Planning Commission - Regular Meeting

Ready, Mark? I've got 12:00. We'll call the order. Roll call, please. Here. Here. Here. Here. Here. Here. Here. We've got at least one conflict of interest. Anybody else? John, you're on number 12. Yep. I'm on 13.

13. Anybody else? Okay. Can move on to approving the agenda that's in front of us. Move to approve. Second. Second that we approve the agenda. Any further comment, discussion? All in favor say I. I. All post nay. Motion carried. Approval of previous minutes. The minutes from uh a August 25th. In the packet. That is a way a ways away. Move to approve. Second.

Second that we approve the minutes. Any further discussion, comments? We're ready to vote then. All in favor say I. I. All post nay. Motion carried. Next meeting would then be the 27th of October. move to set the date. Second move and second that we set the date for October 27th. Any further discussion on that item hearing? None. We're ready to vote. All in favor say I. I. All oppose, nay. Motion carried.

First item on the agenda then is a resoning hearing and recommendation for Lyall Herring at 2635 Anthony Avenue. Legal descriptions in the packet. uh wants to change it from CJM second edition planned unit development to urban development district and the official zoning map be changed to reflect the same. Mark

notices were sent out to neighbor published in the paper sign posted. There were three responses in paper that made the packet and two that didn't but have no comments on them at all. Um, Harry owns 1,00 North Harmon and the lot behind him as well. And then this lot here in the red is what we're discussing today. Um, the two south ones are zoned urban development. This north one is zoned of the PUD. Um, he's requesting to have it reszoneed so that way he can come back and replplat all three parcels into one parcel. because it's two different zonings right now, you can't pl them into one. So, he's reszoning it to plat it in the future for taxing reasons. Um, applicants here if you have any questions for him or I can answer any questions that he has for me as well.

That's backwards. So, we'll have an irregular shaped boundary at some point here when we do this, but it's contiguous. It's not spot. zoning. Correct. What's around? Is it all housing around it? Everything's the same. I mean, what what really changes if we reszone this? Nothing. Just gives him the opportunity to replat and um get his taxes reduced. Think everybody likes that. Any questions, comments? Hearing none. I'm ready for a motion.

So move. Second. Moved in a second that we recommend approval of the resoning. Any further discussion on that item? Anybody in the audience want to address that one? Seeing none, we're ready to vote. All in favor say I. I. All oppose? Nay.

Motion carried. Next item on the agenda is a hearing and recommendation for an ordinance amending 109 C1 lot 5 block one CJM second edition. There's a long legal description in the packet. Notices were sent out to neighbor published in the paper. Signs posted. There was one response in favor that made the packet and two that didn't but didn't have any comments. Um this goes along with item number seven on the agenda. Um because the land that was you just recommended approval to reszone is in a PUD. we have to take that parcel out of that PUB then. That's what this is doing. So with urban development, highway business, any of those in our ordinance, we don't have it listed with a legal description for all those. Your PUD has a legal description attached to it. So now we're taking out his parcel from that PUD. That's what this would be doing. It' be some cleanup if the reszone goes through. Can answer any questions that you have as well.

Can't not do this if you're going to do number seven. Correct. That's why this is the second one. Any questions? I move second. Second that we approve or recommend for approval the ordinance change. Any further discussion? Anybody in the audience? We're ready to vote. Then all in favor say I. I. Oppose. Nay.

Motion carried. Next item is a variance permit for Mark Vandenhoke. It's applied for a variance permit for accessory building combination of 3,470 ft versus 2,000 square ft to build a new accessory building of 1,920 ft located at 3220 North Main Street. Legal descriptions in the packet. Property is zoned R3 medium density residential. Mark notices were sent out to the neighbor. Signs posted. Um, we received one that was in favor, but that did not make the packet. There weren't any comments on it. Um, so I didn't print that off for you. The applicant is looking to put an addition on to his existing shed because of his attached garage, the existing garage, and this addition puts him over the 2,000 square ft that he'd like to build on. Um I believe it is a 32x60 accessory building um which is about 1,900 ft² that he's actually adding to his existing to put him over the 2,000 ft². Um it was the neighbor to the north that sent the late the the letter um that they didn't have any issues with it and he owns the piece of land to the uh east as well and it will meet the setbacks for his park. So I can answer any questions that you have. Any questions? Hearing none. We're ready for a motion then motion.

