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Meade County Plans Giant TIF District to Fund East Sturgis Bypass

Meade County Commissioners have what seems like a good transportation idea: they'd like to build a bypass east of Sturgis to connect state Highways 34 and 79 straight south to Interstate 90:

Proposed East Sturgis Bypass (annotations mine; map from Google; click to embiggen!)
Proposed East Sturgis Bypass (annotations mine; map from Google; click to embiggen!)

This east bypass would run from the Elkview Campground near Exit 37 straight north to the Buffalo Chip entrance. The project would cut a couple miles of new road from the south end of 131st Avenue to the north end of Cardinal Place. Both of those roads appear to be gravel (I invite updates from local travelers!), so I assume the project would also include paving those existing roads.

The new road would nicely entriangle Sturgis. Folks coming from Rapid City to visit the Chip and Bear Butte would not have to drive through downtown Sturgis traffic, which on normal days may cut just a few miles and minutes from the trip but which during the Rally could shorten through-time by at least half an hour. Commissioners also say that the Fort Meade VA Hospital needs this road as a second emergency access route.

The Meade County Commission hasn't poured asphalt yet, but they are taking names: Pleasant Valley Parkway, Fort Meade Expressway, Ronald Reagan Road, Todd Beamer Road, Oren Hindman Road.... Residents will get to vote online over the Christmas break, and the commission will adopt the new name at its January 14th meeting.

But the commissioners may not get to build their road, due to their choice of funding mechanism: tax increment financing. To bring in the two million dollars needed to build this bypass, the Meade County Commission has drawn up a gargantuan serpentine TIF district: 

Proposed Meade County TIF 2014TIF districts usually are neighborhood scale. TIF districts usually encompass the immediate area where improvements will be built. Build new streets or sewer or other public improvements, and property values on adjoining lots should rise, as developers build homes and businesses to take advantage of the new infrastructure. Those increased property values provide the tax increment that pays off the financing that built the improvements.

The proposed bypass would lie in one township at the southwest corner of the TIF district. The TIF district paying for it spans 24 townships (total land area over 600 square miles), including 11 entire townships to the immediate north and east of Sturgis. East of those townships, the TIF district abandons Highway 34 and bends north, east, and back southeast to take in land on the proposed route of the Keystone XL pipeline.

That northernmost jut is the real moneymaker: it appears to encompass KXL pumping station #17 near Opal (according to the map TransCanada submitted to the PUC). Commission Chairman Alan Aker says the TIF District captures enough taxable land value to pay off the road project in 20 years even if Keystone XL does not come to fruition, but the pipeline and especially Pumping Station #17 would help Meade County pay off the TIF much faster.

The TIF would prevent the Meade County School District from cashing in right away on any added tax value from the pipeline, the pumping station or other development in the expansive district. Locking that future value into the new connector road could deprive the school district of $1.6 million over the next five years. The Meade County school board doesn't like that idea:

Superintendent Don Kirkegaard says the board is not opposed to the road, nor to TIF’s in general, but this particular TIF seems nothing more than a shift in taxes.

“I did a five-year estimate and I believe the district would lose about $1.6-million in future revenue based on projections. It really is a 2-mile road and we’re shifting the taxing structure for over 300 sections of land to pay for the road. It seems like the school is the only player in the new revenue source and the district just can’t support this particular map.”

Kirkeggard says typically, a TIF is designed to be a small area of property to help with the infrastructure in that small area. But in this one, he says it’s more of a “rob Peter to pay Paul” situation.

“The rezoning of the how we are going to use those taxes has nothing to do with the project. It’s just a way, as I say, “rob Peter to pay Paul,” and in this case, we’re Peter. So, we can’t support this particular map. It has both short term and long term impacts to the district. We’re strapped for cash, just like the county is, and we don’t think this is equitable for the school district” [Gary Matthews, "Meade 46-1 School Board Opposes County's New 131st Avenue TIF Map," KBHB Radio, 2014.12.10].

