After months of study that led to a considerably less costly plan for a new arena at the Rushmore Plaza Civic Center, the city council voted 9-1 Monday for a $130 million facility. The other option was to spend at least $25 million on repairs and upgrades for a 41-year-old arena.
It’s a plan that does not raise taxes. The money comes from the Vision Fund, the beneficiary of sales tax revenue that built the civic center in 1972 and Barnett Arena, which opened in 1977. It also is money that if not dedicated to a new arena will be spent on other projects that might not have an economic impact for the city.
But despite the undeniable success of a facility that has generated millions of dollars of sales tax revenue and the equally undeniable fact that the arena is outdated, there are opponents and that could lead to yet another special election. If that is the case, it will be a referendum on Rapid City’s future.
Some residents feel like this was resolved when voters rejected a plan in 2015 offered by the Sam Kooiker administration. Therefore, it should never be considered again, a preposterous notion. Mayor Kooiker's plan was vastly different. It called for an arena that could seat 19,000 people with room for an indoor football field. Plans also called for a 2,000-stall parking garage.
The price tag was $180 million. The financing was estimated to cost $240 million. It would have required the city to spend nearly 100 percent of its Vision Funds for 30 years to service the debt. At the time, concerns arose that the city would have to dip into the Capital Improvement Fund to help pay the enormous debt.
Mayor Steve Allender’s plan calls for an arena that seats 12,000 to 13,000 and costs $130 million. The interest payments add $50 million to the bill. The city now has $25 million for an initial payment. As a result, the city plans to borrow no more than $110 million for the project and would initially use 51 percent of Vision Funds — projected to be a total of $11.8 million in 2018 — with that percentage decreasing in future years.
Those who have made up their minds to oppose any plan proposed by Mayor Allender got a boost recently when five former mayors came out against the project in an op-ed on this page. Their primary concerns focused on what they called unanswered questions. Former mayors Hanks, Shaw, McLaughlin, Carlyle and Munson had questions about return on investment, operation costs, parking, the future of the existing Barnett Arena and who future tenants might be in a new arena.
Another former mayor, Don Barnett, said those were the same arguments he heard while leading the city when it built the Rushmore Plaza Civic Center. He dismisses those concerns now. Instead, he points to all that has happened since the civic center and arena were built.
In addition to bringing state basketball tournaments to Rapid City for the first time — one of the goals of what would later become known as the Don Barnett Arena — the civic center attracted events unforeseen at the time.
“No one dreamed,” he said, that the civic center would need to double its convention space in just eight years and the facility would someday host Elvis Presley, the annual Black Hills Stock Show and Rodeo, the annual Lakota National Invitational event, the Rapid City Thrillers basketball team and more recently the Rapid City Rush hockey team.
Looking back, there’s no question the civic center and Barnett Arena have provided a tremendous economic stimulus to the community. It boosted the hospitality industry, created jobs and opportunities, and helped Rapid City expand from a summer tourism town to a community that attracts visitors year-round.
Rapid City has grown considerably since 1972 when around 44,000 people lived here. It now has a population of around 75,000 and continues to grow with valuable additions like Black Hills Energy's new $70 million corporate headquarters, the Buffalo Crossing mixed-use project, Regional Health's expansion and new apartment complexes that offer attractive amenities.
Rapid City is changing into a more modern community, while Barnett Arena now largely stands as a monument to the past.
Since 2009, attendance has dropped around 25 percent at the civic center and the number of events at Barnett Arena dropped from around 90 in 2009 to 60 in 2016, according to the city. Its vintage design no longer accommodates top-tier acts or events that generate a significant economic impact and help put Rapid City on the map. It is even getting increasingly difficult to comfortably host successful events like the stock show in December, which attracts thousands of visitors from the entire northern plains over a two-week period.
If the city were to only upgrade the facility and make it compliant with the Americans with Disabilities Act, it would do little to keep up with the demands of the modern economy.
Some opponents say that what we have is good enough for Rapid City and that a new facility is a waste of taxpayers' dollars. If those voices had prevailed in 1972, Rapid City would be a smaller and less dynamic community today.
The city council has approved a reasonable plan that does not raise property taxes or the sales tax for the Vision Fund, which was initially approved to build the civic center. It only makes sense that the same fund be used to build a new arena now rather than later when it will be far more costly to maintain a vision for a more prosperous community that seeks to improve the quality of life for current and future residents.
Mayor Allender and the city council deserve credit for learning from the past and looking to the future. They were elected to study the issues and make decisions. In this case, they made the right one.