Further Proof TIFs provide little to no economic impact

There has been some people asking me lately ‘What’s going on with the Sioux Steel project?’ I have no idea. There have been rumors that since the land snafu was discovered there has been a state investigation. Don’t know. Some also are wondering if investors have pulled funding due to Covid. Don’t know. Either way, good times or bad, state land deal aside, TIFs are worthless and only benefit the developer.

This story shows after 30 years, and $500 million in TIFs there has been virtually NO economic impact.

The results were persuasive: the CTBA study found no evidence that the massive package of tax incentives made a long-term difference to the economic well-being of Hoffman Estates compared to that of other similar nearby suburbs that did not make such corporate deals.

Simply put, the study found that the Sears deal was the economic equivalent of an energy drink: It provided a jolt of caffeine and sugar that quickly wore off.

The truth is, Hoffman Estates and its neighbors were already primed for strong economic growth when the Sears deal was hashed out in 1989.

This has often been one of my biggest arguments against TIFs in Sioux Falls. The developers are already doing well (well at least up until Covid hit). We have had record breaking building permit valuations 6 years in a row even without all the public buildings and non-profit facilities that pay NO property taxes. Why would developers need an incentive? TIFs are, and remain to be developer welfare and little else.

Hoffman Estates and Illinois provided $536 million in incentives to Sears to build its headquarters and other development projects. Despite the infusion of funds, Hoffman Estates’ property values trended the same as other, nearby towns that did not spend nearly as much in tax breaks. (Chart: Lylla Younes Source: Illinois Department of Revenue)



10 comments ↓

#1 "Very Stable Genius" on 05.16.20 at 2:30 pm

A new Sears headquarters, is that like a new JCPenney headquarters? #PlanoOhNo

#2 D@ily Spin on 05.16.20 at 3:50 pm

Sears went bankrupt. Not only did TIF’s not help but unemployment and social services expense doubled. Illinois and the Chicago area governments are technically bankrupt from corruption. Taxes are high. It’s roads with toll booths every mile and Meth on every street corner. I’d like to see a study of TIF’s here. Start with the millions that went to the Indoor Huether Tennis Center that’s little used.

#3 anonymous on 05.16.20 at 4:23 pm

When the pandemic hit locally, Lloyd Cos. quietly announced the Sioux Steel Project was being put ‘on hold’ until 2021.

There was very little media attention given to this.

#4 The ghost from Seney Island. on 05.16.20 at 11:24 pm

Seney will have the final say.

#5 'Woodstock" on 05.17.20 at 2:03 am

“Don’t you love this town?”… “We live in a town that builds a Bunker Ramp, can’t match-up two bridges on 26th, and is trying to give the state a TIF at Seney’s place”… “But at least we will have a Chick-fil-A in front of a no-show Dillard’s and a bankrupt JCP”… #KidsArtContests #AirPods

#6 The Guy From Guernsey on 05.17.20 at 8:32 am

The business history of Sears reflects that the 90s and the business activities of the company during that era (including, perhaps, building this headquarters) formed “the beginning of the end”.
The fact that a portion of this tax district remains vacant and undeveloped … 30 years later … in a northwest Chicago suburb. .. is testiment that the promise of associated economic development the offshoot of this tax relief action – was empty.

#7 The Guy From Guernsey on 05.17.20 at 8:36 am

From the article:
Had it not been for the arrival of Sears and the development that occurred afterward, McLeod said, the land would “probably still be empty, corn growing out of it, more than likely.”

snort, chuckle I’ll have whatever that gentlemen is smoking please.

#8 My T Ed on 05.17.20 at 3:03 pm

Hmmmm… A small town to the south of the City with a history of poor city counsel decisions and the highest water bills in the state is experimenting with a TIF. Watch for explosive development, many dollars pumped into the area, and plump happy faces… or, it could be higher taxes, a plethora of fees and special assessments, and vacant lots. Watch and see.

#9 Mike Lee Zitterich on 05.20.20 at 10:29 am

If I may … Here is my story about the Sioux Steel Situation, and why more people should take notice of the recent developments.

