Mitch Richter — the same lobbyist Council President Stephen Tamang named on the record at the July 20 council meeting — stood before the Legal and Finance Committee Wednesday and asked it to hold off on suing Tzadik-linked LLCs over unpaid utility bills. The committee said no, and sent the item to full Council unanimously.
Rapid City SD ,- Item LF091626-06 asked the committee to authorize City Attorney Carla Cushman to hire outside counsel and file collection actions against five Tzadik-affiliated LLCs over a combined $643,206.21 in unpaid water, sewer, and garbage bills.
It was on the Sept. 16, 2026 Legal and Finance Committee’s consent calendar.
Richter’s Pitch
“Thank you, Mr. Chairman. My name is Mitch Richter, and I’m here representing Tzadik management,” Richter told the committee when he took the podium on Item #4. His argument, in three parts:
- Payment history: Richter said Tzadik doesn’t dispute owing water and sewer charges and hasn’t stopped paying — that the company has paid the city since November 2025, and over the past several months has paid over $217,000 on these accounts, averaging roughly $27,000 a month.
- The disputed charge: He focused on the August bill specifically — actual water/sewer usage came to about $26,900, but a line labeled “adjustment” added roughly $24,800 more, nearly doubling the total. He said Tzadik has formally asked the city in writing for a breakdown of how the adjustment is calculated, with supporting documentation, and has not received one. He argued it’s unreasonable to be pushed toward litigation over a charge that’s never been explained.
- Duplicative litigation: On the roughly $390,000 attributed to Tzadik Rapid City Portfolio I LLC (Star Village and Aspen Park), Richter argued that entity is already in bankruptcy, the city is already pursuing payment through that bankruptcy process (as Cushman’s own Sept. 11 memo acknowledged), and that authorizing a separate lawsuit on top of that would be duplicative and would spend city money chasing a balance already before the bankruptcy court.
His ask: direct staff to sit down with Tzadik, reconcile the disputed charges, and hold the outside-counsel authorization for roughly another month to let that process play out.
A Case He Failed to Make For Most of the Debt
Richter’s “duplicative litigation” argument was specifically about Portfolio I — Star Village and Aspen Park, roughly $390,070.59 of the total.
He never extended that reasoning to the other four entities, which together account for about $253,135.62: Lacrosse Apartments ($141,950.67), Mountain View Estates ($83,814.05), Oxford Apartments ($24,649.07), and Dakota Flats ($2,721.83).
That’s not an oversight so much as a structural limit — Portfolio I sits inside the Lead Case’s joint administration (25-13865), where Cushman’s own memo says she’s already pursuing payment through the bankruptcy.
The other four aren’t debtors in any case; they’re LLC-owned properties being sold off individually under Hendry’s personal reorganization plan.
The same “we’re already before the bankruptcy court” logic doesn’t automatically apply to them, and Richter didn’t offer a separate justification for asking the city to hold off on that roughly $253,000 as well.
Who Is Actually Paying Richter?
Richter’s South Dakota lobbyist registration — filed with the Secretary of State’s office and received 4/18/2026 — lists his employer simply as “Tzadik Management.” Not Tzadik Rapid City Portfolio I LLC, not any of the other named debtor entities — just the generic management-company name, the same one he used when he told the council he handles “special projects” for the company.
It’s a small detail, but it tracks with the broader pattern here: the entity paying Richter doesn’t appear to be any of the specific LLCs actually named in this specific collection action, which is consistent with a structure where the management company sits outside the individual property-owning entities entirely.
Worth being precise about what that registration does and doesn’t mean: it’s filed under SDCL 2-12, which governs lobbying the state Legislature during a legislative session — a different thing, legally, from appearing before a city council or committee.
Tamang’s July 20 point that Richter is a registered lobbyist working for Tzadik is accurate; the registration doesn’t mean Richter was obligated to disclose that status to the council specifically, since South Dakota’s lobbyist-disclosure law isn’t written to reach city-level appearances the same way.
A Question Worth Asking
If Tzadik Management retains and pays a lobbyist out of its own operating revenue, separate from the individual LLCs, a fair question follows: why does that same structure leave an entity like Dakota Flats LLC unable to cover a $2,721.83 utility bill — the smallest of the five debts by a wide margin?
