I was a little surprised that a former state legislator and current city councilor could be so confused about how the city can apply TIFs. During his interview on KELO AM (Sept 21) Jensen says the city should use TIFs for affordable and accessible housing. Imagine my surprise, especially since Jensen gleefully voted for 3 TIFs totaling $144 million that have ZERO to do with affordable housing. But what he said about what needs to change really surprised me even more. Jensen said the state has to change laws in order to do that. Huh?
While the State could certainly do that, it is not necessary. As I have proposed, with Home Rule we can make our charter stricter than State Law, we just cannot violate the law;
Application for TIF will only be accepted for projects that will eliminate blight, build density in the core, and simultaneously provide affordable and workforce housing. Home rule charter allows the city to be stricter than state law.
There are three ways we could go about this change. The easiest would be the council just proposing the change and voting on it. That would be as simple as a presentation about the change and a 1st and 2nd reading. The next easiest would be my proposal above and have the CRC put the change on the ballot and let the voters make that change. There is also a 3rd option which would be the hardest and that would be to do a petition drive to get it on the ballot.
This is why Jensen’s statement baffles me. The Council and himself already have the power to make this change, we don’t have to wait for the legislature to do something. And if he really believed that TIFs should only be applied this way why did he vote for three that have to do with parking ramps, slush funds and Korean owned egg roll factories?
Talking out of both sides of your butt must be a vampire thing.
UPDATE: Jensen also touches on this during inside Town Hall. Alex offers some strange solutions to our housing shortages;
• Encourage people to live in our neighboring small communities. So basically he is telling people to come to SE South Dakota to work in Sioux Falls, but BTW, we don’t have any room for you in our town. So once you punch out, and go home please take those wages you made in Sioux Falls and pay your taxes in Tea or Brandon or Crooks.
I have suggested for over a decade you could do a pilot program in a core neighborhood in a 4-6 block radius. The city would fix the roads, water, sewer, curb, gutter, city owned sidewalks and lighting. You then could get the residents and property owners in that sector to sign onto a group tax incentive program thru community development to fix up the properties. Depending on income levels the help could be tax rebates or NO or LOW interest loans. As we have seen, the Mayor already has the discretionary power to that.
• Senator Jack Kolbeck brought up TIFs. Either Jack is naive or he is in on the scam, but he wants to get the TIF down to 0% for developers and eliminate excise taxes for them. He then says “So they can pass the savings down to the consumer/renter.” The tired old Reaganomics argument of trickle down. If you are giving the tax cut to the developer, the developer or contractor will simply put that money in their pocket. They know with the demand of housing in Sioux Falls they have NO reason to pass ‘savings’ on down to the consumer. The tax breaks should go to the consumer once the home is purchased. Trickle down DOES NOT WORK, we have proof of this with the enormous income gap that was created by these horrible policies.
• Jack also brings up expanding the prison built homes project to Sioux Falls prison. While I am all for this program, I think the inmates should get paid better for it, I also think they should have job guarantees in the industry when they get out and work it into their probation or parole.
I’m not saying the city needs to do this all at once or even change existing ordinances, just try a pilot program based on existing zoning and laws. Shape Places already fixed a hurdle that allows residential areas like this to either fix up or expand their properties. This isn’t rocket science folks. It’s what I told a friend the other day about the issues at the Dudley House. We have this desire in local government to re-invent the wheel and make things complicated while giving them fancy names. We don’t have to do that, we can get simple straight forward ideas from other communities on what works and we don’t even need to travel or pick up a phone to do it. You can get online and see thousands of projects. It just takes time, research and google. When I used to be a full-time graphic designer a fellow designer told me his secret to being so good, ‘90% of my ideas are stolen’.
UPDATE: This is NOT a fee increase, just an annual notice that the fee exists and renewed, it has since 1992.
City Council Members and Council Staff,
Good afternoon. A resolution (per City Ordinance 96.033) will be presented at Tuesday’s City Council Meeting to levy an annual front foot assessment fee for street maintenance and repair. The special assessment funds are used to partially fund the highways and streets operational budget for the repairs and maintenance of our city streets to include pothole patching, asphalt surface maintenance, and street sweeping.The front foot assessment fee has been in place since 1992. The front foot assessment fee will be $1.00 per foot for 2022 and has not changed since 2009. Attached is the resolution and on the back is the amount that has been collected for each respective year since 1992. Thank you, Mark Cotter
Looks to be a new tax being created assessed on the residents of Sioux Falls, is this true? $1.00 Per foot per property along our ‘streets’. If we have a total # of 900 centerline street miles in this city (1,800 if you include both sides of the street), and each mile is roughly 5,280 feet, this tax generates $9,504,000.00 for the city to be used to maintain and resurface highways, streets, and roads in the city. With a $654,000,000 million revenue stream, is a new tax really necessary?