Seney Island was a piece of land above the Falls. A Naturally Wooded Area roughly 37 acres in size, it was natural city park with breath taking views of the river, the falls, nature, and picnic area. Originally, part of a land claim given to the the a “land trust” in 1862 under Lincoln – this property was ceded to the State in 1902 to pave the way to connect the railroad thru the City. The original land claim states that if the railroad was ever removed, that the land was to be placed in its natural state, to be used as city park. So any new development again, would be found in violation of the land patent terms.

I have done some nice stories on the Island on my page(s). But if you stand near the river on the west side by side walk, and walk near the “Boulders”, you are walking into the mouth of the West Channel; from there, you walk southwest in pathway towards 4th Street; from there you turn and walk in a Southeastern path towards the river. You just walked the path fo the “West Channel” which goes around the island. Below is a picture I mapped out of the Island itself.

“the land” that makes up Seney Island and the West Channel make up 37 acres, yes. I am not an artist, but did my best to highlight the path of the “Channel”. I am an avid supporter of history and done lots of research on this land to show people where it was.

You would be glad to know, the LAND PATENT was rewarded to the Dakota Land Company in 1862 under President Abraham Lincoln as part of Homestead movements to develop the western parts of the Country. The patent predates the “State” and the land even today has remained under land claim rights of the same group of investors ever since. IT can only be sold by the ‘person(s)’ listed on the patent. Land Patents are passed down generations, they are heriditary and last as long as they are willing to keep it. In 1902 – the group ‘ceded’ this land to the State (without giving up the claim) in order to allow for the Railroad to come thru Sioux Falls. The agreement was that the land would have to be given back to the heirs as per the terms set forth on the land patent itself. If you also understand land claims, you would understand that those whom do OWN the land, pay no Property Tax on the land itself, but those whom are granted ‘permission’ to USE the land do. The “land owner” grants permission to use his land, while the “user” pays a rent or tax.

So the question comes into view – Does Sioux Steel own the land or not? If they actually purchased the land from the ‘land owners’ and the Land Patent was indeed transferred to them, they would NOT be responsible for paying property tax on the land. However, they have been paying property tax on the land, and that figure is a very high amount today.

So now we have a problem don’t we? For there now becomes a question of over whom owns the land. The STATE is merely the ‘caretaker’ of this land, while the true land owner here is the Brookings Family Heirs whom purchased the patent from Dakota Land Company in 1877. How do we find them, and do they know they actually own the land today? Someone can legally approach them and offer them to buy the land.

Remember as part of the Homestead Acts, people were paying $10.38 per acre in order to ‘file claims’ to the land. We know this fact as true from other sources such as Laura Ingalls Wilder’s documented evidence that her dad purchased 160 acres of land near Desmet, South Dakota. Seney Island would have been part of roughly the same amount of acres. And in fact, the Dakota Land Company did buy 160 acres of land that stretched from 4th Street north to the Bluff and between Main Avenue and the River.

IF they, Sioux Steel (Lloyd Companies) pursue this development as planned, they could be found in violation of the “agreement”, which explains why it has been so quiet the past few months. There could be a class action lawsuit here…

Both Sioux Steel and Lloyd Developments claim the West Channel was NOT passable by boat, but I have pictures that prove otherwise, and so do many other people. IF the ‘channel’ was not passable, it was the actions made by both the Railroad Companies and Sioux Steel themselves that made it so. Cause history says – these ‘users’ of the land between 1902-1930 turned the channel into a CITY LANDFILL allowing people to dump their trash, garbage, and waste in the channel in order to cover it up, They were dumping all kinds of crap in it, filling it in with sewage, sludge, and fill, which of course would make it less passable by boat. So a great crime against nature occurred.

I also have old news clippings from then, that explores the idea by the people, that they wanted it to become a City Park. So – it is important that we get our hands on a copy of this land patent to see what the terms are. And what the land can be used for, and if the land was officially sold or transferred.

