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New developer joins $50M Sioux Falls downtown project

January 15, 2018

SIOUX FALLS, S.D. (AP) — In May of 2016, Jeff Lamont stood before what is arguably one of the most finicky local governments in the United States.

The Aberdeen native and 1998 Augustana College graduate was selling his vision for a Holiday Inn Express. His audience: The Boulder, Colorado, Planning Board.

For decades, Boulder’s local government has exerted tight, rigorous control over what can be built, and where, and how it’s going to look. Lamont ran a gauntlet of nitpicking, with Planning Board members one after another criticizing the Holiday Inn’s design, which Lamont had called “a statement piece.”

The episode illustrates how far Lamont Cos. has come since its founding in 1998 with the building of a Holiday Inn Express in Aberdeen, where Lamont Cos. is headquartered. Jeff Lamont, who hails from a banking and manufacturing family, has built a hotel development and management company that survived the Great Recession and has quietly expanded far beyond the borders of South Dakota.

Lamont Cos. is about to have a higher profile in Sioux Falls. The company was brought in as a partner for a downtown hotel, part of a deal with the city that includes a parking ramp, the Argus Leader reported . The total project is estimated at $50 million.

The company enters the scene at a time of turmoil for the Village on the River project. Shortly after the City Council last month approved a contract with Legacy Development and Consultant Co., the developer for Village on the River, the Argus Leader reported that a federal criminal investigation was underway into the Copper Lounge building collapse, which Legacy was overseeing as developer. The Argus Leader investigation found that Hultgren Construction, a company managed by Legacy’s Aaron Hultgren, and another limited liability company managed by Legacy CEO Norm Drake, were cited by the state for illegally removing and dumping asbestos from the Copper Lounge.

Mayor Mike Huether’s administration announced the addition of Lamont Cos. to the project on Jan. 2, a move that shored up political support on the council. Jeff Lamont, meanwhile, replaced Aaron Hultgren as one of four personal guarantors for Village on the River.

In Sioux Falls, the company has a low profile. Two years ago, it opened the TownPlace Suites South by Marriott, which it managed.

Teri Schmidt, the executive director of the Sioux Falls Convention and Visitors Bureau, which works closely with hotels, said she has heard the name Lamont Cos. and knows it exists, but little else.

“I’ve never heard anything about them,” she said. “Maybe that’s good news.”

Three hours to the northwest in Aberdeen, Jeff Lamont and Lamont Cos. are major players in the city’s business community, behind the development of hotels, townhomes, apartments and commercial projects.

“They’ve been in existence a long time,” said Gail Ochs, the president of the Aberdeen Area Chamber of Commerce. “They are definitely a good-standing business in the community.”

Jeff Lamont did not return a message on Jan. 5.

A review of public records shows that Lamont Cos. has been named in several lawsuits, but none of those would be out of the ordinary for a large development and hospitality company. The company is currently litigating with Nevada-based AJ Contracting Inc. over an unpaid bill worth $45,000 for construction work on an Aberdeen townhome project. Lamont countersued, claiming AG Contracting’s work was defective and not timely.

Jeff Fromm, the president of AJ Contracting, did not return a message.

Jason Klinknar, a former employee, filed suit in 2014 after Lamont denied worker compensation benefits for Klinknar, who claimed he hurt his wrist in a fall. In his lawsuit, Klinknar said he found other employment working at the Brown County Fair collecting tickets and checking bags at a concert, which happened to be sponsored by Lamont Cos. When Jeff Lamont and another Lamont Cos. executive spotted Klinknar, they told him he couldn’t be there because of his pending work comp claim against the company.

“Klinknar was escorted out of the area, he was required to hand in his uniform and he left the event per Lamont’s request,” the lawsuit said. Klinknar denied comment.

In 2014, Lamont put in a winning bid for the Aberdeen Convention Center, which the city had decided to sell. But the Aberdeen City Council threatened to bring legal action after Lamont failed to make good on his $475,000 bid. The dispute was resolved without legal action, and Lamont acquired the convention center, reselling it last year.

The company was sued in August 2014 in Minnesota federal court by eight former employees of Panchero’s Mexican Grill of Bloomington, Minnesota, which was owned and operated by Lamont Cos., according to the lawsuit. The eight employees claimed they had been sacked from their jobs — almost all on the same day — because they were white and Panchero’s insisted that only Mexican workers could be hired to perform non-managerial jobs. The case settled.

Lamont Cos. has found plenty of ground to expand in Minnesota, where it has participated in several commercial and hotel projects, according to public records.

In Rochester, Lamont has a big mixed-use development project anchored by a Candlewood Suites hotel in the works, said Brad Jones, the Rochester Convention and Visitors Bureau executive director.

Lamont hotels in Rochester are focused on customer service and get good reviews from guests, which makes the CVB’s job easier, Jones said.

“Our dealings with Lamont have been great,” Jones said. “They’re a good company, a good management company. They seem to be a good developer as well. We have nothing to say but good things about them.”

Lamont’s projects, according to records, extend into Iowa, Tennessee, Colorado, North Dakota and beyond.

Last May, the City Council in Bullhead City, Arizona, approved a deal to allow Lamont to build a Holiday Inn Express and conference center on city owned land — a project valued at more than $15 million. The approval wasn’t a slam dunk, winning on a 4-3 vote.

Mayor Tom Brady voted against the deal. He opposed the terms of the contract, which gave Lamont a rent-free, 50-year lease on the land with an option to renew for another 50 years. Brady said he wanted Lamont to simply buy the land, which was assessed at $154,000.

“What hotel lasts 100 years,” he said in an interview on Jan. 5.

But his no vote had nothing to do with Lamont Cos.

“Lamont has a good reputation,” he said. “I did a lot of independent research on my own. They’re an established company.”

Last year, Lamont was named as part of the development team for a $60 million project in Edwardsville, Kansas, that included two hotels just south of the Kansas Speedway. Michael Webb, the Edwardsville city manager, said Lamont is no longer part of the development team because the concept of two hotels changed.

Still, Lamont had gone through much of the process to get building permits before the key developer decided to change the hotel concept. Webb said that working with Lamont was “very positive.”

“They were probably one of the better plans we had gotten back in terms of thoroughness and completeness,” Webb said.

“If they came in today and wanted to do another project, I wouldn’t hesitate,” Webb said.

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Information from: Argus Leader, http://www.argusleader.com

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