City proposing to up rent for Chamber of Commerce to operate Corn Palace gift shop, share profits

MITCHELL — The Mitchell City Council will consider approving a tweaked contract agreement on Tuesday with the Mitchell Area Chamber of Commerce to operate the seasonal Corn Palace gift shop business.

While some city leaders were seeking to end the summer Corn Palace gift shop agreement with the Chamber of Commerce when it expires in August, the council will ultimately decide whether to approve the new proposed one-year agreement with the nonprofit organization at Tuesday’s meeting.

According to the new gift shop agreement attached to the council agenda, the proposed one-year contract that the council will consider approving for the 2023 summer season has several changes compared to the previous agreement. Among the most notable changes are increasing the Chamber of Commerce’s rent to $140,760 – an increase of about $20,000 from the previous contract – and the city collecting 5% of all gross sales over $750,000 from the Corn Palace gift shop.

Under the terms of the existing contract that will soon expire, the Chamber of Commerce rents the Corn Palace floor from the city for $120,000 to set up the gift shop during the summer months. It’s unclear exactly how much revenue the summer gift shop makes, but a 2018 tax report showed the Chamber of Commerce collected a little over $1 million in revenue from gross sales of inventory, according to the organization's most recent publicly available tax report.

Councilman Kevin McCardle is among the city leaders who has been advocating for the city to take over the seasonal gift shop and part ways with the Chamber of Commerce. McCardle said he has confidence in the Corn Palace staff to run a successful, profitable gift shop.

“I am confident that the city would be great at running the gift shop. The Corn Palace has a good team who could keep the shop running well and be profitable,” McCardle said in a late April interview with the Mitchell Republic.

Councilman Steve Rice has stood opposed to the city taking over the seasonal gift shop operation, noting that a city government should not be in the business of retail sales.

Mayor Bob Everson emphasized the city taking over the summer gift shop operation would provide the Corn Palace with a big revenue boost that he said could drastically reduce the deficit that Mitchell’s biggest tourist attraction operates on each year.

The Corn Palace’s yearly deficit can range from around $230,000 to $350,000. The city makes up the difference of the deficit through transferring funds to the Corn Palace via the general fund.

For over a decade, the Chamber of Commerce has operated the seasonal gift shop inside the Corn Palace and its year-round store across the street and collected the profits made from both operations, with the exception of the $120,000 annual rental fee that the nonprofit pays to the city. The Corn Palace Gift Shop inside the 601 N. Main St. building is not part of the contract agreement with the city since the Chamber of Commerce owns the respective gift shop.

Another change in the proposed gift shop contract is a year-to-year lease agreement with the Chamber. Previously, the gift shop contract with the city was a 15-year agreement. If the new contract is approved Tuesday, the council would consider renewing an agreement with the Chamber each year in early May prior to the set up of the seasonal shop.

The following items will be considered as part of the consent agenda:

• Approve the minutes and reports from the following meetings: June 6 City Council meeting; May 23 Planning and Zoning Commission meeting.
• Approve department reports. 
• Approve request to purchase nine APX 6500 mobile radios and other communication equipment for the Mitchell Police Department.
• Approve purchase of curbtender from the Sourcewell contract. 
• Approve accepting grant from Bass Pro Shop’s and Cabela’s Outdoor fund. 
• Approve automatic supplement to Parks and Recreation sports complexes from a donation of funds in the amount of $1,245.
• Approve Exchange Club’s fireworks permit for July 4 Lake Mitchell show.
• Approve special event application for Cruisin’ for a Cause event on Aug. 27.
• Approve the following raffle permits: Palace City Pedalers with the drawing to be held on Aug. 20; Davison County Democrats with the drawing to be held on Oct. 24.
• Approve the following volunteer board appointment: Clayton Deuter to the Parks and Recreation Board for a term to run from July 2022 to June 2025.
• Approve change order No. 1 to BX Construction for Foster Street bridge rehabilitation project. 
• Set the date for the following hearing: July 5, an application to transfer RL-19079 Retail (on sale) liquor license from Anisa Deinert, doing business as Jade’s, located at 107 N. Main St., to Anisa Deinert, doing business as Jade’s, located at 107 North Main Street, Mitchell due to reconfiguration of license.
• Approve gas and fuel quotes. 
• Approve June 21 pay estimates. 
• Approve bills, payroll, salary adjustments, new employee hires, authorization of recurring payments and other expenses.

