The $3.8 million question: As the DSU Foundation heads toward dissolution, how will the remainder of the Biesiot Activities Center’s loan be paid?

Fans sit in the stands during Dickinson Trinity’s football game against Kindred on Friday afternoon at the Henry Biesiot Activities Center in Dickinson. The DSU Foundation, which had been paying the loans on the stadium, is headed toward dissolution after being in fi nancial receivership for nine months. Soon, Southwest District Judge William Herauf will likley be the one to decide how the remaining loan of $3.8 million on the stadium will be paid if the foundation cannot.
Fans sit in the stands during Dickinson Trinity’s football game against Kindred on Friday afternoon at the Henry Biesiot Activities Center in Dickinson. The DSU Foundation, which had been paying the loans on the stadium, is headed toward dissolution after being in fi nancial receivership for nine months. Soon, Southwest District Judge William Herauf will likley be the one to decide how the remaining loan of $3.8 million on the stadium will be paid if the foundation cannot.

A Dickinson judge will decide who takes control of the Henry Biesiot Activities Center’s outstanding loan payments when the Dickinson State University Foundation enters dissolution proceedings in Southwest District Court.

The foundation has more than $3.8 million left to pay on the stadium and events center on DSU’s campus and recently defaulted on its most recent semi-annual loan obligation by paying just 38 percent of the required amount.

Sean Smith, the attorney appointed last December as the foundation’s financial receiver, said he can’t say how or if the foundation has the funds to pay off the BAC’s outstanding loans.

That’ll all be up to the judge to decide,” Smith said. “There are statutory priorities, and I don’t know what’s going to happen so I can’t comment on those. But ultimately it’ll be up to the judge, the facts and circumstances that are in front of him.”

 During the 2008 election, Dickinson voters passed a measure allocating $6 million in city sales tax to build what was then known as the Badlands Activities Center as a replacement venue for the outdated and decaying Whitney Stadium. Now the BAC is home to DSU, Dickinson High School and Trinity High School football and track and field, along with other athletic competitions and a wide variety of social events.

 Completed in 2010, the stadium cost more than $16 million to build. Because of its role as the stadium’s primary fundraiser, the DSU Foundation became responsible for the remainder of the loan obligation.

 Until July, the foundation never missed a loan payment on the BAC.

 Then, on July 15, the foundation paid $99,750.71 of a $264,677.49 BAC loan obligation to Wells Fargo Securities of Minneapolis. Another $90,000 generated by the university from corporate suite rentals will soon go toward those payments, Smith’s most recent receiver’s report stated. But that still leaves a little less than $75,000 to pay on the outstanding loan with another payment due in January.

 As the foundation prepares to enter into court proceedings before Southwest District Judge William Herauf to determine how its debts will be paid, many in Dickinson are asking how and if the BAC’s loans will be paid if the foundation is indeed dissolved.

 “What happens if they continue to default?” asked Shawn Kessel, Dickinson’s city administrator.

 It’s a question no one — including Smith or DSU officials, who declined to comment on the matter — seems to be able to answer.

 The true amount of the foundation’s total assets are unknown, according to Smith’s receiver reports, and will likely be determined by Herauf. From there, the foundation is responsible for various debts on top of its scholarship obligations, including the Blue Hawk Square student housing project on Villard Street and $1.75 million owed to developer Granville Brinkman as a result of an arbitration ruling.

 Kessel said he’s unsure if the city would be willing to take over the remaining BAC loans, but said with the city’s 2016 budget already being trimmed and smaller than 2015’s budget, it’s unlikely.

 “We’ve not evaluated that option,” he said. “I can certainly tell you that our general fund budget is going down this year in total. For us to step up to the plate and take over those kind of loan payments would be a reprioritization of existing commitments to projects. Something goes away if we were to take that on.”

 Dickinson Mayor Dennis Johnson said the BAC has gone beyond his expectations in terms of how it is utilized by not only the university and the high schools, but the city and its residents.

 Still, Johnson called the foundation’s situation “unfortunate,” and is hoping for the best through its dissolution proceedings.

 “It hurts the university,” he said. “Anything that hurts the university hurts the community too. It’s in everyone’s best interest that they try to resolve the situation as quickly as possible and get on to a new beginning. It’s too bad that things developed the way they developed. It’s really unfortunate. I suspect it’ll be, and probably already have been, some lessons learned that’ll help guide us in the future.”

Author: Dustin Monke

Former newspaper editor. Now I market the best baked goods and donuts in America. But every once in a while, I write a cool story too.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s