The Meade County Commission doesn't appreciate the school board's resistance. They may face broader public opposition. Under the banner of Meade County Taxpayers for Responsible Government, TIF opponents are petitioning to subject the county's funding plan to a public vote. They have until early January (January 7, by my calculation) to gather at least 762 signatures.


  1. larry kurtz 2014.12.20

    I go over those roads often: makes total sense.

  2. caheidelberger Post author | 2014.12.20

    Geographically, yes. People make paths to cut similar corners on grassy college campuses all the time. Why hasn't the state acted sooner to alleviate the traffic at Exit 30?

  3. larry kurtz 2014.12.21

    One reason it hasn't been developed is because of the Tilford scale that truckers could go around like we did in the old days if we knew we were too heavy. We would head down the Hereford road then to Elk Vale Road to Rapid: It was out of the way but better than bringing another truck to transfer product to make the weight.

  4. barry freed 2014.12.21

    I travel through Sturgis and end up behind people poking along Junction at 1/2 the posted speed limit. I have thought a Toll Road is the answer. Put it to gravel first and I would pay 50 cents to use it, one day, both ways. Use those proceeds to pave it and I would happily pay $1. Charge $1 for passenger cars, $2 for trucks. Drop the Toll and turn it over to the State when it is paid for.

  5. Tim 2014.12.21

    Larry, I'm not sure the truck scale theory would come into play. The bypass road would enter I90 at exit 37 so you would still have to enter the scale before the Tilford exit. The bypass road does not bypass the scale.

    This road is sorely needed. It is getting a lot of local opposition because a few people have spread fear that property taxes will increase. Others feel the road is being pushed through for select rally campgrounds such as Buffalo Chip, which, if built will run right to the front entrance of the chip.

    If the road is built I feel it will create a building boom east of Sturgis and along its route to the south where it connects with I90. This road will also make Meade county more efficient in regards to road maintenance due to the fact the county shop is located on 131st avenue. They will have more efficient access to county roads to the southeast of Sturgis.

    The positive economic impact this road will have far outweighs the short sited negative views of the CAVE people, you know who I'm speaking about, Citizens Against Virtually Everything.

  6. larry kurtz 2014.12.21

    Tim: bypassing the scale is cake and another reason the New Underwood Road is crumbling.

  7. Tim 2014.12.21

    Larry, I didn't realize you were talking about the New Underwood road, I guess if you were avoiding the scale then it would make sense to drive 30 miles east, or whatever the distance is.

  8. larry kurtz 2014.12.21

    North Haines is filling in as ag land becomes unaffordable so that the middle Elk Creek to Alkali Road is the next wave of sprawl. Sad, really.

  9. mike 2014.12.22

    Well Tim or Mr Aker, the county commissioners have publicly stated, this project is betting on the come, and typically TIFs are brought forth by a business or developer, who bear the cost if the TIF fails, therefore since this was a TIF brought forth by the county, the taxpayers are responsible in paying any shortfall. The voters are not cave men as you say, but are for responsible spending. Simple facts, don't spend money you don't have. Plus what about future maintance cost plans I know that's not free. Plus if you are betting on the come, why gamble the taxpayers money, shouldn't the business that benifits the most front the TIF.

  10. caheidelberger Post author | 2014.12.23

    Tim, you're right that there are misperceptions about how TIFs work. The TIF itself is not a tax increase; it's a gamble that the road project will stimulate building and increase property values from which the county would be able to harvest more tax revenue.

    But then Mike is also right about one reasonable objection: the county is spending money it doesn't have. If for some reason the new road does not spur an east-side building boom, and if Keystone XL doesn't get built, the county will have to raise taxes to pay off the construction loan or bond or whatever financing mechanism they use.

    This instance lays bare one fundamental unfairness of TIF districts: the county gets to stake exclusive claim to a chunk of tax dollars that normally would benefit all taxing entities in the jurisdiction. How have we allowed counties and cities to take money off our school districts' tables?

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