Entries Tagged 'Developers' ↓

UPDATE: Sioux Falls City CountCilor Jensen recuses himself on controversial apartment zoning

UPDATE: Supposedly Councilor Selberg should have recused himself from this vote also since the developer he is working for is considering investing in this project also. It’s hard to keep track of all the conflicts these councilors have.

Don’t get me wrong, he probably did the right thing, but he gave little explanation why he recused himself. He did site this city code;

30.017  VOTING PROCEDURE.   City council members may not abstain from voting, but may absent themselves from the meeting by physically leaving the meeting at the time an item is called by the clerk. Members with a financial interest in a matter shall disclose that interest and shall absent themselves from the meeting by physically leaving the meeting while the matter is considered.

In item #48 tonight at the city council meeting there was a controversial apartment zoning, the applicants are Cresten Capital Holdings. Without mentioning specific names, individuals investors in this group gave heavily to Jenson’s council campaign. Jensen also works for a bank that could be helping to fund this project.

Two great reasons to recuse himself.

The remaining seven councilors voted to move it to 2nd reading.

My only concern is the influence Jensen may have behind the scenes with planning staff and other councilors and one of the biggest reasons I opposed him on the council because of all the conflicts of interest he has financially with the city not only because of the bank he works for but deals like this.

Like I said, he did the right thing by recusing himself, but I would sure like an explanation from a councilor who bought his seat on this council with the very money he received from the investors in this project.

Sioux Falls City Council passes TIF-23, 7-1 (Starr voting no)

I missed the vote because once again the city can’t get their online streaming program to work, I guess they have just resolved to not fix it. The entire debate over the TIF is missing from replay (that’s convenient) and the mask mandate and public input is also missing. Is it just coincidence that when controversial items come in front of the city the video system fails . . . sure.

As for the media, only one story was done about the TIF around the same time the city council was voting on it. Good job media, way to stay on top of this.

Starr I think opposed it for the same reason I opposed it;

“What’s really happening is the development foundation is going to have an additional tool to recruit businesses to town that maybe pay a living wage,” Sioux Falls City Councilor Pat Starr said. “The negative side is we are in a boom-type of economy right now and the real question is, do we need to incentivize additional growth? We already have a housing shortage.”

Five years from now when housing shortages are in dire straits and crime and taxes are through the roof, we’ll be asking why we did this because the people who are making money from this will be long gone while we have to clean up the mess with higher taxes and a crumbling infrastructure in our core. It was a very sad day in Sioux Falls for our local government and their utter failure to not have the vision to do things differently. What a pathetic group of individuals.

We could have had a successful industrial park without incentives and we could have used the $94 million to clean up the infrastructure we already have. Greed wins the day once again.

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.

Sioux Falls Planning Commission has serious attendance issues

As a South DaCola foot soldier pointed out to me yesterday, how can 4 votes out of a 9 member commission pass a $94 million dollar TIF recommendation to the city council?

Good question. After spinning my wheels yesterday I discovered according to the Commission’s own rules and Robert’s Rules they can conduct business with 5 members present even if the chair is a non-voting member (they only break ties).

So this got me even more curious about the attendance of the Planning Commission, even pre-covid and discovered over the past year, even though they can attend meetings via phone, a good chunk of them don’t even bother to show up. In fact, over the past 14 months, they have never conducted business with a full body (9 members);

Feb 2021 – 5

Jan 2021 – 6

Dec 2020- 6

Nov – 5

Oct – 6

Sep – 7

Aug – 7

July – 7

June – 2 meetings, 6 at both

May – 6

April – 5

March – 6

Feb – 7

Jan – 5

While I totally understand that these members are volunteers, I question what they signed up for? While they do have to read a lot of materials to prepare, they only really need to attend ONE meeting per month for about 1-2 hours. That’s it!

But my blame for this attendance isn’t on this all volunteer board, it really lies in the lap of Planning Director Eckhoff and his boss Mayor Stoneless. Has there ever been an attendance discussion? My guess is probably not considering it is easier for the mayor and his developer friends to push an agenda when no one shows up to vote on that agenda (or very few).

I think it is absolutely disgusting that a board that is supposed to recommend to the council can pass a ludicrous $94 million dollar TIF on 4 out of 9 possible votes, with next to no discussion.

This administration gets sloppier by the day when it comes to process.

