A quiet contract amendment also puts the operator’s affiliate inside construction change-order reviews — a role it wasn’t paid for in July.
Rapid City SD – Sports Facilities Management, LLC hasn’t opened the Rapid City Fieldhouse yet.
It hasn’t hired a General Manager, sold a sponsorship, or hosted an event.
But as of a First Amendment sitting on the September 2 Legal & Finance Committee’s consent calendar — bundled in as item 10 of 14, the kind of item that passes in one vote unless someone pulls it — SFM’s monthly pre-opening fee jumps from $18,000 to $30,000.
That’s a 67% increase, six weeks after the underlying contract was signed.
The company already holds three roles in the Sports Complex project: its affiliate, Sports Facilities Development (SFD), advised on the building’s design; SFM itself won the operating contract; and SFM’s own numbers, filed as part of that July 20 agreement, project the facility will lose money its first three years open — $500,419 in Year 1, $339,098 in Year 2, $47,890 in Year 3 — before turning a projected profit in Year 4.
Whether Council saw those loss projections before voting to approve the contract on consent that same day remains an open question.
What actually changed
The original Facility Management Agreement, dated July 20, 2026, set the Pre-Opening Fee at $18,000 a month, starting August 1. The First Amendment, dated September 8, 2026, replaces that clause outright:
“Beginning on September 8, 2026 and continuing thereafter on the first day of each month until the earlier of Thirty (30) months or the first day the facility is open to the public… Owner shall pay to Manager a fee for its pre-opening and owners advisory services… of Thirty Thousand Dollars ($30,000) per month.”
The amendment doesn’t stop at the price.
It also replaces the entire management-services exhibit — Exhibit A — “in its entirety.” The original exhibit listed SFD’s pre-opening work as a flat set of services: design feedback, FF&E procurement support, marketing plans, staff hiring, sponsorship sales. The new exhibit restructures that same work into six numbered phases, and phase five is new territory:
Phase 5 – Construction Phase
“Participate in owner-level project meetings and provide advisory input. Review proposed change orders for validity, cost/schedule impacts, and alignment with project budget… Review and advise on pay application processes and schedule of values. Advise on communication protocols and escalation paths for disputes.”
In July, SFM’s affiliate was hired to help design the building and consult through pre-opening.
Under the amendment, that same affiliate is now contractually positioned inside construction itself — reviewing the change orders and payment applications that determine what the city actually pays its contractor.
The overlap question
That construction contractor is a separate line item entirely — and its contract is no longer pending.
The City issued its CMAR request for proposals back in April 2026, months before SFM’s original contract was even signed. Eight firms responded. A review committee — again drawn from the Sports Commission, Visit Rapid City, and City staff, the same three-party structure that reviewed the Sanford naming rights bid — unanimously recommended Scull Construction Service.
The Council authorized the Mayor and Finance Director to sign the CMAR agreement with Scull on August 26, 2026, at a special City Council meeting called specifically to handle that item alongside the Mayor’s 2027 budget discussion and the first reading of the appropriation ordinance.
That’s one week before the SFM fee amendment showed up on the Legal & Finance consent calendar.
Special meetings in South Dakota can’t have items added to their agenda once called — so the CMAR vote got a narrow, fixed agenda and nothing more.
The SFM amendment got the opposite treatment a week later: folded into a 14-item consent bundle at a regular committee meeting, where it could pass with zero discussion unless pulled.
Two different procedural tracks, two different ways of limiting scrutiny — and the practical result is the same.
The City already had a construction manager under contract, with Guaranteed Maximum Price authority over the build, when it expanded SFM’s affiliate into reviewing that same construction’s change orders and pay applications.
Scull gets paid to manage the build; SFD now gets paid to review it.
Nothing in the amendment explains why that advisory role wasn’t written into SFM’s original July 20 scope, when the City already knew by April that a CMAR was coming.
What it costs
The amendment caps the $30,000 rate at 30 months from its effective date — a ceiling that lands around March 2029.
That’s within the range of opening-date estimates already on record for this project: BID No. 2 minutes cited a Fall 2028 target; the Pete Lien land donation agreement sets a December 31, 2029 substantial-completion deadline; Sanford Health’s own press materials say “open by 2029.”
In other words, the facility could plausibly still be unopened when the 30-month ceiling hits.
Run the math across that full 30-month window and the increase alone — separate from the flat $18,000 first month both versions share — comes to:
- Old rate ($18,000/month × 30 months): $540,000
- New rate ($30,000/month × 30 months): $900,000
- Difference: $360,000 in additional pre-opening advisory fees, before the doors open, assuming the facility takes the full window to complete.
If the Fall 2028 estimate holds instead, the window is shorter and the gap smaller — but still in the low-to-mid six figures, on top of the $49,999 prepayment and the Base Management Fee structure already reported.
What to watch
- Whether the Scull CMAR agreement, once its Guaranteed Maximum Price is set, discloses any coordination — or cost-sharing — with SFD’s new construction-phase advisory role.
- Whether Council discusses the SFM amendment at all, given its placement on consent — one week after the CMAR vote got a special meeting of its own.
- Whether the Deferred Management Incentive Fee structure — tied to EBITDA targets that assume losses through Year 3 — gets revisited alongside a pre-opening cost structure that just got more expensive.
Sourcing
Facility Management Agreement between the City of Rapid City and Sports Facilities Management, LLC, dated July 20, 2026; First Amendment to Facility Management Agreement, dated September 8, 2026 — both filed under agenda item LF090226-12, September 2, 2026 Legal & Finance Committee agenda; agenda item CC082626-01, August 26, 2026 Special City Council Meeting agenda — all rcgov.org.
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