Rapid City is tightening its policies for tax increment financing district applications in a move that’s likely to cause concern for local developers.
The policy change comes at the direction of Ken Young, the city’s Community Development Director, who has been working with staff over the past few months to change how the city handles TIF district applications and limit where they can be utilized. The issue has been on his mind since his first day in Rapid City, Young said in a Journal interview Wednesday.
“One of the first things that I noticed coming into the community is that we need to tighten this up,” Young said.
He first became aware of the situation during a three-hour tour of the city with Public Works Director Dale Tech while interviewing for the position he’s held since October. As Tech pointed out the various TIFs across the city, Young was shocked.
“I’m just going ‘My goodness! What are we doing here?’” he said.
His conclusion of Rapid City’s TIF process was simple.
“It’s just been too loose,” he said.
Tax increment financing districts are intended to encourage economic development or public improvement projects in blighted areas by diverting the payment of property taxes in the district. In essence, as the construction or improvements are completed, the district’s property valuation and subsequent property taxes increase. But instead of collecting the increased property tax payments and allocating them to the city, county and schools, the money is instead diverted to a fund to pay for project costs approved by the city council. Property taxes are still collected by the government but only for the amount related to the valuation of the property before the work begins, called the base valuation. The additional tax payment monies related to the increased valuation are diverted toward the TIF’s pre-approved project. Theoretically, the diverted funds make it possible for a project that would have otherwise been unfeasible to move forward.
In the past, Young said the city has been too lax with its definition of blight and its requirement that a developer prove a project would be difficult or impossible to achieve without the TIF. It’s also been too easy for a developer to divert TIF funds to project costs that weren’t specifically related to the project’s public benefit, he said.
“It appeared that there were a lot of projects that would have happened anyway without that (TIF),” Young said. “There are several projects in the past that have been approved that probably wouldn’t be now simply because of our new focus.” Young refused to give examples of those districts, saying he didn’t want to “hurt any particular developer’s feelings.”
As part of the city’s new focus, priority will be given to applications within an area Young called the “community core,” which encompasses the city’s historic boundaries of North and South streets and East and West boulevards, as well as all land within one mile of those boundaries.
Outside that area, “redevelopment corridors” would be created in locations where blight is prevalent and economic development is needed. Young mentioned Deadwood Avenue and St. Patrick Street as two possible redevelopment corridors.
“We’re certainly not trying to chase any developers away,” he said. “We’re just trying to say we want the focus to be more on the central core of the community.”
Currently, Young estimated the city has about 80 TIF districts and 24 active districts, with many of the largest districts on the outskirts of the city. Under the new policy, approval of a TIF outside the community core and redevelopment corridors wouldn’t be restricted but the applications would need to be very strong, Young said.
The presence of blight, potential for economic development, location in the community core or redevelopment corridors, and the necessity of the TIF to the project’s viability would be the four largest components in the city’s decision on TIF applications, Young said.
In conversations about the anticipated policy changes with area developers Doyle Estes and Hani Shafai, both men were hesitant to comment, saying they would prefer to wait until April 24 when the city plans to unveil a first draft of the policy at an open house meeting. Developer Pat Hall was not available for comment.
Shafai said he remained hopeful, noting that the language, not the overarching policy, would determine his opinion.
When the expected policy of prioritizing TIF applications in the community core and redevelopment districts was explained to Estes, he offered a brief take.
“If that’s the case, it’s rather disappointing to me,” Estes said.
But one area man with a deep connection to TIF districts, Don Frankenfeld, sang a different tune. Frankenfeld helped write South Dakota’s TIF district laws when he was a state senator from 1977-1984.
“My immediate reaction is euphoria,” he said. "It sounds terrific. It sounds like we have a person (Young) who understands TIFs and their uses and also understands their disadvantage and that has, in my opinion, been lacking in the city culture for as long as I can remember.”
The new policy and associated ordinance amendments setting it into city law are expected to be considered by the Rapid City Council in May.
Floyd Simunek wants to wait until the first shovel of dirt is turned on a new housing development before he changes his job title.