UPDATE: Sioux Falls Planning Commission passes TIF #23, 4-0

UPDATE: There has been some discussion today with my local government nerds on why the Planning Commission has 9 members but they rarely all show up. In fact, one member’s term was up last April and have not been replaced yet. In the last meeting only 4 members voted throughout the meeting even though 5 were present (the chair wasn’t voting) and over the past year it seems like only 5 members have been voting on things. Ideally you would say that you can only conduct business with a Quorum, 5 or more members, so what does it mean if only 4 votes. Robert’s Rules says this;

64. A Quorum of an assembly is such a number as must be present in order that business can be legally transacted. The quorum refers to the number present, not to the number voting. The quorum of a mass meeting is the number present at the time, as they constitute the membership at that time. The quorum of a body of delegates, unless the by-laws provide for a smaller quorum, is a majority of the number enrolled as attending the convention, not those appointed. The quorum of any other deliberative assembly with an enrolled membership (unless the by-laws provide for a smaller quorum) is a majority of all the members. In the case, however, of a society, like many religious ones, where there are no annual dues, and where membership is for life (unless it is transferred or the names are struck from the roll by a vote of the society) the register of members is not reliable as a list of the bona fide members of the society, and in many such societies it would be impossible to have present at a business meeting a majority of those enrolled as members. Where such societies have no by-law establishing a quorum, the quorum consists of those who attend the meeting, provided it is either a stated meeting or one that has been properly called.

So while having only 4 members vote out of a possible 9 is unfortunate, apparently it is legal, but I am still wondering why this body can’t get 9 people, even on the phone, together? Another sloppy move by this administration.

FF: 23:30

This occurred on Wednesday night and I forgot to attend for public input. Nobody else from the public showed up to speak against or for the TIF. This is unfortunate because it will literally raise property taxes on us $94 million over the next 15-20 years with $30 million of that as an ‘incentive’ slush fund. It is probably one of the most ludicrous TIFs I have ever seen.

What made it even more strange was there was very little discussion from the commission except that it was ‘good’. And besides the presentation from a planning department staffer, the representative from Development Foundation also said very little. It was pretty obvious this was pre-determined by the commission.

The other part about using $30 million of this for ‘business’ incentives also surprises me based purely on economics and development in Sioux Falls. Year after Year we are growing and year after year we are crushing building permit records. In fact we have a housing shortage and can’t keep up. So why do we have to ‘incentivize’ a business to come hereI recently saw that Tessiers (a South Dakota company from Mitchell) is building a new facility at Flopdation Park. Did they get any deals? Did they ask for any? Not sure, but I liked this quote from them;

“We thought that Foundation Park location would be ideal for us as we do business in the places on the I-90 and I-29 corridor,” said Gopal Vyas, who recently retired and was board chairman when the deal was done.


“Also it is easily accessible for our team members from Mitchell to commute when needed. It also is very convenient for our team members flying from Minnesota or driving on I-90 coming west.”


That is what often puzzles me when they ask for these TIFs, are they even needed to bring business here?

UPDATE: How can NON-Elected City Employees Recommend Approval of a $94 million dollar TIF?

I’ve complained in the past about the ludicrous nature of city employees in the planning department recommending approval of projects. But a $94 million dollar TIF? Get Out!

Just look at the Planning Meeting agenda for Wednesday;

Notice that on the actual agenda page there is NO recommendation from staff, but if you look at the attached documents you get this, approval;

Situational factors are also evaluated in any TIF request with flexibility and discretion, and may include any factor important to elected and appointed officials. 
Staff recommends approval. 

I’m not sure who wrote the sentence above, but in my circles we call that poppycock, horse pucky or in Europe, Bullocks!

While I understand they have to evaluate re-zones and permits, what gives them any authority to simply recommend approval of a $94 million dollar tax rebate?

I have encouraged the city council in the past to either change the charter/ordinance or write a new one that doesn’t allow NON-ELECTED city employees in the Planning Department recommending approval. They should give the PROS and CONS of every agenda item and let the Commission and Council decide.

Oh, and another City Hall mole tells me that the City Attorney even dipped his toes in the water sending city councilors a recommendation of approval. The City Attorney! If this is true, WOW! Not sure what a JAG officer with little knowledge of 1st Amendment rights can contribute to a TIF argument . . . oh that’s right, he has the Mayor’s boot polish on his tongue, my bad, I forgot. He did learn one thing in the military, a good spit shine.

What makes it even more egregious in this case is that they have NO basis that this is a good plan, in fact all they do is quote state law;

Tax Increment Financing is an economic development financing tool established by Chapter 11-9 of South Dakota Codified Law. TIF’s allow property tax dollars from a specific geographic area to be applied towards eligible public and private capital improvements and to stimulate and develop the general economic welfare and prosperity of the state by utilizing the anticipated increase in property tax— known as positive increment— generated from a project to reimburse for improvements determined as eligible by the municipal governing body. Improvements are typically financed and paid off in future years through the tax increment proceeds. 

They also make this assumption without backing it up with data;

Project Details The property included in the district boundaries are part of Foundation Park, which is a development park owned by the Sioux Falls Development Foundation. In an effort to promote development of the property, the Sioux Falls Development Foundation has requested Tax Increment Financing to offset the costs associated with preparing the property for development and to stimulate and develop the general economic welfare and prosperity of the state. The request is substantiated by economic development that will be generated through growth in taxes by a development site of this scale.

