DEADWOOD — The first step in Cadillac Jack’s owners’ second expansion was approved by the Deadwood City Commission Monday, as TIF No. 10 public work was awarded to RCS Construction of Rapid City, in the amount of $2.8 million.
This was lower than the engineer’s estimate of nearly $3 million
The city commitment on the project is $2 million from property tax revenue in the district.
“The remaining $790,827 will have to be picked up by the owners,” said Deadwood planning and zoning administrator Bob Nelson, Jr.
Ted Schultz, senior project manager, who made the recommendation to award the contract to RCS, following the bid opening, estimates the total public work project costs including utility fee relocations, engineering fees and related costs to be $3,191,977.
Other public work in the tax incremental financing district (TIFD) includes removals, demolition and mobilization, a soil nail wall, excavation and retaining walls for utilities, street improvements, water and sewer, burying overhead utilities, a pedestrian crossing/improvements bridge, storm sewer and detention, streetscaping and lighting.
Nelson said that public work is work that ultimately would be the responsibility of the municipality to improve, maintain, or repair public infrastructure.
"Such items would be replacing city water main, installation of new city sidewalk, new storm or sanitary sewer, or could even be the construction of a planned capital improvement," Nelson said. An example of a planned capital improvement would be the crosswalk and pedestrian bridge crossing in the TIF #10 project."
Nelson said to keep in mind, a TIF can also be used for economic development and if components of a project are required for the construction of a new building such as a retaining wall then the wall would qualify. "In the case of the TIF #10 project a portion of a retaining wall is supported by TIF dollars," Nelson said.
“Regardless of whether we did this project or not, the city was going to do water main work at some point and bury the power lines in 2018,” Nelson said. “So we would have spent the money, anyway. Hopefully, the expansion will create more jobs and bring the economic development benefit of additional restaurants and additional lodging.”
A TIFD is used as an economic development tool and can be explained like this.
It is a public financing system that uses future increases in property tax to reimburse the costs of public improvements built within a designated TIFD boundary. The value of all the properties inside the district is assessed or calculated and the total amount of property tax generated by all those properties is noted — we can call that number the base amount of property tax revenues. All property revenue above this base amount, for the life of the TIF, is captured by the TIF district to refund the costs of the public improvements or project. This amount — the amount over the base, is called the “tax increment”. Over time, property values are presumed to increase in part due to infrastructure improvements brought about by the TIF project itself. When the TIF is retired the total taxation values revert to the original taxing entities.
Four other bids were submitted for the public work portion of the project: Lind-Exco, Inc., $2,959,776; Scull Construction Services, $3,718,981; Dietzler Construction Corp., $3,878,006; JR Civil, LLC $5,694,964.
The $2.9 million development project is anticipated to start in January 2017 and to be complete by late May 2018. This next phase of development will add a new hotel, underground parking garage, restaurants, new gaming areas and other amenities to the existing Cadillac Jack’s complex.
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