Developers

Sioux Falls Mayor TenHaken taps former Thune and Rounds staffer for Housing Development Manager

Logan Penfield was tapped 2 months ago according to his profile. He does have educational and professional government experience (unlike some of Paul’s past appointments) but I found it interesting that the circles Mr. Penfield runs in probably contributed to his appointment.

When I think of affordable and accessible housing advocacy, the Republican Party usually doesn’t rank high on that list. (FF 9:40 to hear is introduction);

Sioux Falls City Councilor Selberg should recuse himself from Bunker Ramp negotiations

During the informational this afternoon the council discussed what next to do with the Bunker Ramp;

A public parking ramp that took nearly a decade and more than $20 million to build in downtown Sioux Falls could be sold to a private developer.

During a Tuesday informational meeting at Carnegie Town Hall, city councilors urged Mayor Paul TenHaken’s administration to consider all options when picking a new partner to build at the Mall Avenue and 10th Street site.

And that includes selling the entirety of the seven-story ramp that opened in July 2020 and is equipped to handle up to eight additional stories. The site has gone undeveloped since a mixed-use parking ramp project fell apart in 2019.

I do agree with councilors that they should take the best deal and I also agree with councilor Soehl that we need to use a 3rd party to vet the investors properly. I am also partially in agreement with what councilor Merkouris said;

Rich Merkouris said he’s apprehensive about giving any tax breaks to the eventual buyer unless they use the space to add residential stock downtown.

“For me personally, I would struggle incentivizing anything outside of housing unless it was a part of the bigger package,” he said.

I would go a step further and say there should be NO incentives. Anyone who takes over this property is being given a site in a plum location with an opportunity to do well. The taxpayers have already incentivized this project, there is absolutely NO reason to hand out more candy. Find an honest free market developer who has a solid plan to make it successful, then you don’t need to worry about tax incentives. It was also pointed out it is in an opportunity zone which means there will be some incentives to build there without city tax payers help.

But what what really pissed me off was having councilor Selberg sit in on meetings and negotiations for future use. NO councilor that helped approve this pile of sh!t should be involved. It should either be handed over to a new councilor or Pat Starr who opposed this. It would be like hiring the guy who rear ended your car to fix it. Any councilor who approved this should not be in closed door meetings trying to cover up their mistakes. We need councilors with a clear conscience to negotiate this deal with a focus on hyper transparency.

These knuckleheads learn very little from past mistakes.

The Sioux Falls City Council could have stopped Wholestone Foods

A group filed paperwork today in opposition to the Wholestone Foods ballot initiative. But all of this legal wrangling could have been avoided.

The mayor and council have stated several times there is nothing they can do to stop WF from building a slaughterhouse, but that isn’t true.

As I have mentioned in the past, after Shape Places passed both the council and voter’s muster it was set in ordinance (city charter law) but that doesn’t mean the city council can’t amend it. They have already amended it several times when it comes to signage and building codes.

As it stands right now, the power of the council to either accept or reject conditional use permits for large projects like this was eliminated in Shape Places.

BUT, after the ballot initiative signature drive started the council could have easily amended Shape Places within 30 days and brought back conditional use permits for projects of this nature. They could have rejected most of the permits, especially when it comes to water usage.

The mayor and council are telling you they are powerless to stop this train, but that isn’t true.

Top Down approach to affordable housing is a ruse

Ever since the Reagan administration introduced trickle-down economics governments across our country have experimented with it. It simply doesn’t work. The concept is that if you give tax breaks to the very top it somehow will help the ones below in better jobs and housing. In fact it has done the opposite, expanding the wealth gap.

The cat was let out of the bag during this interview yesterday that the TIF sponsored housing development in SW Brandon was depending on the tired old broken system of trickle-down;

Meanwhile, Karl Fulmer, the executive director of Affordable Housing Solutions in Sioux Falls, told DNN that these TIF-paid city developments are an effective way of addressing affordable housing.

“The benefit of just building more houses in the $250,000 to $400,000 range still provides the unit, and you can see the transition out of more affordable units from those who might make enough to buy homes in that price range”, Fulmer said.

In other words, these new houses in new “accessible housing” developments actually are not for those most struggling to find affordable housing the most. They are far those who bought smaller, older “starter houses” in town that cost less than $250,000 and are ready to move out of them.

The true affordable housing comes in those starter houses. And the more new “accessible” houses funded by city TIFs that are built, the more those older, smaller houses become available to lower income people.