Second. Move and seconded that we approve the variance request. Any further question, comment, discussion? Anybody in the audience? We're ready to vote then. All in favor say I. I. Oppose. Nay.

Motion carried. Next item on the agenda is a hearing and action on establishing the boundaries and approval of the project plan for tax increment financing district number 44. Mark, you'll recognize this piece of property. It's been in front of you a few times to do some platting. Um, previously for this um this would be uh tax increment financing district number 44. Um there is a little bit of number county tiff 2 that is on lot one block 10. um that's scheduled to pay off in about 2028. Um they're not looking to do any improvements on that lot currently. Um the where this will be taking place for most of the improvements is lot 2B1. So um TIFF 2 still has to get paid off before um if there's any increment that would go to that, which that's not going to change on that one. Um but that'll get paid off in a couple years while 44 is still being going as well. Um, let's see here. City staff did an internal review um gave comments back to the applicant um for them to present this today for you. Um it is a developer finance tiff. Um so there is nothing that the city would be on the book for. It's all on the developer um public notice for the published for this which includes these three lots and then Commerce Street adjacent to them as well. Um as we go through it is going to be Chef Lou Steakhouse and Lounge which is what he's requesting part of the tiff to go for. Um, as we go through, it's kind of like our other tiffs that we've had in the past um, from um, Morgan Thieler helping assist with the project plan. And this would be an economic development tiff um, which would include up to 15 full-time employees and 25 part-time employees. Um, construction of

a new 13,000t building. Um, the project itself overall is about $10 million. It's 9.271 271 um with 5.469 million um could be project eligible. Um but they're requesting um 2.91 326 million in eligible and reimbursement for that. Um we'll get to that in a little bit for where that breakdown is at um as we go through this. We have our regular definitions for everything. the legal description again where it's at. Um again, the boundary of the tiff combination conditions much more taxable value. Um the department of equalization has the assessed value of the parcels out there. Um these were broken down from larger parcels. So, lot 2B1 and 2C1 actually was coming out of um a bigger 4.74 acres, but this is only or excuse me, it was broken out. So, we took the assessed value of what Department of Equalization has it assessed at, took it per acre, then took it back, divided it by the acres that it was going into, times it by how many acres are going into this tip. Um, same with lot 10. Um, I believe there's about 65 acres in that. We're only taking out 1.7 acres from that. Um, it is zoned highway business, but it's being used as agriculture right now. So, that's how Department of Equalization is assessing it because that's what it's being used as. Zoning is one thing. Um, how it's assessed is another. Those don't always go together because it's two different entities that are looking at that. Um

all the tiffs that we have in the city of Mitchell come to about $19 million. Um we are staying underneath the 10% of that of total and again it's a developer finance tiff. Um discretionary costs and grants is what they're using this for for the $2.91 million developers agreement. um as in other ones, it cannot exceed 20 years or or get paid back early. Whichever one of those would be the ending period of that. Um eligible costs can have to be spent within the first five years. Um they're waving the discretionary formula for this and if the state of South Dakota doesn't classify it as a economic development, then the tiff wouldn't continue. Um they are have also said that in here um trying to find where it is. So they're doing the tiff for the steakhouse, the parking lot there. In the next couple of years after that though, they're also planning to do a quick serve restaurant and a lodging facility in this area as well. Um those aren't part of the tiff, but that's what they're working with somebody to have those facilities on this site as well. Um so be development in this area. Um continuing through breakdown of their eligible expenses um that they would be on the hook for. Here's the $9.2 million of the total cost. The non-p project costs are 3.8, but there's actually tiff eligible $5.4 4 million. The increment though will only bring out the 2.9 million once it gets reassessed from the original assessment um to the new assessment. That's the money that they get back to pay for the tip. That's the

roughly $3 million that they would get as the increment goes up but stays taxed at that same spot to the city, the James River Water District, the school that stays froze there, but the assessment goes up. That difference there is what is going to pay back for this tiff and that's a pass through through the city. Um breakdown um of the lot improvements there money there for that the street phase one breakdown street phase two breakdown for their costs showing what those would be. There's your taxing and taxing the tax levy. Um then as this project goes on um here's our breakdown for the taxes as to how that would increase as projects got built um in the future.

