22 minute read
Spark Sioux Falls
Spark Sioux Falls: Rekindling the regional economy
Story contributors: Scott Carbonneau, First PREMIER Bank; Courtney Drenth, Sioux Empire Fair; Stephen Thurman, Showplace Cabinetry; Mason Van Essen, Bender Commercial Real Estate; and Jennie Doyen and Holly Rader, Greater Sioux Falls Chamber of Commerce.
In early May, even as the nation was still dealing with many of the immediate challenges of the COVID-19 pandemic, leaders in Sioux Falls came together to plan for the future.
An initiative was launched to support long-term community and regional economic recovery. Called Spark Sioux Falls, the effort engages business leaders from a variety of industries to share insights, identify challenges and build actionable strategies to restore the local economy.
Guided by a steering committee, three task forces focus on recovery for specific sectors. They are: 1. Reviving local business, retail and restaurants 2. Recharging hospitality, entertainment, the arts and tourism 3. Assessing key industry clusters
Each task force is charged with developing recommendations that can assist the economy and labor force in Sioux Falls and surrounding counties to emerge from the economic downturn. The steering committee will build upon task force findings to shape a plan for future economic resiliency.
Resiliency and optimism
Early data indicates the Sioux Falls area is emerging from the economic downturn triggered by the COVID-19 pandemic slightly quicker than anticipated. According to the City of Sioux Falls, the May sales tax numbers (which reflect April transactions) were down 13% over 2019. While this is a daunting number, it is better than the 20% decline that had been projected by city administrators and a positive indicator of the community’s position for recovery.
Unemployment claims in South Dakota peaked in early May. Since then, claims flattened and began to decrease in June, according to data from the U.S. Department of Labor.
Hotel occupancy rates, which saw a sudden and dramatic drop in late March, were showing a slow but steady increase. From the end of April to the end of May occupancy rates averaged an 8.6% increase. During the first week of June the occupancy high was 43.8% and by the third week it had reached 71% - a gain that gave encouragement to everyone in the hospitality industry.
Other positive signs of recovery are harder to quantify but no less valuable. The Empire Mall, after being closed for 50 days, reopened on May 8 and by mid-June was reporting that 90% of its tenants had reopened their stores. In downtown Sioux Falls, pedestrian traffic was up and metered parking spaces that had sat empty during April were once again occupied at levels close to pre-pandemic.
Local businesses are demonstrating their ability to adapt to rapid change – such as a local manufacturer that found creative ways to keep its entire workforce employed and as a result is well-positioned to meet pent-up demand in their industry.
While commercial real estate transactions have slowed in other locations around the country, Sioux Falls continues to experience an active market. Local banks have worked overtime to support both business and consumer loan customers, embracing a mindset that we are all in this together.
The regulatory approach taken by local and state governments created an environment that attracted the attention of major events from around the country. Sioux Falls is capitalizing on that opportunity – securing a large agriculture event that was displaced from another state and leading the way for a global company in implementing new event venue safety protocols.
Stories of incredible resiliency can be found the Sioux Falls region. Spark Sioux Falls is sharing these stories and searching for opportunities to build on the successes.
Get out there
Empire Mall Manager Dan Gies serves on the Spark Sioux Falls steering committee and also chairs the Reviving Local Business task force. Gies said the collaborative nature of the Spark initiative compelled him to participate.
“All the business leaders from our community have one common goal: How can we come together and get the word out to customers that it’s safe to return to our your favorite local place to dine and shop?” said Gies. “We need our customers to feel safe, and businesses need to determine what customers expect and how we should engage them when they are ready to return to our businesses.”
While many recommended action steps are aimed at longterm recovery, there was a clear need for immediate action to boost public confidence that it is safe to get out and patronize local businesses, restaurants and attractions. Marketing messages were crafted to communicate to consumers the many measures that businesses have implemented to keep people safe and to encourage them to be active in whatever manner they feel comfortable.
