Sioux Falls Media ignores the negative effects of TIF 23

As I have said in the past, I have NO doubt that this TIF will pass on March 2 when it comes before the city council. Sure a couple of them will put an amendment in there about ‘getting reports’ on how the $30 million dollar slush fund is being spent, but this is hardly the transparency that should be given. TIF 23 is what it is, corporate socialism funded by the taxpayers in higher taxes, crime and less affordable housing.

While the local media has done a handful of stories about the TIF, they basically just copy the press releases from the Development Foundation and call it good.

What they have not discussed is the very negative effects this TIF will have on our community. They also have NOT told us about the over $50 million the state, city and county taxpayers have already put into this park that really wasn’t needed, and even if you could prove it was, it could easily be propped up by private investment, you know that silly notion that we live in a FREE enterprise capitalist society.

Here are some issues the media could look into;

No studies. There is yet to be a comprehensive independent study on the economic impact of TIFs in Sioux Falls and South Dakota. In other parts of the country where these studies have been done, usually by university economic departments, they have shown little to NO impact on the overall economy. I think the developers in Sioux Falls have run their own numbers privately and probably came up with the same conclusion, this is why you will never get a honest evaluation from them.

Your taxes will go up significantly. This is also a dirty little secret. When the valuation of Flopdation Park’s properties go up, their property taxes go up, but they get those payments back in the form of a TIF (rebate) to pay for upgrades to infrastructure that benefits these private businesses. That valuation in taxes has to be made up with higher taxes on the rest of us. As for the school district, the state coffers (sales tax revenue) will have to make up that shortfall. In other words much higher taxes for us that actually decrease our infrastructure services. It’s corporate welfare on the highest level.

Crime will increase, affordable housing will decrease. Sioux Falls has one of the lowest unemployment rates in the nation. Where will the thousands of workers needed to work at these new facilities come from? Well they will have to be brought in. This is nothing more than growth for growth’s sake that will increase crime, public education costs and decrease our inventory of housing. The only people benefitting will be the banksters and developers while the rest of us will have to pay to clean up the mess.

Profits will not impact our local economy. A lot these businesses are international and national companies that will send their profits out of the community while paying NO state income taxes, no property taxes (TIF) and very little to NO Federal income taxes.

Low wage jobs. There have been numerous studies that show that large industries like this actually drive wages down in communities. This is the scariest part because as I have said above, it will increase our costs for crime prevention and public education.

They don’t need the incentive. The most egregious part of this TIF is that it really isn’t needed. As I pointed out on Tuesday night, this is most baffling part. We are growing business in Sioux Falls at a breakneck speed, if anything, we need to cool our jets a bit. With record breaking building permit numbers and our lack of affordable housing, I just see incentivizing low wage businesses to come here as counter productive and compounding our problems. We are already years behind on infrastructure upgrades to the core of our city (this is where we should be investing the money). On planning preview a couple of days ago a planning employee said a developer told them there is already a 5 week waiting period in getting into a new apartment in Sioux Falls and they have already broke building permit records from the year before in January. We don’t need to incentivize businesses that already want to come here. We also need to help local business thrive, another benefit to cleaning up our core.

I’m hoping our local media wakes up and actually tells the public about TIF 23 and the massive negative repercussions this TIF will have on Sioux Falls and the region because 5 years from now when your taxes have doubled, the core is crumbling and crime is through the roof, all roads will lead to TIF 23.



7 comments ↓

#1 The Guy From Guernsey on 02.20.21 at 11:49 am

“As for the school district, the state coffers (sales tax revenue) will have to make up that shortfall.”

This would be a point of view which one your regular commenters has attributed to Councilor Erickson (unless you want to say Erickson stole it from you [shrugs]). It is a point of view which I believe to be false.

From the perspective of the school district-
There will be more students to educate.
Then also needed – More teachers, more educational materials, more support personnel (teachers aids, more cooks and lunch [insert gender pronoun of your choosing], etc.), more buses, more bus drivers. More of everything directly related to educating an additional student.
Even more. More classrooms, larger higher capacity lunch facilities, more gyms and more school buildings. The Tri-Valley district is already at this point (see also, a couple of recent contentious school construction bond election votes in the district).
I acknowledge that the per-student-based state aid formula would increase the total state aid sent to the district. But, it will not cover the total additional cost of educating those students.
Those who will pay more, likely with opt-out spending adopted into the local school district budget – those in the Tri-Valley school district who ACTUALLY WILL pay real estate taxes (today!) on the full assessed valuation of their properties.
The alternative to opt-out local spending will be to to make budget cuts from other programs in order to accomodate the additional costs to educate more students.

#2 The Guy From Guernsey on 02.20.21 at 12:10 pm

“The most egregious part of this TIF is that it really isn’t needed.” Agree.

Amazon is building in Fargo, ND a distribution center almost identical to the project in Sioux Falls.
Fargo needed to grant ‘0’ in incentives for this result. Amazon was building a distribution center in Fargo regardless.
If we have such a special regional economic engine, isn’t it time to stop offering for free, or reduced financial commitment the opportunity to be part of something so special?, so lucrative?
We have quite an inferiority complex in Sioux Falls. We are constantly seeking validation of our decision to live here. We measure our worth along the continuum of the chain restaurant scale. We’ll feel much better about ourselves if Dave and Buster’s ever completely consumates their presence here … but not as good as when we finally “get Cheesecake Factory”.
Know your value!

