The Chamber says I am wrong, but offers NO evidence

Just like most of our shallow leaders in Sioux Falls, the head mouth piece of the Sioux Falls Chamber, Mark Lee, had this to say about my city council testimony Tuesday night;

We often hear interesting things at City Council during public input, but on Tuesday we heard a new argument. The Premier Center is harming the economy of the City of Sioux Falls. You can listen to it if you choose by going to the City’s website and listening to public input between 12:34 and 15:21. The premise, if I might summarize, is that paying acts to come here and promoters to promote and SMG to manage means all our money is “going out the door.” Thus, there is no economic benefit, but rather harm.

Virtually all the empirical evidence is to the contrary and we’ve heard no other such contention, but we began to wonder. Has Omaha come to grips with how the CenturyLink Center is harming their economy? Or, how about the financial disaster must be happening in Kansas City due to the Sprint Center?  The Target Center and the Xcel Energy Center in the Twin Cities has to be bringing the metropolitan area economy to its knees, right? Why do communities build these money draining facilities?

Anyway, the City Council agenda was light on substantive issues Tuesday so this seemed to be the most interesting thing to report. Still, we’ll stay alert to the financial challenges our successful Premier Center imposes on our city.

Empirical evidence? We are not Kansas City or the Omaha. I WANT economic evidence from Sioux Falls. I actually have been asking for it since the Events Center has opened, and city councilors have asked also, with no avail. I guess the over 20 employees in the Finance Office don’t have the time to put together some simple tables;

I say prove me wrong and give us the numbers, because I have only guessed from extrapolating tax revenue that the EC had around $25 million in sales last year (but they couldn’t even give us those numbers).

So some would ask why I think the EC is a drain on the economy.

• While we have had continued sold out shows at the EC, sales tax revenue is down more then before we built the facility.

• The only development that has occurred at the site was a pawn shop that went out of business and a tax payer subsidized hotel.

• We take around $9 million a year directly OUT of 2nd penny road funds CIP to pay the bond mortgage on the EC. This is $9 million a year that won’t be spent with local contractors building our roads. That’s a lot of lost labor.

• We don’t use the net operating revenue to pay down the debt.

We can make the EC economically beneficial to the community though. If we start promoting the majority of the shows ourselves (like the Pavilion does) instead of just being a rental facility. We could probably inject enough money into the community to not only operate in the black but pay down the mortgage. SMG has argued they are not in the promotion business, OK, then we hire a management company that is, and we pay them a commission on the shows.

This isn’t rocket science folks, and it is hardly a steep request to ask for the sales numbers. But just like the secret siding settlement, the City, and it now seems the Chamber have something to hide. So instead of coming clean or even proving me wrong, they do what they know best, kill the messenger.


#1 The D@ily Spin on 04.08.17 at 6:10 pm

Surprisingly, the Events Center has been busy. How come tax revenue (aka budget) is down? One would think there’s gain from visitors. Perhaps, retail sales tax is way way down. We don’t know. A complete itemized accounting must happen soon and before the end of the mayors term. If there was good news, Huether would gloat. I suspect there’s not and he’s hiding bad news. It’s to bad the chamber has joined city hall corruption.

#2 Emoluments Clause on 04.09.17 at 12:41 am

Well, if they attack you, that’s only because you’re a problem for them…. Keep it up!

I am surprised the Chamber had time to attack you, though. I would think they would be too busy keeping wages down; while at the same time they help fund studies on how to deal with the affordable housing crisis in this town…

But I think your theory on the EC has some merit. That’s why, whenever I shop at a big box store, I always checkout with a clerk and not through the self service line.
Because I like to think that I am helping to keep some of the profit here in town in the form of wages, rather than having all of the profit go to Arkansas and China…..

#3 l3wis on 04.09.17 at 12:56 am

Oh, they have come after me before in the Chamber Advocate, at least time they didn’t use my name. But yes, it was petty.

Hey, I may be completely wrong on this, but I’m sorry ’empirical evidence’ doesn’t cut it for me. I want to see the economic data.

#4 The D@ily Spin on 04.09.17 at 9:58 am

The Chamber deserves criticism. They have no practical purpose. Siding with the city makes them partial and unfavorable toward business. They should stick with what they’re for. Namely, cutting big ribbons. Why does it take more than one person? They’re only dangerous when they run with those big scissors.

#5 Mike Kokenge Sr on 04.09.17 at 10:37 am

I’m with Scott all the way on this one. The chamber once again is wrong. You cannot bring Paul McCartney to a community this small, pay him over a million dollars for a single night, then he jets out with that million. A million dollars, never, ever, to be recirculated in our community again.

#6 l3wis on 04.09.17 at 11:23 am

Mike, you also have me thinking about something else, what about all the scalper money. That could be anywhere around $10 million that goes straight out the door.