Once again Paul is showing us his lack of transparency and his dark hatred towards open government. Most government’s would have put this thru a vetting process with it’s public works department, the city council and the citizens. Not to mention in the same night there will be a property tax increase (item 15). You also have to remember we spent most of the $50 million in Covid money on play things and gave away $144 million in tax rebates this year. It looks like we will be heading into the dark abyss for another 4 years unless Paul gets one heck of a challenger.
While the almost 5 hour meeting last night had many fireworks from the Med MJ ordinance discussion (this was only 1st Reading) towards the beginning of the meeting they approved TIF #25 with almost zero discussion (they moved it up so the VIP wealthy developer getting a handout wouldn’t have to sit thru all the people’s REAL business).
Besides the same lame brain presentation from the Planning Director about the TIF itself only one speaker emerged to defend the TIF, and it wasn’t the developer. In fact the developer has said NOTHING about the TIF except when he made a presentation to the council at an informational meeting. His daughter did say a handful of words when the Planning Commission approved the TIF, but the developer himself has said NOTHING at the 2 readings of this ordinance. Not even a please and thank you for getting this handout that the rest of SF property tax payers will have to make up for. Of course, why should he? All of those negotiations were done in secret over the past several years, this is also why you didn’t hear a peep from the councilors either, just a gigantic sound of 7 whaps on the dais with a rubber stamp. (Marshall Selberg was absent)
Wouldn’t it be great if getting food stamps was that easy?
So who was the only defender last night? Joe Batcheller, Director of Downtown Sioux Falls. While Joe and I are on good terms, even if I disagree with him about bringing snakes to outdoor events (he thinks it is fine) 😊 we also disagree on TIFs. As a trained urban planner, Joe adamantly thinks they are good thing. He also even makes the tired old argument I hear councilors make ‘TIFs may not work well in other communities, but golly gee they work great here’. The problem with the argument is that we have NO economic or financial evidence of that, NO studies have been done on TIFs in SF or SD that shows an actual benefit to the public.
Which brings us to another point Joe made. He said this TIF was justified because we are getting a Return on Investment (ROI). I’m not sure a parking ramp (this is what most of the TIF will be spent on) that can only be used by the public on nights and weekends is much of an ROI when you consider that the Bunker Ramp is mostly empty at night and barely filled during the day, we will have another parking ramp sitting at the Sioux Steel Project and my long term argument is parking ramps really probably won’t be needed in the next decade. The irony of it all is that by the time this TIF runs out in approximately 20 years, it will probably NOT be a parking ramp.
Joe also made the argument that TIFs are not ‘Handouts’. I’m not sure what else you would call them. TIFs are essentially a tax rebate you get to use on your private property. The developer builds a parking ramp that they will be using during the day, and likely charge for access and they get that ramp paid for by getting a rebate on the $25 million dollar taxes they are supposed to be paying to the county, the school district and the city while raising taxes on the rest of us due to the total valuation of the project. It would be like you personally getting a $500 dollar property tax rebate to fix your front door. While that benefits YOUR property, it has very little benefit to the tax payers who have to pay their full tax bill, while also supplementing your rebate. Sure they throw us a few crumbs saying the TIF will also build roads (to their private project, to their benefit) and we get to use the parking for the Levitt (even though I have yet to see a parking issue at the concerts even when the lawn is packed) the true beneficiary of this REBATE is the developer and his investors, this is why it truly is a HANDOUT.
The most egregious part about the almost $200 million dollars in TIFs the city council has gleefully handed out this year is that this could ALL be done with private investment. The money is there. It has been proven by the past decade of record breaking building permits that have been issued to contractors in this city who have asked for ZERO tax breaks. Besides the public building permits, I think most of the private permits issued by the planning department are 100% privately funded. It would be a great presentation and study done by our Planning Department, but of course that would shoot holes in the whole NEEDING TIFs to succeed in Sioux Falls. Believe it or not, I think that is fantastic that private business, can invest privately while providing good jobs without a government HANDOUT.
