An ordinance before the Rapid City Legal and Finance Committee could determine whether a permit would be needed to do graffiti artwork in Art Alley. According to the Rapid City Journal article, the proposed ordinance would give the Rapid City Arts Council control over the permit process and be responsible for determining what goes up in the alley. Artists would need permission from the building owners and a permit from the Arts Council before they could proceed with their designs.
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For more information on Art Alley itself, check out this website.