Sioux Falls area residents are being encouraged to “Get Out There” and enjoy their local favorites again – whether it is dining out at a favorite restaurant, visiting a local business to purchase items for a home improvement project, or planning a staycation at a local hotel. The public awareness campaign is running on television, billboards, print and digital platforms. A landing page at getouttheresf.com provides safety information and connects residents to staycation package options.
In conjunction with the local campaign, ads are being run in regional markets to encourage travel to Sioux Falls and overnight hotel stays. The visitor campaign is running in Minneapolis/St. Paul, Des Moines, Sioux City and Omaha.
Darrin Smith, Washington Pavilion, is the chair of the hospitality, entertainment, arts and tourism task force. Smith said, “The top priorities for our task force are to see government restrictions lifted and the execution of a public confidence campaign, and I believe we will be successful on both fronts.”
Staying open to future growth
When the pandemic hit the American economy, the Showplace Cabinetry management team knew they would have some big decisions to make.
“We saw the sales decline coming. We knew the faucet was being turned off, and yet we remained busy,” Showplace CEO Paul Sova said. “To me it felt like we were falling off the cliff in slow motion. In reality, once the crash came, it was sudden and very steep.”
Dealers in kitchen and bath showrooms across North America had customer orders that kept Showplace going during March and April.
“Until the national shutdown prevented showroom shopping, we maintained our production schedules,” Sova said. “When the time came that no one shopped anywhere, we faced the question—would we need to shut down?”
The answer, for Showplace, was an emphatic “NO!” to a company closure. With 300,000 square feet of production space, maintaining a safe work environment was possible. Meticulous cleaning, social distancing, closing the cafeteria to reduce contact and encouraging office workers to telecommute kept Showplace cabinets flowing from the Harrisburg plant throughout the worst of the national response to COVID-19.
Showplace Cabinetry found creative ways to maintain a safe environment and keep employees working throughout the pandemic.
Image courtesy Showplace Cabinetry.
“Despite an eventual 30% drop in orders, our decision to remain open was a good one,” Sova said. “While many
Showplace Cabinetry found creative ways to maintain a safe environment and keep employees working throughout the pandemic. Image courtesy Showplace Cabinetry.
of our competitors were closed down, we were able to keep our workforce intact with no furloughs or layoffs, and that allowed us to continue filling the orders we received. Our dealers and consumers saw Showplace as a reliable manufacturer that stayed in production and delivered on time.”
Showplace had an advantage with its South Dakota location. While other states required manufacturing shutdowns, our state enabled companies to remain open and provide necessary services during the pandemic response.
“We did everything we could to stay open for our dealers and maintain full paychecks for our employee-owners,” Sova said. “Even with some reduced hours, we did all we could to keep people busy and on the job—our business was always ready to fill orders as they came.”
As a result of keeping the Showplace manufacturing production running, the company’s drop in sales was less dramatic, Sova said, and the company is now positioned more strongly for recovery. During the pandemic’s slow time Showplace strategically focused its resources on product innovation; along with a lengthy list of new designs and products, the company fast-tracked the development of a new cabinet line which will be introduced to dealers and consumers nationwide this summer.
Paul Sova CEO, Showplace Cabinetry
“We’re seeing customers coming back to the marketplace,” he said. “The trend for American homebuilding and remodeling is up. July looks to be a full month for us, and we’re starting to hire again—we have openings in production.”
Sova said that economic fundamentals in his industry are good; mortgage rates are at historic lows, available housing inventory is low, consumer confidence has been bruised but not battered, and the demographics of young adults forming new households is growing. This all points to an increasing demand for cabinetry.
“We’re seeing more people coming into kitchen and bath showrooms again nationwide,” he said. “There’s a pent-up demand, and because we maintained production, kept our workforce active and strengthened our reputation for reliability, we’re ready to meet that demand.”
