Informational Meeting

MINUTES Informational Meeting Tuesday, October 25, 2022 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: David Barranco, Sarah Cole, Alex Jensen, Rich Merkouris, Greg Neitzert, Marshall Selberg, Pat Starr Council Members Absent: Curt Soehl Council Vice Chair Alex Jensen called the meeting to order at 4 p.m. 2. Committee/Commission Reports A. Homeless Task Force: Monday, October 24, 2022 (Council Members: Merkouris (Chair), Selberg, and Soehl) Council Member Rich Merkouris reported that the committee met yesterday and reviewed their draft recommendations. A report will be presented to the Council at a future meeting. He said that there will be actionable things for the Council to review. 3. Councilor Remarks Jensen announced that there will be a Breakfast Club meeting in the morning. 4. Presentations A. Zoo/Butterfly House & Aquarium Update by Becky Dewitz, President and CEO of the Great Plains Zoo; and Audrey Otto-Pepper, CEO of the Butterfly House & Aquarium Presentation: Approximately 15 minutes followed by discussion In 2020, representatives from the Butterfly House and Zoo began to work together in regards to educational programming, some cross marketing promotional items, and conservation work. The Butterfly House was able to provide some guidance, when the zoo began working with the Dakota Skipper butterfly. Dewitz provided an overview of both organizations. The Sertoma Butterfly House opened in 2002; and Aquariums were added in 2011. They are located in Sertoma Park and are on land leased from the City of Sioux Falls, and sub-leased from South Dakota Games, Fish and Park. In 1957, the Zoological Society of Sioux Falls was formed. The zoo was opened in its current location in 1963. They have a management agreement with the City of Sioux Falls, which is reviewed every five years. Their agreement was  renewed last year. Dewitz reviewed the Joint Exploration Committee Timeline. Exploration of a merger began in November of 2021; and it will go into effect on January 1, 2023. Dewitz stated that this is a friendly merger between two equals and not an acquisition. She then reviewed ways that they will be "Stronger Together", which included: diversification and growth of educational programming, new conservation opportunities, and employee attraction and retention. Community needs were also mentioned. Some of the desires are: an expanded aquarium experience; accessible and inclusive experiences; and year-round family opportunities. Affordability for the facilities was also discussed. A more detailed merger timeline was discussed. Construction projects will be taking place for the next few years. The grand opening of the Sioux Falls Zoo & Aquarium will take place in late 2025. An operations feasibility study was conducted and resulted in positive feedback for a merger. Dewitz spoke about attendance projections and a moderate model projects, +25% growth in total attendance by 2031, for 400,000 annual guests. Peak vs. Off- Peak attendance projections, revenue projections and topline financials were also discussed. An Economic Impact Study indicated $340M for future direct spending impact; $548.5M for a future Total Economic Impact; 530 total annualized jobs generated; and $291.1M total state and local tax revenues. Annual economic impacts, both historic and future, were discussed. Discussion followed regarding: plans for the existing Butterfly House post merger; funding and fundraisers; infrastructure needs; Butterfly House expansion fundraiser and distribution of some funds; donor support; and Butterfly House ownership, current and future. B. Alcohol and Video Lottery Regulation Review by Council Members Rich Merkouris and Greg Neitzert Presentation: Approximately 20 minutes followed by discussion Merkouris, who spoke to numerous people regarding casinos, began the presentation by discussing some of his casino-related observations. They are: the current regulations in the City creates the opportunity for beverages from one licensed premise to easily be transported to another licensed premise; and there appears to have been a substantial increase in video lottery applications since 2019. With the onset of casinos being next to one another, for employee safety, lottery machines have jumped from 10 to 20 up to 30 to 40. Another observation that has been made is the confusion surrounding State Law and how it's being interpreted in regards to license applications. Merkouris spoke about what the presentation is and isn't about. He said: this is not a commentary on the morality of video lottery or gambling; this is not a debate about whether video lottery should be legal; not talking about what to do with existing facilities, this is about what to do moving forward when applications come in to allow everyone to be on the same page; today is a review of State Law; and today is a recognition of the number of video lottery machines and establishments are increasing in our community, since 2019, at a rate not seen previously. He said that it's important as community leaders to have a community conversation. Neitzert said that they tried to balance getting enough information so that this is understandable, but it is a complicated subject. He said that they have had numerous and extensive conversations with the City Attorney and Licensing staff. In 2008, the City created an ordinance that required a 2,000 foot separation distance between all video lottery establishments and sensitive uses. In 2011, the law was  challenged and - Rick Law vs City of Sioux Falls was struck down by the South Dakota Supreme Court. The ordinance failed to exempt liquor license establishments, in accordance with State Law. Neitzert reviewed South Dakota Codified Law Chapter 35 - Alcoholic Beverages and Chapter 42-7A - State Lottery. In the City of Sioux Falls, there are three On-Sale Alcohol License Types which qualify for video lottery placement in an establishment. They are: on-sale, wine and malt beverage, according to SDCL 35-4-2 (4), (12) and (16). The City has more authority to regulate, and State Law imposes additional requirements on businesses with a malt beverage or wine licenses, before they can place video lottery machines in their establishments. This is an important distinction. Whether the business has a liquor license or a malt beverage/wine license has important consequences related to what they must do and what the City can consider when approving them. Neitzert said that there is one section in State Law regarding video lottery, which is SDCL 42-7A-64 - Additional criteria for on-sale alcoholic beverage licensees in video lottery licensed establishments. He reviewed the types of establishments in Sioux Falls with video lottery machines. The majority of video lottery placement is with malt beverage (MB) or wine licenses (144 with MB/wine vs. 66 with liquor). Only 12 casinos (their only use/name is casino) have a liquor license, and there are 121 that have MB/wine licenses. Neitzert spoke about cities that have capped video lottery placement. He mentioned that SDCL 42-7A-37.1 - Restrictions on Licensed Establishments is very important to understand. This law outlines the requirements an on-sale alcohol establishment must meet for video lottery placement. These requirements do not apply to a licensed establishment with an on-sale liquor license, but these requirements do apply to a licensed establishment with a wine or malt beverage license. The type of licensed establishments that qualify for a video lottery machine was discussed. Included in the discussion was Lottery Commission Ruling 93-1 - Location of Video Lottery Machines in Bars or Lounges. One of the rulings states: "While video lottery machine placement and play may be an integral business component of the bar or lounge, the premises cannot be designed solely for video lottery machine placement and play." Neitzert discussed some of the factors that could be considered when determining if the business holding a malt beverage or wine license is a bar or lounge and is qualified for video lottery placement. Currently all licensed establishments are limited to 10 video lottery machines. But many casinos and businesses have created multiple businesses (one per room) to create casinos with 20, 30, 40, or 50 machines with more requests forthcoming. Approved requests for video lottery licenses continues to increase. Neitzert reviewed the Rule regarding separate and distinct facilities. He also spoke about the City Ordinance change that occurred in 2019, which was intended to comply with State Law and regulation, but provided extra flexibility for employees. This ordinance is being implemented in ways not intended or envisioned. Diagrams showing a variety of ways to connect casinos was shown and discussed. Next steps were discussed, which include a possible amendment to the ordinance. Additional conversations will be had. Discussion followed, regarding: the need to clarify the 2019 ordinance; the possibility of placing a cap on video lottery machines; having open discussions with casino owners; the expansion of video lottery in the city; going against the intent of the State Legislature; and casino employee safety. 5. Public Comment  There was none. 6. Adjournment Council Vice Chair Alex Jensen adjourned the meeting at 5 p.m. Denise D. Tucker, MMC, Assistant City Clerk