South Dakota is broadening policy for concession operations in state parks

Capitol News Bureau

CHAMBERLAIN, S.D. (KELO) — Changes are coming for how some concessionaires conduct business in South Dakota state parks and recreation areas.

One concession operator wants to expand, provided there’s a much-longer lease. But a second might stay only partially open, perhaps as a state operation. The future of a third one, which has been on the market for three years, is uncertain.

Those concessions are at Lewis and Clark reservoir marina on the Missouri River; the Spring Creek complex on Lake Oahe on the Missouri River; and at Roy Lake State Park near Lake City in northeastern South Dakota.

Scott Simpson briefed state Game, Fish and Parks Commission members Friday morning about the three situations. He is director for the state Parks and Recreation Division that oversees leases to concession operators.

The good news, according to Simpson, is operator Chris Donlin wants to “inject some new life” into Lewis and Clark marina on the Missouri River near Yankton. Donlin agreed to a 10-year lease in 2015.

“It’s an opportunity for the department. It’s an opportunity for the concessionaire,” Simpson said about Donlin’s latest concept. “I think we’re working in a great direction down at Lewis and Clark.”

Simpson hopes Donlin will go to the November 7-8 commission meeting in Watertown to explain what’s on the drawing board.

The capital investment would be “several millions of dollars” but would require an extension of the lease, according to Simpson.

He said Donlin seeks a plan in place for 2020 and the commission could consider changing the lease at the December 12-13 meeting in Madison.

“That’s an exciting thing,” Simpson said, describing Donlin’s ideas as potentially “a new model” for some concession operators. He said Donlin could lay out those ideas at one of the commission’s next meetings. 

The news from Simpson was gloomy regarding the Spring Creek Resort lease on Lake Oahe 17 miles north of Pierre.

The most recent Spring Creek prospectus closed July 8 without an offer for the $1.8 million price. Simpson said there had been several sales attempts.

The lease ended last year and the owners kept Spring Creek open on a one-year extension. Simpson said the owners aren’t interested in another extension.

Simpson said he and Kelly Hepler, who is state Game, Fish and Parks secretary, notified the Spring Creek group that the parks division is done seeking a new concessionaire for the site.

Simpson said Spring Creek has been operated by several private business parties for several decades. The challenge now is the coming divorce of interests: The state Game, Fish and Parks Department owns some of the assets, including the land, but the operators own the docks and other pieces.

Simpson said the sides are trying to reach agreement about “how they move on and how we move in.”

A group from Nebraska agreed in 2008 to lease the complex and formed a limited liability company called Spring Creek Ventures.

Several men involved in Spring Creek Ventures attended a recent commission meeting to discuss their financial situation.

“We don’t have a lot of communication with them right now,” Simpson said Friday.

What it means for spring 2020 isn’t clear.

“We’re going to be creative and think outside the box,” Simpson told commissioners.

The previous Spring Creek owners — John and Marlene Brakss and their son Sean — last filed a corporate report for their business, called Spring Creek Resort, in November 2008 with the South Dakota Secretary of State office. Their business was dissolved in 2010 for failing to report.

As for Roy Lake Resort, the lease ended December 31, 2018. The search for a new purchaser began about one year before that, according to Simpson.

“We’ve offered that prospectus several times,” he said.

The selling price sought by Jan Pitzl started at about $900,000, according to Simpson, and gradually dropped, getting down to $609,000 in the latest prospectus.

Simpson said Friday his office hadn’t received a viable offer as of the latest September 12 deadline.

Simpson wants to hang onto the property.

“We are looking at some different options for Roy Lake that hopefully would be suitable to us and suitable to the owner,” Simpson said. “We need to have some further conversation with the ownership group up there.”

The parks division charges concessionaires various percentages of their gross income.

Commissioner Scott Phillips of New Underwood was the only member to speak after Simpson concluded the presentation.

“These concession issues are complicated. They’re getting more complicated all the time,” Phillips said. “We can’t do it like we did.” 

The department has faced financial difficulties in past years with various concession operators.

One recent example came in 2018 when Steven Rounds of Pierre decided against opening Oahe Marina and Restaurant, located downstream from Oahe Dam on the Missouri River.

Rounds received the state lease while his older brother, U.S. Senator Mike Rounds, was governor. The flood of 2011 sent the Rounds business into financial difficulty from which it didn’t recover.

Steven Rounds filed his last report for Oahe Tailrace LLC with the secretary of state in June 2018. That office officially dissolved the business September 15 for failure to report.

The Game, Fish and Parks Department meanwhile converted the site’s cabins to other uses. The restaurant didn’t reopen.

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