Which brings us to Joe’s last point, that was so ridiculous when he said it, I laughed for about 5 minutes. Joe said it was important to remember that Cherapa II’s developer was taking on 100% of the risk for this approximately $350 million dollar project.
Really Joe?!!! He should be commended for that after getting this handout from the city?
Isn’t that how the Free Market system is supposed to work? Oh never mind, in Sioux Falls it’s called Developer Socialism. You give us massive tax breaks and we will make sure we spend it on us and never present data that shows otherwise.
And lastly, Jeff, a Thank You would have been nice.
Earlier this year, the Fargo City Commission declined Hyde’s request for $5 million in tax increment financing for site development for the project but he says he was able to negotiate both a lower price for the property and the bid for site work and was able to get the model to still work.
Pretty crazy how the developer could figure out a way to invest in the property even after the TIF was denied. Even this story from September 2020 shows how Amazon turned down incentives in Fargo;
Amazon has reportedly not asked for any local tax breaks.
While Amazon technically didn’t get direct TIFs or tax breaks from the City of Sioux Falls either, the park they are at has gotten millions in infrastructure upgrades from taxpayers and will continue to benefit from the $94 million dollar TIF recently given to the park. I have argued for a long time that the developers in this community have plenty of private investment without needing TIFs. But when you turn on the candy trough, they all come to feed. If I were the mayor or a city councilor I would have ended TIFs a long time ago in this city, the welfare program for the super rich.
Shocker, I guess LOCAL business folks have figured out the FREE Market system and are not asking for a handout from the City of Sioux Falls like communist foreign investors;
Wholestone Farms, an entity owned by regional pork producers, plans to build a more than $500 million pork processing facility in Sioux Falls.
Wholestone has exercised an option to purchase 170 acres in northeast Sioux Falls near Benson Road and Interstate 229, near the new Gage Brothers Concrete Materials location.
Yes, that’s right folks, they didn’t buy the land in Flopdation Park and they are not asking for any TIFs or other handouts from the city, which got a very strange response from Mayor Stoneless;
The city, however, voiced reservations about the project.
“To be frank, we are facing historic housing challenges right now,” Mayor Paul TenHaken said in a statement provided to SiouxFalls.Business.
“In this unique environment, our employers are also facing critical hiring challenges as we have strategically added thousands of new jobs in recent months. Under normal circumstances, the addition of 1,000 more jobs would be an enormous win for the city of Sioux Falls, yet these are not normal circumstances. While I have been and continue to be supportive of value-added agriculture investments in our region, I have a duty to note the challenges currently being faced within our community at this time.”
Instead trying to help this plant find workers, it seems Paul is trying to defend his welfare queens from Communist China, international companies like Amazon (who pay no federal taxes) and South Korean investors. What is Paul afraid of? That this locally owned business will pay better than his foreign welfare friends? Or that more immigrants will come to town to work there? How can you brag about growth then poo poo it when local producers are doing it and not asking for handouts?
Because the plant is still years from opening, Wholestone has not set wages but said they will be competitive and include a full benefits package.
“All the robotic technology that’s available will be employed,” Webb said. “There will be some traditional knife work because there are no robots to do that, but the ergonomically difficult jobs will be done by robots.”
Imagine that, they actually care about the working conditions of their employees, don’t want any government handouts, and are locally owned and Paul is concerned?!! Isn’t this the kind of business we want in Sioux Falls? While I am not wild about another packing plant, at least it isn’t stinking up our namesake. I have told the council and mayor on several occasions that handing out all this candy would eventually bite us in the ass. Plenty of taxpayer subsidized jobs, nobody to work them.
Heck the company even wants to help with housing;
How might Wholestone Farms support community housing initiatives?
Wholestone Farms will be a significant, new employer. We’re sensitive to the housing needs of the community and our future employees. With a minimum of three years to plan for our project, we’re prepared to help the community leverage the increased tax base that will be realized as a result of our project to help provide for additional housing support. There are a multitude of ways to support the housing needs in the community, and our team is open to those ways as determined best by the Sioux Falls community. We want to be part of the solution and would challenge other major employers in Sioux Falls and the region to join us in this effort.
