Back to: Investigates
April 11, 2018 10:00 PM

Junkyard? You Be The Judge

Sioux Falls

How do you feel about your neighbors?  Whether you love them, hate them or are indifferent, your neighbor probably isn't an auto salvage business.

Typically that sort of business wouldn't be in a residential area, but in northern Sioux Falls, Norton Acre residents have an operation right across the street that they believe violates City zoning laws. 

KELOLAND Investigates has been looking into the matter and the latest issues the neighbors say are a direct result of the kind of business Insurance Auto Auctions is running. 

Tonight's Eye on KELOLAND Investigation looks into what's really a junkyard and what that City says is not. 

"The City told me to plant some trees if I didn't like the view," Schmidt said.

Bernie Schmidt lives right across the street from Insurance Auto Auctions in northern Sioux Falls. He doesn't think the business belongs here and had been saying so for seven years.

Schmidt: No you cannot fight City Hall, at least in Sioux Falls you cannot fight City Hall
Angela Kennecke: Because what's happened when you complained? 
Schmidt: I've been stonewalled, I've been stymied. I've been rebuffed.

Insurance Auto Auctions operates on 11 acres. A fly over reveals row after row of vehicles in the lot; a majority of them inoperable.

According to the company's own website: "IAA works to facilitate the efficient sale of total-loss vehicles."

"These vehicles have windshields missing; back glass missing, side glass missing. They have trunk lids that have; maybe don't close, or hoods that don't close. They are homes for rats, raccoons, opossum, skunk--any number of vermin," Schmidt said.

Schmidt had his own close-encounter with such vermin when he was out walking his dog and stumbled upon this dead rat in Bryant Park.

"Kind of freaked me out to be honest with you. Nobody wants a Norway rat to be next to their house," Schmidt said.

Bryant Park, a popular spot for neighborhood kids, is surrounded by the salvaged car lot on two sides.

"You can see the proximity of the rat to the fence," Schmidt said.

I showed the dead rodent to Sioux Falls City Code Manager Matt Tobias.

Angela Kennecke: We saw this next to the fence, right in the park where children play. Is that a concern?

Tobias: I went up there and was unable to find the rat.

But Tobias assured us the City is addressing the matter with the company.

"They need to have a pest control plan in place and that's something I will find out; making sure they're doing that," Tobias said.

But Schmidt says zoning, not pest control, is at the heart of this issue. 

IAA's land is zoned "Light Industrial". Salvage lots or Junkyards are only allowed in "General Industrial" zones.

"For our opinion, from our standpoint, that is not run as a junkyard," Tobias said. 

The City's own definition of a junkyard: includes any land used for the "storage, wrecking, dismantling, salvage, collection, processing, purchase, sale or exchange of abandoned and discarded vehicles."

Junkyard Definition according to Sioux Falls City Ordinance:      

JUNKYARD: Any lot, land, parcel, or portion thereof used for the storage, wrecking, dismantling, salvage, collection, processing, purchase, sale, or exchange of abandoned or discarded vehicles, goods, waste, and scrap materials including but not limited to two or more abandoned or inoperable motor vehicles, glass, tires, appliances, machinery or automotive and mechanical parts. A JUNKYARD does not include operations entirely enclosed within buildings.

"This is without question a junkyard. The City cannot make its own definitions," Schmidt said.

Tobias:
That's what it comes down to, they're not dismantling vehicles. The vehicles are sold as whole. It's a staging area for them.

Angela Kennecke: 
How can you say that? I think the average person would go out and look at it and see all these junked cars, sitting there for a very long period of time and we would call it a junkyard.

Tobias:  Because they have auctions, their inventory does come and go out of that facility. But that's under the definition, the sale. The inventory comes and goes out of the facility.

However in 2012, Circuit Court Judge Stuart Tiede ruled that IAA did operate as a junkyard when the owner wanted to add a location near Crooks. Tiede overturned a Minnehaha County Commission decision to allow a permit for the operation as something "other" than a junkyard. 

Tiede wrote in his decision: "The wrecking or dismantling of motor vehicles is not required in order for the use to a salvage or junk yard." 

And then there's this promise IAA made to the City in this 2011 letter obtained by KELOLAND Investigates when the facility first got approval for its current location.
A company official said they will, "remove from site or store indoors any vehicle that has been on site for more than 365 days." The letter goes on to say, "most cars are removed in 60 to 90 days and we will agree that we will keep our over 180 day inventory less than 10 percent of our total inventory."

"I contend there are units here that have been there for years. I asked the City to pull an inventory," Schmidt said.

Angela Kennecke: Is the City taking regular inventory reports? 
Tobias: No, At this point in time we're not and what I can say from our perspective is that there are no violations on site at this time.

We wanted to ask IAA about how long salvage vehicles remain in the lot so we showed up on auction day, 

Angela Kennecke: How many vehicles are here longer than six months?

Wade Persson/IAA Manager: I can't say. Again, all questions have to be directed towards corporate.

Angela Kennecke: How many vehicles are here more than a year?

Persson:  I can't say. All questions have to be directed toward corporate. 

Schmidt:  If we're stuck with them, they're stuck with their plan. And we need someone to implement their plan.

Angela Kennecke: To enforce it?

Schmidt: To enforce it.  That's right. That's all I'm asking,"

IAA's manager did tell KELOLAND News that the business has made $60,000 worth of improvements to address neighborhood concerns.

We asked for an on-camera interview with someone from the corporate office but were denied and issued a written statement instead. 

KELOLAND News specifically asked about this rusting combine that can be seen above the fence line that neighbors told me had been there at least three years.

The company told me that sometimes insurance claims require a vehicle be stored longer and anything over a year is stored inside its facility per its agreement with the City.

But that "large farm equipment like this cannot be safely or reasonably moved indoors."

Statement from IAA Corporate Headquarters:

Insurance Auto Auctions (IAA) is one of the leading North American salvage auto auctions with more than 170 facilities across the United States and Canada and is a critical component of the automotive lifecycle. Working in partnership with a variety of sellers including automotive insurance companies, car dealerships, rental car companies, charity organizations and fleet lease companies, IAA works to facilitate the efficient sale of collision damaged, total-loss vehicles, high mileage, and end of life vehicles.

Since 2011, IAA has worked closely with the city of Sioux Falls to comply with, and adhere to, zoning regulations and has addressed issues about the site including water testing, lot paving and site safety monitoring. The City of Sioux Falls has clearly stated that the IAA location is considered a light industrial district and we have met all conditions in accordance with the city's zoning ordinance (see attached letter).

IAA Sioux Falls location hours of operation are Monday through Friday 8 a.m. to 5 p.m. CT; the location hosts auctions open to registered and licensed dealers only, on a weekly basis on Tuesdays at 9 a.m. CT. During these auctions, IAA typically sells more than 150 vehicles from its inventory. The vast majority of IAA's inventory is from vehicles declared "total loss" by insurance companies, and therefore remain in inventory until the title is secured and the vehicle sold. This process can take on average 60 to 90 days. However, there are cases where there is an insurance claim that requires a vehicle to be held beyond this timeframe. IAA has a written agreement with the City of Sioux Falls regarding such vehicles and stores vehicles in its possession over 365 days inside our facility. Units of large size and significant weight such as large farm equipment cannot be safely or reasonably moved indoors.

Gene Rodriguez | Senior Director, Public Relations | KAR Auction Services, Inc.


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