As I have mentioned in the past they have never done a comprehensive study about TIFs to prove that they ‘stimulate and develop the general economic welfare and prosperity of the state’ and they never will because it will only prove what TIFs really are; corporate welfare and little else.

UPDATE: The simple video below from our friends up North explains quite simply how TIFs raise taxes on the rest of us while the receiver of the TIF gets a nice little treasure chest (It gets juicy at about 5:10) H/T MLZ.

Notice the mention of a ‘TIF Account’ this of course will be held in a private bank. I’m not sure which bank would be used, but it is highly likely that the city and development foundation will use the one the city uses for it’s accounts now, you can guess which one that is.

Also notice the mention of ‘Bonds’. The city and state almost exclusively use one bonding company. You see where this money trail is going . . .

She also does a fine job of explaining how the original intent of TIFs was to clean up slums but now has been changed. She doesn’t flat out call it a scam, but the half-way sarcastic grin and partial eye-roll gives it away.

The best part is when she essentially explains how the rest of us will have to make up for this $94 million dollar TIF by increasing our taxes on over a billion dollars in valuation. OUCH!

She also talks about the ‘buddy system’ that is alive and well in Sioux Falls between the developers, the planning department, the mayor’s office and the city council which why I have argued for years is ripe with corruption. Remember the city holding onto land for a certain developer, tax free for over a decade at Phillips to the Falls then giving a TIF to boot for luxury apartments?

The video shockingly ends with my argument about using mini-TIFs for everyone in the city.

Oh, and I love the ending where she pretty much blows a hole in ‘urban renewal’ stating what it really is, higher taxes for the rest of us.

I know a lot of people think I blow a lot of smoke about TIF’s but this video is from a leading policy agency in a neighboring state.

Breaking Down proposed Sioux Falls TIF 23

During public input today at the Sioux Falls City Council informational meeting (FF: 1:39:00) I touched on the morality and ethics of tax incentives and rebates for citizens and local contractors and business owners opposed to International Companies. What I did not touch on is what this TIF is really about, a select group of investors making a buttload of money while using the city as collateral.

Before reading anymore, I encourage you to first watch the presentation of TIF 23 than consider what I think I saw;

• The real beneficiary of the TIF would be the Development Foundation, not the businesses coming in or the citizens of the city.

• Basically the DF is using the TIF as a slush fund (for about 15 years) to make the land more appealing by spending the money on upgrades and infrastructure instead of putting it back into the existing city infrastructure for street improvements, public education or judicial/public safety expenses. In other words they are robbing from the other governmental entities (that benefit us all with their services) to build an industrial park we never needed to begin with (seriously folks, it was much better as farmland).

• Do you think this slush fund will just sit in a metal box down at the executive offices of the Foundation? Nope, now we bring in the banksters and bond salesmen to get their cut while they use the city (taxpayers) as collateral if any of these deals fall thru.

I ask a simple question; If you had two choices as the Mayor and City Council where you could spend $94 million in tax incentives/rebates over the next 15 years? Would you . . .

• Spend it on upgrading existing infrastructure in our city which would improve neighborhoods, reduce crime, create much needed affordable housing, employ local contractors and enrich local small multi-housing property owners or would you . . .

• Spend it on building NEW infrastructure (that we will eventually have to maintain) that will house International and National businesses (which pay substandard wages and little in local taxes while shipping profits overseas) attracting more people to our city who will be looking for housing, public education and creating more social headaches.

Don’t get me wrong, I don’t have an issue with attracting good employers to our city, but why do we always have to dangle the TIF carrot? If our economy was truly strong in Sioux Falls (I think a certain sector of it is) why would we have to offer property tax breaks? If a business truly has a good business model, they should have no problem paying for land upgrades, infrastructure upgrades, living wages and 100 percent of their property taxes on day one. Isn’t that what Free Enterprise and Capitalism is founded on? Not to sound like Ayn Rand, but Cheese & Rice!

But like I said, TIF 23 isn’t about investing in any of these things it is clearly about a handful of bloodsuckers who want to scrape up the fat drippings from the bottom of the broiler pan while our council and city administration is either too blind, too dumb* or too paid off to see it.

*During the Q & A session Councilor Marshall Selberg (who was actually awake for a meeting for once) asked if he could build a Burger King out there. Remember, Marshall is NOT a self-employed piano teacher, he has worked in commercial real estate for a very long time. After asking his question of the DF director, Bob responded, “It’s an industrial park, you can’t build a Burger King out there.” Think about that the next time you hire Marsh as your realtor. Whopper’s are on me!!!!

