South Dakota environment regulators ding Baltic developer amid rare mayoral recall
"This legitimized our concerns, which we appreciate as leadership," the mayor of Baltic said about a letter from the Department of Agriculture and Natural Resources to a local developer.
BALTIC, S.D. — The South Dakota Department of Agriculture and Natural Resources has thrown a wrench into an ongoing recall effort against the mayor of Baltic, a city of just over 1,000 residents that sits 10 miles north of Sioux Falls.
On April 21, the state agency handed down an initial ruling that found Grant Park Capital, LLC, the company behind two housing developments in Baltic, had run astray of state laws on stormwater runoff and erosion prevention at its Phillips Crossing Addition development on the east side of town.
“Our client has deep roots in Baltic,” said Lee Schoenbeck, whose law firm, Schoenbeck and Erickson, PC, represents Grant Park Capital. “They don’t want to do anything harmful to any waterway in Baltic, and this is going to get fixed quickly.”
Grant Park Capital, a development company backed by seed magnate Brian Hefty and headed by Mike Wendland, a former Baltic mayor, is not involved in the recall effort.
However, many of the complaints brought by South Dakotans for Transparent Government, the political action committee leading the recall signature drive, center around one question: Was the suspension of new building permits in the development in July 2022 by the Baltic Planning and Zoning Commission a reasonable step to reign in poor erosion control or part of a personal vendetta by Mayor Deborah McIsaac that’s hurting the growth of Baltic?
The recall petition specifically hits McIsaac for “failing to present public information in a true and correct manner to members of the public” on issues related to Grant Park Capital.
But, according to a DANR document obtained by Forum News Service, the concerns of McIsaac and the planning and zoning commission appear to have some grounding.
“I guess the word was finally,” McIsaac said of her reaction to the initial ruling by the department. “Until then, they could say we were just being bullies, we were picking on them. But this legitimized our concerns, which we appreciate as leadership.”
DANR letter comes at critical point in recall
While South Dakotans for Transparent Government references other alleged misconduct, much of the evidence thus far made public — compiled on a website dedicated to the recall — is related to the fallout from a legal back-and-forth between the city and Grant Park Capital.
For example, the recall petition and website partially blame McIsaac’s supposed mistreatment of Grant Park Capital for the 13% increase in property valuations in Baltic, which fell short of a 15% expected increase.
McIsaac finds the accusations misguided, noting she has no power that goes unchecked by her city council. She created an opposing website to “debunk” the claims in the petition.
The dispute traces back to a July 27, 2022 decision by the Baltic Planning and Zoning Commission to suspend the issuance of new building permits in the development over a lack of compliance with soil, erosion and stormwater flow mitigation measures. Members of the commission are appointed by McIsaac with the consent of the Baltic City Council.
A memorandum prepared by the commission last year indicates that the reason for the halting of new permits was a failure to meet requirements related to stormwater pollution prevention and other erosion control. Existing permits were allowed to continue building.
In a now-dismissed lawsuit, attorneys for Grant Park Capital called the actions by the zoning commission “unlawful, arbitrary and capricious,” and part of a “never-ending laundry list of demands.”
“I don't think we're asking anything more than we would ask any other developer," McIsaac said.
Though McIsaac says even moderate rains would cause mudslides from the high-ground development through much of Baltic, the issues with erosion control came to a head during a July 6 rainstorm and ensuing confrontation between McIsaac and Hefty, a heated exchange that has been presented as evidence on the recall website.
In a tour around Baltic, McIsaac showed Forum News Service several markers left over from the sediment-filled stormwater that spilled out of the development after summer rainstorms: the uphill edges of Murphy’s Pond, a small fishing hole in the middle of town, showed thick deposits of silt.
Throughout 2022, the South Dakota Department of Agriculture and Natural Resources says it received complaints stating that sediment was washing into the city’s sewer system; the violation letter also notes that the city government in Baltic “received numerous citizen complaints about dust and sediment on private property from the housing development project.”
Inspections of the Phillips Crossing Addition by the department in June, July and October of last year found several issues: sediment controls that “needed maintenance;” sediment that had “accumulated offsite;” and a “failure to manage … erosive flows” by Grant Park Capital.
These alleged violations of the stormwater discharge permit given to the construction site by DANR — and especially the effects of these violations on state waters like Murphy’s Pond and the Big Sioux River — could carry per-day fines of up to $10,000, though the process to quantify those penalties would come in a separate proceeding.
In lieu of this possible punishment, the letter from the DANR included a set of corrective measures that Grant Park Capital must meet, including cleaning up the effects of sediment outside the development and conducting regular inspections moving forward.
Moving forward, South Dakotans for Transparent Government said in a statement to Forum News Service that it has “surpassed the legal requirement of 139 signatures by an impressive margin.”
“This clearly shows the vast community support of citizens who are ready to put Baltic back on track,” the statement reads.
After the committee turns in the required number of signatures, the allegations will likely face scrutiny in circuit court. State law allows a challenge to the “specific statements of the grounds of the recall petition” within five days of the petition’s filing.”
If the signatures and reasoning are deemed fit, McIsaac would then face a rare special election this summer.
“My hope is that Baltic will come out on the other side of this as a thriving community,” McIsaac said. “It’s unfortunate that a few individuals decided to go scorched earth on our wonderful little town because of their feelings toward one person. Baltic has a lot to offer, and we’ll focus on that going forward.”
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or firstname.lastname@example.org.