#7 Bruce on 04.09.17 at 1:36 pm

I’ve been advancing the negative economic multiplier effect idea since the EC was built. The very concept is to take money out of the community every time the door is opened. Sioux Falls cannot be compared to Kansas City or Omaha by anyone trying to keep a straight face. We are not a corporate headquarter town. This town has been boom towned up with franchises and warehouses. The manufacturing and processing we have had here are being pushed out in the beautification and gentrification mentality. We are not going to survive the next recession very well because nothing is made here. South Dakota and Sioux Falls are struggling because we do not build things here, we only buy and dispose.

The economics is very simple but it appears the Chamber leadership and out economics major mayor missed those lessons. All they are concerned about are the pretty lunches and grand opening open bars for the next fried chicken drive thru?

#8 possum jenkins on 04.09.17 at 2:20 pm

when they bringin bto and foghat back?
for 89 gd bucks a pop
insanity that ripoff yall got there


#9 anonymous on 04.09.17 at 4:29 pm

The entire complex (Arena, Convention Center,and EC) is owned by the taxpayers. Why is all of the accounting not available to the public?

The minute Turbak announced all 3 facilities would be handled as one for accounting purposes, the waters became muddied.

Also, they had a multi-million dollar slush fund the day the EC opened. I believe they have used this funding to incentivize the concerts they have put on.

Both national consultants (CSL and AECOM) put in their final reports that at most the EC could support 2 to 3 concerts a year. So, where is the funding for all of these concerts coming from!?

If there’s nothing to hide, Mike, then make the numbers public.

#10 l3wis on 04.09.17 at 4:37 pm

That’s the funny part, by the Chamber bringing attention to my testimony, they probably got a lot of their members asking the same questions I am.

#11 LJL on 04.09.17 at 4:43 pm

You hit the nail on the head with this one. With all the tickets being sold, why is the sales tax in the shitter. The sensitivity of the chamber says your close to the target.

Good work.

#12 Mike Kokenge Sr on 04.09.17 at 5:10 pm

Chamber studies overstate the economic impact of any entertainment facility because they confuse gross and net economic effects. Most spending inside the denny tin can is a substitute for other local entertainment spending, such as movies and restaurants. Similarly, most tax collections inside the can are substitutes, as other entertainment businesses decline, tax collections from them fall. If McCartney and all the other million dollar performers we get lived here, and spent their dollars here, then sure, the denny would have a positive impact. But when tens of millions of dollars leaves SF each year just to entertainers? Scalpers? SMG? Then we got a problem. If the chamber can prove otherwise, gross vs net vs money in vs money out, then show us. I’m guessing they cannot.

#13 l3wis on 04.09.17 at 5:17 pm

Just like the percentage of local contractors they used, it would be a lie.

#14 what??? on 04.09.17 at 11:12 pm

Isn’t this public information? Are they hiding it with fancy accounting methods? Echoes of Enron, et. al…

Can’t this information be leveraged via lawsuit? It’s public right? Am I missing something?

#15 Bruce on 04.10.17 at 9:33 am

You ask a good question what?? and it deserves an answer. Our fine upending mayor and his administration are so afraid of the information getting out, they release nothing to nobody. The Argus has been trying the court route on several issues only to be foiled at every angle.

The best thing the city does is never compile anything in a report so it can never be leaked. When something is said, Tracy Turdbak will give a monotone nothing report based on glossy information to make it look like something when it isn’t. He is our expert?

The economics major mayor we have believes he has a winning formula of pretend and it shall be. Tell a story enough times and enough people will believe it eventually. If these methods don’t work for everyone, put a candidate up for mayor who will continue the happy talk.

L3wis continues to lead a way through the mess by giving us a forum / platform to compare notes. My hope is to so totally discredit the policies and behaviors of this administration, the citizens will vote to clean up the mess in 2018. We have a few trusted members of the Council but not enough.

We need a Grand Jury to be seated to dig into the mess we are being left with when the 2018 administration change happens.

A part time citizen of Mexico is not going to do the clean-up job needing to be done.

#16 The D@ily Spin on 04.10.17 at 10:08 am

It’s called ‘Sunshine Law’. By law, anyone (especially media) can request city information via subpoena if necessary. I did it (Daily vs City). What you get is irrelevant disorganized volumes. It took weeks of clerical time looking for real information without results. Then, you re-petition the court and two mayoral terms for relief. City finance not reporting is criminal but you can’t prove it privately. The Feds must step in. They’re busy doubling Trumps empire and they’re not coming.

#17 The Guy from Guernsey on 04.11.17 at 8:21 am

Not rocket science, but I see a Nobel Prize in Economics on the horizon.

You will need a name for your economic theory. How ’bout “The Decompounding Effect of an Entertainment Facility upon Multipliers of Economic Development in a Local Economy.”

#18 Emoluments Clause on 04.11.17 at 6:28 pm

But unlike Dylan, I would suggest that you attend the Nobel ceremony…