STAR auction is Friday

The former State Treatment and Rehabilitation Academy (STAR) will hit the auction block again Friday, but with a drastically reduced price from the last time it was offered for sale.
The price of the campus has been reduced to $1 million, which is $680,000 less than the previous listed price after $320,00 was subtracted from the property value following the sale of 40 acres of the property at the previous auction in September. The state has tried three times unsuccessfully to sell the campus and buildings, of which 133 acres and all the buildings, homes, etc., remain.
The auction will be Feb. 12 at 11 a.m. at the Custer County Courthouse, with the minimum bid of $1 million to find a buyer for the remaining property.
Ryan Brunner, the state’s School and Public Lands commissioner, said the state has had solid interest in the facility, both from parties who were previously interested and new parties who have toured it now that the price has been lowered.
“Just like before, we don’t know if any of those people intend to bid,” he said. “Lowering the price made other people look at it.”
The lower price may make the sale less risky for redeveloping the property. Part of the reason for lowering the minimum bid was to take into account any demolition and renovations that may need to be done to buildings on the campus.
“We do have a variety of people interested and a variety of potential uses,” Brunner said, as both local people and those from other states have shown an interest in the property.
Brunner said the recent vandalism at the property has not been repaired, but some of the damage might be in areas—such as one- sex bathrooms—that were going to be demolished or renovated anyway. Brunner noted the reduced price “more than covers” the vandalism if someone is looking to remodel the facility.
Brunner said previously several interested parties in buying the campus viewed the large three-story building, the former administrative building, as being too big for commercial purposes. It checks in at over 85,000 square feet.
“In addition, the fact that it was a boys-only facility limits commercial uses for multiple genders with community-style showers and bathrooms,” Brunner said previously. “The facility also continues to cost the state for ongoing maintenance and repair.”
The portion of the campus that remains includes the main building, administration building, Brady Academy, the gymnasium and eight houses on 133 acres.
The campus has been auctioned three times before, with the first auction garnering no bids, while the second resulted in the ill-fated purchase by 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 bought at auction and was purchasing on a contract for deed. The most recent auction resulted in the 40-acre parcel being sold, but not the main campus and buildings.
Brunner said previously the current proposed state budget for next year includes a recommendation from the Department of Corrections for up to $1.7 million in funding to tear down the buildings on the site and return the entire campus to bare land so it can be easily sold. Brunner said the legislature will not act on any legislation to that end, however, until after that auction.
Even if the campus fails to sell again, Brunner said it doesn’t mean the buildings will be automatically leveled or that there won’t be another auction. He said other options besides demolition have been discussed, including selling it to the county—if the Custer County Commission was interested—at a largely reduced price. The state has done that in both Redfield and Hot Springs with state-owned buildings slated for the wrecking ball, but were instead taken over by those respective towns.
“I think there is a desire to explore other options and not go straight to demolition,” Brunner said, adding the state would have to spend money to demolish the buildings and then hold another auction to sell the land.
Any potential options will have to be approved by the legislature.
Terms of Friday’s sale  are the same as they were at the September sale. State officials said then the state wants a cash sale, although ultimately Gov. Kristi Noem would make the final call on whether financing would be allowed. Brunner said 10 percent of the cost would be required at the time of the sale, with the balance due after 60 days.
There is one well on the campus that pumps 75 gallons per minute and another well around a half-mile away that STAR Academy utilizes that pumps 50 gallons per minute. That well crosses Forest Service property, for which the state has an easement. The state intends to transfer that easement to whomever purchases the campus, but the Forest Service will have to be involved in that process. The on-site well will automatically be a part of the sale. The wastewater treatment plant on the campus can handle 50 gallons per minute.
The sale is scheduled for 11 a.m at the Custer County Courthouse Commission-er’s room.