Corporate Welfare Buying Land for Sioux Falls “Megasite” at $23K Per Acre

Hartford, Chester, and Madison took another step closer to absorption into the Sioux Falls metroplex last week with the announcement of the state’s latest corporate welfare project, the Foundation Park “megasite” northwest of Sioux Falls in the armpit of Interstates 29 and 90.

The state is tying up $11.5 million dollars in the project: a $3-million Future Fund grant and an $8.5-million  REDI Fund loan, the biggest such loan by the state ever. The state is thus covering more than half of the $19 million the Sioux Falls Development Foundation (also significantly funded by taxpayers) is spending to acquire the 822 acres for the site.

Farm owner Jerry Sechser told KSFY last week that he thinks the development is great. Of course he does: the Sioux Falls Development Foundation bought 120 acres from him on May 15 for $2,578,000. That’s $21,483 per acre, more than twice the highest land value SDSU Extension found for Minnehaha County crop land in its May 2015 survey. Sechser may not feel quite as great when he reviews the other seven Foundation Park land purchases listed on the Sioux Falls City Council agenda for today: SFDF is buying these eight parcels at an average of $23,116 an acre. Landowners Persing and Wintersteen are getting over $25,000 per acre.

The Sioux Falls City Council will begin discussion of annexing the land at today’s meeting. Annexation means the city will take on responsibility for extending infrastructure to the site.

It’s awfully nice of us to use government money to help private business create 8,000 jobs. It’s awfully nice of us to take care of all the land acquisition to spare businesses the hassle of dealing with local landowners. But it continues to surprise me that Governor Daugaard gives handouts like these to able-bodied capitalists who apparently recognize the value of land at a transportation hub (two Interstate highways and a BNSF rail line, all built with government assistance) and ought to be able to buy this land and develop their projects by their able-bodied selves.


14 Responses to Corporate Welfare Buying Land for Sioux Falls “Megasite” at $23K Per Acre

  1. Steve Hickey

    This is the type collaboration and creativity we need to see in the places where we actually have an unemployment problem. http://madvilletimes.com/2014/09/hickey-proposes-sd-trade-workforce-plan-for-indians-redemption-for-eb-5/

  2. Good point, Steve. Sioux Falls should have no problem drawing such development without government help. Why isn’t the market making this happen… and why is government focusing its favors on Sioux Falls instead of the unemployment areas you have in mind… like Pine Ridge?!

  3. mike from iowa

    Why not claim eminent domain and seize the land? Probably be cheaper. Were these land owners friends of the establishment?

  4. Paul Seamans

    Mike from Iowa makes a very good point about eminent domain. If Gov. Daugaard is in favor of TransCanada and Dakota Access having the power of condemnation why not also use it to obtain this land by Sioux Falls. Save the state’s money for some more worthy project, like enticing more chicken CAFO’s into the state.

  5. Disgusted Dakotan

    This is disgusting! A perfect example of how SD does NOT have an actual Republican governor and legislature.

    When we misuse tax payer monies for this kind of crap, then we don’t have the funds for the infrastructure that people actually pay their taxes for like highways, our childrens’ education.

    Can’t wait to see what legislators next “retire” with unusual job promotions..

  6. Don Coyote

    @MFA: Eminent domain doesn’t mean the land is free or there isn’t any compensation for the land and only occurs in lieu of a willing seller. It appears Mr Sechser is not only willing to sell but is also content with what could be considered a fair market price for prime land.

  7. But remember, Don, this isn’t the free market at work. This is government picking winners who apparently aren’t willing to achieve their goals through their own private efforts.

  8. mike from iowa

    Eminent domain does not mean the seller gets to set the price. The unwilling seller may end up with a whole lot less than he asked for.

  9. True Mike, but it will be based upon fair market value. It isn’t as if they could get away with offering $100 an acre while pretending it was legit, and if the landowner feels they are getting the shaft they do have recourse to appeal the amount.

    What eminent domain does is allow large scale projects to come to fruition without being hindered by a single lone holdout. For example when they brought the Interstate Highway system through, not every landowner was pleased. Imagine if they managed to secure 98% of the land required for construction, but one landowner said he wouldn’t sell his 20 acres unless he was paid $1 Billion. In that case, eminent domain makes sense – pay the landowner what his land is worth and allow the project to succeed.

    In many cases such eminent domain is justified (infrastructure such as railroads, highways, bridges, dams, drainage improvements, utility access etc. etc.). However in other cases such as a commercial business park, it would be much, much more difficult and much more expensive to pursue that option. Could someone push the idea for a pipeline? Sure – but due to the number of landowners and various jurisdictions involved it would probably result in a decade or two in court and millions upon millions of dollars wasted on legal fees before they realized they were now at the point where the oil was no longer needed due to the burgeoning solar/wind energy industry that inevitably will replace fossil fuels. :)

  10. mike from iowa

    Looking at land values based on Cory’s maps,these landowners made out like bandits at three or four times fair market value. It has no effect on me since I don’t live in Dakota. Just guessing the land could have been had at closer to fair market value. Seems like authorities kept upping the ante instead of the other way around.

  11. Douglas Wiken

    That land probably should always have been appraised higher because of its commercial value for development. The people in Hartford are not too happy about this deal.

  12. $25,000 an acre. Why, back in my day if you would have offered me $25,000 an acre you could have knocked me down with a feather. And I was a lot fatter then.

  13. And that, dear readers, is further evidence (as if we needed it) that the SD government is one of nation’s most corrupt state governments.

  14. Paul Seamans

    There is a huge difference between granting an easement for a road, power line, or a water line that will benefit a neighbor and granting an easement for a tarsands pipeline from Canada that will not benefit me or anyone that I know.