Banks invest in customers and community
Dave Rozenboom receives a lot of mail. As president of First PREMIER Bank and Chairman of the Forward Sioux Falls Management Committee, Rozenboom receives a daily stack of invoices, solicitations and industry journals. During the past three months, however, many of those envelopes have contained heart-felt letters from the bank’s customers.
“Banking is a very personal business,” Rozenboom said. “It’s built upon trust and personal relationships. So, when the COVID-19 pandemic broke out in March, our bankers proactively reached out to our customers and others in our communities. Sometimes it was simply to ask how they were doing and provide reassurance.”
Since that time, Rozenboom has received numerous letters from appreciative customers. Letters from business owners who received Payment Protection Program (PPP) loans. Letters from young parents who received loan payment extensions. And letters from community leaders who were grateful for the donations PREMIER made to relief organizations.
“The stories are powerful and some of them really touch your emotions,” Rozenboom said. “It was a great reminder for everyone at First PREMIER, as well as other financial institutions, that we do play an essential role in the well-being of our customers and communities. It’s quite humbling.”
Rozenboom said the past three months have reinforced the importance of having a disaster plan in place. When state and federal leaders issued disaster proclamations in March, First PREMIER Bank and PREMIER Bankcard implemented a plan to address the needs and concerns of their customers, communities and employees. Bankers made personal calls to their customers and a number of initiatives were launched including a two-month payment deferral for its consumer loan customers, a minimum payment and late fee waiver for its credit card customers and a team of 80 banking professionals were assembled to process federal PPP loans for local businesses.
“Our business bankers literally worked around the clock and through the weekends to process PPP loans” Rozenboom said. “I don’t know that you would find that type of dedication anywhere else. It’s a testament to the way we look out for one another in South Dakota and come together for the common good.”
During just a few short weeks, First PREMIER Bank processed more than 1,200 PPP loans totaling more than $113 million. This infusion, along with PPP loans from other banks, will ensure many Sioux Falls area businesses are open in the coming months and years. It will also help accelerate the region’s economic recovery as consumers return to stores, workers continue to receive their paychecks and families enjoy community events and activities.
Dave Rozenboom President, First PREMIER Bank
While being prepared is important, companies like First PREMIER Bank and PREMIER Bankcard continued to look forward throughout the crisis. Rozenboom said construction of its new main office and corporate headquarters in Sioux Falls continued as planned at the corner of 14th Street and Minnesota Avenue. The bank also opened a new branch in Madison and launched a new children’s savings account. Despite the cancellation of many charitable events, PREMIER honored its commitments to more than 600 non-profit organizations throughout the region. It also invested in its customers who owned restaurants by purchasing $50 gift cards and distributing them to PREMIER’s nearly 2,300 employees.
“We’re all in this together and we need to continue looking forward and seeking new ways we can help one another,” Rozenboom said. “A small thing like providing gift cards to employees has a dual impact. It helps our families who might simply need a night out; and it helps our business customers who were negatively impacted by COVID-19. We hope others will follow this example if they are able.”
Rozenboom said the Sioux Falls area is poised for a strong recovery. In the meantime, he will continue to appreciate notes like the one from a consumer loan customer who accepted the bank’s two-month payment deferral: “When I opened the letter you sent me, tears came to my eyes. You have no idea what your compassion means to me and other customers. I want to thank you so much. God bless all of you and your families. Stay safe.”
ASM Global, which manages the Denny Sanford PREMIER Center, is pioneering its Venue Shield safety protocols at the Sioux Falls facility. The protocols are expected to be used at facilities around the world. Image courtesy Denny Sanford PREMIER Center.
ASM Global, which manages the Denny Sanford PREMIER Center, is pioneering its Venue Shield safety protocols at the Sioux Falls facility. The protocols are expected to be used at facilities around the world.
Image courtesy Denny Sanford PREMIER Center.
