Secrets in plain sight


SIOUX FALLS, S.D. (KELO) – Take a walk around your neighborhood. Are there dirty needles and empty liquor bottles lying around? How about people passed out at your front door?

The answer is likely, “no.”  Most Sioux Falls neighborhoods are clean and safe.

But one organization that’s trying to provide safe, affordable housing for the people who need it most say it’s an uphill battle because of what’s happening, literally, right outside its front door.

For months, our team has been monitoring a one-block area on West 11th Street.

In 2016, a man was shot and killed outside the Lucky Lady Casino on West 11th Street on a Friday night.

“Hold up, man, come back over here,” police said.

Three years later, it’s not unusual for police to make frequent stops here.

“It is a high drug area, so a lot of cars you see stopped near the Lucky Lady, within those few stops, short term stops,” a Sioux Falls police officer said.

But it’s what’s happening behind the strip mall that’s the subject of this KELOLAND News Investigation. 

“While we are searching, we find a cap for a needle. Walking around back here, it’s lying in the middle of the road, is a loaded rig,” officer said.

A typical Saturday night for Sioux Falls police includes stops near West 11th Street.

“We make a lot of arrests’ a lot of contact with people in this area,” a Sioux Falls police officer said.

This area averages 14 police calls a day. And the activity isn’t just cloaked in darkness.

Angela Kennecke: Is there a lot of activity around here?
Woman resident: Yeah; lots–always something going on.

What’s happening at these apartments on the back of the strip mall can’t be witnessed from busy W. 11th Street.

KELOLAND Investigates made several trips over several months to this parking lot, in both the light of day and at night.

Kennecke: He’s breathing, but I don’t know if he’s okay.

In the middle of the afternoon, we found a man sleeping on a bench outside an apartment. After a while, he got up and approached us.

Kennecke: Are you using drugs right now?
Unidentified man: I don’t use drugs. I only drink.
Kennecke: Drinking?
Unidentified man: Yes. I just drink and I stay here with my home boys. We just drink here.

“It’s kind of scary actually,” former resident Candace Peneaux said.

A couple who used to live in the apartments still bring their children to the Volunteers of America Dakotas day care here.

“It’s all I could afford at the time. I could get by, it’s something I’d do, better than sleeping out in my van,” Mark Yellow said.

“Coming out our front door, see people doing drugs right in the hallway. Our kids played outside all the time; finding baggie and syringes all over,” Peneaux said.

It didn’t take long for us to find evidence of intravenous drug use.

Kennecke: Would it surprise you to know that we found syringes around here?
Deelstra: It would not surprise me. We have found syringes; we have found alcohol bottles lying around. We have seen some really challenging things in this neighborhood.

Becky Deelstra with Volunteers of America Dakotas says the issues in this parking lot are hurting the organization’s mission to help people get back on their feet through affordable housing.

“There are so many challenges and it’s almost a perfect storm,” Deelstra said.

Part of the problem, the VOA says, is this set of garages, right outside the front door of VOA’s housing project, Summit Heights.

Kennecke: So, when people step out their door, and see right there, what are they seeing? What is happening?
Deelstra: There are a lot of people who hang out in this area because it’s known for people to hang out looking for unsafe activities such as drugs, alcohol. And maybe that wouldn’t happen in my neighborhood or your neighborhood.

The apartments and garages are owned by West 11th Street Properties, LP.  According to the Secretary of State, the sole General Partner is UHP Affordable Housing III, LLC. The managers of that Limited Liability Partnership are Sioux Falls developers Kevin Keating and Norman Drake.

Kennecke: Hey there. Do you live here?
Garage apartment tenant: Yeah.

Two of the end garages were converted into efficiency apartments. The woman who answered the door asked that we didn’t show her on TV.

Kennecke: Do you pay a lot in rent for this?
Garage apartment tenant: No, not much?
Kennecke: How much do you pay? We’re not showing your face. How much do you pay?
Garage Apartment Tenant: $350
Kennecke: $350 a month?

“But living in a garage-turned-apartment, I understand it may be affordable, but is it the very best living conditions for someone who is trying to get on a good path? And that’s really the concern,” Deelstra said.

The apartments were built in 1972. Garages were added in 1974.

“I’m not saying it wouldn’t be allowed, period. But there would be different criteria that would have to be met, in order for this thing to pass today,” Matt Tobias of City Code Enforcement said.

Previous owners Nick and Dawn Clausen were given approval for the garage-apartment conversion in 2008 and were told to bring the rental units up to current City building codes.

Kennecke: Is there any other building inspection that goes on between 2008 and today?
Tobias:  Really no, there are no inspections unless we get a complaint. In which the complaints we’ve got on that have been low to none.