“I will not call myself a developer until we officially break ground on this project,” said Simunek, who along with his wife, Kelly, owns Bella Vista, LLC, a development firm in Rapid City.
That change will happen soon, when construction is slated to start later this spring on the Simuneks' first big project in southern Rapid City.
Their Bella Vista Estates will consist of 18 lots on 10 acres for upscale homes in an area boasting a stunning view of the Black Hills overlooking Sheridan Lake Road and with a sightline extended as far north as Summerset.
“The views from this development are insane,” said Floyd Simunek.
This project is located west of Black Hills Corporation’s new headquarters complex, Horizon Point, near the intersection of Mount Rushmore Road and Catron Boulevard.
Simunek said Bella Vista Estates will offer convenience to the amenities of south Rapid City, restaurants and shopping along newly rebuilt Mount Rushmore Road and the nearby expansion of Buffalo Crossing, where professional, retail and residential development are underway.
“The convenience factor of this location is quite high, but with the privacy level of not having that through-traffic and having to stare at all that development. You look away to the west, which is quite unique,” Simunek said.
Homes in the new development will start in the $600,000 range, he said. Plans will include a 3/4–mile round-trip jogging, walking, and exercise trail fronting an 8-acre area that the city is retaining for drainage. Simunek is treating the area like a nature preserve where no homes will be built.
The project will start with the construction of a paved access road with curb-and-gutter and including utilities for the new development.
Unlike other projects relying on municipal assistance, like tax increment financing, to help with utilities, Simunek said he is footing the bill for the access road, to be built along with a Catron Boulevard widening project.
“I’m a small-time developer, and I’m paying for 850 feet of curb and gutter street just to get to my property, with no benefit of a TIF,” Simunek said. "We're proud of that."
Preliminary paperwork was completed this week and Simunek is ready to start moving earth.
“We’re to the point of being ready to go full-bore on the infrastructure. I’m waiting tor that moment to call myself a developer,” Simunek said.
SIOUX FALLS | The thought of someone convicted of illegal sexual contact walking around a college campus is disturbing to rape victim Tara-Claire Whalen.
Whalen, a sophomore at the University of South Dakota, was shocked when in October, the heart of football season, two of the school's players were arrested on rape charges stemming from an incident at an off-campus residence.
What concerns her now is that one of them, who admitted to his involvement and was criminally convicted, is still enrolled.
"It's terrifying to think someone who should be in jail isn't and can still be walking around our campus and still has the potential to do this to someone else," said Whalen, who is part of student organization PAVE: Promoting Awareness, Victim Empowerment.
Danny Rambo Jr., a USD junior, was charged with second-degree rape after a woman reported being sexually assaulted by him and another student, Dale Williamson Jr., while she was having consensual sex with a different student, who was also a football player. Williamson was charged with attempted rape and has pleaded not guilty.
In November, an arrest warrant for a separate case was issued for Williamson. He was charged with second- and third-degree rape from a March 2017 incident. Williamson is awaiting trial on both cases.
Neither individual is on the football roster, the university confirmed. Williamson is no longer enrolled.
Rambo's criminal case has closed up: he pleaded guilty to a lesser charge and received his sentence in February, leaving some to wonder how a student who admitted to a crime involving sexual contact can remain on campus.
But criminal procedures and college disciplinary processes are separate, and universities are strapped in their ability to respond until their own Title IX investigation can be completed.
USD officials said in October a Title IX investigation was taking place but have not said if it was completed.
"With the exception of interim measures and the general authority to protect the safety and well-being of the campus community, no action is taken against a student accused of violating the Student Code of Conduct until the conduct process is concluded and the student is found to have engaged in prohibited conduct," South Dakota Board of Regents general counsel Guilherme Costa said in an email.
Rambo is still enrolled at the university and won't be seeing much jail time, a result that isn't uncommon locally and nationwide. That's true even for an incident that was jarring when it was first reported last fall.
The victim and two of her friends joined Williamson, Rambo and another USD football player to watch a movie in his bedroom at an off-campus residence on Oct. 22, according to an affidavit for an arrest warrant.
The victim's friends left the residence, and Williamson and Rambo exited the room at 10:26 p.m., according to the court document.
