The Sioux Falls media are giving their local business leaders all sorts of boosterist press this week. One main story is the building boom on fake Lake Lorraine at 26th and Marion:
“The attention it’s getting is just amazing,” said Van Buskirk Companies Director of Land Development Mike Van Buskirk.
At all hours construction crews come in and out of the development that surrounds a 30-acre man-made lake [Jill Johnson, “South Dakota’s Largest Lifestyle Center: Plans for Live Work, Play Booming at Lake Lorraine,” KDLT, 2016.12.28].
Strange: if South Dakota’s sales tax receipts are lagging, who’s crazy enough to build more retail?
The wall being put up on the east side of Lorraine is the beginnings of a Hobby Lobby, which is relocating and expanding. Nearby will be a Ross Dress For Less, along with several more national retailers.
“These retailers coming are going to be brand new to Sioux Falls, things that people have heard about, talked about, and wanted to see in Sioux Falls,” Van Buskirk said.
Smaller ‘Shoppes’ at Lake Lorraine, restaurants, and hotels are expected to fill in spots north and west, closer to the lake [Johnson, 2016.12.28.
Either retail sales are stronger than our state sales tax receipts and projections indicate, Sioux Falls is uniquely better off than more rural areas, or Van Buskirk is just doing a really good job of getting the local press to do its advertising for free.
Good question: Strange: if South Dakota’s sales tax receipts are lagging, who’s crazy enough to build more retail?
Better question: South Dakota’s sales tax receipts are lagging; and retail is tremendously over-built in the US and in Sioux Falls; so who’s crazy enough to finance more retail?
The RCJ this morning has a feature article on the Cadillac Jack’s 25+ million expansion that is part of the previously announced TIF. Over 100 new rooms and restaurants in addition to expanded gambling in a town that has reported relatively flat revenue and room occupancy. It is felt that it will be a “game changer” for Deadwood.
I am skeptical.
Hobby Lobby is a born-again, evangelical, right-wing Christian outfit looking for sympathetic territory. Right up there with Chick Fil A, Interstate Batteries, Forever 21, Tyson Foods, ServiceMaster, Tom’s of Maine and (sort of) Wal-Mart. Any of these coming to Sioux Falls, too?
Three things to remember:
1) Sioux Falls Metro area adds a “Madison” to its population every year.
2) Sioux Falls Metro retail sales are effectively equal to a trade area of over 350,000 people (more than its population as it serves a region beyond its Metro area).
3) Unlike office, apartment and most other real estate development which lags demand (they demand immediate full occupancy to work), retail development anticipates future demand (they tolerate a more gradual movement to full occupancy). I don’t know why that is but a guy in real estate development told me this.
“1)Either retail sales are stronger than our state sales tax receipts and projections indicate,
2)Sioux Falls is uniquely better off than more rural areas, or
3)Van Buskirk is just doing a really good job of getting the local press to do its advertising for free.”
1- doubt it, but who knows
2- of course it is. Rural flight is occurring at record rates and Sioux Falls’ growth is explosive.
3- Likely true as well
Re your three part question Cory:
1. No. Farm economy bad, sales tax bad in rural areas.
2. Yes. We are special snowflakes in the Sioux Empire. Thank God I don’t live in the hinterlands.
3. Yes. Local media never met a business press release it didn’t love.
That is all.