#3 l3wis on 02.20.21 at 1:33 pm

You point out why this is more complicated then most people know. I was told by a local government official that the media won’t cover the TIF because they do not understand it. Yeah, no sh!t. This is why they need to dig around and do a comprehensive story about it. I will give credit to the mayor on one front, he has made alliances within most of our MSM organizations in SF, heck, KELO AM gave him an award. He has few enemies in the news business in SF. I actually believe passing this TIF will be one of the most disastrous things city government has ever done. It will be way beyond the failed EC or Bunker Ramp and like the Sanford TIF over a decade ago, it will just open the door to more larger TIFs that have nothing to do with propping up the economy in SF, I actual believe it will have the exact opposite affect. Some of it is flat out greed, but I also think it is economic ignorance when it comes to running a city.

“We have quite an inferiority complex in Sioux Falls.” That comment makes me laugh, it reminds of the time I went to see the Foo Fighters at the Denty. It was the first event (and last) I bought a ticket for. I had been to other concerts, but I got free tickets to them. I couldn’t sit next to my friend because we both bought our tickets at different times, but we ended up hanging out at the South Bar where you can see the state from. But before that I was sitting at my seat and surrounded by very nice people, younger couples. When the FF were playing the record version of their ‘hits’ everyone around me was dancing and singing once they started improvising and playing covers (the best part of the concert) they all just stood there, lost and unresponsive. People and government officials in SF like things to be ‘safe’ they don’t want to try something new like re-investing in our core, because that is scary and full of risk. I actually believe it way less risky and would have a major impact on the local economy.

#4 Mike Lee Zitterich on 02.20.21 at 1:40 pm

Excellent Post – people need to ‘educate’ themselves on what, why, and how TIFS came to be.

They also need to understand the manner of which “property tax” is assessed. IT is very much manipulated to get the utmost greatest revenue from the land itself. That is right, the “tax” itself is assessed to the value of the land; and

As ‘we’ develop our land(s), build a home, a business, a public park, a railroad, a junk or scrap yard, a farm, thus zoning the land as such: Agricultural, Residential, Commercial, Public Use, Railroad Use, Wasteland, Nature Reserve, Public Park, etc-etc – it manipulates the value of the land itself.

Each form of ‘use’ carries a different tax rate, and the taxes collected from that ‘use of the land’ are used for such things as Public Education, Economic Development, Community Development, Local Government Infrastructure, etc-etc.

Ever wonder why the Cities thru out the State routinely either BUY tons of land, annexing that land into its incorporated territory – it adds ‘asset value’ to the city.

The more value of assets owned by the city, the more it can borrow, the it can borrow, the more special pet projects it can create. “WE” saw this more aggressively thru out the Mayor Mike Huether Administration;

The current administration is not so aggressively choosing to not begin all those new big projects, other than choosing to finish ones already started, or contracted out prior to 2017. Give Mayor Paul Tenhaken some credit here…

As ‘we’ proceed to redevelop lands within our city, everything we do adds to the value, which ultimately raises our property tax revenues – which is set to be close to $80,000,000 in 2021.

Look at the amount of LAND owned by the City in 2019 – the last published C.A.F.R – $179,202,680 dollars worth (page 26).

The City itself holds over $2,193,150,009 (billion dollars) worth of “ASSETS”. That is Cash in Bank, Receivables, Land, Infrastructure, Buildings, Machinery, Construction in Progress …

That is alot of future ‘revenues’ coming into our city in our near and long term future.

In fact – the CITY has so much revenues, that after it pays off all Debts, Liabilities, Expenses, Obligations, it has $1,789,902,686 left over – folks that is enough to write every resident a check for $10,000 dollars each.

Revenue Problem?

This shows there is SO MUCH “money” floating thru out the City of Sioux Falls; there is NO need to hand out these T.I.F’s right and left. Simply allow the devlopers to purchase land, secure that land, develop the land, build on the land, by encouraging “Residents” of the City to invest in their own properties, expanding their own interests, in order to produce a future income source.

My argument here, is we should be lowering our ‘tax rates’ in order to allow ALL CITIZENS to keep more their income, of which can then be used to invest in their Land, Real Property, Tangible Propertries, etc-etc; all of which as a collective society, provides the CITY a ‘tax base’ of which to collect its taxes from.

But … we manipulate this thru establishing these TIF districts, allowing a small portion of our residency to in 80 acres, 160 acres, even 250 acres by allowing them to go outside the community to gather investors, of which we promise them a “TIF” in order to reimburse them for “City Infrastructure” of which they pay for themselves.

IF only ‘we’ lowered our tax rates, we be giving everyone the same equal right to invest in their properties, of which the ‘taxes’ we do collect can then build that same infrastructure as the land is being developed.

So in order to provide those TIFS in these Districts (Downtown, Sioux Steel, Foundation Park, et); those of us outside the districts then much sacrifice today, allowing a portion of our property tax dollars to go back into infrastructure that ‘we’ as a city should have paid for simultainiously as the land was being developed.

In closing – all we really do is allow for “Special Interest Groups” to come here with the benefit to capitalize on our tax dollars to build the very infrastructure ‘we’ should have planned for years ago.

– Mike Zitterich

#5 Scott D Hudson on 02.20.21 at 3:06 pm

lol the Foos are about the safest band out there these days.

#6 Fear & Loathing in Sioux Falls on 02.20.21 at 7:11 pm

Fargo has buses of people who can intimidate, that’s probably why Amazon didn’t ask for a TIF from them.
Perhaps, a rumor that the buses are now headed are way could help.

#7 "Woodstock" on 02.20.21 at 7:16 pm

“TIF stories are probably more difficult to report”…. “Food truck stories involving a veteran with a Purple Heart from Senator Thune, however, are most likely much easier”….

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