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.
Last night at the Sioux Falls City Council Meeting when the Development Foundation was pushing the biggest boondoggle ever pulled on the taxpayers of Sioux Falls in the history of our city, State GOED director Steve Westra came to testify that the Governor was in support of the $94 million dollar TIF for Foundation Park.
I didn’t think of it until after I testified (FF: 49:00), but I found it ironic that Noem would complain about Communism and Socialism in Georgia yet support blatant corporate socialism for possible foreign communist investors.
The hypocrisy never ends with these folks.
I also made funny about the Municipal Band reach around (FF: 11:40).
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).
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: 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 here? I 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?
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!
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.
Speaking of ‘Tifilicious’ while our city council is drooling over anotherridiculous $94 million dollar tax rebate slush fund to dangle carrotsat Asian investors, while we have gotten the shaft on the Midco Aquatic Center windows (still waiting to hear the final on that) and the failed HVAC at the City Center (haven’t heard a peep about that either) or the $26 million dollar bunker ramp to nowhere with a foundation that could hold an aircraft carrier (still no clue how that lawsuit is going either) we have another ‘Tifilicious’ project kind of just flopping in the wind; Sioux Steel project.
As we learned last year due to Covid, the project was delayed and had to be revamped. Understandable. My suspicion is if this project ever does get going again, it will be mostly apartments since Covid has kind of made office space and hotels not a very good investment. But I am wondering 1) why the original TIF hasn’t been rescinded (especially with the South Korean Egg Roll factory TIF on the horizon) and what’s going on with it?
Usually if construction projects are going to break ground in late spring or early summer, the deal is done by February, but we have not heard a peep. I think if the city council doesn’t hear the revamped plans by Feb 1st they need to rescind the original TIF immediately. I have a feeling we won’t see any groundbreaking in 2021 for this project. Maybe they should look into building a Canadian frozen burrito factory on the land, that’s a sure fire way to get a TIF!
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!!!!
As we have been hearing through sparse media reports, the project is on hold until 2021. What does this mean? Well, it means if it does rear it’s head next year, and that’s a big if, the project may change. This of course means the TIF would be null and void. I have encouraged councilors to rescind the TIF ASAP and get it off the books until we actually know what is going to happen.
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.
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)
The recent story (Land ownership question hovers over $185 million Sioux Falls redevelopment plan) of Seney Island tripped a few issues long ago buried in the back of my mind. I have no dog in the show being presented in the Sioux Steel – Seney Island project, but I feel the history of the project needs to include a proper land title search being performed and then presented.
Also, the interesting bit of data in the article claims 160 acres being granted but the original 1859 clearly shows the town lot company survey had the planned layout and 1865 – 1869 maps show the Fort Sod fortification lines of the new settlement. From my research of many years ago, there would not have been a granting of homestead rights in the 1860’s to land already committed to being a townsite.
The enclosed image of the original survey 1859 map of Sioux Falls, shows Seney Island and the village platting. These discrepancies have bugged me to the point where I matched the 1859 images over a current Google Earth image of Sioux Falls. Though not perfect, it does show the relationship of the Island and most of the Sioux Steel property being on Seney Island.
The 1881 drawing shows the relationship of Seney Island to the coffer dam rerouting the water for the mill.
For over 40 years I have heard from old-timers and read stories of how the west channel or oxbow of the Sioux River was used as the original community landfill until it closed it to navigation. The main channel of the Sioux had to be changed to allow for the dam to produce enough water for the mill and power plant.
The 1900 photo of the west channel shown in your story, was the result efforts to fill in the river channel. The old-timers I knew, used to tell stories of the smells coming from the rotting debris leeching to the surface until it was finally covered over. As the property is now being readied for a new purpose, opening up the land could bring back the environmental issues long ago covered up.
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