STURGIS, S.D. – The Sturgis City Council met in special session Wednesday morning and passed an option to purchase 12 trademarks that were up for auction last month due to the dissolution of Sturgis Motorcycle Rally, Inc.
A local auction company had the marks up for auction in late October until the city of Sturgis advised First Interstate Bank, the mark’s lien-holder, of legal issues affecting the sale. The auction was then paused.
Since then, the city and First Interstate Bank have negotiated a tentative agreement for the purchase of the marks.
Sturgis City Manager Daniel Ainslie says terms of the agreement provide for the payment of $75,000 by the City for an assignment of all the trademarks that are subject to F.I.B.’s liens and a mutual release.
“The staff’s recommendation is to approve Option 1, it captures all the rally-related marks in one house that would be controlled by the elected representatives of the city,” Sturgis City Manager Daniel Ainslie said. “It would settle all existing claims with First Interstate Bank and S.M.R.I. It would bring closure to the community. This has been an incredibly long, drawn out process that has been very contentious.”
In addition, Ainslie says it would establish a heritage collection that would provide 100-percent of all proceeds each year back to the community, which was the original vision.
Ainslie says the city is willing to license the so-called “heritage marks” to Jerry Berkowitz and Al Rieman for an 11-percent royalty on the wholesale price of any merchandise sold for a period of three years in return for consent to sale.
Berkowitz and Rieman were the plaintiffs in the initial trademark case years ago.
Ainslie says now, the city will continue to work with the three creditors involved.
“We are trying to get all of them to agree,” Ainslie told KBHB News Wednesday. “Once they agree, or, if they agree, then we’ll proceed with having this done and get agreements with Tom’s T’s and Black Hills Rally and Gold and I think we are very close to be able to have an agreement with them.”
Sturgis Mayor Mark Carstensen says they hope this may bring to end to the many years of fighting over trademarks.
“The city’s intentions to, one, make sure there’s clarity in the marketplace going forward because that’s something we battled for years. And, two, is to truly return to the community through the endowment to Black Hills Charities with these heritage marks, as they were intended.”
Carstensen says he hopes to have things wrapped up by the first week of December.