So Mark, also it's important that the increment that's estimated assumes that those other developments will take place as shown on this sheet.

Yeah. um impact 2.9 economic feasibly study construction project what they're using the the tiff dollars for with the economic development cost or excuse me economic development tiff um there is a but for clause in here and I have moved over top of it because I think it's in there about three or four different times that the developer would not do this but for this gift being approved. Um, what else? Again, the legal description, the boundary of the out is outlined in red on this one. Um, floor plan for the projected um, Chef Lou steakhouse and the rendering of it. Um zoning wise, this part of it is highway business, part is R4. Um they do not plan on change that. They will reszone in the future for the restaurant. Um the excuse me, the quick serve if that comes to fruition. Um but right now with what they're looking to do, it doesn't need to change the zoning for it at all. And it's okay to have a tiff with two different zonings in it. Unlike the plat that was or unlike the reszone that we just did for a future plat, this can have different um zoning designations in it. Um can I answer any questions that you have or if Justin or Stephanie or the applicant have anything as well?

There are there any concerns if those extra developments don't happen with the feasibility study here with it working out mathematically? Obviously the increment wouldn't be as much that they wouldn't be able to claim as much. Um I can let the applicant or his representation go over that. So another thing to keep in mind since this is a pass through grant. If the increment doesn't develop as anticipated, the developer just won't receive that that increment they were anticipating. Okay. No additional risk to the city. We don't have to make up any shortfall. We're simply passing through the increment that does generate

and we do not pass that increment through until it's actually been received from the city. So there's no fronting of cost. It's done as the increment is paid by the taxpaying entity. Okay.

Don, would you like to add anything to that discussion? Uh my name is Don Peterson. I'm attorney of Morgan Theieler and we were working with the uh developers on on this project. I really I think I'll uh kind of turn it over to either Chuck or Carrie to talk about the actual uh question. Um the question on the financing I think is is right. it's a developer and and the developers know that um uh that if if the tip doesn't fully develop, that's just more that they'll have to have pay the debt finance and they're aware of that. Um the buck door is huge here. Uh I can tell you that uh um Chuck can probably tell you there was about four things that had to happen for this project to go forward and and one of them's the tiff and and uh another one was coming up with investors. And uh there's there's several investors that are saying, "Well, we're on, but only if there's a tiff. If there's not a tiff, we're not in." So that's uh that that's been a pretty common thought. Do do you have any questions? I think that uh uh Mark did a great job of explaining everything and a lot quicker than I could.

Any questions for Don? No questions, I guess. Okay, Chuck, if you want to talk about the plan at all or the business or

I can't I can't turn an invite down. I feel sorry for you guys because I've spent a lot of money and a lot of time and a lot of effort understanding what we just heard. So, uh, for you guys to understand it that quick is remarkable. It won't happen without the tip. We have a significant amount of our investors arranged. We have another deal breaker. We have to go to bed. Uh, we've worked hard on the bids. uh six of the guys that'll be building the place will be investors out of 16. So, we're proud of the investors because the community one 99.9% wants this. Uh when you ask somebody for some money, it's a different deal. And we're almost through that. So, we have to go to bid and we have to have the biders confirm. and bidding right now is going pretty good. Generally, um when the bids are correct, we would like to start early next year breaking ground because uh with other parameters like the license and so forth, we'll need to be in business by next fall one way or another. And uh uh I've learned I I do things as a developer to make money, but I've learned that this community really likes this project and so that's an element of what we're doing and we hope that we get this approval. We hope we get to do it and uh Mitchell deserves it. Thank you.

Thank you. Any questions for Chuck before he sits down? No. Okay. Is there anybody in the audience that wants to address this? Please come forward.

