Extra tax could be applied to Mitchell hotel rooms

Talk about it

They’re close, and getting closer.

Creating a business improvement district (BID) that would tax hotels and motels is the final piece in the financial puzzle for the planned second ice rink at the Mitchell Activities Center. City officials and the general manager of two Mitchell hotels say they are closing to finalizing the BID.

A BID is a self-taxation arrangement in which businesses agree to pay a fee with the money going toward a specific project. The proposed Mitchell BID would charge $2 per room per night at all Mitchell hotels and motels.

Adding the second sheet of ice is estimated to cost $2.875 million. The city has committed $2 million for the ice arena expansion through the sale of bonds, and another $500,000 has been pledged by the Mitchell Skating and Hockey Association.

In addition, $400,000 is being sought through the creation of the BID by local hotels and motels.

Dave Helleloid, the general manager of the Days Inn as well as the Comfort Inn and Suites, both in Mitchell, is leading the BID effort.

Helleloid said he thinks creating a BID is “possible,” as long as least nine of the 17 hotels and motels in Mitchell agree. They would add the fee to room rentals to help raise $400,000.

“If a majority of them agree, all must participate,” Mayor Ken Tracy said.

But the BID will have a sunset clause, Helleloid said.

“A soon as the $400,000 is reached, it would end,” he said.

Helleloid said the BID is being pitched as a way to support the ice arena. Adding a second rink could bring more hotel guests for hockey tournaments and other events.

“We’re looking at September through March as that slow time for Mitchell,” he said. “Hopefully it would help.”

Mitchell lawyer Don Petersen has helped create the BID. He did it at no cost, and had some experience with the procss, having worked on the BID for the Highland Conference Center and at least one other proposed BID in the city..

“I prepared the petition,” Petersen said. “If 51 percent of the motel owners submit a petition to the council … the City Council would schedule that for a hearing.”

He said once the petition is presented to the council, only one of the motel owners who signed it could ask to have the process halted. Lacking that, if the council approves it, the BID would be created.

Council President Jeff Smith said he has been told it will be discussed at the April 1 council meeting.

“As I understand it, some of the hotel owners and managers will be at the next council meeting to present sufficient signatures to proceed with the $2 BID,” Smith said in an email to The Daily Republic. “I really appreciate the hotels helping this project succeed.”

Finance Officer Marilyn Wilson said the city is counting on the BID money. Until it comes through, the project is somewhat stalled, Wilson said.

“The city will interim finance,” she said, “but we will rely on the BID to repay the city the $400,000.”

Bids were opened for the project March 14, revealing the city will need at least $2.875 million to pay for adding a second sheet of ice, according to city Public Works Director Tim McGannon.

That’s up from the original estimate of $2.6 million. An additional $200,000 comes from work that will be needed on the ground, which was not stable enough for the building, according to Mark Puetz of Puetz Corp.

The Mitchell City Council heard a report on bid openings for the MAC project Monday but declined to act until the BID is in place.

The recommended bid awards include:

*$1,315,604 to Palace Builders, of Mitchell, for general construction. That includes the $200,000 for the dirt work.

*$623,853 to Rink Tek, of Little Canada, Minn., for rink construction.

*$234,000 to Puetz Corp., of Mitchell, for architectural and inspection services for engineers it is responsible for, including mechanical, electrical, civil, structural and ice systems.

*$150,895 to Paulson Sheet metal, of Mitchell, for heating, ventilation and air conditioning.

*$106,091 to Powertech Electrical Services LLC, of Brandon, for electrical.

*$104,378 to Krohmer Plumbing, of Mitchell, for plumbing.

*$58,000 to Howe Heating & Plumbing, of Sioux Falls, for fire suppression.

That’s a total of $2,592,821.

“These are the numbers to date,” McGannon said. “Each bid had alternatives, and they won’t be awarded until next meeting, so these are the best numbers right now.”

He said other figures are not yet available.

“There are things we will buy which are not under contract, such as sport floor for non-ice season,” McGannon said. He added there will be separate engineering contracts for testing during construction, contingency (unforeseen items), a sound system and dasher boards.

The Mitchell Skating and Hockey Association has led a fundraising drive to help pay for the second sheet.

Council President Jeff Smith, who has been involved in that effort, said $398,200 in donations and pledges have been made toward the $500,000 commitment.

On Sunday, the MSHA Twice the Ice Fundraiser was held at the MAC. The Mitchell Marlin hockey players collected $5 to shoot pucks, and the varsity girls and boys played the coaches in a game after that.

“My family attended the fundraiser and it was an outstanding event,” Smith said. “It was really nice to see the youth helping raise funds as they are the true beneficiaries of the new sheet of ice

The young skaters helped raise $4,530.50 during the afternoon, Smith said. The effort also netted pledge cards over and above that amount totaling $5,950. So the total raised is around $10,000, he said.

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