Washington Square Developer whines about the easement process

(FF 41:00)

Yes, folks, only in good old Sioux Falls would a developer complain about how he had to front a little money in legal fees and surveying (City Council Meeting, Items 16-17) after receiving some easements.

First the obvious, and replying to one of his main complaints, that while taxpayers are essentially giving him FREE land, that this gifting party should somehow also pay these fees?!

This same developer also received millions in a TIF (massive tax rebate) before the project was built. While I do complain sometimes when the council doesn’t discuss an item or answer constituent questions, I did chuckle a bit last night after this developer stood at the microphone and cried about how he had to spend a couple of grand (to receive FREE property). Their non-response to this unwarranted fit was completely appropriate. Not a single councilor, the mayor, the city attorney or any of the planning/environmental staff responded to his rant.

It reminds me of when I used to wait tables and people would want a free meal if I forgot to give them complimentary free bread. This developer has received free property and millions in tax breaks and has the nerve to complain about it?!

What are the Benefits of Amazon coming to Sioux Falls?

As we have known for several years, Amazon was looking to put a distribution site in our area, it was only a matter of time. We also know, like most businesses that move here, they want handouts, and if there is one thing we love in Sioux Falls and South Dakota is giving out massive amounts of corporate welfare. Flopdation Park has already received around $50 million for infrastructure from the taxpayers. Amazon has received a Federal Grant and now the SF Development Foundation pretty much wants an open ended TIF to attract more businesses. Their argument is always the same, growth for growth’s sake (which I have never understood, because growth only drives up the prices of affordable housing due to infrastructure and public education costs) and JOBS! JOBS! JOBS!

So let’s look at the kind of jobs Amazon supplies. Most workers will be pickers that make around $15 to start. So where will Amazon get these workers? I have argued that they will suck from other businesses in town that pay less (and there is quite a few of them) and once that bleeding is done, people will start moving here. I also believe many workers at Smithfield will try to move over to Amazon. So in essence, Amazon will not be depending solely on our current workforce, they will have to do a lot of transfers.

Another reason I think it will be hard for Amazon to fulfill their worker needs is because of a very difficult qualification process, like background checks, drug tests and physical fitness. It will also be interesting to hear what Amazon’s policy on marijuana use (outside of the work place) will be if it becomes legal in our state.

But all of those things aside I think there are a few benefits to bringing Amazon here. First off, they will support many other businesses in town, maybe even create some new ones. I also believe once they start stealing workers from local businesses, it may force some of them to raise their wages to keep people.

Amazon coming to town will have some benefits, but I often am confused by Sioux Falls’ mantra ‘Growth for Growth’s Sake’. Which just ends up costing taxpayers more in infrastructure and public safety and public education while the fat cats get their TIF’s, tax breaks and government grants. Let’s face it, Sioux Falls has just turned into a welfare state for the rich, which is no surprise when it is so cheap for them to buy the city council and mayor’s office.

City of Sioux Falls to give $350K interest free loan to developer

On the Sioux Falls city council agenda Tuesday night you will see a little tidbit in item #7, approval of contracts, sub-item #4;

Don’t be fooled by the title, this interest free loan is a pass through from the Feds for affordable housing to Lloyd Companies. I wonder if someone will ask exactly what the rents will be for this supposed affordable housing. Once again, developer welfare for a developer that doesn’t need it.

Just imagine if we gave interest free loans to people in the core of our city to help clean up their property? How far would this money go? Maybe we could clean up 50-100 properties with sidewalk repair, roof and siding repair, windows, landscaping? Let’s go even a step farther and give mini-TIFs to property owners in these affected neighborhoods in the form of property tax relief.

I truly believe the death of Tracy Saboe could have been avoided if we would have started cleaning up these neighborhoods over 12 years ago when first proposed by Mayor Munson. NOTHING has been done. So now crime increases while wealthy developers continue to cash in on projects that do nothing to prevent crime. But hey we have a $115 million dollar dented up events center (that sits empty while we pay a $10 million dollar a year mortgage on it). A $26 million dollar bunker ramp (that has yet to open) and a $20+ million dollar TIF to a project that is in flux while we go ahead with a $11 million dollar bond to build a greenway project around it (even with speculation if the project will ever happen). Why do we keep blowing the money on welfare for wealthy developers instead of helping hardworking Sioux Falls residents to clean up their properties and ultimately their neighborhoods? Because of the greedy fools we continue to elect.

So instead of using the money to clean up these existing neighborhoods we are using it to tear down a nature area and create more density where it is NOT needed.

You are going to see a lot of this over the next two years especially with a banker on the council and only two councilors left to ask the tough questions and a mayor who is more concerned about cashing in on his 5G investments(?) (That’s the rumor going around that our local media refuses to look into because the mayor has a tight grip you know where).