While having another packing plant in Sioux Falls may not be ideal, it just might be so successful it will close down the communist owned stinkhole downtown. Still baffled by Paul’s resistance. Maybe it has something to do with his mysterious trip to China a couple of years ago? Things that make you go Hmmmm . . . .
Some of these stories and studies are NOT totally pessimistic about TIFs, but they all have an underlying theme, there really is little benefit to TIFs if they are NOT used for their original intent, cleaning up blight and providing affordable housing.
I have never seen so much groveling in my life at the Sioux Falls City Council informational meeting, and it wasn’t from the developer of this project, it was from the city councilors supporting this, almost falling over each other to thank, yes, thank, the developer for asking for this tax break.
The Bancorp Inc. will anchor the next phase of the development, bringing its 175 employees downtown and serving as the catalyst for Cherapa’s envisioned mix of retail, luxury condominiums, additional office, parking and community gathering and event space.
The planned Cherapa development will require support from the city of Sioux Falls, including $25 million in tax increment financing for the construction of the parking and related infrastructure, such as the extension of Reid Street. The city also is assisting in helping create a quiet zone around the rail line.
I actually got a good laugh at the beginning of the developer’s TIFilicious presentation when he talked about how the city’s accomplishment in removing rail travel from Downtown. LOL. Not only is it still there, running along this development, it has gotten more intense in the neighborhoods less then a mile south of it.
The lack of leadership, economic ignorance, little historic knowledge of TIF’s and this incredibly huge hand-out to wealthy developers on this project shows just how out of touch this mayor and city council is with the real needs of our community. I keep going back to just imaging how much of our core neighborhoods we could clean up with $25 million dollars but instead our council has turned into corporate socialists who don’t even want to do their homework on TIFs.
The saddest part is that this project, Flopdation Park and the Sioux Steel project could all develop 100% with private investment and pay their full property taxes on day one, and they all know it. But hey, they got it covered, the rest of us working stiffs will pick up the slack for these destitute folks and the city council will gladly oblige, because that’s just what they do. What a bunch of goofs.
As I said a few months ago, it was baffling to me why we would give a $94 million dollar TIF to incentivize businesses to come here. First off, it is pretty obvious we don’t need anymore job creators currently;
To find out more about what might be going on, I reached out to Secretary Marcia Hultman, who leads the South Dakota Department of Labor.
“What you are seeing and what we’re hearing anecdotally, the numbers really support,” she said.
They definitely do. The most current number she could pull for me Friday was 23,500 active job openings in the state’s database. Nearly 10,000 of those are in the city of Sioux Falls.
You read it correct, 10,000 available jobs in Sioux Falls, and we want to incentivize business to come here? It’s ludicrous. Factor in our schools are over crowded, affordable housing is a rarity (where we should be investing tax rebates) and building permits are through the roof. If anything we should be giving the tax rebates to the citizens to create more affordable housing and propping up our current infrastructure instead throwing it at Egg Roll factories owned by Koreans.
I also found this interesting in the article;
Another tip: You should list a wage with your opening.
“Statistically, if the wage is posted, even if it’s not the best, those job orders get more activity. If nothing is listed, the assumption is that it’s low,” Hultman said.
Nearly every business I talk to has increased pay, some significantly. Frankly, that’s not a bad thing, to me, in a state that has struggled with persistently low wages in some sectors.
I have often said the city council should pass a city ordinance that any job listed within city limits should have the minimum and maximum pay listed in the ad.
It’s time to end most if not all TIF’s in the city and tax rebates for the supposed (low wage) job creators and start helping the people who live and work in this city with more affordable housing and propping up infrastructure, and we can do it without welfare to big business. This is what happens when you have a partisan greedy mayor on cruise control and a former developer executive running the city as Chief of Staff.
Ironically, when she left the city the first time she met me for coffee. She told me the deciding factor to leave the city, besides the last mayor being a total jackass was that she was forced to write the Sanford Sports Complex TIF which she felt set a bad precedent for TIFs because of it’s size and that it was NOT for housing or blighted property. Funny how her feelings have changed on the Tifiliciousness of TIFs and doesn’t seem to bothered by the bad precedent she set.
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.
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.
Jean Pearson has been a fixture at the aquatic center since the doors opened in October, 2016. She says the finished product was 50 years in the making, but worth the wait.
A couple in India's southern Alappuzha town sailed to their wedding venue in a large cooking vessel on Monday (October 18) as roads near the temple where the wedding was to take place were inundated with floodwater.
