Jul. 28—MITCHELL — Perhaps silence is golden.
The Mitchell City Council, without discussion or comment, has approved a tax increment district project plan and developer agreement for a Peaceful Pines Senior Living Center, and the second reading of a rezoning ordinance from urban development district to lakeshore unit development district for a proposed 25-acre development, of which the proposed senior center has been platted out from.
This is a change of pace for city meetings involving the 25-acre lakeshore development, which have embroiled the Mitchell Planning Commission and the Mitchell City Council in heated and tense discussions.
Thiesse credits the support of Mitchell business owners who reached out to the council directly as the reason why the lakeshore development rezoning ordinance passed.
“I think (the council) just had a lot of feedback,” Thiesse told the Mitchell Republic.
When Thiesse received calls and texts asking about what happened at these meetings, he directed people to ask the Mitchell City Council directly. The result? The second reading of the rezoning ordinance for the lakeshore development, at the July 7 council meeting, had 27 letters of support for the development while four letters of opposition came from the proposed development’s neighbors or representatives.
“I think with all the letters of support for it that they got, I think maybe they were scared to say something,” Thiesse said.
June discussions included Mitchell Mayor Jordan Hanson calling out the Mitchell Area Development Corporation (MADC) for its lack of support for Thiesse, MADC board member and neighbor Brian Klock expressing concerns over the broad range of options that could be included in the project, and council member Jeff Smith seeking to amend the ordinance to not allow a convenience store or car wash while allowing a gas station, in opposition to the Planning Commission’s recommendation to approve the plan.
Unless a location is already zoned for a gas station, it is unlikely that the location would ever be considered for a gas station by a developer, according to Thiesse.
The lakeshore development’s plan calls for a mix of conditional use and permitted use purposes.
“It’s no different than Main Street,” Thiesse said.
Mitchell’s Main Street has a mix of storefronts, restaurants and business offices with apartments on upper stories.
Thiesse noted his appreciation for the council passing the rezoning ordinance, but told the Mitchell Republic that fighting with the council in Mitchell has caused him to go to other towns and invest more there.
“By pushing back so hard on me, how many people did they chase away from even looking at Mitchell for something new?” Thiesse said.
The council, during its regular meeting on Monday, July 21, without discussion, unanimously approved a developer agreement with PPSL Mitchell LLC for Tax Increment District No. 43 for a proposed 55-unit Peaceful Pines Senior Living Center. The boundary of the tax district encompasses 4.65 acres, which is lot 2 of Justin Thiesse’s lakeshore development.
The developer agreement lays out that the primary purpose of Tax Increment District No. 43 is to finance infrastructure costs. The tax district may not exceed $2.89 million in increment financing, and has a maximum of $2.5 million in developer reimbursements, and $375,000 in administrative reimbursements to the city of Mitchell, to be disbursed to the city after the developer increment has been paid. However, only infrastructure-related improvements completed by the developer within five years will be reimbursable.
The agreement states that the base value of the property has or will be certified by the SD department of Revenue at approximately $26,040.
Local Steve Sibson told the council that the property is worth more than $26,040. Sibson cited the project plan, which stated the land cost at $473,000, and noted that the 25 acres was assessed at $140,000.
“We’re understating the base and overstating the tax increment,” Sibson said.
The property is worth far more than $26,040, Sibson told the council.
The council did not respond to Sibson’s statements.
Two of the three established South Dakota Peaceful Pines Senior Living Center locations have valuations of more than $9.1 million, according to the tax district’s project plan. In addition, Mitchell’s Peaceful Pines is a Brookings-based entity.
The proposed 59,000-square-foot senior-living facility has plans for 21 assisted living units, 18 independent living units, and 16 memory care units. The plan also states the facility will offer a common dining room, lounge, exercise room, a pub, hair salon, and resident laundry.
City Attorney Justin Johnson noted the developer had not gone through the “Mitchell process,” but did have tax increment financing agreements with other communities.
“I’ve got no objection to any of the terms that they included. If anything, they’re slightly more beneficial to the city,” Johnson said.
Most of these terms are not likely to have any practical impact over the life of the tax increment district, Johnson told the Mitchel Republic. This developer agreement calls for a developer liability insurance policy of at least $1 million, which is to remain in effect until the city accepts any public improvements.
During the meeting, the council did not comment on Johnson’s overview of the developer agreement.
The tax district does not count toward the city’s debt capacity, and construction is to start in the fall.