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Posted: June 26, 2025
Rapid City
Agenda Item Summary

Agenda Item Ref. #: LF070225-05

Agenda Item Title:

Authorize Mayor and Finance Director to Sign Loan Payoff Agreement between Homestead Street Project, LLC, Midwest Business Solutions, LLC d/b/a Pactola, LLC, and City of Rapid City and Authorize Finance Director to Make Payment Contemplated by Loan Payoff Agreement

Origination Group:
Legal & Finance Committee
Origination Meeting Date:
07/02/2025
City Council Hearing Date:
07/07/2025
Staff Contact:
Mike Dugan & Kinsley Groote
Location:
Council Chambers
Agenda Item Summary:
On November 3, 2020, the City and Homestead Street Project, LLC (“Developer”) entered into a Contract for Construction of Public Improvements by Private Developer for Tax Increment District Number Eighty-three (“Original Contract”). On that same date, the City, Developer, and Midwest Business Solutions, LLC d/b/a Pactola, LLC (“Lender”) entered into an Assignment Agreement that stated that Lender had agreed to loan the funds to Developer to accomplish the purposes set forth in the Original Contract on the condition that the City directly pay Lender all future positive tax increments owed to Developer pursuant to the Original Contract.

On December 2, 2024, the City Council voted 9-0 to approve the Resolution for Amendment #1 to the TID No. 83 Project Plan for the Homestead Street Extension. This Amendment was based upon the premise that the City would pay off Developer’s loan obligation to Lender, the City would become a developer for TID No. 83, and the City would be entitled to be reimbursed for the cost of paying Developer’s loan obligation plus the City’s cost of financing this amount of debt at a fixed rate of 7%. Please see pages 13-18 of the document entitled TID 83 Project Plan with Amendment 1 for a more detailed explanation. However, please note that the loan payoff amount is lower than it was originally projected to be in the Amendment 1 explanation.

This agenda item is a Loan Payoff Agreement to memorialize the terms of the loan payoff, the termination of the Assignment Agreement, and the effects upon the Original Contract. This item also authorizes the Finance Director to make the payment contemplated by the Loan Payoff Agreement.

Funding Source & Fiscal Impact (if applicable):

Funding Cost Center
TIF 83 424
Is Funding Budgeted?:
Budgeted

Recommendations:

Origination Recommendation Action:
Approve
Published in 2025 - LF Agenda Items
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