information regarding a matter that Hani is probably more conversant and knowledgeable about than any other participant in this deal.  If the Mayor has some reason to believe that the information is inaccurate, he should just come right out and give us the reason why he "is concerned." 
     The second assertion in Landeen's letter that raises eyebrows--and gets my dander up--contains a code word that is quite disturbing as it is applied.  That word is "honest," and its application to the situation is less than favorable to Hani.  Here's the sentence:  "If the Mayor has questions regarding the funding he will continue to ask them and if he believes he will get a more honest appraisal of the situation from someone other than your client he reserves the right to ask them"   The compelling question raised here is, what has led Mayor Kooiker to believe that under some circumstances "he will get a more honest appraisal of the situation from someone other than" Hani?    As with the statement referenced above, I think the Mayor owes it to us Rapid Citians to tell why he has reasons to question Hani's honesty. 
     To me, the letter reads like a none-too-subtly-worded smear.  As one of Kooiker's and Landeen's employers I would like to know why they are "concerned" that  Hani's information might sometimes be "less than accurate" and why they think there are circumstances when they might "get a more honest appraisal of the situation" from sources other than Hani.  Until then, I wish the Mayor and our lawyer would stick to their legitimate contention that city officials have a right and responsibility to seek this information directly from the source and spare us the unsupported innuendoes on the character of a very good man, Hani Shafai. 


  1. John, Happy New Year. Thanks for your post and for the invitation to respond. I have known Hani for a long time, and sincerely like him. I don't doubt his desire to serve our city -- there are many, many projects where he has contributed to our community. One prime example would be his request for a TIF district in 2011 near the School of Mines. It was a tie vote, and I broke the vote in favor of putting a TIF in place for Rocker Square Apartment buildings for student housing. His contributions to this community have been many. Sam Kooiker

    I also support the President’s Plaza project. I want to see it build this year. A time extension of 2 years makes less sense to me than a 1 year extension, but a 2 year extension is something I signed because it’s a workable compromise and finally gives us a ticking clock for this project.

    Hani forwarded an email from Steve Baker at Dakota’s Americas about the 2012 schedule. The 2012 schedule is different from 2013 and 2014. I asked about the 2014 schedule. Asking for clarification shouldn’t be frowned on. When an average citizen of Rapid City gets a mortgage, they are expected to provide a lot of information. In contrast, the city is providing millions of dollars to this project and has asked a fraction of the questions that is typically asked of someone taking out a loan for a car or house. Dakota’s Americas is a federal agency by way of MOU. If I can’t talk to them, it also means I can’t talk to the State or Pennington County about this project – they also are funding it.

    I am completely baffled as to the reaction by the developers for my simple questions of Dakota’s Americas, which the developers were carbon copied on. Someone called my office the other day and complemented me on asking tough questions – I said my questions weren’t even tough and I included the developers on the questions!

    They were simple questions regarding the schedule and the criteria and generated an over the top reaction. I am also being asked why I brought the info to the council and made it public – it’s because as Mayor I have a role to help protect the council. We have one of the most productive and inquisitive councils in decades and all 10 council members are unafraid to ask questions. They need to know that an important business partner of ours doesn’t want us asking questions.

    One of the things I found out from Steve Baker at Dakotas Americas is the 2014 round of New Market Tax Credits will be especially geared for “highly distressed areas”. So I question how New Market Tax Credits are applicable for Rapid City, based on the information I have obtained from Dakota’s Americas (it’s linked to the 12/13/13 Legal and Finance agenda:

    Can someone tell me what’s “highly distressed” about downtown Rapid City?
    And I think that’s the crux of the issue. I have no further questions at this time, and I have signed the time extension. However, if it turns out that Rapid City actually gets NMTC’s, then I am going be asking what the criteria was and exactly how downtown Rapid City is highly distressed. I feel we have one of the most vibrant downtowns in our entire country, and a designation of “highly distressed” needs to be completely understood. The developers don’t want me to ask. I will be asking anyway.

    It’s also important to know that Community Health Centers of the Black Hills has also applied for NMTC’s, and they truly due serve low income people.

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  3. NOTE TO READERS: THE ABOVE IS FROM RAPID CITY MAYOR SAM KOOIKER. Thank you, Mayor Kooiker for the detailed and thoughtful response. As I note in the post, I'm completely supportive of your office's responsibility to obtain information that's relevant to this project by using your own resources to do so and not depending on the developer as the sole conduit of information. As a resident of Rapid City I believe it's your duty to watch over our city's interests and encourage you seek relevant information independently of any other source. My main concern, of course, is the rather jarring use of phrases like "less than accurate" and "more honest" in describing your relations with Hani. The judgemental connotations attached to these words only add some unnecessarily suspicious and distrustful elements to the process and create defensive postures that simply do not lend themselves to maintaining open channels of communication and cooperation. I of course hope that my good friend Hani will seek out a less confrontational reaction to your decision to follow up on what I believe was a good faith effort to gain some clarification on the New Markets Tax Credits and work with you on moving forward in a spirit of the teamwork that is crucial for the success of perhaps the most significant economic development proposal that downtown Rapid City has ever experienced. I thank you for your time and consideration of this.