Badgerow Building developer sues architect for $50 million - KTIV News 4 Sioux City IA: News, Weather and Sports

Badgerow Building developer sues architect for $50 million

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SIOUX CITY, Iowa (KTIV) -

Efforts to redevelop a historic landmark in downtown Sioux City have failed to come to fruition in the last decade.  Now, the developer is suing a Sioux City Architect for $50 million claiming negligence.

"Our revenue potential is dramatically reduced,” said Mako One Developer Bruce DeBolt.

He bought the Badgerow Building six years ago with a plan to turn the historic building into a high tech data center.

“It's certainly never going to be developed into our original vision,” DeBolt said.

He claims he's spent six million dollars on the redevelopment and just bonded another six million, and doesn’t expect to see a return on that investment anytime soon.

"It will be a long time,” admitted DeBolt.

“What's happened to us would be the equivalent of buying a 100,000 square foot building and then discovering after the fact you can only use 25,000 square feet of it,” DeBolt reasoned.

In order for DeBolt to attract a larger data center, he says the floors, footings, and foundations now have to be reinforced. In a lawsuit filed by DeBolt against its architect, Dale McKinney, owner of Sioux City's M Plus Architects, Mako One claims McKinney misled him on the cost of upgrading the load limits of each floor. What DeBolt says was supposed to cost hundreds of thousands of dollars, will now cost three to five million.

"Is it economically viable, absolutely not,” said DeBolt.

DeBolt's attorney provided KTIV with half a dozen emails that he says proves McKinney misrepresented the scope of the project. In one, he tells DeBolt "we could take the live load capacity to 150 pfs without too much difficulty." The load limit is crucial to how many racks the floor could hold for a data center, DeBolt explained.

McKinney counters those comments are taken out of context.

"You can't just take those little six emails and translate that into the big picture,” he said.

McKinney added that there's more to the story, but under the advisement of his attorney, McKinney would not share those details.

"Those really will come out in final legal proceedings,” he said when asked about each of the allegations listed in the 10-page suit.

"We're not negligent. I've done hundreds and hundreds of projects over the years. I've had no difficulties with any of those projects,” said McKinney.

DeBolt also blamed McKinney for a hold-up in historic tax credits, which he planned to use to pay for future phases of the redevelopment. The project was denied because the windows installed weren't historically accurate.

"Those windows are going to all have to be replaced. There's about 250 of them,” pointed out DeBolt.

In the suit, Mako One claims McKinney failed to property characterize the project’s phases as separate projects, impeding the company from participating in other tax credit programs and costs millions of dollars in delays.

McKinney sits on state and national boards overseeing the activities of architects around the country.

"I've done several historic tax credit projects,” McKinney said, adding that he’s never had a problem with the program in the past.

So, how does DeBolt get to that $50 million claim? The developer says that’s the revenue potential of the Badgerow that will never be realized.

Asked if the Badgerow Building is a money pit, DeBolt said, “Knowing what I know today, we would not have invested the money that we have invested in this building."

Does he wish he’d never bought the Badgerow Building?

"It has been a challenge, we have had some tremendous challenges,” said DeBolt.

Still, he says he has no plans to try to sell the building. In fact, the Badgerow Building will see a new tenant move in. DeBolt says they've secured a data center, which cannot be named for security reasons. It will take up the 4th floor of the building. The new tenant will use 25% of their available power capacity, which DeBolt calls significant.

He says they'll move in as soon as he gets the building's occupancy permit.

McKinney, meanwhile, has filed a counter suit against DeBolt for $160,000 in unpaid services.

The parties tried mediation unsuccessfully two months ago.

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