Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Economic Development topic
No spam. Unsubscribe anytime.
Committee approves $300,000 no‑interest MOU with Elevate to support north-side climbing wall project
Summary
The Rapid City Legal and Finance Committee approved a memorandum of understanding to provide $300,000 at 0% interest through the Opportunity Capture Fund to support a proposed climbing wall development on the city’s north side; councilmembers raised questions about repayment risk and whether the funding is an exception to prior grant practice.
The Rapid City Legal and Finance Committee on Aug. 27 approved a memorandum of understanding (MOU) with Elevate that would provide $300,000 at 0% interest from the Opportunity Capture Fund to support a proposed climbing wall development on the city’s north side. The MOU calls for the funds to be repaid to the city within five years but does not guarantee reimbursement if Elevate or the project fails to deliver the full amount.
The committee approved the MOU on a motion by Councilwoman Seacrest, seconded by Councilwoman Meyer; Councilman Rod Pettigrew recorded the lone vote against the measure. Several council members and staff asked for more detail before the vote but ultimately supported the agreement.
Why it matters: The Opportunity Capture Fund is designed to provide gap financing when traditional grants or private capital are unavailable. City staff said most prior awards from the fund were grants rather than loans, which makes this MOU atypical because it expects repayment rather than being structured as a grant.
Staff responses and council concerns: A staff member identified in the meeting as Daniel said the MOU “effectuates the approval” the council previously gave to the Opportunity Capture Fund recommendation and described the arrangement as providing cash flow to the project developer so the developer could secure an SBA loan guarantee. Daniel said the city would expect the $300,000 back at the end of five years “with the caveat that if for some reason Elevate does not receive the full $300,000 … the city would not be reimbursed.” He said projections prepared by a firm that studies climbing‑wall businesses showed the project would be cash‑flow positive and profitable within 10 to 12 months and that property‑tax and sales‑tax gains exceeded 10 percent in the original analysis (he said the estimate was about 15–16 percent and that he would follow up with the council in writing).
Council members debated the business rationale and risk. Councilman Pettigrew said he could not support a no‑interest loan and argued it did not make sound business sense for the city to provide capital without a return. Councilwoman Meyer said she supported using city tools to help small businesses and favored the project.
Terms and future use: Daniel told the committee that the $300,000 would be returned to the Opportunity Capture Fund if repaid; if repaid to the fund, the money would be available for future Opportunity Capture projects. He also said each recommended project is evaluated individually and that most prior awards were grants, making this deal “fairly unique.”
Next steps: The MOU was approved by the committee; staff indicated they would provide additional written materials on the ROI estimates and repayment assumptions.
