Posted: September 06, 2018
Rapid City
Agenda Item Summary

Agenda Item Ref. #: 18TI001 - Prairie Meadows South

Agenda Item Title:

18TI001 – Resolution to Create Prairie Meadows South Tax Increment District and Approve Project Plan

Origination Group:
Planning Commission
Origination Meeting Date:
Sperlich Consulting, Inc for Freeland Meadows, LLC
Staff Contact:
Patsy Horton, Long Range Planning Manager
South of Country Road, east of Haines Avenue, west of 143 Avenue
Agenda Item Summary:
Tax Increment Review Committee Recommendation: On May 2, 2018, the Tax Increment Committee recommended approval to create the district and Project Plan for consideration by the Planning Commission and City Council, provided the applicant revise the proposal to reflect the ineligible drainage and storm water expenditures located outside the city limits. Staff Recommendation: Staff recommends denying the application to create a tax incremental district and deny the Project Plan, as it does not meet the statutory requirements of either SDCL 11-9, the criteria related to the local TIF Policy requirements, and does not appear to meet the “but for” test based on area sales data. However, if the Planning Commission and Council determines the application meets the intent of SDCL 11-9 and the Rapid City Tax Increment Financing Policy, staff recommends including language in the agreement used to implement the proposed project plan to address concerns related to the ineligible regional drainage and storm water expenditures, LaCrosse Street construction, and the non-expansive soil usage, along with stipulating a maximum fifteen year limit for the proposed district. As consistent with other districts, this is intended to encourage the applicant(s) to move forward immediately with all proposed subdivision improvements in order to begin the repayment process as soon as possible. The current proposal is to create an affordable workforce housing tax increment district, to include 101 single-family homes and four apartment lots. The proposed tax increment district will capture incremental tax funds in order to complete site improvements and a regional drainage pond (partially located outside the TIF boundary and the city limits boundary) on the southern-most forty acres within the proposed district. The site improvements include erosion and sediment control measures, mass grading, drainage and storm sewer improvements and non-expansive granular material stockpile used for stabilizing the footings and floor slabs if expansive soils are encountered on site. Professional and contingency costs are also included in the proposal. With the 2018 legislative session, new “affordable housing” language was added to the state’s school funding formula. This new language, effective July 1, 2018, allows communities to collect statewide property taxes as part of the TIF process in funding the school district portion of the incremental tax revenues. SDCL 13-13-10.10 defines affordable housing for purposes of generating tax incremental revenue to account for the loss in school district tax revenues. An affordable housing district is only those tax increment districts where: 1. The original selling price of any house in the district will be at or below the first-time homebuyer purchase price limit being used by the South Dakota Housing Development Authority as of the date the house is sold; or 2. The monthly rental rate of all multifamily housing units in the district will be at or below the calculated rent for the state’s eighty percent area median income, being used by the South Dakota Development Authority, as of the date the district is created, for a minimum of five years following the date of first occupancy. In order to assist the City in addressing these requirements in relation to the current proposal, the South Dakota Housing Development Authority provided a copy of their restrictive covenant document to ensure compliance with the affordable housing definitions as well as provide public notice regarding the original selling price requirements. If the council desires to move forward with creating a “local” tax incremental district by omitting the requirement for the developer to comply with the new language in SDCL 13-13-10.10, the auditor is then required to assess an additional tax levy for all taxed property within the Rapid City limits until the district is repaid or dissolved.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
$725,169 Mass Grading / Erosion and Sediment Control
$338,529.00 Drainage (Detention and Storm Sewer)
$735,000.00 Non Expansive Granular Material (Stockpile)
$161,106.78 Professional Fees/Contingencies
$1,150,186.81 Financing / Interest (5.5%)
$3,109,991.59 $20,000 Total TIF Financed Expenditures / City of Rapid City – Imputed Administrative Fee


Origination Recommendation Action:
Origination Recommendation Notes:
Planning Commission Denied: 9/6/2018

Attachments & Links to Download:

18TI001 Proposed District - Attachments & Links:

pdf 18TI001 Staff Report (73 KB)    pdf 18TI001 Aerial Photo/Vicinity Map (2.05 MB)     pdf 18TI001 TID Boundary (363 KB)      pdf 18TI001 Resolution Creating Tax Increment District (16 KB) pdf (363 KB)     pdf 18TI001 Resolution Approving Project Plan (10 KB)    pdf 18TI001 Prairie Meadows South Project Plan (5.67 MB)        pdf 18TI001 Public Comment recd 9 6 18 (32 KB)

18TI001 Proposal - Attachment & Links:

pdf 18TI001 Preliminary Review  (19 KB)    pdf 18TI001 Public Improvements Map (819 KB)    pdf 18TI001 Master Plan (85 KB)    pdf 18TI001 Revenue Projections (73 KB)    pdf 18TI001 Amortization Schedule (63 KB)     pdf 05-02-18 TIF Meeting Minutes (30 KB)

18TI001 Applicant Information - Attachments & Links: 

pdf 18TI001 TIF Application (475 KB)     pdf 18TI001 TIF Checklist (172 KB)     pdf 18TI001 Application Exhibits A-E (1.51 MB)

18TI001 Applicant Financial Data - Attachments & Links:

pdf 18TI001 Project Costs (50 KB)     pdf 18TI001 Applicant Pro Forma (62 KB)     pdf 18TI001 Applicant Development Timeline (68 KB)

Other Resources - Attachments & Links:

pdf TIF Guidelines (113 KB)    pdf SDCL 11 9 Tax Increment Financing (41 KB)    pdf 2017 Tax Valuation Spreadsheet (27 KB)    pdf SDCL 13-13-10.09 and 13-13-10.10 - State Aid to Education  (84 KB)   pdf 2018 SDHDA First Time Buyer Housing and Income Limits (24 KB)   pdf 2018 SDHDA Income and Rent Limits (32 KB)



Login Form