The city of Mitchell can begin negotiating leasing a piece of land to the Corn Palace Stampede Rodeo organization to host its rodeos after the Mitchell City Council approved an indemnification agreement on Monday.

The Corn Palace Stampede Rodeo group has been in a legal dispute for the past year with its landlords of the grounds where the rodeo has been held for decades in the north side of Mitchell. In light of the Corn Palace Stampede’s ongoing lawsuit against Horseman’s Sports Inc. -- the organization that leases the 4125 N. Main St. rodeo grounds along north Highway 37 -- Mitchell Mayor Bob Everson said the Corn Palace Stampede Rodeo organization reached out to the city recently, inquiring about leasing a piece of land next to the airport to become the new rodeo grounds for Mitchell’s annual rodeo that draws around 8,000 to 10,000 people each summer in late July.

“I talked to both entities, and my role is that I want to make sure the city is able to continue hosting the rodeo since it’s a great event that brings a lot of people,” Everson said. “I started looking at areas that could host a rodeo. It gives the ability to work out an agreement for them to have a new spot for the rodeo grounds if things don’t work out between the two entities.”

During Monday’s special meeting at City Hall, the council unanimously approved the indemnification agreement that stipulates the Corn Palace Stampede Rodeo group must agree to indemnify the city of Mitchell from anything that arises out of the lawsuit between Corn Palace Stampede Inc. and Horseman’s Sports organization, meaning it will hold the city “harmless.”

In addition, the council approved a resolution of intent to position the city to lease a piece of land along Airport Road for the Corn Palace Stampede Rodeo to host its events, which would shift the annual Mitchell rodeo from the Horseman’s Sports Arena to the land located at 5971 Airport Road. Everson said the land that the city is considering leasing sits on a little over 20 acres, which he noted could allow for a bigger arena than the existing arena at Horseman’s Sports Arena.

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“The land could allow for a bigger arena than what they currently have, which could also potentially bring the state high school rodeo finals that’s been hosted in Huron,” Everson said. “There would need to be some improvements that need to take place if this moves forward.”

According to City Attorney Justin Johnson, both the city and the Corn Palace Stampede Rodeo group believe the indemnification agreement is “necessary given that Corn Palace Stampede, Inc. is currently engaged in a lawsuit regarding an existing lease.” Although the city has begun preliminary discussions with the rodeo organization about a potential lease location next to the airport, Johnson noted that “negotiations over terms have not begun and will not until the indemnification agreement is approved.”

“Given that they got a current civil suit that’s ongoing, we felt it was appropriate to put an agreement in place in case there was some kind of allegation that the city interfered,” Johnson said.

The Corn Palace Stampede, Inc.’s lawsuit that was filed roughly a year ago alleges that Horsemen’s Sports Inc. committed “intentional” property damage to the Corn Palace Stampede’s property and breached the contract, among other things. The complaint also alleges unjust enrichment and seeks a permanent injunction and declaratory judgment.

Despite the ongoing legal dispute, the 50th annual Corn Palace Stampede Rodeo went on as planned in late July at Horseman’s Sports Arena after a judge granted a relief in April at the request of the local rodeo organization.

The two sides have a lease that runs through 2031. Corn Palace Stampede has alleged that its group has done all of the improvements for the property and alleged that the defendants from Horsemen’s Sports have trespassed on the property and damaged it without cause, not allowing Corn Palace Stampede to use the grounds as intended.

The lawsuit doesn’t specifically list what property was damaged and destroyed. The complaint seeks a jury trial in the case and requests damages and costs for the property being destroyed.

The claim says the plaintiff — Corn Palace Stampede Inc. — has “created, provided and done all improvements on the property, at its own expense and efforts.” The suit says that there is no severance agreement between Corn Palace Stampede and Horsemen’s Sports about those improvements.

In the lease agreement, which started in 2000 and was continued for another 20 years in 2011, Corn Palace Stampede agrees to care for and maintain the rodeo grounds in its entirety. Corn Palace Stampede also has ownership of a loader tractor that is kept on the grounds and Horsemen’s Sports can use it and will furnish fuel.

Currently, Corn Palace Stampede pays Horsemen’s Sports $2,000 a year from 2017 to 2021, up from $1,500 a year from 2012 to 2016.

For parking at the new land where the city could lease, Everson said there would be a solid amount of room for parking. Everson added the Pepsi-Cola Soccer Complex parking lot that sits nearby, could be used for parking at what would be the new rodeo grounds.