Spearfish shouldn’t need any new, massive project to attract visitors—it’s a beautiful town! But local developers Joe Jorgensen, Vic Uttke, Doug Hoff, Rick Furnish and Wayne Klein see an opportunity to bring even more people to town (and make a tub of money) by converting the mostly empty land around Exit 10 at the north end of town into a $210-million commercial and residential development:
Local developers are proposing the Dakota Meadows project. The project isn’t just another housing subdivision, but a development designed to draw people to the area with amenities to include an indoor hockey arena that could host other sporting events and trade shows, a 322,000-square-foot outdoor lifestyle shopping center, three hotels and restaurants, an outdoor sports complex, a furniture store, a school, a travel center, and 400-500 acres of home sites near the intersection of Interstate 90 and Highway 85 at Exit 10 [Mark Watson, “$210 Million Development Proposed for Spearfish,” Black Hills Pioneer, 2015.06.30].
Predictably, the developers aren’t just buying the land and making profit-magic happen. They are hoping for taxpayers to bear much of their costs through a business improvement district, tax increment finance districts, and public-private partnerships. The TIF might be not only the usual property tax arrangement, in which any additional tax revenue created by the development goes to pay off the developers’ construction loans instead of toward public works, but also a sales tax deal that would allow businesses in the new development to divert their sales taxes toward their expenses as well. Arrgghh!—are there no true capitalists left?
The Spearfish developers cite Cabela’s in Mitchell as an example of TIF and other taxpayer subsidies promoting economic development in South Dakota.
Enter Steve Sibson, who contends that Cabela’s took Mitchell taxpayers for a ride. He cites this 2012 news report on the failure of subsidies for Cabela’s to produce real economic boosts:
In fact, Ball State economist Hicks studied the economic impact of seven Cabela’s stores that opened between 1998 and 2003 and found that despite millions of dollars in economic development incentives given to the retailer, there had been no net gain in jobs detected in the communities one year after the stores opened.
“It’s not like folks suddenly have more money to spend on hip waders once a Cabela’s opens up. What generally happens is that instead of buying those hip waders from an independent business, they go to big box store,” says Leroy of Good Jobs First [link added; Scott Reeder, “Why Have So Many Cities Given Away So Much Money to Bass Pro Shops and Cabela’s?” The Atlantic: CityLab, 2012.08.13].
I don’t know how Spearfish Mayor Dana Boke feels about corporate tax subsidies, but she is talking about making sure that growth enhances downtown rather than cannibalizing it:
“There are a lot of exciting things that are planed that would be great for Spearfish,” Boke said. “There is a lot of opportunity here.
“We need to continue to strengthen the downtown area and make it our core,” she said. “This would enhance and bring other types of businesses into town. Competition isn’t always a bad thing, but I am very protective of our downtown” [Watson, 2015.06.30].
I’m torn on the Dakota Meadows proposal. Development at Exit 10 makes perfect sense. Visitors entering South Dakota from the west pass three Spearfish exits (including my favorite way into town, Exit 12) before encountering an I-90 exit that shouts “Stop and shop and play and sleep and eat here!” More development at Exit 10, including a nice visitor center, would catch a lot of that traffic from the west, as well as travelers coming from the north on 85, and give the Chamber a chance to welcome those folks and lure them downtown, to the bike trail, the City Park, the Hatchery, and Spearfish Canyon. And as much as I prefer downtown businesses and lodging, Exit 10 is an empty canvas, just waiting for a gutsy entrepreneur to build and make lots of money.
But brave capitalists would be seizing that opportunity. They wouldn’t be waiting for handouts from the public to help them collect their profits. They would build Dakota Meadows themselves.