Corn Palace expansion or lake dredging? Does Mitchell have $55 million funding for both?

MITCHELL — Over the past decade, dredging Lake Mitchell and expanding the Corn Palace have been merely pipe dreams shared among many city leaders.

Now, both once-in-a-generation city projects are on the table at the same time. But is it a realistic possibility to fund both multi million-dollar projects that Mayor Bob Everson says would have a “profound and lasting” impact on the future of Mitchell?

Some of Mitchell’s top elected officials think it’s possible to dredge the lake and expand Mitchell’s biggest tourist attraction within a similar time frame. But there is a shared consensus that big donors and sponsors need to step in for the Corn Palace expansion project to take flight in the next few years considering early rough cost estimates for the project hover around $40 million, which is much higher than the roughly $15 million to $16 million price tag for dredging.

“I think we need to do both, and we may have to figure out which one is more important to prioritize first,” Everson said, noting the public input on both projects will be vital for him and the council to prioritize the projects. “If you don’t set your goals high, you’re going to fall short every time.”

Mitchell Republic file photo

Though the big projects are lofty goals, Everson said there is no reason city leaders can’t explore both. As the council has been diving into the lake dredging design in recent weeks, some have not lost focus on a potential Corn Palace expansion project that’s currently in the final design phase.

Longtime Councilman Jeff Smith said both projects can be done and need to be accomplished. However, he foresees them being completed about two to three years apart from one another.

While Smith is on board with both projects, he pointed to the Corn Palace expansion plan as a project that would have a bigger economic impact on Mitchell with its potential of attracting more large-scale events and tourists.

“That is our biggest event center. It brings locals and many people from around the area during the winter months for basketball and other sports, and it becomes one of the biggest tourist attractions in the state of South Dakota. Anything we can do to enhance that is going to bring more sales tax revenue to Mitchell and help with growth,” Smith said.

Republic file photo

Although the Corn Palace has long been operating in a deficit each year, Smith said the roughly 300,000 visitors the landmark building brings to Mitchell each year who typically spend money locally is vital revenue that could grow if an expansion materializes.

For the city to take on the Corn Palace project, city leaders emphasize it will hinge on sponsorships, private donations or grants.

“I think we can to a certain degree, but both would likely be done within an extended period. I firmly believe there needs to be some type of grants or private money that will have to supplement because the city can’t do it all by itself,” Smith said, pointing to sponsorships as potential major funding sources. “People are going to need to voice their opinions on which of the two projects they would prefer.”

While he indicated the lake dredging project appears to be on track to begin before a potential Corn Palace expansion, Smith said donations and sponsorships could shuffle them up.

“There is a strong possibility that the Corn Palace plans could jump ahead, depending on what kind of funding sources we could secure,” Smith said.

For Councilwoman Susan Tjarks, the lake dredging project is a goal she’s committed to seeing through before a potential Corn Palace expansion. Her focus on dredging the lake as a potential solution to reduce the algae that’s been plaguing the 693-acre body of water for several decades is also being driven by community input she’s kept tabs on.

During the Forward 2040 Community Visioning study, Tjarks said Mitchell residents who participated in the survey made it clear that restoring Lake Mitchell was the biggest shared goal among the community.

“The lake was the number one priority and opportunity identified in the 2040 survey, and there is nothing more insulting to the public to ask for their input and not act on it,” Tjarks said. “Without a doubt the Corn Palace has immediate needs that need to be addressed like seating, air conditioning and building maintenance, but the lake has been in rough shape for decades. I’m not against the Corn Palace plan, but of the two projects, it’s absolutely my top priority to address the lake issue as soon as possible.”

From the moment Stephanie Ellwein took on her role as city administrator nearly a decade ago, she said putting the city in a financial position to lead a major lake restoration project has been a shared goal among the mayors she’s worked with.

One way the city has been making financial moves to fund a lake dredging project is freeing up more debt capacity. As of now, the city’s debt is well below its 5% capacity that’s set at $48.7 million. According to Ellwein, as of January 2021, the city was $31.1 million shy of reaching its debt capacity. She noted the city has retired over $1 million since 2021, giving more capacity for the city to take on dredging.

“The city has been very conscientious of what we’ve been undertaking to ensure we keep debt capacity available in the event that we had to issue debt in order to fix the lake,” she said, noting the city’s debt capacity is in position to fund a $15 to $16 million lake dredging project. “That’s the direction I’ve been given for over five years.”

Republic file photo

While the city could fund the lake project by itself, Ellwein said that’s not the case for the estimated $40 million Corn Palace expansion. That’s why city leaders say it’s vital for the city to seek sponsorships and private donations for the Corn Palace project to materialize.

“Of course, the city doesn’t have $55 million in cash sitting around to do both of these types of large projects. The city does have some reserves set aside for future capital improvements that could be put toward either one of these projects, but the city by no means has enough money for both without looking at some other alternative funding,” Ellwein said.

Although city leaders have been mulling over the projects, Ellwein stressed the importance of getting a good gauge on the community’s priorities between the two. After all, Mitchell residents could force both projects to a public vote by referring funding decisions the council makes through gathering enough signatures on a petition, if one is submitted within an allotted time frame.

Since discussions of the projects have heated up over the past year, the question of whether the city is required to hold a public vote on the two projects has surfaced. Ellwein said the Corn Palace expansion and dredging project are not required to go to a public vote.

The only instance the city would be required to hold a public vote for the projects is if the city sought the debt to be issued in the 10% capacity instead of the current 5% capacity. If the city pursued issuing debt under a 10% debt capacity for either project, it would need to be authorized by a public vote, similar to how the B-Y Water project was funded years ago.

“Hopefully, we can raise some funds for both projects and not have to tap into public dollars. We have some ideas, and it could come to a public vote,” Everson said.

Ellwein anticipates the council will hold a work session in the near future to discuss the possible funding methods for the projects. Some potential funding sources the city could explore include tapping into city revenue through budgeting means.

As talks of dredging the lake intensified recently, a local nonprofit organization formed to help advance a dredging project. The organization known as Friends of Firesteel has been kicking around a potential fundraising campaign with a goal of raising $3 million for dredging the lake.

Another funding source Everson has been exploring is selling some of the city-owned land along the lake shoreline. According to Everson, the city owns about 70% of the land along the edges of the lake.

“We are always looking for grant opportunities, but the city owns a lot of land along the lake that could be sold to interested parties and then earmarked for dredging,” he said.

After the Corn Palace’s contract with Daktronics ended, it freed up the city-owned event venue to welcome more sponsors. Under the terms of the previous Daktronics contract, the city was required to seek approval from Daktronics for new sponsorships.

Republic file photo

With more sponsorship opportunities available, Everson said it could open the door for the Corn Palace to allow naming rights for various pieces of the facility, including the main basketball court which has been a hot topic in past years.

“There are opportunities to get donations for various pieces of the Corn Palace like the locker rooms or gift shop through naming rights, and that would be a great way to get more private funding,” Everson said.

As for the timeline of the projects, depending on the council’s direction and community input for both, Everson anticipates advancing one of them within eight months to a year from now.

“We are still in the planning and designing stages. There will be more opportunities for community input and funding talks in the near future,” he said.