Leading the way in event safety protocols
The PBR Monster Energy Team Challenge will crown its champion in Sioux Falls at the Denny Sanford PREMIER Center the weekend of July 10-12. The event, featuring 48 of the world’s top professional bull riders competing in a 12-team tournament, will be one of the first major events in the country following the COVID-19 pandemic to have fans in attendance. “We are the tip of the spear on this, and the protocols we’re implementing will be used around the world.” Mike Krewson General Manager, Denny Sanford PREMIER Center
The eyes of an entire industry are on Sioux Falls and the Denny Sanford PREMIER Center while hosting the PBR Monster Energy Team Challenge, said General Manager Mike Krewson. “We are the tip of the spear on this, and the protocols we’re implementing will be used around the world. It’s very exciting.”
PBR selected Sioux Falls to host its first in-person attended event thanks to its successful track record for hosting the event in the past and its ability to quickly implement new safety measures. PBR CMO Kosha Irby said, “The team in Sioux Falls have shown unwavering support for PBR and immediately got on board and developed a comprehensive fan safety plan that we’re combining with PBR’s protocols. We’re very excited to wrap up our new Monster Energy Team Challenge, inviting fans back to the arena at the Denny Sanford PREMIER Center, in an environment in which they can feel safe and comfortable.”
Mike Krewson General Manager, Denny Sanford PREMIER Center
Fans will notice changes at every point in the experience – from the parking lot to the concession stands and the new pod style seating. Krewson said that mitigating risk has always been a large part of what his team does. “Prior to the pandemic, that meant keeping sidewalks clean and cleaning up spills promptly. This is risk mitigation on larger scale. We are erring on the side of caution as much as possible.”
Krewson credits strong community support and progressive state and local governments as key to the PREMIER Center’s ability to attract events. Multi-day events like PBR have a significant impact on the local economy. In addition to the riders and staff, there are many fans who will travel to Sioux Falls and stay one or more nights in a hotel room, eat at local restaurants and patronize local businesses.
Irby stated “We’ve found the perfect place for championship weekend of the PBR Monster Energy Team Challenge. In speaking with experts and working with ASM Global and Denny Sanford PREMIER Center, we’re giving fans a safe and responsible environment to enjoy a great weekend of bull riding.”
Youth exhibitors show their livestock at a previous Maine-Anjou/Chianina Junior Nationals Show. The event was held in Sioux Falls for the first time this year after being displaced from Ohio due to COVID-19. Image courtesy of American Maine-Anjou Association.
Sioux Falls welcomes events displaced from other states
There are multiple cattle breed associations in the U.S. that each traditionally host a summer event for youth exhibitors. Cattle showing families often plan family vacations and summer travel around their breed’s annual junior nationals show.
The 2020 Maine-Anjou/Chianina Junior National Show was scheduled to take place in Lima, Ohio. When COVID-19 hit, Ohio’s restrictions on gatherings sent the show organizers searching for a new location.
“When we received the unfortunate news that our event could not go on in Ohio, our immediate plan of attack was to put our heads together and come up with places we were familiar with, places that had certain amenities that would prove helpful in moving a large event,” said Lindsey Broek, Voice Editor/Director of Show, Communication & Events for the American Maine-Anjou Association. “Sioux Falls seemed like a logical choice when we started weighing out our options.”
Lindsey Broek, Voice Editor/Director of Show, Communication & Events, American Maine-Anjou Association
Broek and her team worked with staff to quickly make arrangements to move the show to Sioux Falls. By mid-May, Maine-Anjou/Chianina Junior National Show exhibitors were informed that the show would go on. Instead of traveling to Ohio in late June, Sioux Falls became the new destination for over 500 youth exhibitors and their families.
The 2019 Maine-Anjou/Chianina Junior National Show took place in Des Moines, Iowa, where the six-day cattle event was credited with a $1.5 million impact to the local economy. While this year’s show might be a bit smaller due to COVID19, it is expected to have a big impact on the Sioux Falls economy, at a time when it is needed more than ever.
Youth exhibitors show their livestock at a previous Maine-Anjou/Chianina Junior Nationals Show. The event was held in Sioux Falls for the first time this year after being displaced from Ohio due to COVID-19.