The two facts don’t automatically connect. A management company keeping its own fee revenue separate from what an individual property owes is ordinary in real estate, not evidence of anything improper on its own.
But it’s not a question asked in a vacuum, either.
In the Rushmore Hotel bankruptcy case, secured creditor BankWest has alleged in a filed motion that Hendry diverted hotel rents and revenue to unrelated Hendry-controlled entities, on top of what it describes as a pattern of overdrafts and collateral dissipation.
That’s not speculation — it’s a creditor’s sworn allegation already in the court record, describing money moving between entities in this same corporate family in ways that left one property short to benefit something else.
Whether anything similar explains Dakota Flats’ unpaid balance is unconfirmed. But given that precedent already exists in this specific portfolio, it’s a fair question to put on the record rather than let go unasked.
A Demolition Claim
Richter also raised the Star Village garage demolitions as evidence of good faith, saying Tzadik removed 40 structures ahead of the city’s deadline, at a cost north of $150,000.
That figure is worth noting against what’s already on the record: as of the July 20, 2026 council meeting, the total was 28 garages, with Tzadik having submitted 18 demolition permits and 10 still outstanding at that time.
Whether the scope grew since then or Richter’s figure includes structures beyond the original 28 is unclear — but the gap between his number and the one the city cited two months ago is real, and worth naming as its own detail rather than smoothing over.
The Same Lobbyist, A Different Posture
Richter was present at the July 20 council meeting too, but said almost nothing — declining to comment on unrelated agenda items and passing on a final chance the mayor offered him to respond even after Tamang, Councilwoman Meyer, and Police Chief Don Hedrick criticized Tzadik’s handling of the property directly. The council voted unanimously to move forward with the city’s demolition contracts anyway.
Wednesday was the first time Richter has actually stood up and made Tzadik’s case out loud.
Pulled Off Consent
Item 4 didn’t move quietly to a vote. Councilman John B. Roberts pulled it off the consent calendar for separate discussion.
The Committee’s Response
Roberts opened by asking Finance Director Daniel Ainslie a direct question: “Other than the outstanding balance for Star Village, what is the outstanding balance right now? Just a rough estimate.”
The answer: $253,000 — a figure that lines up almost exactly with the roughly $253,135.62 owed across the four non-Portfolio I entities (Lacrosse, Mountain View, Oxford, and Dakota Flats) once Star Village and Aspen Park are set aside.
Roberts, in other words, asked the committee’s own staff to confirm the same gap in Richter’s argument independently.
Finance Director Daniel Ainslie — the point of contact Cushman’s memo had named since she couldn’t attend — told the committee he had tried to make contact with Tzadik several times and failed. Roberts’s response was pointed: “I know you have. The only time they ever act in good faith is when they’re afraid of getting sued.”
Earlier in his remarks, Roberts said: “I find it very interesting that this company — the only time they ever want to come do anything is after we threaten to take them to court. So hopefully maybe you can get together with them and get something taken care of.” He closed with: “Anyway, thank you for showing up. Thanks”.
Tamang added only a brief endorsement: “I just wanted to say I completely agree with Mr. Roberts.”
The Committee Vote
Roberts moved to advance the item; Lance Lehmann seconded. The vote was unanimous, sending LF091626-06 to full Council, expected to take it up at its Sept. 21, 2026 meeting — rejecting Richter’s request to delay.
Why This Matters
Two months ago, Tamang told Tzadik that its own capacity was the problem: a company able to retain professional advocates and manage its public image had, by that same measure, no excuse for failing its basic obligations to residents and the city.
Wednesday was that argument playing out again, in miniature. Richter arrived with a detailed, three-part financial case — payment history, a specific disputed charge, a legal argument about duplicative litigation — the kind of preparation a $2,721.83 bill doesn’t usually get.
What he didn’t bring was payment, or, by Ainslie’s account, so much as a returned phone call.
Roberts said it plainly: the only time this company acts in good faith is when it’s afraid of getting sued.
A unanimous committee vote suggests that’s simply how the city now plans to get paid.
Sourcing
Reported from direct transcription of the Sept. 16, 2026 Rapid City Legal and Finance Committee meeting, published to YouTube.
Richter’s lobbyist registration is drawn from his SD Secretary of State filing (received 4/18/2026).
Prior council and bankruptcy-case details are drawn from previously published Sentinel reporting and primary-source court filings, linked and cited above.
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