• Recite pledge of allegiance and receive invocation from Grace Baptist Church.
• Consider entering into executive session, citing legal discussion.
• Hear citizens input.
• Meet as Board of Adjustment.
• Hold hearings on the following applications: Jason Bates’ application for a variance for maximum lot coverage of 50% vs. 45% to construct a detached garage, located at 1112 N. Rowley St., legally described as lot 16, block 4, D.A. Scott’s Addition, in the city of Mitchell. The property is zoned in a R2 Single Family Residential District; DAK Properties LLC’s application for a variance for side corner yard setback of 12 feet vs. 20 feet to construct an unattached 24-by-24-foot garage on a 43-foot wide lot, located at 1001 E. Fourth Ave., legally described as the west 7.5 feet of lot 9 and all of lot 10, block 9, Gleeson’s Addition, in the city of Mitchell. The property is zoned in a R2 Single Family Residential District; Thiesse Chiropractic’s application for a Conditional Use Permit for a Parking Facility located at 317 W. 13th Ave., legally described as lot 5, block 27, Capital Addition, in the city of Mitchell. The property is zoned in a R4 High Density Residential District; Maxwell Rysdon’s, on behalf of Krall Eye Clinic, application for a conditional use permit to install and operate a electric message center in a residential district located at 1415 N. Sanborn Blvd., legally described as lots 1 through 6 and east half of vacated Edmunds Street, block 12, Capital Addition, in the city of Mitchell.  The property is zoned in a R2 Single Family Residential District and R4 High Density Residential District.
• Reconvene as city council.
• Hold hearings on the following alcohol license applications: Palace City Lions Club’s application for a special event liquor license, located at the Horseman’s Sports Arena for the July 14-17 Corn Palace Stampede Rodeo; Exchange Club’s application for a special event liquor license, located at Cadwell Park for the State Amateur Baseball Tournament on Aug. 3-14.
• Approve letter of intent to explore secondary water source with Randall Community Water District. 
• Consider approving pending offers on the former Kelley property near Lake Mitchell.
• Approve developer’s agreement with Groeneweg Construction for a housing development near Mitchell’s airport. 
• Approve agreement with HDR for a water and wastewater fee analysis. 
• Approve Resolution No. R2022-32, a plat of lots A1, A2 and A3, a subdivision of lot A of Mommer's Subdivision in the northeast quarter of section 14, township 103 north, range 60 west of the fifth prime meridian, in Davison County, as requested by Keith and Carrie Young.
• Approve Resolution No. R2022-33, a plat of lot O-2 of Titze’s Addition, in the south half of the southwest quarter of section 24, township 103 north, range 61 west of the fifth prime meridian, in Davison County, as requested by Keith and Connie Struble.
• Approve Resolution No. R2022-36, a plat of lot 2, block 5 of Woodland Heights First Addition, a subdivision of lot 2, and tracts 2 and 3, block 1, all in Crane's Addition, in the city of Mitchell, as requested by Ethan Co-op Lumber.
• Approve Resolution No. R2022-37, a plat of lots 1-4, block 1; lots 1-12, block 2; lots 1-22, block 3; lots 1-30, block 4; lots 1-46, block 5; lots 1-5, block 6; Apache, Cheyenne, Sioux and Dakota avenues; All of South Lake Estates Subdivision to the city of Mitchell, in Davison County, as requested by CJM Consulting Inc.
• Approve second reading on Ordinance No. O2022-08, amending Mitchell City Code section 6-1-1 regarding animals at large ordinance.
• Approve second reading on Ordinance No. O2022-09, amending Mitchell City Code Chapter 6-1A regarding vicious animals.
• Approve first reading on Ordinance No. O2022-11, revising provisions of chapter 4-2: Liquor Control.
• Hear input On 5G technology within a total time limit of 5 minutes.