Planning Commission sends TIF plan to Sturgis City Council

News Staff/City of SturgisNovember 16, 2022Local
courtesy photoConceptual design of the project from Kyle Treloar, the manager of Vanocker Development, LLC.

STURGIS – The Sturgis Planning Commission has recommended approval of a Tax Increment Financing District for the Vancocker Development in south Sturgis that will help to finance the new Sturgis Adventure Park.

Commission members Alex Usera, Alex Moravec, Aaron Rabenberg and Richelle Bruch voted unanimously in favor of the TIF. Members Dusty Kirk, Dustin Bostrom and Rachel Hale were absent from Tuesday’s meeting.

The Sturgis City Council will take up the issue of the Vanocker Development and Sturgis Adventure Park TIF at its meeting on Monday,Nov. 21. 

Sturgis City Manager Daniel Ainslie gave a comprehensive explanation of what TIFs are and provided background on how the Sturgis Adventure Park proposal got to where it is today.  He said the committee’s goal from the beginning was to ensure that taxes were not raised. This is the primary means by which other communities in the state have constructed water parks, passing a bond issuance which is paid over several decades through higher property taxes. Ainslie said the committee sought to ensure that property taxes would not be raised to fund the park, as such they recommended using TIF financing and donations to fund the construction of the park.

The process of creating the park was set in motion in 2020 when the city began discussing some sort of outdoor aquatics venue within the city. A call was made for citizens to serve on a committee to discuss the options.

The committee hosted several town-hall type meetings to present their ideas. A community open house was held in the fall of 2021 at the Sturgis Community Center. Its intent was to be an intensive planning session where citizens, designers and others collaborated on a vision for development of the park. Another interactive meeting was held this fall to narrow the focus of the park even further.

The Sturgis Aquatics Committee’s proposal calls for building a water feature with a beach, water slides, an aquatics obstacle course, pickleball courts, volleyball courts, a walking path, a memorial splash pad, mini golf and a sledding hill at the site in Vanocker Canyon.  Preliminary costs for construction include a water feature (twice the size of Dalton Lake) $1 million; Splash Pad, $400,000; Inflatable play scapes, $400,000; Miniature Golf, $200,000; Restrooms/Concessions/ Shade Structures, $750,000; Lighting/Landscaping, $300,000; Parking, $250,000; and Watercraft Pier, accessories, $250,000; for a total of $ 3.55 million.

Initially, the park was planned for land the city owns at the Sturgis Fairgrounds. But, earlier this year the city bought 77 acres of land in Vanocker Canyon where the Sturgis Adventure Park would now be built.

A large portion of the estimated $3.55 million cost of the park will be funded from the sale of the Vanocker Canyon property to a developer and from the establishment of a Tax Increment Financing  (TIF) District. Tax increment financing uses the increase in property tax revenue that new development causes to finance costs of the development such as site preparation or public infrastructure (streets, sewer, water and parks). And in this case, some of those funds would be directed to help fund the Sturgis Adventure Park.

A TIF was the main financing mechanism for improvements at Fireman’s Park Beach in Verona, Wis., in 2020. “The city had in excess of $1 million in TIF money and it was basically made available to us,” said Casey Dudley, Recreation Director for the city of Verona. They used the money to double the size of Fireman’s Park in order to accommodate a wide range of outdoor recreational activities, including a custom Vortex Splashpad and Water Journey system, a state-of-the-art playground, shade structures, site amenities and more.

Dudley said their approach, like Sturgis, was to make the Fireman’s Park Beach pay its own way.
“The idea was that we wanted to break even. As a city, our goal was to cover the costs of staffing lifeguards and other ongoing expenses,” he said. The improvements and the addition of the splash park at Fireman’s Park Beach have been well received, Dudley said.

“The splash pad is a huge hit, as is a new turf area we added for sunbathing,” he said. “The park really draws a lot of people.”

When consultants came up with designs for the Sturgis Adventure Park, they also were asked to provide a business plan that showed the park could pay its own way.

“The consultants created this cash flow estimate and we are confident in it,” Sturgis Mayor Mark Carstensen said.

In Sturgis, the city estimates that gate entry each year could conservatively generate about $70,000 in revenue. Another $25,000 could be generated through concessions and about $63,000 in rental equipment. There would be one cost for gate entry, say $10 and a second charge for spending time on the aquatic’s obstacle course. Total potential revenue is estimated at $158,000 a year.

The potential operational costs for the Sturgis Adventure Park is $157,584. That total includes $108,584 for labor, $29,000 in maintenance and $20,000 for utilities.

Projections anticipate a 14-week Memorial Day to Labor Day summer season. Estimates were created using varying usage and rate scenarios based on history from locations with similar sized operations.

A season pass ticket was modeled to accommodate resident season pass holders that would allow access for locals at highly reduced rates. It was also discussed that a season pass to the Sturgis Adventure Park could be linked to membership for Sturgis Community Center. An annual individual
pass would cost about $90. Final costs, including what activities would be free, will be determined soon, Sturgis City Manager Daniel Ainslie said.

Daily waterpark fees in Spearfish are $10 and $12 for individuals for a day pass. An individual season pass to the Spearfish Water Park is $200. In Rapid City an aquatics day pass for an individual is $6 and an annual pass for an individual is about $300. Those fees are for both indoor and outdoor
pools in Rapid City.

In Verona, the price of a pass is $45 for the season for a youth resident, $60 for an adult resident and $100 for a family. The costs are higher for non-residents costing $70 for a non-resident youth, $85 for a non-resident adult and $150 for a family. The Verona Park was open from June 13 to August 18.