Argus Leader sues city over $1M event center settlement secrecy

Argus Leader Media on Thursday filed a lawsuit against the city of Sioux Falls after the city failed to release details about a $1 million settlement regarding a construction dispute at the Denny Sanford Premier Center.

The lawsuit filed in circuit court alleges that the city violated open record laws by refusing an Argus Leader Media request that city officials turn over records surrounding faulty panels installed on the $117 million event center.

The city and five contractors involved in the event center's construction settled the issue in September after months of secret negotiations about how outdoor paneling on the facility started buckling before the facility opened.

City Attorney David Pfeifle said the request to release the settlement was declined because the parties agreed to a confidential settlement.

Under state law, parties to a "civil action or proceeding" may agree to keep a document confidential. But the Argus Leader lawsuit asserts that the city can't keep the records secret because no lawsuit was ever filed by the city.

"The city's website news item went on to imply that the settlement stipulation in issue was the result of the 'informal resolution process'" and no formal legal action against those involved in the settlement ever took place. That means the city is not bound by the confidentiality agreement, according to the complaint against the city.

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"The construction of the Denny Sanford Premier Center was an important moment for our community," said Bill Albrecht, Argus Leader Media president and publisher. "It was approved and built using taxpayer money and on behalf of the taxpayers of this community. It is important that those same taxpayers see and understand the financial decisions made on their behalf, meaning finances must be as transparent as possible."

Pfeifle confirmed service of the lawsuit in an email Thursday, and maintained the city was within its rights when it agreed to a confidential settlement and subsequently denied the open records request.

"The city was able to announce the global amount of the confidential settlement agreement but was contractually unable to reveal the details such as individual contributions by the settling parties," he said. "We are confident the city of Sioux Falls followed the law and the terms of the agreement."

But Albrecht said whether laws are being broken by keeping it secret is only one factor in the suit. Taxpayers invested heavily in the event center – the largest building project in city history – and deserve to know how their money was spent, he said.

"We differ with the city on the interpretation of a specific state law regarding confidentiality of the open records. And beyond that, we have a general concern whether a government, in this case our city, should negotiate secret agreements on behalf of the people, even if an open records exemption were to allow it," Albrecht said.

Citizen activist Bruce Danielson, one of the most vocal critics of the city's handling of the Premier Center siding dispute and closed-door nature of the manager at risk method used for the building project, agreed the public should have access to the settlement.

"The underlying issue here is this is a public building, and the public has to pay for this building for the next 19 years, and we do not know anything about the financing, the construction, the change orders or where the money went to. We know nothing," he said. "The first step in any audit of any situation like this is breaking the seal of secrecy."

View the complaint here: