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Tangled history of Howard hotel takes another turn with Canadian company's treatment center plans

Alberta-based company has plans for addiction center on small town's Main Street

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The Howard Hotel and Conference Center is pictured on Thursday, June 9, 2022 in Howard, South Dakota.
Adam Thury / Mitchell Republic
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HOWARD, S.D. — A Canadian company’s plan to bring an addiction treatment facility to Howard’s hotel and convention complex that was built for more than $6 million a decade ago is a source of community controversy.

It is the latest in a long series of events in the complicated history of the building, once known as Maroney Commons and currently the Howard Hotel and Convention Center, which has been much maligned since opening in 2011.

The building’s sale could go to a more consistent use that would bring job growth to 850-person Howard, but some local residents aren’t happy with various facets of the plan. That ranges from the nature of having a treatment center next to a bar, the potential stress on the community’s small law enforcement and ambulance staff, along with the friction building between the company’s leadership in meetings with Howard residents.

The Maroney Commons was built in 2011 as a gathering place for rural development, plus with a 24-room hotel, restaurant, fitness center and classrooms intended for community uses and workforce development training programs. It closed for financial reasons about a year later. An auction in 2014 was held, with a goal of selling it for $500,000, but that didn’t materialize. The building was mostly funded through U.S. Department of Agriculture loans and through regional development agencies and organizations.

Later in 2014, the building was sold to Sioux Falls minister Judy Shaw, who purchased it through her Judy Shaw Foundation. Miner County officials said Thursday, June 9 that Shaw has been trying to sell the property for most of the time since then.

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A 2018 internet listing was asking $2.6 million for the 30,000-square foot property but noted the annual occupancy rate of the hotel was 34.4% and with an average daily rate for the hotel of $88 per night. The listing noted the property’s real estate taxes were $55,000 in 2017. At that time, the property’s assessed value was just over $1 million.

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iRecover CEO and founder Jim Gray speaks during a Howard City Council meeting on Tuesday, June 7, 2022 in Howard.
Marcus Traxler / Mitchell Republic

The property is proposed to be sold to Canadians Jim Gray and Dr. Hilgard Goosen, who are the executives that lead iRecover, which is the business that has plans to come to Howard.

Gray, the firm's CEO, said the company was looking for property in Montana when an internet search brought up “this beautiful hotel.”

“We had no designs of coming to Howard,” Gray said. “It’s not about the location but it was about the type of facility. .. If we’re not here, we’ll be somewhere else.”

“The hotel hasn’t been successful,” Goosen said during a Tuesday, June 7 meeting with the Howard City Council. “We can change that.”

The project still has some hurdles to clear to be a reality. The current owner’s debt of unpaid taxes and penalty costs with Miner County, which is nearly $240,000, still need to be resolved. Miner County has a quit claim stake in a partial share of the property.

The Howard City Council this week approved rezoning rules that would pertain to iRecover. The changes will require a conditional use permit for group homes, a process that will involve a city council vote over two meetings and a publishing waiting period before being enacted.

What’s proposed

iRecover is a Canadian business that specializes in substance abuse addiction and disorders. In Canada, the company has three treatment facilities. The business' flagship facility in Tees, Alberta — a community of fewer than 100 people — is located along a rural road and in each of those facilities, it offers medically assisted detox, cognitive behavior therapy and in-person treatment of 30 or 60 days. The company has also operated two facilities in California.

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The business was founded by Gray, a Canadian who is recovering from alcoholism and is now 31 years sober and created the business 16 years ago after his son was nearly killed by a drunk driver. Goosen, who is a partner in the business and lead physician, said that the average person is biased against those with mental illnesses, treating them differently than someone who has a more commonly understood ailment like heart disease.

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iRecover Dr. Hilgard Goosen speaks to residents during a Howard City Council meeting on Tuesday, June 7, 2022 in Howard.
Marcus Traxler / Mitchell Republic

“I honestly believe this will be a positive for the town and I believe we can employ many people and it will be a good development,” he said. “It won’t put any more of a burden on your town than when the hotel was running.”

Goosen said the facility would screen potential patients to make sure they qualify for treatment. For example, he said iRecover wouldn’t accept a patient on suicide watch because of the demands that would put on staff.

The treatment is voluntary and iRecover is a for-profit business. If the business came to Howard, Gray said personnel would be hired to come to the area, adding he has a physician lined up to move to the community.

“People pay their own way. There’s no free rides,” Gray said, adding later: “You don’t pay 17,000 dollars a month if you’re not serious about getting help. To think someone is going to come to town and bring their drugs while doing this, it’s just not realistic. … They’ve got a big investment in getting help.”

In speaking to the Howard City Council, Gray cited the treatment costing $17,000. That is what patients paid as of 2020 in Canadian dollars for four weeks of in-person treatment, including detox and after care, according to an iRecover document. (An eight-week program cost C$28,000, with patients paying on a per-week basis.) The detox and initial week cost the most, roughly $4,150 per week when converted to U.S. dollars, while the final weeks of the program cost roughly $2,150 in U.S. dollars.

Gray noted that the company is trying something different with their treatments. They’re hoping to do what they call “treatment in a box,” which would include interacting with a patient over a tablet and through materials sent to their homes for a month. After 30 days, if in-person treatment is needed, the patient can then potentially come to Howard.

Gray said they have a purchase agreement but indicated they have not closed on the property.

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“We’ve seen and heard all this gossip,” Gray said.

While there was a mixed level of public testimony about the proposal in the recent pair of public meetings, concern came regarding the demands on law enforcement and the town’s ambulance, along with having the facility on Main Street in the town’s core business district.

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Howard resident Mary Leary speaks about the plans regarding the Howard Hotel and Conference Center on Thursday, June 9, 2022 at Miner County Courthouse in Howard.
Adam Thury / Mitchell Republic

“You do what you think is best. But you don’t understand,” Howard resident Mary Leary told the iRecover leaders. “This is our retail block. This block is our Main Street. It’s not the place where we would appreciate this facility. … It might be successful in another town.”

“When you talk about the sheriff and the ambulance, they have small staffs and they have a large area rurally,” said Connie Ruml, who lives in Howard.

“There’s not a person (in town) that didn’t recognize the need for both drug and alcohol rehabilitation. That’s not the issue,” Leary added. “The issue is location. … We don't have a hospital, we don't have full-time mental health facilities, and we don’t have adequate police force. Should we develop more police, it’s at our expense, not yours.”

In Tuesday’s meeting, tension bubbled up when local residents had questions for Gray and Goosen, who flew in from Alberta and flew back on the company’s plane after the meeting.

“We don’t really feel we have the need to come here and explain ourselves,” Goosen said. "But we also want to work with the council and the community. But we realize we won’t have 100% support ever. … There’s a lot of myths.”

One of the answers that rankled some residents came from Gray, who was asked by a Howard City Council member Eric Rentschler if it’s a problem that the proposed treatment facility would be next door to a bar. Gray responded boldly saying it’s a “good challenge.”

“I don’t think it makes any difference, personally,” Gray said. “I don’t see the difference between a bar or a gas station or whatever that might sell alcohol. … If they go in there and they drink, they go home. … They’re not going to go into the facility and come back.”

“It’s not ideal,” Goosen then responded. “We saw that. We’re not blind. … We don’t think that’s insurmountable.”

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Miner County State's Attorney Kristian Ellendorf speaks about the status of the Howard Hotel and Conference Center on Thursday, June 9, 2022 at the Miner County Courthouse in Howard.
Adam Thury / Mitchell Republic

A messy process

Miner County has a stake in the building now, adding to the complexity of the process. As of April, the county was seeking payment on the back taxes owed on the property, plus utilities, insurance premiums and county costs and penalties owed at a grand total of $236,105.34. (That figure could continue to rise as time passes.)

It was part of an April 5 resolution approved by the Miner County Commission to seek reconveyance of the tax deed that is held for the county on three lots involved with the property. The deadline for that payment to happen is June 15, and if it doesn’t occur, State’s Attorney Kristian Ellendorf said the agreement expires and the county will pursue legal action, something it has started and then backed off of when Shaw said she was pursuing a sale.

There is also the community perception of a conflict of interest related to Ellendorf and her involvement with iRecover, something Ellendorf defended and laid out for county residents on Thursday.

Ellendorf is the business’ registered agent in South Dakota for incorporating iRecover as a business with the South Dakota Secretary of State’s office, which was filed on April 21, well after her involvement on the county side of the issue. She told the commission and residents that she first resisted the efforts of iRecover to have her work on its behalf in the state but only agreed to help iRecover if they acknowledged she would defer in the matter to the county’s efforts. She said her knowledge of the intricacies of the property was part of why she agreed to help the Canadian company.

“My first priority is to help the county,” Ellendorf said. “I told them that up front and any documents I prepare will protect the county. And they’re OK with that.”

The county could appoint special counsel to handle the matter instead of Ellendorf, but they have not taken that step. On Thursday, community members made it clear they weren’t happy with the confusing nature of the relationship.

“Who are they advising? You as commissioners or the client?” Howard resident John Mengenhausen asked about the state’s attorney. “In a county-run government, you need to be much more aware of conflicts. … There was an appearance of a conflict of interest and when there's an appearance, that's the way everyone assumes it.”

Ellendorf noted the complexity of the property, which is spread over seven lots and 12 legal descriptions, plus a litany of surveying and encroachment issues which affect right of ways and neighboring properties. No matter what happens with the building and the property, Ellendorf said she believes the county will want those issues with the lots and legal descriptions corrected.

She said reconveyance of the property — which is the process of returning the title to its original owner, commonly in a tax deed situation — is the only way that the county can be made whole on the owed money. If the county pursued litigation, it would likely be at least a year to get it resolved in court.

“If we go through litigation, that money dwindles. And the costs will go up,” she said.

Some of the frustration is also directed to the building’s consistent troubles. Miner County Commissioner Kari Jo Carlson noted to the iRecover representatives in a past meeting that local residents have “been plagued with big promises of money that would be coming into the community, only for those things to never materialize, to the detriment of the community,” according the commission’s May 17 minutes.

Greg Dufault, a longtime former Howard City Council member, told the county commission on Thursday that the town worked hard to get the hotel to materialize. Even despite its struggles, he and others believe there would be support for the hotel again if it was owned by the right people.

“The people here poured their heart, soul and money into this facility,” Leary said, noting it hosted regional meetings and was a place for seniors to have lunch until workers stopped being paid. “ There were reasons that it wasn't successful. It wasn’t the building. …The hotel has never been successful because it’s never been run like a business.”

Traxler is the assistant editor and sports editor for the Mitchell Republic. He's worked for the newspaper since 2014 and has covered a wide variety of topics. He can be reached at mtraxler@mitchellrepublic.com.
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