Planning commission approves TIF district to support North La Crosse redevelopment, police precinct and possible Luna Avenue extension

The Rapid City Planning Commission on July 24 approved creation of a tax increment financing (TIF) district and an associated project plan (option 2) intended to spur redevelopment near North La Crosse Street and to help fund a future north-side police precinct.

Finance staff said the proposed district centers on 1902 North La Crosse and adjacent parcels and would support a private developer’s plan to demolish existing structures and construct four restaurant buildings and one commercial retail building. Staff identified three confirmed tenants in presentations and subsequent public remarks: Chick‑fil‑A, Panda Express and Chipotle; the retail space is intended for Les Schwab Tire; a fourth restaurant site is listed as to-be-determined. Estimated construction costs presented were just over $27 million. The developer’s (AAM Rapid City / Allred USA parent) TIF request was about $5.1 million with interest under option 1.

The city would be a second “developer” in the project plan to partially reimburse acquisition and renovation of 120 (address listed as 120 Nowhere Drive in the staff presentation) for a proposed north-side police precinct; staff indicated a $1.8 million purchase price and requested up to $1.15 million of TIF support for that component under option 1. With the originally submitted boundary (option 1) total eligible project costs were described as roughly $8.7–8.8 million.

Staff presented a second boundary (option 2) developed after the application that would expand the district to include undeveloped parcels behind the North La Crosse Walmart and to capture increment that could be used toward public improvements including partial funding for a Luna Avenue extension and a traffic signal at the intersection of Luna and Eglin. Option 2 increases the city’s reimbursable capital by roughly $600,000 for the additional public improvements and raised total eligible project costs to just over $10 million in staff materials. Staff said developer 1 would receive increment first (anticipated payoff in year 14) and the district would run up to 20 years; staff used a conservative amortization, projecting full repayment in year 20. Staff’s finance slides assumed a financing interest rate near 7 percent and projected about $9.4–11 million of tax increment captured over 20 years depending on the option.

The commission’s hearing included detailed staff analysis, public comment and questions from commissioners about traffic, phasing, the police precinct and who bears risk if development comes in slower than projected. Public commenters—some nearby property owners and business representatives—expressed concerns about existing traffic congestion in the area and urged careful attention to access and turning movements; other local property owners said they plan substantial private reinvestment across La Crosse Street and supported redevelopment.

Traffic engineers and Public Works staff told the commission the submitted traffic-impact study identified the need for a northbound right-turn lane into the development from La Crosse and recommended continued monitoring of the Luna/Eglin intersection; counts used in the study predated an additional nearby restaurant (Freddy’s), and staff noted a corridor study of Eglin is planned in the next year or two. Public Works said La Crosse/Eglin would continue to meet acceptable levels of service (C or better) with the project and that the Luna/Eglin intersection did not meet signal warrants at the time of counts, though a signal was recommended for monitoring and potential future installation once warrants are met or with the expanded TIF capture.

Commissioner Eric Hicus moved to create the district using option 2 (the expanded boundary that could capture increment to help pay for Luna/Eglin improvements); Karen seconded. After public comment and deliberation the commission voted to create the district under option 2 (vote recorded as carried with six commissioners in favor and three opposed).

The commission then considered the project plan for option 2. Commissioners and staff discussed phasing, how TIF reimbursements would be prioritized (developer first, city second for the precinct), and the limits of city risk if private development does not occur. Staff noted projections were intentionally conservative and that additional private development (for example Libertyland and other nearby projects) could accelerate repayment. The commission approved the option-2 project plan after motion and second; the minutes record the final project-plan vote as 6–3 in favor.

The approved project plan identifies eligible public and private improvements (demolition, abatement, site utilities, a northbound right-turn lane on North La Crosse, partial reimbursement for the police-precinct purchase/renovation, and potential Luna extension and signal if the expanded boundary is used). Staff and commissioners emphasized that building permits, site-plan review and traffic mitigation will be required before tenant occupancy, and that public improvements may be phased as development occurs.

The commission’s approval sends the district and project plan forward for city-council consideration and subsequent state certification steps required to implement TIF financing.