The City tells us that it has trimmed trees in the area and added LED lights to improve the safety. But police say it’s not helping.

We looked at all the police calls to this area between 9th and 12th streets from Minnesota to Menlo Avenues. Since 2017, the 18-block area averaged 5,000 police calls a year; mostly for disorderly conduct, intoxicated subjects and drugs.

The number of drug arrests jumped from eight percent of all of Sioux Falls’ drug-related crimes happening here in 2017 to 11 percent in 2018.

A high percentage of the City’s assault, resisting arrest and fleeing from police charges took place in this small area in 2017 and 2018. The same trends continued in the first half of 2019.

“If you look at the surrounding area; our parking lot, there’s an alley and garages, so if someone is fleeing on foot, this is kind of an area where it makes it a little bit easier to run on foot,” Deelstra said.

Residents told us they’d witnessed crimes.

“My boyfriend’s car got broken into before,” Resident said.

“We watched one guy get beat up so bad; his girlfriend was on top of him. She was trying to stop it. She couldn’t stop it,” Peneaux said.

While police and the City say there’s not much else they can do, Volunteers of America would like to see the property owners help improve safety in the area.

Kennecke: Does the landlord hold any responsibility in all this, do you think?
Deelstra: Certainly. As landlords, we do have responsibility to ensure safe housing and that the people who are choosing to live in our residences are upholding the rules and we are responsible for enforcing those rules.

Page 12 of Ownership
Page 12 of Ownership

Murray Properties manages the apartments and garages for Kevin Keating and Norm Drake.

Both men talked to KELOLAND News in 2018 about their other downtown properties.

But when it came to discussing the issues surrounding their West 11th Street properties, neither would grant us an on-camera interview. A spokesperson for Drake denied to us he owned the property.

Hi Angela, I cannot speak to Kevin’s availability, and he is your contact for this property. I want to point out that the property you are inquiring about is not owned by Norm Drake as you stated in your email. The property is owned by West 11th Street Properties, LP. Parcel finder will confirm that for you.

Stacy Jones

Keating told us that Drake was not involved in the day-to-day property management.

Norm Drake (Legacy Development) is not involved in the day to day property management and therefore would not be knowledgable about the day to day operations on the property, so I don’t think he can add anything to the conversation.

Kevin Keating

Keating told KELOLA ND News in an email that there were legitimate safety and security reasons why he wouldn’t do an on-camera interview and that talking to me about what they are doing to make the property safe could make him or his staff the target of retribution.

After repeated requests for an on-camera interview, Keating also sent KELOLAND Investigates this email, late Thursday afternoon: 

We are available this afternoon to meet off-camera to discuss Plaza 600.   If you are interested in hearing the facts and learning about actions we’ve taken to address some of these problems then I suggest we meet so we can share that information with you. For example, maybe you would be interested to know…
how many apartments are really in the garage building;
whether we perform criminal and/or credit background checks on all prospective tenants;
how frequently we visit the property to do wellness checks;
the level of cooperation we provide to local law enforcement;
what our maintenance and repair history is on the property;
what our lease termination and eviction history is on the property; 
what capital improvements we’ve made to the property;
what safety and security measures we have implemented and when;
what do we expect from our tenants (both residential and commercial); 
what our own experience is as victims of verbal and physical assault;
what our own experience is as victims of property damage;
how do we respond when we discover criminal activity on the property; or other valid questions.
I hope you are interested in learning the facts and not just doing a hatchet job on me or my dedicated team of housing professionals.   We have invested in this community and work hard every day to provide decent affordable housing for low income households, even in difficult neighborhoods like Pettigrew Heights.    After hearing our side of the story, you can evaluate whether we are contributing to the problem or helping to alleviate it.   We would much prefer not to have to deal with the issues you are reporting and we fully support finding solutions to these problems.  The problems you are reporting about affect our whole community not just Plaza 600.   We want everyone who visits one of our properties for any reason to feel safe and have a positive experience everytime they visit.   We don’t turn our heads when we see a problem but we can’t solve every problem in the Pettigrew Heights either.  This is much bigger than Plaza 600 and it’s going to take a collective public-private effort to deal with these problems and, as you know, many of those problems are not unique to Plaza 600. I find it hard to believe hearing the answers to the questions presented above won’t help improve your story even if you can’t you can’t put me or my staff on camera.   After all, you plan to do the story anyway, right? I hope you are interested in learning the facts. By the way…there is currently only one apartment unit in the garages.  When we leased it to the current tenant it was clean, dry, all plumbing, heating, lights, a/c and appliances were all in good working order.  That unit is very small but she chose it because it provides an affordable housing option for a tenant that didn’t have other options.  

Kevin Keating

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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