Sioux Falls Rubberstamp City Council passes $25 Million Dollar Corporate Welfare TIF Tax Rebate to wealthy developer with ZERO discussion

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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) ðŸ˜Š 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.

The King of Sioux Falls TIFs himself (Stormland TV Screenshot)

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.

Fargo, ND developer still invests in project after City denies TIF

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So you mean some cities still believe in the FREE Market and private investment;

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.

Locally Owned Pork Producers building Plant without Government handouts?

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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 . . . .

More info on TIFs

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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.

Why Tax Increment Financing Often Fails and How Communities Can Do Better (lincolninst.edu)

Dzigbede-MFC-07-15-19.pdf (brookings.edu)

FiscalTIF-20160129.pdf (cberdata.org)

Lester-Tax-Increment-Financing-in-Chicago-Working-Paper-2-12-13-FINAL-rm.pdf (unc.edu)

Improving Tax Increment Financing (TIF) for Economic Development (taxpayersci.org)

The Promises and Pitfalls of TIF in the St. Louis Metropolitan Region: A Look at Neighborhood Disparities (core.ac.uk)

Illinois Issues: TIF—The Swiss-Army Knife Development Tool | Illinois Public Media News | Illinois Public Media

(PDF) The death and life of Tax Increment Financing (TIF) (researchgate.net)

Has TIF been successful for economic development in Iowa? | The Gazette

Report: TIFs fall short of economic development promises (illinoispolicy.org)

Cherapa Developers ask for ludicrous $25 million dollar TIF for luxury retail, office and housing

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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.

This isn’t about affordable housing or blight, it is what it is, developer welfare while raising taxes on the rest of us. And while the developer and councilors talked about the economic impact, there still has yet to be an independent study proving TIFs work in Sioux Falls, or provide any impact to the rest of us paying higher taxes to supplement their whims. The reason why? Because they know the answer.

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.