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Posted: July 28, 2023
Rapid City
Agenda Item Summary

Agenda Item Ref. #: LF080223-25

Agenda Item Title:

Authorize Mayor and Finance Officer to Sign Real Estate Transfer Agreement Between the City of Rapid City, Elevate Rapid City, and 11 Main LLC for the Property Generally Located at 416 Saint Joseph Street

Origination Group:
Legal & Finance Committee
Origination Meeting Date:
08/02/2023
City Council Hearing Date:
08/07/2023
Staff Contact:
Joel Landeen, City Attorney
Agenda Item Summary:
The owners of 11 Main L.L.C. have approached the City and inquired about purchasing the City owned parking lot at 416 St. Joseph Street. They previously purchased the adjoining property and constructed an office building that serves as the home to Property Meld, a local technology company. The one of the primary reasons they are seeking to purchase the City lot is to allow them to expand the offices of Property Meld. In addition to expanding the Property Meld offices, they are proposing to incorporate into the project a home for Wildfire Labs, a technology incubator they have started, along with some residential uses and retail and/or social spaces. In conjunction with the development of the neighboring building, the City previously sold them a no-build easement along the eastern edge of the property they are now seeking to purchase. The City convened a group comprised of elected officials, City staff, and the Chair of the City’s Parking Advisory Committee to determine a value of the property. They recommended to the Council that the value of the property is approximately $900,000 ($32.28 a sq.ft.) At the City Council meeting on June 17th my office was directed to work with 11 Main to bring forward a proposed agreement to facilitate the sale of the property for economic development purposes pursuant to SDCL 9-27. The draft agreement is attached. The City will sell them the property for $900,000. The agreement allows the City to own and maintain the parking for at least another year. This will help facilitate the relocation of the existing users of the lot and allow the City to continue and generate revenue while 11 Main is designing the project and locking in its financing. The agreement requires closing on the property to occur prior to January 25th 2025. Once closing occurs, they have a year to begin construction of the project. If they fail to do so, or they attempt to resell the lot without building the project, the City has the exclusive right to repurchase the property at its FMV as determined by an appraisal. The agreement also contemplates that the City may grant an easement to the owners of the neighboring property to protect their windows and stairway. If the City grants an easement, the agreement calls for the purchase price to be reduced by the square feet of the easement by the per foot value of the sales price.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
Funding Source & Fiscal Impact Notes:
Approval of this agreement will generate $900,000 in revenue (Approx. $45,000 less if easements are granted to neighboring property owner)

Recommendations:

Origination Recommendation Notes:
Staff would recommend that if you proceed with the sale of this lot you direct the sales proceeds be deposited into the City’s parking fund.
Published in 2023 - LF Agenda Items

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