Thank you, Chair. Steve Simpson. Uh before I get into the study I did on the project plan, I want everybody to understand that I I'm in favor of this project. I think it's a great project and the developer is the long-term family friend. My dad had a lot of respect for for for Chuck and uh I'm working on a project statewide on tiffs and this is a a particular tiff that after reading the project plan I see problems in the project plan that all ts or most all ts in South Dakota have. So, I'm not directing this directly at this project or or to Chuck. If you look at uh page three of the project plan, it talks about the overlapping district into the county district tiff. And I I did spend some time this morning at the county commission meeting talking to the auditor. And uh we don't have a project plan for county tiff number two. And I suggest that we add that PDF uh file to this project so that we can look at it to make sure that the overlap district is taken care of before uh this particular tiff uh receives the tax increment benefit. Um also on page three, the project described in this project plan will not proceed and not economically feasible but for the use of tax or permit financing. If you go to page 26, schedule 4 economic feasibility study, you'll see a similar statement. says that the construction of the new restaurant facility will result in creation up to 15 full-time jobs, up to 25 part-time employees, and will assist development of an area in city of

Mitchell has been slowly developed over the last few years. However, the real estate to be used for the project and the improvements to the real estate will not be made but for the tiff being approved. And this is what we've been talking about statewide. It's called the buttforce statement. And if you look in the study, there was no return on investment calculation to prove whether that force statement is true or if it's false. And that's critical in understanding whether or not this project really does need a property tax break in order to be successful. I can't say it. You know, numbers in the planet tell me that it will or it won't. And that's one of the deficiencies on our on our tiff process in the state of South Dakota. And this is a perfect example of that. I believe this is a a rock solid project. And and it's I don't I can say anonymity that it probably doesn't tough, but I don't know that for sure. And talked about all the investors that looked into this project. I'm sure there's some some really detailed calculations as to what is the expected revenues and costs and what is the actual return on investment. We we are tell if if this is approved we this the public is going into a partnership with the private sector. The private sector knows the numbers but we are the public do not know. We do not have the numbers. We cannot determine whether or not this project needs this tiff in order to be successful. That's the main problem we have in South Dakota with tiffs. Okay. Um on page 26 it says this feasibility

study provides that the project cost can be financed through tax increment financing under South Dakota increment district law 11-9 with the balance the cost to be paid by the developer. Okay. A proper test for the butt for statement would determine not just can be financed but shouldn't be financed with a public tiff or fairness to the public including those already serving the same markets. Simply taking business away from other South Dakota entities is not creating new growth for the state as required by statute 11-9-8. And you'll see that that exact statute rewarded restated on page 28, schedule 5, section one. On page 25, the fiscal impact statement is intended to provide a succinct analysis of the estimated impact of the tax increment district to the public pursuant to South Dakota qualified law 11-9-16. It is intended to it is not intended to rival the level of detail required by detailed financial analysis. So the project plan page 25 actually states we do not have a detailed financial analysis. And I'm arguing that we do need that in the project plan so that we can answer the but for test. And the the last thing that I notice on page nine is the base value. the base value is critical because the county the the state of South Dakota state aid formula and the city uh will continue to get property tax revenues on the base value. This plan says that base value is $14,000. It's about $2,300 per acre because in

2024 it it was assessed as egg land. What I uh found out is that there's been changes to this property. It's been plotted. It's been annexed by the city. If you go to page 34, you'll see that it is zoned highway business. It's no longer a. So if you go to the plot just to the south of of this particular uh TE district, you'll you'll see that it is assessed at 20 $76,000 per acre, not 2,300. So today, I argue that this property is not is going to be assessed should be assessed at $76,000 an acre, not $2,300 an acre. That would make the base amount $497,000 instead of 14,000. And therefore, the $2.9 million tiff would is overstated by 150,000. So, uh, this is something that's deficient in state law. We should have it reassessed today before the test starts and have the baseline accurate because what's happening if the baseline is underststated by 497,000, the tiff increment is overstated by 497. And you're saying that it wasn't for this tiff, we would not have this increase in valuation. I argue that if you don't approve this tiff, come come uh assessment time next spring, that property is going to be worth way more than $14,000. And with that, I'll stand by. I do have a a another issue with the project cost and page 19. Uh there there's the

