Potential STAR buyers reveal plans

A group of investors have big plans for the former State Treatment and Rehabilitation (STAR) Academy should they successfully purchase the facility when it is once again auctioned to the highest bidder Sept. 16.

And they are plans that would make Bubba Gump himself proud.

At the Aug. 19 meeting of the Custer County Commission, Tammy Ackerman of EXIT Realty Black Hills of Rapid City came before the commission representing a group of business owners and investors who plan to bid on the facility with the hope of turning it into a mix of nonprofit and for-profit entities that includes a shrimp farm.

“It’s all organic, all environmental,” Ackerman said of the group’s plans. “They want to be part of the culture here and work with the county and see if it’s a good fit. These folks are extraordinary.”

Ackerman said the group consists of “several” investors who have guarantors and are already working with banks, seeking loans and receiving financial backing from John Sheldon, who funds shrimp farms all over the country.

If you’re wondering what shrimp farming is, it’s exactly what it sounds like. It’s is an aquaculture business that cultivates marine shrimp or prawns for human consumption. Commercial shrimp farming began in the 1970s and production grew steeply, particularly to match the market demands of the USA, Japan and western Europe.

Ackerman said the first phase of the plan would be setting up a shrimp farm on the property, as well as a biochar startup company. Biochar is a charcoal-like substance made by burning organic material from agricultural and forestry wastes (also called biomass) in a process called pyrolysis. Although it looks a lot like common charcoal, biochar is produced using a process that reduces contamination and safely stores carbon.

Among the proposed project partners is Black Gold Biochar LLC, which producers gasifiers, biomass boilers, grain dryers and various biochar production equipment. Gasifiers are used as a heat source for shrimp production. The two would complement each other and work hand-in-hand to supply a cash flow at the facility while the nonprofit leg of the plan — a tech school/trade school in the former hospital portion of the academy — takes hold.

“The benefit for Custer is jobs and helping the economy,” Ackerman said.

Ackerman laid out a scenario in which the proposed trade school could benefit area colleges/trade schools such as the South Dakota School of Mines & Technology, Western Dakota Technical Institute, Mitchell Technical Institute and even South Dakota State University to offer development, inspirational and healing programs. 

She mentioned the welding program at Western Dakota Tech and the culinary program at Michell Tech as examples of courses that could work with the businesses on site for real- world experience and educational development. 

Apprenticeship programs could be offered, she said, and the machines used at the on-site businesses could even be produced at the school. She called the number of products that could come out of the campus for research and development “endless.”

The growth wouldn’t stop there, either. Ackerman said, as the facility got its footing, it could expand even further and augment Custer’s tourism industry with such things as campgrounds, hiking trails, a store and even carriage rides.

The group would set up a local board of directors, she said, and is ready to pump millions of dollars into the plan.

“I hear a lot of soul in this,” Ackerman said. “It’s a lot of dedicated people.”

For that plan to come together, the group will have to be the successful bidder at the auction, which commission chairman Jim Lintz reminded Ackerman at the conclusion of her presentation.

“We really can’t be extremely supportive of it until after the auction,” he said, saying the commission would welcome a request from the investors behind the plan to attend a commission meeting, but, again, only after the auction and if they are the successful bidders.

“We would definitely work with you,” he said, “but after the sale.”

The state will once again try to sell the former youth corrections center Sept. 16 at 11 a.m. for a minimum bid of $2 million. The property is 173 acres and includes seven homes, part of which was an estimated at 170,000 square feet. However, that estimate included four homes that have since been removed.

The auction will take place at the Custer County Courthouse in the commissioner’s room, unless COVID-19 numbers are such that the auction will be held outside of the courthouse.

The sale will follow the repossession of the facility last year from ill-fated SLIC-e, which went belly up after SLIC-e Holdings bounced a $116,588 check to the state for an annual payment that was more than four months overdue. When the check bounced, the state repossessed the facility, which SLIC-e Holdings,  operated by Kevin Teasley of Custer, bought at auction and was purchased on a contract for deed.

State officials said this time the state would like a cash sale, although Gov. Kristi Noem will make the final call on whether  financing will be allowed.

State school and public lands commissioner Ryan Brunner said in an email potential buyers could purchase the property whole or it could be split into the main campus and buildings, which would be about 132 acres, and a 40-acre parcel, which would be sold at a minimum of $320,000, as it was appraised at $8,000 per acre. If the land is split, the state still has to receive a combined $2 million from sales: the $320,000 for the 40 acres minimum and $1,680,000 for the 133 acres and buildings.

However, Brunner said there is a possible scenario where if no one bids on the entire campus or the 133 acre parcel at $1,680,000 the state could still sell a  40-acre parcel for a minimum of $320,000 even if no one bids on the buildings. That again is based on the appraisal of the land at $8,000 an acre.

In other news from the Aug. 19 meeting, the commission:

• Discussed its plans to have someone at the north doors of the courthouse to monitor visitors for symptoms of COVID-19, including a temperature check. The person will be stationed at the door from 7:30 a.m. to 5 p.m. and will be paid $18 an hour. There is no set end date as to when the monitoring will cease, although the commission plans to discuss it at every meeting.

• Learned from Lintz he heard from a rancher who is concerned about thistle spilling over from Forest Service land onto his land. Lintz said if the county expects county residents to keep on top of its noxious weeds, it should expect no less from the Forest Service. Lintz said there are  ranchers spending large amounts of money battling weeds only to have their land infected from adjacent Forest Service land.

Private landowners who do not take care of their noxious weeds receive a letter from the county and can have their land sprayed by the county and then be charged the cost of the spraying.

“We expect our landowners to do it, but we give the Forest Service a bye,” he said.

• Accepted the resignation of Caley Buckert as weed and pest supervisor, although she may be retained in a part-time role for an unspecified time. A new weed and pest director will be sought.