Aug. 28, 2020

Anticipating significant development and continued interest in businesses locating at Foundation Park, the Sioux Falls Development Foundation is asking the city for help getting part of the property ready for building.

The foundation will ask the City Planning Commission and Sioux Falls City Council to approve tax increment financing for the northwest Sioux Falls development park, which would allow for infrastructure to be installed on the north end of the property.

The foundation is “being proactive” given the increased attention South Dakota and Sioux Falls are receiving for economic development projects, president and CEO Bob Mundt said.

There are several active deals underway in the park, he said. No current deals are contingent on tax increment financing, he added.

“We don’t have any new tenants or projects to announce at this moment,” Mundt said in a statement.

“The purpose of creating the TIF district is to proactively prepare for growth due to the increased interest being shown in South Dakota and Sioux Falls for economic development projects.”

According to information submitted with the Planning Commission agenda, the foundation is requesting a TIF “to offset the costs associated with preparing the property for development and to stimulate and develop the general economic welfare and prosperity of the state,” the staff report said.

“The request is substantiated by economic development that will be generated through growth in taxes by a development site of this scale.”

A 540-acre parcel is encompassed by the proposed TIF district.

A TIF district works by allowing the applicant – in this case the Development Foundation – to use the difference between property taxes paid on the base value of a property and the property taxes paid on the value of the same property once improvements such as buildings are made. That difference – the increment – could be used for improvements such as utility work, roads, lighting or landscaping.

Numbers behind both those values have not been established yet, said Jeff Eckhoff, the city’s director of planning and development services.

“Given the increased activity and interest in Sioux Falls and South Dakota, and working in conjunction with our partners at the Sioux Falls Development Foundation, it’s a unique opportunity to be ready,” he said.

“Foundation Park has proven it’s successful in attracting attention from companies across the region and the country, and the more we can do to be prepared and ready for development, the further ahead it puts us. It’s a chance to work with our partners and be proactive in growing jobs in Sioux Falls.”

Approving a TIF is a multistep process, and the first step is establishing the boundaries of the district, which is what the Planning Commission will be asked to consider at its Sept. 2 meeting.

“We will continue to work through the public process by creating a project plan for the TIF, which will come in the fall months,” Mundt said. “At that time, there will be more details on how the proposed TIF will be used.”

Foundation Park was announced five years ago as a partnership among the Development Foundation, the city and the state.

Nearly 100 acres have been sold so far, with tenants that include Win Chill LLC, Nordica Warehouses, Dakota Carriers and New Century Partners.

There are more than 300 acres remaining south of the railroad tracks, although several lots have active options on them, Mundt said.

There are roughly 450 acres available north of the railroad tracks – the land that would become shovel-ready if the TIF is approved to allow for infrastructure build-out there.