Following a decisive no vote on the Destination District that included Libertyland, Rapid City Mayor Jason Salamun and Sports Commission Executive Director Domico Rodriguez answered questions from the media regarding what happens next with the sports complex and their initial reaction to the election results.
Salamun said Wednesday that while he believes it's a missed opportunity for the community, he respects the will of the voters.
"I do trust that this community wants what's best for Rapid City and the surrounding area," said Salamun. "And so do we. So, as we move forward, obviously our big project is the sports complex."
The new fieldhouse, also called the Rapid City Sports Complex, is part of a separate TIF district called the Catalyst District. The adjacent Destination District was originally going to contribute between $10 million and $15 million to the sports complex.
According to Daniel Ainslie, the city finance director, the Destination District committed $5,232,222 in capital funding to support infrastructure essential to the fieldhouse project, including the construction of 143rd Street. Additionally, it had allocated $7,269,510 in capital funding for infrastructure improvements that might be required to support the fieldhouse, such as the expansion of Seger Drive and the completion of Tish Boulevard.
Ainslie said preliminary site reviews also indicate that substantial earth removal is necessary at the current site of the sports complex. The land where the site is located was donated by Pete Lien & Sons.
"The original plan anticipated relocating these spoils to the Destination District site, thereby greatly reducing costs," said Ainslie. "However, if the [Destination] District development does not proceed as intended, the earthwork will become significantly more expensive with early estimates projecting costs of $2 million or more."
Lastly, a joint parking lot was planned for the Destination District and sports complex. Without the Destination District, Ainslie said the additional parking costs at the current site would likely exceed $2 million.
Despite these new considerations, Salamun said he's determined to make the sports complex a reality.
"For one, it builds a year-round visitor industry, which is really what all of this was about," said Salamun. "It was about bringing visitors in all year round, not just in the summer time. Why that's important is that brings sales tax revenue to our city as well as our state."
State Sen. Taffy Howard, a leading opponent of the $125 million Destination District TIF, said that this particular TIF was different from others.
"This TIF was an abuse of the TIF system," said Howard. "So it's a clear mandate to the city council. Don't overstep your bounds. Stay within what is reasonable. Stay within what is not abusive of the system. Let's not be looking at $47 million in discretionary grants or $54 million in interest costs."
According to the Destination District project plan, $46,517,513 of the project costs were structured as a grant to be used, at the discretion of the governing body, for the development of the Commercial and Entertainment Zone in the TIF district, as well as amenities for the Resort Village. The grant would come from the tax increment, or increased property tax value created through the development of the TIF district.
The project plan also outlines that financing expenses for the project are calculated at a 7.5 percent interest rate during the life of the TIF District, with interest expense eligible up to $54,210,333. That number includes the combined financing costs for both developer one of the project, or Libertyland USA, and developer two, the city of Rapid City.
"I am feeling like the people won," said Howard. "The people won. Not the powerful, not the super wealthy, but the people. They spoke and they said $125 million building a privately owned business is absolutely insane."
If the sports complex moves from its current site for financial reasons, Salamun said it still needs to be within the Catalyst TIF district boundary.
"It's not just the infrastructure on that site, but they have to do a traffic impact study, what roads need to be widened leading up to it, what traffic lights have to go in," said Salamun. "So those would be considerations for us to say, 'If we were to move it, what does that mean for these other areas? What's that expense? How does that expense compare to the existing site?'"
More than 11,000 votes were cast on Tuesday in the TIF District Special Election, amounting to over 22 percent voter turnout. There were 7,965 no votes for the Destination District and 3,415 yes votes, or about a 70 percent margin against the Destination District TIF.