interest amounts which are huge and there should be detail on how those interest amounts were calculated because I And you can imagine that the level of detail to calculate those interest also provide us some idea of what the return on investment calculation will end up being. So again this is a good plan. I do not know if this is necessary or not because we don't have the numbers to make that determination. Thank you. Anybody else in the audience want to address this? No. Any further comments, questions from us? I'll just say I'm sympathetic to what you're saying, Steve. I I think there's some points in there. I'd encourage you to keep working with the state getting that figured out. Um, but we have a precedent that's been set and I don't know that we can say no to this. based on some I'm not going to say arbitrary, but not offic not official language yet. Um, and another comment that I would have is I think the property to the south is valuated much higher because it's got a building sitting on it. It's been developed. This propertyy's not developed and so there has to be a difference there. Until it's developed, it's not worth as much. Um, so I don't know what the truth is there, but I I think we have to go with until something changes at the state level with what we've been doing. And so I'm I'm in favor of the tiff um until the laws change or until some clarification comes down from the state. So that's where I'm at. Um, anybody else want to chime in or be ready to vote?

Motion to approve. Um, we want to do two different We need to do the boundary first. We want to approve a boundary for TIFF district 44 as presented. Yes, your motion. Okay.

Is there a second for that motion? We have a first and second to establish the boundary. Is there any further discussion on that item? Does anybody in the audience want to address that motion? All right, we're ready to vote then. All in favor say I. I. I. Any opposed? Motion carried. All right, so now we need to approve the project plan. Approve the project plan and recommend approval for TIFF district number 44. Thank you. What do you say? I have a motion

and a second. Any further discussion on that motion? Anybody in the audience want to address that motion? We're ready to vote then. All in favor say I. I. I.

All oppose, nay. Motion carried. Next item on the agenda is a plat for DW KD and Ryder. Legal descriptions in the packet. Um, you should recognize this as lot 8, which is this area right here in yellow. Was just um flattened not too long ago. Um DW owns this lot currently. They are selling half of it to KD, half of it to riders. Um with doing that, um riders and KDles are also vacating their existing lot 7 and existing lot 9 to create lot 7A and lot 9A to incorporate that half a lot that they're purchasing. Um here's the actual plot that shows where the boundary was were before. Lot eight gets vacated, lot seven and lot nine get vacated and then the new lots are created. I can answer any questions that you have for me on this

pretty straightforward. Any questions, comments? Ready for a motion? Move to approve. Second move and second that we approve the plat as presented. Any further discussion? Anybody in the audience? All in favor say I. I. All oppose nay. Motion carried. Next item on the agenda is a plan approval for Schmidt's construction 926 North Main Street. It's zone central business district.

This because it's zone central business building permit. It's uh is required and that brings in part on this board for your review. Um they're looking to demo part of the structure which is this in blue right here. And then on this area, um, which would be this here, they're going to put a couple of different overhead doors in and redo the roof on it. Um, here is a plan that they gave us for that. Um, the applicants here, you can probably answer explain the project more than myself. Is that my invitation to speak?

Yep. So, just to clarify, Mark, the area um I'm going to call it purple to the south was was was an existing structure that was removed, right? Um to the west of that was another structure that was removed. So, that will be entirely new construction where you've got the the the the deep green border line there. This right here. No, no, no. the uh oh the inside corner there. Yes. Okay.

So, the original build to the west would remain the building and those two structures to the south um the long skinny ones would remain and and I mean there's going to be future improvements made there but in that particular corner where you see all the notations and stuff that is going to be a new structure. Okay. So it's really this building right here for structure and this structure but then this structure is getting rebuilt

right the intent was to um remodel that particular area and after evaluation of the structure it didn't pay to to try and put any investment into that. So, it's basically been removed and is awaiting construction. I'm just glad somebody's doing something with that building. It needs it. Any questions for John? Ready for a motion then? Motion to approve. Second.

