Informational Meeting

MINUTES Informational Meeting Tuesday, May 18, 2021 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: Janet Brekke (via telecom), Christine M. Erickson, Alex Jensen, Rick Kiley, Greg Neitzert, Marshall Selberg, Pat Starr Council Members Absent: Curt Soehl Council Chair Greg Neitzert called the meeting to order at 4 p.m. He recognized that six Council Members were present, Council Member Janet Brekke was available by phone, and Council Member Curt Soehl was absent. 2. Committee/Commission Reports A. Urbanized Development Commission (UDC): Thursday, May 13, 2021 (Council Members: Kiley, Neitzert, Selberg, Starr) Neitzert provided the meeting update. He reported on: the approval of the I-229, Exit 3, Minnesota Avenue Interchange and Environmental Study Report; the approval of the I-229, Exit 4, Cliff Avenue Interchange and Environmental Study Report; and mentioned that three letters of support were approved to be sent to the Transportation Secretary and the Federal Transportation Secretary, for the Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant applications for I-29, Exit 74, the proposed 85th Street Interchange; the Maple Street/Park Street Corridor; and Veterans Parkway. 3. Councilor Remarks Council Member Alex Jensen extended an invitation to the public to attend a Housing meeting on Thursday at HyVee, 37th Street and Minnesota Avenue. He mentioned that Council Member Christine M. Erickson would also be there. 4. Presentations A. TIF Update - Cherapa II by Dustin Powers, Community Development Coordinator; and Jeff Scherschligt, Pendar Associates Presentation: Approximately 20 minutes followed by discussion Powers began the presentation by explaining why the project was before the Council today. He said, that a portion of the property is within the downtown Rail Yard redevelopment area; and in 2019, the City entered into an option to purchase agreement with Pendar Properties to sell this portion of the Rail Yard redevelopment subject to a future development agreement that would come in front of the City Council for approval. The project being outlined today would be associated with that agreement. The other part of this project will be a request for Tax Increment Financing (TIF) that would be used to support the development of the project. Powers said the next steps, for the project, would be to bring a development agreement and TIF request to the Council for consideration. Scherschligt began his PowerPoint presentation with a brief history of the East Bank development and an explanation of how Cherapa Place has ignited more than $100M worth of new development in the area. He explained that the redevelopment plan is a public/private partnership; and that this would be a diverse area for people to live, work and play in. When speaking about the addition of Cherapa buildings two through four, Scherschligt described it as a "dynamic vision". The proposed $160M+ project would be completed in one phase and would include: retail, 150 apartments, 10-12 luxury condos, and up to 1,000 parking spaces. Building Two would be: nine stories; 130,000 sq. ft. office; 20,000 sq. ft. retail/restaurant; and 12 luxury condos. Building Three would be: eight stories; 25,000 sq. ft. retail/restaurant/entertainment; 50 rental apartments; and a 300 space ramp. Building four would be: seven stories; 100 rental apartments; 3,000 - 5,000 sq. ft. retail/restaurant; and 375 ramp parking spaces. He said the area would have the things that "big cities" have. Cherapa Place and Building Two would be interconnected with a 5,000 sq. ft. conference center that would have a deck on top of it. Scherschligt said that this area would be tied in with a courtyard and amphitheater. Construction of the project would begin in the Fall of 2021 and would be completed by Summer of 2024. He then provided a financial overview, which included the Tax Increment increase. The project would cost $160M+. The 2021 Property Tax Payment would be $50,000; the estimated 2040 Property Tax Payment would be $2,625,000 annually; and the City and State Sales and Excise Tax would be $6.7M+. Scherschligt said the eligible cost for the TIF would be $57.6M+. Projected cost for: the ramp parking is $15,752,417; the site work is $4,775,765; the architectural and engineering is $6.8M; and financing is $14,816,650. The total TIF request would be for $25,375,392 plus financing. Scherschligt added that this project is going to activate hundreds and hundreds of high paying jobs. Scherschligt said that it was going to take a "dynamic tenant to activate the whole vision". He then introduced Greg Garry, Chief Operating Officer with The Bancorp, which will move its services downtown. Garry briefly explained their services, business partners and awards. He said that they would be offering high paying jobs to help keep younger people in Sioux Falls. Pendar Properties, ECM (Elgethun Capital Management), ISG, and Journey Construction were recognized for their partnership with the project by Scherschligt. He then requested support from the Council for this "grand vision" of a project. Discussion followed regarding: appreciation for Scherschligt and for his ability to get things done; excitement for the project; why the construction won't be happening in phases; return of the investment in property taxes; price estimate for the luxury condos; wages for The Bancorp employees; Cherapa Place TIF payoff; the project  being well laid out; projected new downtown workforce; and the change in the downtown landscape. 5. Public Comment Alex Halbach, with Cutler Law Firm, spoke about the project and how it would help to bring more people to work downtown. 6. Executive Session A. Consulting with legal counsel or reviewing communications from legal counsel about proposed or pending litigation or contractual matters pursuant to SDCL 1-25- 2(3) A motion was made by Council Member Erickson and seconded by Council Member Jensen to enter Executive Session at 4:55 p.m. Roll call vote to enter Executive Session. 7 Yes: Brekke, Erickson, Jensen, Kiley, Neitzert, Selberg, Starr; 0 No: (None). Motion Passed. A motion was made by Council Member Erickson and seconded by Council Member Kiley to exit Executive Session at 5:38 p.m. Roll call vote to exit Executive Session. 7 Yes: Brekke, Erickson, Jensen, Kiley, Neitzert, Selberg, Starr; 0 No: (None). Motion Passed. 7. Adjournment A motion was made by Council Member Erickson and seconded by Council Member Kiley to adjourn at 5:38 p.m. Roll call vote to adjourn. 7 Yes: Brekke, Erickson, Jensen, Kiley, Neitzert, Selberg, Starr; 0 No: (None). Motion Passed. Denise D. Tucker, MMC, Assistant City Clerk