The victim texted her friend until 11:06 p.m., when she told her friend that she and the third student were going to have consensual sex, according to the court documents. Rambo and Williamson re-entered the room without the victim's knowledge.
Rambo, according to court documents, approached the victim without her knowing and penetrated her with his fingers. She stopped him and he left the room. Williamson twice tried to force the victim to give him oral sex, according to the affidavit.
The victim told police that the other player, who is a senior and will graduate, did not seem surprised that Rambo and Williamson entered the room. She also said he did not ask them to leave the room.
The three players were suspended from the football team.
Rambo, 21, was initially charged with second-degree rape. In February, as part of a plea deal, he pleaded guilty to sexual contact without consent with a person capable of consenting, a Class 1 misdemeanor with a maximum sentence of a year in county jail. The charge does not require Rambo to register as a sex offender.
Rape in the second degree is a Class 1 felony, which would have given the judge the opportunity to sentence up to 50 years in prison.
Rambo was sentenced to spend 10 days in the Clay County Jail, starting Nov. 1.
Jason Rumpca, a Beresford lawyer who handled the defense proceedings, declined to comment beyond providing sentencing information.
Clay County State's Attorney Alexis Tracy said she was unable to comment on Rambo's case, as it is connected with Williamson's currently open case. But experts say a drastic drop in sentence parameters and charge level is nothing new in cases involving a sexual crime.
Sexual crime cases hinge upon victim involvement, said Minnehaha County State's Attorney Aaron McGowan. From identifying the assailant, if possible, to repeatedly providing intricate details to an intimately harrowing experience, the court process can be another barrier to closure.
But softer sentences can also be difficult to grasp.
"It's rough on victims when it gets (pleaded) down because a lot of them come to us and want justice to be done," said Michelle Markgraf, director of the Compass Center for sexual assault and domestic violence advocacy in Sioux Falls. "They don't see that as justice happening."
Each sexual assault case is unique. Best-case scenarios involve a participating survivor, DNA evidence, physical evidence and witnesses — elements that would give a jury confidence beyond a reasonable doubt that the person being accused of the assault is guilty.
Rape cases are fluid, McGowan said. A victim can change his or her mind halfway through the process and not want to continue the case. There could be no physical evidence to counter a denial from the accused.
For cases where evidence is unavailable and a victim isn't ready to share in open court, prosecutors often try to get what they can, such as working with the defense to reach a plea deal, which isn't always satisfying justice.
"Even at the beginning of the process when I'm in the ER with somebody who is reporting a sexual assault and is considering a rape kit, they want to know at that point, am I going to get justice?" Markgraf said. "That's so tough for me as an advocate because the chances are they won't get justice just because these cases are hard to prosecute and very rarely do they go to trial."
Nationally, about 1 in 10 rapists see jail time, according to the Rape, Abuse & Incest National Network (RAINN). That number includes the two-thirds of rapes that don't get reported to law enforcement, according to the same site.
About 16.5 percent of those charged with rape were convicted, according to a 2009 data analysis on felony defendants from the country's 75 largest counties from the Bureau of Justice. The majority of those were reached in a plea deal with attorneys rather than a jury trial.
The same trend carries into cases involving a college student.
Former Stanford University swimmer Brock Turner was given a six-month sentence but was released after only three for good behavior after a jury found him guilty of multiple felonies from a 2015 assault of an unconscious woman behind a dumpster.
University of Colorado student Austin Wilkerson was convicted by a jury of sexually assaulting a woman in March 2014. Prosecutors said he "isolated and raped the half-conscious victim" after a St. Patrick's Day celebration, according to The Guardian, after he had told his friends that he was going to take care of her.
He saw no prison time, and instead was ordered two years of "work release" and 20 years to life on probation.
The reality of sentencing in these cases could serve as a barrier to future victims who are considering reporting the offense, Whalen said.
"It's terrifying that (Rambo) got sentenced to 10 days in jail after admitting he did this to a girl," the Mobridge native said. "If it would happen to me again, I (wouldn't) want to tell anyone because they just get a slap on the wrist. I feel like it's more of a downer on people who would want to report."
