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The original item was published from 5/23/2023 9:44:02 PM to 6/7/2023 12:00:07 AM.

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City of Pierre News

Posted on: May 23, 2023

[ARCHIVED] Financing Agreements Approved for Downtown Redevelopment

5.24.22_DOWNTOWN REDEVELOPMENT

 On May 23,  the Pierre City Commission approved two agreements to help transform a portion of the old City Hall site into an 81-unit hotel.

The first agreement is a development agreement between the City and Chapelle Investments. Chapelle Investments is affiliated with Hegg Companies, the private development firm that is building the hotel, as well as an apartment complex and commercial building at the site.

The agreement outlines the responsibilities of both the City and Chapelle as they relate to the TIF (Tax Increment Financing) that will be used for the development. Specifically, it states that the City will set aside up to $5.45 million of the new property tax collected on the hotel to help finance the project. In turn, Chapelle will develop the property in a lawful and responsible way and shall bear all the financial risk.

The second agreement is between the City of Pierre and PEDCO (Pierre Economic Development Corporation). It outlines how PEDCO will facilitate the use of the City’s Sales Tax Rebate program for the project. In alignment with City policy, up to $200,000 of the new sales tax collected at the hotel property will be rebated back to Chapelle to assist financing of the hotel construction.

Pierre Mayor Steve Harding says that the two agreements are great examples of how economic development tools can be used.

“Both the TIF program and the Sales Tax Rebate program were designed to help spur progress in communities,” said Mayor Harding. “The development of the old City Hall site will breathe new life into that corridor of Pierre, and it wouldn’t be possible without these financing pieces.”

Mayor Harding also stressed that tax payers are held harmless by these two programs.

“No existing tax dollars, property or sales, are lost by using these programs. Both tools help increase tax revenue that is eventually realized by the City, the County, the School District and ultimately our citizens.”

Redevelopment of the old City Hall lot and adjacent properties was announced in May 2022; the estimated $33.4 million private development includes an 81-unit hotel, 60-unit apartment building, and an office building. 

 


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