Commission hears about $21 million TIF district request

Date:

By Dave Baumeister, County Correspondent

SIOUX FALLS – Dustin Powers, the urban planner for the city of Sioux Falls, went through information for a proposed Tax Increment Funding district with Minnehaha County Commissioners at their final meeting for 2019 on Tuesday, Dec. 31.

sioux steel conception
An artists conception of what the Lloyd Companies Sioux Steel development will look like when completed shows the facilities built along the bank of the Big Sioux River between 6th St. and the Falls.

Powers was joined by Jake Quasney, the Executive VP for Development with Lloyd Companies, about plans for the Sioux Steel property near 5th and Phillips in Sioux Falls.

Although this was just a briefing and no action was taken, Lloyd Co. will eventually be looking for the area to become a TIF district to the tune of $21.5 million for that proposed development.

As Commissioner Dean Karsky explained, a TIF district “isn’t a hand-out.”

“TIF’s are broadly misunderstood,” he said. “These taxes are (still) going to be paid, and once that TIF is paid off, then the full community – county and city – get the full tax advantage.”

According to citylab.com and other sources, the way tax increment financing works, the amount of property taxes collected in the TIF district are earmarked specifically for improvements, infrastructure, and the like in that district, as opposed to being spread throughout the area governed.

This is an aerial view of the old Sioux Steel land between the Big Sioux River and Phillips Ave. Lloyd Companies of Sioux Falls is looking for the land to be part of a $24.5 million TIF district. They plan to develop the land to the north of this photo with a hotel, apartments, office and retail spaces, and a parking ramp.

This system is currently used in all states, except Arizona, for economic development.

Karskey’s comments about the benefits of a TIF district seem to be aimed at city government, after a majority of the Sioux Falls City Council agreed to spend over $20 million for a parking ramp with the now defunct “Village on the River” project, and for which they recently had to approve more money to complete.

The project, which was pushed for by former Mayor Mike Huether and approved by the city council in December 2017, was designed not as a TIF, but as a joint public and private venture.

However, last spring, the city announced that the Village River Group was in default of their contract and the city’s involvement with the project would be terminated.

The Lloyd plans for the Sioux Steel area include many of the same amenities, but it is all being done without the use of public money.

Quasney’s presentation showed the plans for a retail shopping area surrounding their parking structure, and that the ramp would connect to a hotel, offices, apartments, and a convention center via a skywalk.

He also said that the parking ramp, although privately owned, would follow city guideline for the available parking spots to be free during evenings and weekends, which he claimed would be especially desirable during summer Levitt at the Falls concerts.

Quasney had figures on the overall project cost to be over $186 million.

In 2019, the property tax bill on that land, as is, amounted to just under $57,000, but by 2040, the estimated tax bill with the development on that same land will be $2.5 million.

Commissioners seemed to approve of this future development, but, again, this was only an informational briefing, and no action was taken.

The next step for this project will be a public hearing with the Sioux Falls Planning Commission at 6 p.m. at Carnegie Town Hall.

Commissioners also voted to supplement and credit different department budgets.

The major “sticking point” came from court services, which was asking for a supplement of $335,000 to their budget for additional costs during 2019.

thoennes
Minnehaha Court Services Administrator Karl Thoennes. (Photo by Dave Baumeister)

Karl Thoennes with that department explained that their largest overrun came with court-appointed attorneys, but the county commissioners asked Thoennes for more oversight during the year, and especially during the budgeting process.

As they pointed out, court services had asked for more money as a supplement every year since 2010.

While Thoennes said the department was always submitting “hopeful” budgets, Commission chair Jean Bender said, “I don’t understand ‘hopeful.’ Budgeting is budgeting.”

She pointed out that even while they were allocated a major increase in their budget in 2016, they still came in with a “shortfall” that year.

Commissioner Jeff Barth echoed the sentiments of increasing the budget to a higher amount, as it seems when court service gets more they still find ways to use more.

He likened that to a sailor gong on shore leave knowing he had a lot of money in his pocket.

But in making a motion on whether to supplement the request, Commissioner Gerald Beninga said, “I agree with all of the comments, but the bottom line is that we have no choice at this point in time… this is why we strain during the budgeting process, and we need to remember this conversation when we do it in June.”

The motion passed 5-0.

The Minnehaha Commission has its regular meetings each Tuesday at 9 a.m. on the second floor of the county administration building at 6th and Minnesota in Sioux Falls.

These meetings are open to all, and public comment is always encouraged.

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