Committee declines to terminate Stockgrowers purchase agreement, keeps downtown TIF on track

The Rapid City Legal and Finance Committee voted April 30 to not terminate the real-estate purchase agreement with Elevate Rapid City and 11 Main LLC for the city-owned Stockgrowers lot at 416 St. Joseph Street, preserving the developer's opportunity to close and asking the full City Council to consider associated tax increment financing (TIF) requests.

The decision followed public comment from the development team and a staff presentation that said the purchase agreement had not closed by the contract date but did not automatically terminate. Joel Schweindien, the city attorney, told the committee that the contract gave the council discretion to terminate or to allow the sale to proceed. "If you terminate it, obviously, that would be the end of the project," he said.

Why it matters: the project under the purchase agreement is tied to a proposed downtown innovation district that developers say will create office space, green space and housing intended to attract technology companies and retain graduates from the South Dakota School of Mines. Developers and incubator leaders said the TIF support is a key financing piece to keep buried parking and public green space in the plan.

Project representatives told the committee the closing is imminent and cited a short delay in the easement work as the reason for missing the original contractual date. Todd Gagne, speaking for the development team, said the project will proceed without a TIF but would likely remove the underground parking and change some green-space elements if public financing is not approved. "If we do not get the TIF, the project still goes forward," Gagne said, while urging the committee to preserve the purchase agreement so the parties could close.

Ray Hespin, who traced the history of Property Meld's growth in Rapid City and its role in the downtown innovation effort, described the local ecosystem the project is intended to support. "We believe, between Property Meld and Wildfire Labs that over the next 5 years we can create 150 technology jobs in this segment, in the downtown corridor," Hespin told the committee, and described rising interest from out-of-state applicants to the incubator.

Legal staff summarized options for council: terminate the contract and retain city title (keeping the lot for surface parking or resale), or allow the agreement to continue and coordinate the TIF decision and closing. Alderman Josh Bieberdorf moved that the committee not terminate the agreement; Alderman Kevin Maher seconded. The committee approved the motion by voice vote.

The committee discussion also touched on transparency and contract terms. Some committee members said the council could have acted earlier but had waited to see how the TIF consideration progressed. The city attorney said the change in the developer's LLC and the delayed easement did not, by themselves, make the agreement void and could be addressed by amendment if council desired.

The committee's decision preserves the developer's requested May closing window and passes the TIF recommendations to the full council for final action. The council will consider the TIFs and the underlying agreement at upcoming meetings.

Ending: The committee's vote keeps the project under contract while routing financial incentives and final approvals to the full City Council. If the council approves the requested TIF later, staff said the parties expect to close within weeks.