The victim in Rambo and Williamson's case didn't report the incident to police, according to court documents. Someone known to the victim reported it to university police.
"The victim was very reluctant about having an investigation started due to the backlash she believed she would suffer from the football team, student population and community," according to the affidavit.
The fear of backlash hovers over nearly every survivor who walks into the Compass Center, Markgraf said. They're often told by people in whom they confide that their assailant "would never do this."
"They're not believed a lot of the time. We've seen it a lot," Markgraf said.
It's even more intimidating when the accused has the high profile of an athlete.
ESPN's Outside the Lines did a five-year look at 10 major college sports programs across the country. It found that the status of an athlete has a "chilling effect" on whether cases were brought to police and how the cases were investigated.
More than 2,000 documents showed that athletes from the 10 schools examined benefited from the "confluence of factors" readily available to many college sports programs, such as quick access to high-profile attorneys and intimidation felt by witnesses to take on a well-known accuser.
"Numerous cases never resulted in charges because accusers and witnesses were afraid to detail wrongdoing, feared harassment from fans and the media, or were pressured to drop charges in the interest of the sports programs," according to Outside the Lines.
"It's surprising to think that anyone would do this, and athletes are held to a higher standard than most," Whalen said. "It was crazy to think that they would risk everything for what they thought was fun."
Rapid City-based Regional Health is undergoing a period of belt-tightening to address a 2-percent budget shortfall over the final three months of its fiscal year.
Regional operates five hospitals and 24 clinics, employing more than 5,000 physicians and caregivers in 20 communities in western South Dakota and Wyoming.
A March 29 memo sent to physicians and caregivers from Regional Health CEO Brent Phillips, obtained by the Journal and later confirmed by a Regional Health spokesman, outlined the steps being taken to address the shortfall, caused, the memo stated, by “soaring health care industry costs, uncompensated care, declining reimbursements and regulatory and policy changes.”
The measures, to be implemented from April 1 through the end of Regional Health’s fiscal year on June 30, include:
• Minimizing overtime and premium pay.
• Intentionally not filling non-essential, currently vacant positions, or open positions resulting from natural attrition.
• Restricting expenses, including non-critical minor equipment purchases, travel and discretionary spending.
Additionally, members of management are being asked to take seven days (56 hours) of paid time off, with all caregivers who are within 10 hours of the paid time off maximum asked to take seven days off between April 1 and June 30.
One factor cited in the shortfall included the cost of implementing a system-wide electronic medical records system, called Epic, which Regional Health began using last fall.
“While this investment was foundational and necessary to meet the future needs of our community, the costs of the software licensing fees, training, hardware, consulting fees and other operational costs has impacted our financial performance,” said a statement emailed to the Journal.
The system has reportedly slowed doctor production, reducing the number of patients seen, and slowed the payment process, with cash flow suffering as a result.
According to information supplied by Regional, the health care system is not alone in seeing a drop in cash flow with the implementation of an electronic records program.
They cited the case of the MD Anderson Cancer Center in Houston, which suffered a $160.5 million (or 56 percent) drop in adjusted income after implementation of electronic health records system, contributing to a loss of 1,000 jobs, a 5 percent drop in its workforce.
California-based Sutter Health’s one-time EHR implementation costs contributed to the health system’s 31 percent decrease in operating income.
The drop in cash flow because of implementation of a records system is temporary, according to a 2017 study by Moody’s Investors Service. Those hospitals which saw an average 10 percent decrease in cash flow saw improved results in revenue and bad debt the following year.
“Epic costs a bit to implement at this point, but in the long term, we’ll make that up, and then some,” said Regional Health spokesman Dan Daly.
Phillips said the budgetary measures, in effect through the end of June, will not affect services offered by Regional Health or the safety and quality of the care provided to patients.
“We have been very thoughtful in our decision-making to minimize the impact on our caregivers and patients,” Phillips said.
“Our commitment to our patients and each other is unwavering,” he said. “Together we will work through our current financial challenges.”
(Editor's note: the above story has been changed to reflect paid time off for caregivers within 10 hours of the maximum time off.)