Image courtesy of American Maine-Anjou Association.
Sioux Falls is not often in the running to host a national agricultural event of this size, primarily due to the age and size of its facilities. Broek, who is a graduate of SDSU, stated that the size of the community, its excellent amenities and its strong ties to agriculture all make it an appealing location.
In light of the pandemic, all of Sioux Falls’s positive factors outweighed the facilities. “The state of South Dakota has been a leader in making the COVID-19 pandemic bearable. They took on a reasonable and responsible approach and that is what we were after,” said Broek. “Additionally, the city, hotels and facility have rolled out the red carpet in making our event happen in a year when most people have just said no.”
In a time of chaos for many, Sioux Falls is capturing an opportunity in a sector that is alive and thriving. Hosting this show allows Sioux Falls genuine hospitality to shine and should encourage facility updates needed to attract more shows in the future. If appropriate steps are taken to maximize the city’s presence in this arena, Sioux Falls could become competitive in the livestock show industry for years to come.
Real estate industry weathers the storm
After weathering the COVID19 storm, the Sioux Falls real estate landscape looks primed to move forward.
“Each Bender company has felt the impacts of COVID-19 differently, but all three are in a good position moving forward,” said Michael Bender, Bender Companies’ founder.
Bender Commercial Real Estate Services saw several major transactions take place during the height of the pandemic, a time when the narrative in the business community was to take a wait-and-see approach.
New offers and transactions, many of them more than $1 million, continued to materialize after Sioux Falls lifted many of its social distancing suggestions last month.
“Many of our clients are seeing business pick up,” said Bender Commercial partner, Nick Gustafson. “The fact that Sioux Falls was doing business amid COVID illustrates the resilience of our businesses and individuals.”
Bender Commercial’s sister property management company, Bender Midwest Properties, saw its multifamily portfolio’s vacancy rate decrease during the pandemic.
In January, Bender Midwest Properties’ portfolio was at 93% occupancy. By May, the monthly average was up to 95%—an unexpected result given the team anticipated vacancy would increase during the pandemic.
“Housing is an essential need. People still need a place to live whether it’s a pandemic or not.” said Jill Madsen, Bender Midwest Properties’ President. “One thing to note is the One Sioux Falls Fund worked to help those in need during a crisis. A handful of our residents impacted by COVID-19 utilized the fund to pay rent in April and May.”
Nick Gustafson Partner, Bender Commercial
On the other hand, Bender Midwest Properties’ commercial tenants have had difficulties paying rent as many businesses in the city, state and country have struggled to fully replace in-person sales with online services or curbside orders.
However, many landlords have been flexible with their tenants. Many of Bender Midwest Properties’ clients have been flexible with their lease terms and have worked with tenants to create realistic payment plans to help keep them in business.
Additionally, other economic stimulus efforts, such as the Paycheck Protection Plan, seem to be working for commercial tenants. By bridging the gap in lost sales and being flexible with the terms of the lease, many businesses have not been forced to close.
As Sioux Falls continues to adapt to the new normal, the real estate market—like the Sioux Falls community—remains resilient.
Fairgoers enjoy the carnival at a past Sioux Empire Fair.
Image courtesy Sioux Empire Fair.
Sioux Empire Fair to be held Aug. 1-8
A much-anticipated family event will take place this summer, just as it does every year. The 81st annual Sioux Empire Fair is scheduled for Aug. 1-8 at the W.H. Lyon Fairgrounds.
Fair organizers carefully considered whether or not to hold the fair, in light of the COVID-19 pandemic. The fact that the W.H. Lyon Fairgrounds is a large, open area and much of the event takes place outdoors was a big factor in the decision to proceed with this year’s fair.
A small number of features that are typically at the fair will not be available this year, but attendees can still expect to experience many of their favorites – including livestock shows, arts center, the carnival and food vendors. There will also be free concerts in the grandstand on Runnings Main Stage with paid fair admission.
