Sioux Falls: Economy
Major Industries and Commercial Activity
In May 2005, for the third consecutive year, Forbes magazine named Sioux Falls the best small city for business and careers, a ranking based on employment, job and income growth, cost of doing business, labor pool, crime rate, housing costs, and net migration. The Sioux Falls economy is comprised of a diversity of sectors, including finance, healthcare, retailing, agriculture, tourism, and distribution and trade.
Set in a fertile agricultural region and the site of one of the world's largest stockyards, Sioux Falls has traditionally been a center for the agricultural industry. John Morrell & Company, a meat packer, is the city's third largest employer. Among other agriculture-related activities are meat processing, the production of dairy and bakery items, livestock feed milling, and the manufacture of farm implements and equipment.
When Citicorp moved its credit card operations to Sioux Falls in 1980, it launched the city to new heights in financial services. In the two decades since that time, other financial companies followed, as did those in such related sectors as insurance and real estate. The main offices of state and regional banks, as well as brokerage and insurance firms with nationwide connections, are based in the downtown financial district.
The healthcare industry figures significantly in the city's economic stability. Sioux Falls has emerged as a regional health care center, with the two major hospitals ranking as the top employers in the city, employing roughly 9,000 combined. Private physician clinics employ more than 1,000 workers.
Sioux Falls is the largest retail center between Denver and Minneapolis-St. Paul. As such, it attracts more than 14 million shoppers annually from throughout the state as well as from Iowa, Minnesota, and Nebraska. Approximately 3,228 retail outlets employ 20 percent of Sioux Falls' labor force.
Other economic sectors important to the city are tourism, which is South Dakota's second largest industry, and distribution and trade, which take advantage of the interstate highway network and the Sioux Falls Regional Airport.
Items and goods produced: meat and meat products, fabricated steel, concrete blocks and prestressed concrete, millwork, sewn items, electronic test equipment, corrugated boxes, computer components
Incentive Programs—New and Existing Companies
To encourage economic expansion, the Sioux Falls Development Foundation and the Chamber of Commerce jointly undertook a long-range marketing program titled "Forward Sioux Falls." The program goals include diversification of the local and state economies, creation of new enterprises, expansion of existing businesses, growth of the tax base through capital investment, and continued development of medical services, food processing, and retailing.
The Sioux Falls Development Foundation offers a number of incentives to attract new companies and retain existing businesses. The Property Tax Abatement allows new structures to be taxed at a lower rate. The Rural Electric Economic Development Fund, available in the eastern part of the state, offers financing for business development. The Minnehaha County Economic Development Association offers a Revolving Loan Fund for projects that result in significant capital investment and/or the creation of quality jobs.
The business climate of South Dakota is the first big plus for new and expanding businesses. Company owners pay no corporate or personal state income tax, no business inventory tax, and very low workers compensation rates. Additionally, the MicroLOAN South Dakota Program offers loans to small businesses in amounts up to $50,000 for use as working capital or for equipment, real estate, or other project costs. The state also offers the Revolving Economic Development & Initiative Fund to provide financing for new or existing businesses, and Economic Development Finance Authority Bonds to finance up to 80 percent of new construction and 75 percent of new equipment expenditures.
Job training programs
The state's Workforce Development Program provides businesses with partial funding to train new employees, retrain existing workers, or upgrade the training of current employees. Kilian Community College meets the educational demands of the local labor force by providing continuing education and customized training programs.
By the early 2000s, the population of Sioux Falls was growing at a rate of more than 3,000 residents each year, putting a strain on indoor public facilities. In response, the city established the Public Facilities Task Force in early 2004 to examine alternatives for accommodating this growth while still attracting visitors and new residents. One problem in particular needed to be addressed- the 40-year-old Sioux Falls Arena was typically booked with sporting events, rendering it unavailable for conventions and meetings. The task force arrived at a three-pronged solution. An Event Center would be constructed to accommodate stage productions and professional, college, and high school sports, as well as such events as rodeos, circuses, and rallies. A Recreation Center would offer indoor features including swimming pools, hockey rinks, soccer fields, a walking/jogging track, adventure gym, playground area, and conditioning area. Finally, the existing Sioux Falls Arena would be redesigned as a convention center complex. The Event Center would be located downtown, and the Recreation Center would be built at Nelson Park; construction on both is scheduled to begin in 2006 and end in 2008. Remodeling of the Sioux Falls Arena will begin in 2008 and be completed in one year.