And as I have done further research, and placed this section of land in proper historical context; something else bothers me as well – there were ‘two’ townships both claiming this area. On the west side you had the Dakota Land Company of St. Paul which occupied the west side of river between 4th Street north to the bluff; then you had the Western Town Company of Dubuque, Iowa which occupied the eastern side of the river between Falls Drive and 6th Street.

The Western Town Company later became “City of Sioux Falls” in 1879, while the Dakota Land Company ceased to exist. But it was from this group of investors of the Dakota Land Company that purchased the land claim that included the 37 acres known today as Seney Island. The island itself was not annexed into to the City Limits of the City of Sioux Falls until the 1930’s. Until then, it remained a sovereign piece of territory under the terms set forth in the land patent. All of which were ‘ceded’ to the State (in care of) to allow for the Railroad Companies – St Paul and Omaha Railroad Companies to use the land to connect their lines to the Citizens of the State.

I would safely bet an ‘agreement’ came to be part of the deal that rewarded the Western Town Company the full rights to establish the CITY OF SIOUX FALLS, while the Dakota Land Company (a Trust) to maintain possession of parts of their land to be governed as they wish, which they have the right to do under the terms of the land patent.

Both groups wanted to fully establish their claims to the land, create a lovely city, but only one would survive; so what deals were made by the two as trade offs upon South Dakota becoming a State after 1889.

Could it very well be – the Western Township was rewarded to develop the CITY OF SIOUX FALLS, while the Dakota Land Company was rewarded to keep claims to their property between 4th Street and the Bluff which includes Seney Island today. This would explain the deals and the Railroad development that took place between 1890-1910. And if I am correct – out of this Dakota Land Trust, the Brookings’ Family appeared and became the sole holder of the Land Patent to Seney Island, thanks to the large fact that the “Company” pulled out their investment in South Dakota, and Wilmot Brookings whom then purchased the land patent rights to the land, whom then later agreed to cede the land to the State, to care for the land and allow for the Railroad Development to proceed. But did he or any of his family ever release the official ‘rights’ to the land patent itself? I say no.

In fact, I go on to make the claim, that it was Welmont Brookings whom in order to carefully watch out for his future family and heirs, that he placed stipulations on the patent, that if any changes, change in land use, or the any change zoning or development were to occur; the land would end up back in the hands of the family allowing them to control what happens to the land thereafter.

See – it was politics as usual. IF we moved forward with allowing the Western Town Company to establish any future city, the Dakota Land Company wanted to protect its interest; but as they agreed to pull out, handing the land patent claims to Wilmont Brookings – it was Brookings that later made the land deals with the State to allow for the St. Paul and Omaha Railroads to ‘use’ the land and pay the “people” of the State a property tax for that right to use the land. All at the same time, the Brooking’s Family would go on to become major players in the future development of Sioux Falls thus controlling a vast section of land along the Big Sioux River today.

In the end, the “People” of South Dakota won, as how many dollars have been collected by the State thru property tax dollars and invested back into our Education System, Economic Development, and how many jobs were created by the Railroad being connected to Sioux Falls.

You see, both groups actually won. Both the Western Town Company and Dakota Land Company played a valiant role in establishing both the City and the State. The Western Town Company got rewarded the town, while the Dakota Land Company were rewarded their railroad connection, while they allowed for Sioux Steel to ‘use’ the land beginning in 1918 to present day establishing a quality economic engine within the steel industry that supplied millions of South Dakotans jobs, steel, and infrastructure.

And what happened to the Brooking’s Heirs, the land owners of the land itself? Well, I presume they are still around somewhere today enjoying the fruits of their labors from all those years before.

So, does Sioux Steel truly own this land today? Why do you not make that call. History says they do not, and unless the “people” of this City, this State rise up, ‘we’ may lose that beautiful island park that our ancestors once dreamed of for good. Make your voices heard loud and clear, we have one last shot to save this Island. What is left of it today.

– Mike Zitterich

#10 "Woodstock" on 05.20.20 at 9:54 pm

“I’ll see you at Seney”….

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