SIOUX FALLS, S.D. (KELO) — A California man purchased nearly two dozen mom and pop motels across the state starting in 2018. However, as we first reported, he didn’t pay the bills, from taxes to wages. In many cases, the motels bought on contract for deed went back to their previous owners.
The International Hotel in Palm Desert supposedly bankrolled AG Dakota’s efforts to buy up properties in South Dakota. Dave Hooper, who now tells KELOLAND Investigates in an email that he is CEO of the company, shared this update.
Alan has stepped away from the company completely. He lost another dear family member and needs to take care of his family, wife and kids. He has immense debt personally to restructure. I could not tell you when we spoke as it was still with legal. He is going to have no further connection to the company Operationally or from any corporate position. He is merely the AG in AG Dakota.Dave Hooper, CEO AG Dakota
Hooper told KELOLAND Investigates over the phone that investor Alan Gross sold off a portion of the Palm Desert, California, hotel in order to reinvest it in South Dakota.
“It’s money he made from selling a portion of his ownership in the Palm Desert motel. And that was short sighted to use one hotel to fund others,” Hooper said.
KELOLAND Investigates checked with the Riverside County, California, Assessor’s office and several condos on the property are owned by individuals, not LMSHG investments, which is Gross’ California hospitality company.
Hooper said there was a fire in the motel that shut it down and caused the revenue to dry up.
“The funding from that hotel that was covering us through the winter fell apart when that hotel burned. We’re still under construction, so we’re not getting any of the money from that,” Hooper said.
A California contractor took out the electrical permits for the property in California. He did not want to be identified, but he said there are 52 motel rooms on the property, in addition to the condos, and that he is working on those after an electrical surge caused many small fires throughout the buildings. KELOLAND Investigates asked if he was getting paid and he said he was as the insurance money was coming in.
We found several online complaints from people who claim they paid a deposit on a room at the motel only to find out it had closed because of electrical issues and were having trouble getting a refund.
We also checked on AG Dakota’s Chamberlain motel, named the Bel Aire. Hooper told us it was closed because of a mudslide. However, the City engineer tells KELOLAND Investigates there was not a mudslide on that property.
On Monday, we got an email from owner Alan Gross saying he was turning over all operational control of his remaining eight motels to Dave Hooper, but he still wouldn’t do an interview.
I can confirm that over the next two weeks I am working to transition all operational control to Dave Hooper and his team. I will be stepping back to focus on my family and Mom. I truly want the company to able to regain the confidence of employees, guests, vendors, and communities of South Dakota. At this time I would like to kindly decline an interview and allow Dave Hooper the opportunity to “show” that the company is committed to reestablishing relationships.Alan Gross, AG Dakota/Dakotah Red
KELOLAND Investigates has also heard from more former employees, contractors and people who sold their motels to Gross; all complained of similar issues we had in our original report.