The "Phillips to the Falls" project was underway in the mid-2000s. This expansion project will connect Falls Park, the city's natural beauty centerpiece, to downtown via Phillips Avenue, enabling people to walk from the park through the city's showcase of restored twentieth-century commercial architecture. By acquiring additional land, the city was also pursuing expansion of Falls Park to the north.
South Dakota has adopted the "2010 Initiative," a state-wide program to increase economic growth and visitor spending by the year 2010. Among the goals of the initiative are to double visitor spending from $600 million to $1.2 billion; to increase the gross state product by $10 billion; and become a recognized leader in research and technology. By 2005 Sioux Falls was already experiencing success in these areas, especially in the third goal. In 2003 Hematech LLC, a biotechnology firm, announced plans to construct a $15 million headquarters and plant in the city. "This is exactly the type of economic development we are looking for," said Governor Mike Rounds in the Argus Leader, continuing, "It promises to bring together the academic research and corporate worlds."
Economic Development Information: Sioux Falls Development Foundation, 200 N. Phillips Ave., Ste. 101, Sioux Falls, SD 57104; telephone (605)339-0103; toll-free (800)658-3373; fax (605)339-0055; email email@example.com
Sioux Falls, known as one of the "Crossroads of the Nation," is situated at the intersection of I-90, an east-west highway connecting Boston, MA, with Seattle, WA, and I-29, which runs north-south between Kansas City, Kansas, and Winnipeg, Manitoba, Canada. So situated, the city has long been a hub for the distribution of automobiles, trucks, food, fuel, oil, gasoline, machinery, plastics, and paper products. More than 50 truck lines provide over-the-road transportation through Sioux Falls to markets throughout the nation. Rail service is provided by Burlington Northern Santa Fe and the Ellis & Eastern railroads. Air cargo services at Joe Foss Field, the largest regional airport in South Dakota, are provided by FedEx, United Parcel Service, and DHL Worldwide. Additionally, the airport serves as the state's only Foreign Trade Zone, an area where foreign goods bound for international destinations can be temporarily stored without incurring an import duty.
Labor Force and Employment Outlook
Sioux Falls is consistently listed among the top metropolitan areas for economic strength and an expanding business community. Companies moving to Sioux Falls routinely report an increase in productivity and a decrease in overhead costs. In 2003 the total available labor supply was approximately 11,986, drawn from 12 counties in three states.
The following is a summary of data regarding the Sioux Falls metropolitan area labor force, 2004 annual average.
Size of nonagricultural labor force: 122,900
Number of workers employed in . . .
construction and mining: 6,800
trade, transportation and utilities: 26,700
financial activities: 15,300
professional and business services: 8,200
educational and health services: 22,400
leisure and hospitality: 12,000
other services: 5,100
Average hourly earnings of production workers employed in manufacturing: $13.36 (2004; statewide figure)
Unemployment rate: 3.5% (February 2005)
Cost of Living
The following is a summary of data regarding several key cost of living factors in the Sioux Falls area.
2004 (3rd Quarter) ACCRA Average House Price: $211,250
2004 (3rd Quarter) ACCRA Cost of Living Index: 95.2 (U.S. average = 100.0)
State income tax rate: None
State sales tax rate: 4.0%
Local income tax rate: None
Local sales tax rate: 1.92%
Property tax rate: $24.546 per $1,000 of assessed valuation (2003)
Economic Information: Sioux Falls Development Foundation, 200 N. Phillips Ave., Ste. 101, Sioux Falls, SD 57104; telephone (605)339-0103; toll-free (800)658-3373; fax (605)339-0055; email firstname.lastname@example.org
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