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.
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.
Kansas-based Freddy's Frozen Custard and Steakburgers is entering the Sioux Falls market with a new restaurant location at the Dawley Farms in eastern Sioux Falls.
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