[insert laughter]

If you speak with anyone in the real estate business they will tell you that these homes are usually owned by lower income people, families, retired folks or rental property, they are not the Jeffersons moving on up. And even if what he was saying was true, most of the homes being sold in this development will go to NEW homeowners not people looking for a step up. In fact, I have argued that many of the starter homes in the lower price range (mostly in the core of the city) have more square feet and bigger yards (and basements) than what these new homes will have.

A better approach would be addressing the housing crisis we have with the people who are having the crisis;

Pat Starr, who represents the northeast district, also told Dakota News Now on Monday that city government is continuing to “dig a hole” by continuing to dig literal holes to build homes partly funded in part by Tax Increment Financing (TIFs).

“We need to talk about the real causes of the housing issues in our city rather than trying to put a band-aid and build 65 houses, which is what this program will do.” Starr said.”

“It’s not the program I’m concerned as much about as as I am figuring out who we’re trying to help. And, it seems to me we have a wage issue more than we have a housing issue.”

We must be giving a helping hand to those who are at the bottom first to lift the other boats. The city has decades long programs in place including low interest Community Development loans and grants. We also need to upgrade the existing infrastructure in our core such as streets and lighting. We can do all this using existing money in our 2nd penny and Federal dollars.

The president of Sioux Metro Growth Alliance, which helps people with payment on houses in rural and suburban communities surrounding Sioux Falls, disagrees.

“If you look at wage growth around the country and in the Sioux Falls market in the last three years, it’s been astronomical,” Jesse Fonkert said.

While wages have increased in SF, inflation and housing costs have been beyond astronomical and have wiped away any wage increases.

But Fonkert does agree with Starr’s assessment that continuing these city-funded housing projects is not solving the affordable housing crisis.

“It’s a challenging situation, because if you spend too much money on government programming, you’ll have companies that will just hike their prices up,” Fonkert said.

Notice the Sioux Steel District and Cherapa II projects didn’t announce they were building hundreds of units of affordable housing after receiving a combined TIF payout of $50 million. Developers will always go where the money is, and that is how a FREE market system works. But tax rebates for parking ramps attached to condos isn’t fixing anything it’s just making that wealth gap larger.

The water problem with Wholestone’s packing plant

Recently Joe Kirby wrote a post about why another slaughterhouse is NOT a good idea for Sioux Falls;

Slaughterhouses are a horrible fit for our community. Affordable housing and workforce availability are already huge concerns. The idea of adding lots of difficult, low-paying, low-skill jobs, the type that have traditionally been a drag on our progress and success, makes no sense to me. And expanding the presence inside our city of an industry which has long caused pollution problems in our river and air makes no sense. I simply don’t understand why we would want more of this in Sioux Falls.

I agree, I don’t want another slaughterhouse built, but I would much more prefer there was an effort to not only STOP Wholestone but to close down Smithfields.

The issue with this entire fiasco has nothing to do with Wholestone vs. the Citizens vs. the City, it has to do with South Dakota voters, including right here in Sioux Falls who vote against their own interests. When the City Council passed Shape Places, several citizens said this was a bad thing and wanted to see some changes to the zoning ordinances, so they referred it to a vote. The development community along with some councilors said nothing to see here, move along, and the voters ultimately passed the original plan.

The argument then is still the argument today, Shape Places took power away from the council to make conditional use decisions, and when you take power from our citizen representatives, you take power from us.

I think if the council still had that power instead giving total control over to the developers Wholestone would have been denied by the Council or scaled way back and it has little to do with water quality or air quality, it has to do with water supply.

Where do you think WF will get their water? The reason WF is building within the city limits has nothing to do with the labor market, it has to do with using city resources, they will be using a lot.

Besides letting the developers take over almost all branches of city government we have also let them plan this city instead of the government and citizens;

Granted, the city does a lot of planning. It has a parks plan, a capital spending plan, a downtown plan and much more. But I am not aware of any sort of comprehensive plan for our city with direct participation of the mayor and council.  In support of that, some council members and candidates have told me they wished they could be involved in that sort of big-picture, strategic planning. If there was such a plan, I doubt it would have included the phrase, “add more slaughterhouses”.

This is something Janet Brekke stressed in her entire 4 years on the council. Her colleagues on the dais ignored her and did nothing. I think if she would have gotten re-elected and we would have changed a couple of other seats, Brekke would have been successful moving it forward.

Once again, in Sioux Falls and the rest of the state we continue to vote against our own best interests, and until that changes, you will see NO change in the status quo; DEVELOPERS RUN OUR CITY.