Western Dakota Tech satellite project has setback

The purchase of this building at 1342 Laurel St. in Whitewood, planned to house a satellite education center for Western Dakota Tech’s LPN program has been put on hold until lease and service agreements can be finalized. Pioneer file photo

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DEADWOOD — The Western Dakota Technical College (WDT) satellite education center in Whitewood has seen a setback after cleaning costs, due to COVID-19 concerns, were revealed nearly as much as the lease.

On July 23, WDT hosted a ribbon cutting on its first satellite education. College leaders sought to expand is licensed practical nurse (LPN) program into Whitewood. As such, the Whitewood Economic Development Organization (WEDO) requested the Lawrence County Commission assist the operation with a $250,000 revolving loan fund application that was set to be finalized Tuesday.

That has been put on hold no thanks to COVID-19.

Lawrence County Deputy State’s Attorney Bruce Outka briefed county commissioners on the status of the project, indicating that the West River Foundation for Economic and Community Development (WRFECD), the group that would be servicing the revolving loan, had met and ultimately recommended approval of the loan, contingent upon the final lease agreement between WDT and WEDO being finalized.

“My understanding is that there’s been a lot of work done on the lease,” Outka said. “The ground lease is being prepared in conjunction with a service agreement with Western Dakota Tech, and I think that WEDO is also going to be providing additional services to include IT, maintenance, snow removal, and those kinds of things. The agreements were ‘lumped’ together … (but) there is no final lease agreement to present to you today. That is part of a larger agreement.”

Chris Chiller, of WEDO addressed the commission, explaining that the hold-up on the project is pandemic related, not that the parties involved don’t want to proceed.

“The main sticking point we’re reaching right now is totally based on the COVID cleaning standards that need to happen in the classrooms and it looks like the expense of cleaning daily of all surfaces is almost two-thirds of the lease payment,” Chiller said. “And so, they’re thinking carefully about whether this is going to be a deep black hole of money loss for them, or if it’s wise to go forward. They still have an appetite to do it, but we need to figure out how this is all going to work and what standards they’re going to go to.”

A discussion then ensued regarding whether or not the commission should move forward and approve the loan, or wait.

Commissioner Randy Deibert said there were two items of collateral on the loan.

“One was the collateral of the real estate and one was the collateral of the lease,” he said. “What Mr. Schiller just said raises some concerns that the lease wouldn’t be collateral. It would be a deficit, so, it makes me a little uneasy about approving it until we’ve got a solid document for our legal counsel to review.”

Outka asked what the ease or difficulty would be in continuing with the closing date of Aug. 7 on the proposed building location at 1342 Laurel St. in Whitewood.

“Can we continue that on? Probably. We have everything in place here. We’re just waiting for WDT to make a decision,” Chiller said.

WDT’s occupancy date would be Dec. 1, which would begin a five-year lease.

Chiller said that while the closing date could be pushed back.

“The one thing we won’t do is set ourselves up to have to come up with cash to subsidize WDT in the building,” Chiller said. “That will never happen.”

Deibert said his preference would be to have the details worked out prior to issuing a check.

Commissioner Richard Sleep said he would also like to wait and see the agreement worked out first.

Commissioner Daryl Johnson advised WEDO to discuss the matter with the credit union, the owner of the building, to see if the closing date could be extended.

“They’ve been trying to sell it for a lot of years and here’s their chance, so I don’t think that would be a problem,” he said.

Commission Chairman Brandon Flanagan said the money has been allocated, it just hasn’t been formally approved.

“Just to be clear, we have zero interest in borrowing money from the county to buy a building with no tenant,” Chiller said. “And I agree with Commissioner Sleep. You all should wait until we’ve got this nailed down.”

The approval of loan and documents was moved to the Aug. 18 commission meeting.

“I think you’re aware and the public is aware that we’re 100% behind this project,” Johnson said. “So hopefully, it can be held together. It would be good for the whole Northern Hills.”

“I think you recognize we’re in support of it,” said Commissioner Randall Rosenau. “We want to do our due diligence to secure this properly.”

Upon loan approval by the Lawrence County Commission, Whitewood Economic Development Organization (WEDO) would use Economic Diversification Fund Severance Tax interest money to purchase the property.

Western Dakota Technical College President Dr. Ann Bolman said Thursday that Western Dakota Tech is excited about pursuing Whitewood as an additional location to provide its LPN program.

“We know employers need more LPNs and the addition will create additional good-paying career opportunities for people living in the area,” Bolman said. “There are some details yet to be worked out with WEDo. And, as stated previously, we are also awaiting approval to start the LPN program from the S.D. Board of Nursing and the Higher Learning Commission, but we foresee no issues. We look forward to meeting with WEDo next week and moving forward with the plan to begin offering college classes in Whitewood.”

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(1) comment

FanB

"That has been put on hold no thanks to COVID-19."

So it wasn't caused by COVID? I think the correct phrase would be, "thanks to COVID."

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