Moved and seconded that we approve the plan as presented. Any further discussion? Anybody in the audience want to talk about this one? All right, we're ready to vote then. Uh, let's go. Roll call. Hi, Pav. Yes. Oscaroo, yes. Schmidz, abstain. Shers, yes. Sunny, yes. Ginsinger, yes. Motion carried.

Next item is a plat for servicemen's memorial cemetery association. Legal description is in the packet. Um, this is actually out in the county still. Um, this the parent parcel is still in the county. Um, so it'll go through county and city for this, but it's city zoning jurisdiction. Um, the applicant is looking to plat off this area in red right here. Um, which is picnic shelter area. And then they are planning to put um a bathroom that'll get built onto this location as well. You can see that um with this photo right here, some of the trees have been removed because it's going to go at this location right here. So once it's platted, then it's going to get transferred to somebody to build it and then I believe it gets transferred to the city to take over maintenance on that. Okay. I can answer any questions that you have.

Any questions? Hearing none, we're ready for a motion then. I'll get a motion in a second, then I'll bring the public in. No, we'll get them in here. So, I need a motion. Move to approve. Second.

Move and second that we approve the plat. Would anybody like to talk about it? [Music] So, I'm I'm Dwight Stadler. I'm the treasure of the Serviceman's Memorial Cemetery Association. Um, bottom line up front, I was going to request this be deleted from the agenda at this time, but it's on the agenda, so I'll instead request that it be tabled. And my reasons for that are twofold. One is that when the BFW and the Serviceman's Memorial Cemetery Association met with the attorney, uh, an agreement walked away with was that, uh, when the surveyor was to conduct the survey for this piece of property, both the buyer and the seller would be notified. No one was notified. I don't know what source the surveyor used to plot out the survey points, but in the end the survey is incorrect. It's approximately 2 feet too farther too far to the north, two to three feet too far to the north on the west boundary. looks like it either cuts right along the cement of the picnic shelter on the back side and it should be off like a foot or so further to the west. So, the survey is actually incorrect. It's it doesn't correctly identify that piece of property that's supposed to be um transferred and or sold between the serviceman Cemetery Association. We're we're all in for it. It's just that there was a hiccup in this process where um the buyer and seller weren't notified to be present out there. I don't know if the survey I give the surveyor the benefit of the doubt that probably was never told to

notify the buyer and the seller. So, and so I know from talking with um Jay who's a chairman of the serviceman's memorial cemetery association and Dr. Christensen, who's the state commander of the VFW, as well as Dean Strand, who's been neck deep involved with trying to get this public restroom put up. None of them were notified. Nobody was notified to be present for that. What that would have done was enabled the surveyor to be provide an accurate assessment for the plotting points of where that property boundary should be. So, I'd respectfully request that this be tabled until you have really more accurate information as to what the boundary lines are because right now they're off.

And there was a third point, but I found out this morning, I was informed that uh I was thinking originally that um your city and this is actually county um property. So, I was thinking you can't plot on county property, but I was informed this morning that you can do that. I'm okay with that. I it that's fine. It's just there's a sticking point with this and then we have a meeting tomorrow again with the uh attorney and the group to get together and maybe we can get this resolved and get it reserveyed so that you all have accurate information to go with and not uh not something that's off base. Okay. Thank you. Thank you.

So Justin, what do we do? We just we want an alternate motion or we vote this one down and then get an alternate motion. You can make a substitute motion if you want. All right, let's get a substitute motion to table it. Um, I'll make a motion to postpone. Second. So, we have a motion and a second to postpone until Dwight's ready to bring it back. Any further discussion? Anybody else in the audience want to address it? All right. So, we're voting on a postponement. All in favor say I. I. All oppose? Nay. We had one extension. Right. Any other business come before this board?

All right. If you need to address the board on an item that was not on the agenda, excluding personnel items, please come forward to the podium and state your name and your concern. Presentations are limited to three minutes. Items will be considered, but no action will be taken at this time. We have no one coming forward. We are adjourned.