“People have had to miss out on so much this year and the fair is a place where we celebrate as one,” said Fair CEO Scott Wick. “We believe it is important to provide this opportunity to the Sioux Empire and surrounding communities.”
Scott Wick CEO, Sioux Empire Fair
Staff are working closely with city and county leadership to implement health and safety measures for fair attendees and vendors.
The Sioux Empire Fair is one of the largest events in South Dakota, second only to the Sturgis Motorcycle Rally. It typically draws about 300,000 people to Sioux Falls over the course of its 9-day run.
Wick said he understands that some people may not feel comfortable attending this year but hopes they will return in future years. “We welcome all who choose to attend and experience this year’s fair. We also recognize and respect those individuals and families who choose not to participate in this year’s event and we hope to see you all next year. We look forward to serving the community from this great historic location for many years to come.”
Local Business, Restaurants and Retail Task Force
Joe Batcheller* Downtown Sioux Falls
DeAnn Echols* The Great Outdoor Store
Julio Espino Inca Mexican Restaurant
Dan Gies* The Empire Mall
Mike Grigsby City of Sioux Falls
Jeff Griffin* Greater Sioux Falls Chamber of Commerce
Mitch Jackson Queen City Bakery
Melissa Johnson Oh My Cupcakes!
Valerie Loudenback Grand Prairie Foods
Alex Ramirez* USA Media TV
Lindsey Schliemann Nestle Toll House Café by Chip
Tom Slattery JJ’s Wine, Spirits & Cigars
Riccardo Tarabelsi R Wine Bar
Hospitality, Entertainment, Arts and Tourism Task Force
Troy Giegling Sanford Health
Frank Gurnick* Dakota Alliance Soccer Club
Nancy Halverson Levitt at the Falls
Brandon Hanson Washington Pavilion
Jered Johnson Pepper Entertainment, Inc.
Mike Krewson Denny Sanford PREMIER Center
Thomas Lee* Sioux Falls Sports Authority
Sarah Maag Hilton Garden Inn Downtown
Tom Morris Kelly Inns, LTD.
Suzie O’Meara Hernes Great Plains Zoo & Delbridge Museum of Natural History
Krista Orsack Experience Sioux Falls
Audrey Otto-Willard Butterfly House and Aquarium
Teri Schmidt* Experience Sioux Falls
Darrin Smith* Washington Pavilion
Stu Webber Denny Sanford PREMIER Center and Sioux Falls Convention Center
Key Industry Task Force
Jay Rasmussen* Journey Group Companies
Christine Erickson* Sioux Falls City Council
Chris Houwman* Malloy
Tony Nour* First PREMIER Bank
Bob Mundt* Sioux Falls Development Foundation
Mike Gray* Sioux Falls Development Foundation
Special thanks to the following leaders for serving as panelists for Key Industry task force panels.
Food, Ag & Manufacturing Panel: Jeff Lautt, POET; Clark Meyer, Concrete Materials; Dan Rykhus, Raven Industries, Inc.; Paul Sova, Showplace Cabinetry; and Mark Wiggs, Smithfield Foods. Banking, Development & Real Estate Panel: Michael Bender, Bender Commercial Real Estate Services; Dana Dykhouse, First PREMIER Bank; Stacy Erdmann, Eide Bailly LLP; Mark Mickelson, Mickelson & Company; and Randy Knecht, Journey Group Companies. Medical, Health Care & Biotech Panel: Dr. David Basel, Avera Health; Scott Cross, Lewis Drug, Inc.; Dr. Daniel Heinemann, Sanford Health; Joni Johnson, South Dakota Biotech Association; and Bill Ladwig, Lewis Drug, Inc. Technology & Information Services Panel: Natalie Eisenberg, Click Rain, Inc.*; Dr. Jose-Marie Griffiths, Dakota State University; Mike Grigsby, City of Sioux Falls; Matt Paulson, MarketBeat; and Michael Zuercher, Prismatic.
