STAR Academy sells

Jared Carson, left, talks with the media following making a successful bid to purchase the former State Treatment and Rehabilitation (STAR) Academy last Thursday when the campus was auctioned. Carson was representing a local partnership in offering the bid of $2.34 million, which was the minimum bid allowed by the state.

The former State Treatment and Rehabilitation (STAR) Academy is set to become a clean air light industrial project that could bring up to 125 high-paying jobs, says the man who represented those who purchased the property at auction last Thursday morning.
Former Custer Mayor and local realtor Jared Carson made the winning—and only—bid at the auction, $2,340,000, which was the minimum bid set by the state for the sprawling 173-acre campus with buildings totaling nearly 170,000 square feet.
After the auction concluded, Carson elaborated some on the plans for the project, but declined to name the backers of the project or how much money they were willing to bid for the property.
“These backers are local, and it’s a small community,” he said. “While all of them recognize politics come into this whole scenario, they would much rather not be dragged into that. That’s a Pierre game, not a Custer game.”
Carson said in email correspondence later in the day he could not divulge the product that would be manufactured at the facility, saying the product would reveal the process, and subsequently, reveal the technology.
“Right now we are in an enviable position of being a first mover in this field,” he said.
After the auction, Carson said the ecologically-minded, clean air light industrial project brought to Custer by the successful bidder, later revealed as SLIC-e (Sustainable Light Industrial Complex & energy) would not only provide an opportunity for new technology to come to South Dakota, but also a place for economic development for the community and for all the light industrial projects that are hindered by a lack of space in the community. While one business is already planned for the area, he said, there is space for more, whether it be start-ups or fully-established businesses, provided they meet the light, clean industry criteria.
The Custer Area Economic Development Corp. (CAEDC) sent out a press release later in the day, saying it supports the local business acquisition of the campus, reiterating something Carson said after the meeting—that the corporation had been looking at the “what’s next” for the campus ever since STAR Academy was closed.
“(STAR) was a very large employer in our community, so the process to figure out what is next has been ongoing by a number of entities, not the least of which is the state,” Carson said. “We decided it was time to take ownership of our economic destiny here and capitalize on the state’s decision.”
Carson said the project was finalized in between the failed October auction of the property and last week’s auction. All it needed was a home.
The campus won’t sit idle for long, either, as Carson said spring thaw would be the time activity would begin at the site, and remodeling could begin even sooner. That would require state approval, however, as by state law the property cannot transfer for 60 days.
Carson said the conservative business plan for SLIC-e would see 100 to 125 jobs created that will pay $15 to $30 an hour.
There were two other registered bidders at the auction, but the commissioners room at the Custer County Courthouse and adjacent hallway were packed with interested parties, including print and TV media, state representatives, Department of Correction employees, county staff members, Custer County Commissioners, a Pennington County commissioner and even a protestor who held up colorful signs and videotaped the entire auction on her phone. The other two registered bidders were Sen. Neal Tapio, R-Watertown and Wade Wilkins of Hot Springs.
Tapio only spoke to pose questions to state commissioner of school and public lands Ryan Brunner, who helped conduct the auction, and Wilkins never made a bid although he did join District 30 Rep. Tim Goodwin in the hallway for a discussion after requesting a 10-minute break following Carson’s bid.
After the auction it was floated that some legislators might still try to block the sale, Tapio included among those. Prior to the auction, District 30 Rep. Julie Frye-Mueller made an impassioned bid to potential buyers to reconsider bidding and allow the legislature to revisit the sale of STAR Academy when the legislative session begins this week. She said, ultimately, a new juvenile detention facility will need to be constructed and will cost the taxpayers much more than keeping STAR Academy would.
“To get rid of this property, which is still usable, for $2.34 million is absolutely shameful to the taxpayers,” she said. “I’m asking you to please, please reconsider this whole issue.”
“The time to do that was last year when the legislation was passed,” someone offered from the crowd.
District 30 Rep. Tim Goodwin was supportive of the sale after the auction concluded, however, calling it “a great day.”
“It looks like we’re going to have some economic development and get some jobs,” he said. “STAR Academy goes back on the tax rolls, which (Custer County) desperately needs, because it has a lot of state and federal land. It’s already limited on its tax base. This will help a lot. If we can bring jobs to Custer, it’s perfect.”
The buyers want to execute a contract for deed for the land, which means the buyers would make payments on the property until the full purchase price is paid. The proposed terms include money on the yet-to-be-determined closing date and more shortly thereafter, followed by annual payments for 10 years and a final balloon payment. The sale and terms are subject to approval by Gov. Dennis Daugaard, who has been adamant about selling the property.
The proposed terms, which include 4 percent interest on the 10-year payments, were a subject of discussion prior to the auction. The fact that the sellers had proposed the terms beforehand led some in the audience to infer there had been back room dealings for the property.
Brunner and other state officials on hand assured the audience the property was going to the highest bidder, saying the proposed terms were just that—a proposal should those who offered the terms end up being the successful bidder.
“High bidder takes it,” Brunner said.
And, as it turns out, that high bidder(s) is local.
“CAEDC is extremely pleased to have played a part helping this sustainable light industry find a foothold in Custer,” the corporation said in its press release, touting the efforts of an ad hoc committee from the group to find a potential new use that would offset the series of job losses the community has experienced. “(We) are excited to have a year-round and full-time job creator and innovator that includes Custer, SD and zip code 57730 in their address.”
Goodwin called the sale “bittersweet,” saying a juvenile detention facility is needed in the state, but acknowledged the legislature already authorized its sale.
“You can’t unring the bell. Once it was authorized to sell, that’s what we came here to do was sell it,” he said. “It sold and it goes back on the tax rolls. It looks like we got good jobs for Custer and the Southern Hills. That’s what we need.”
Carson said STAR Academy was a large part of the Custer economy for years, but to an extent that meant the economy was controlled by the state, not by the people of Custer.
“As we have seen, as the administration changes in Pierre, things down here change and it impacts us much more than it impacts anybody in Pierre,” he said. “We are taxpayers, as well, and we are ready to ensure we have control over our own destiny.”