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FEB. 8, 2016 - VOL. 51 No. 5

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COVER STORY

Collaboration helps drive
regional economic development

By Amy Smolik
Sioux Falls Area Chamber of Commerce

Sioux Falls had another record construction year in 2015, with more than 12,000 permits issued valuing more than $676 million. The communities surrounding Sioux Falls also continue to grow, adding more housing and commercial development projects in the past year at a value of nearly $180 million.

Regional communities surrounding Sioux Falls have worked together formally for 25 years to promote economic development. Their advantages include access to Sioux Falls and its amenities – entertainment, education and quality of life opportunities – coupled with the benefits of living and working in a smaller community. They also offer their own industrial parks and economic assets.

Regional Planning

A unique regional development effort began in 1991 with the creation of the Minnehaha County Economic Development Association (MCEDA, pronounced mah-keeda), which started from what was then known as the Rural Mayors Association. The group, made up of communities in Minnehaha County, wanted to collaborate in promoting their various communities and collectively raised funds to do so. An executive director was hired, who was located out of the Sioux Falls Development Foundation offices in downtown Sioux Falls. The communities included: Baltic, Brandon, Colton, Crooks, Dell Rapids, Garretson, Hartford, Humboldt, Sherman and Valley Springs. In 1997, the Lincoln County Economic Development Association (LCEDA, pronounced lah-keeda) was formed. The communities included: Beresford, Canton, Harrisburg, Lennox, Tea and Worthing.


Across both Lincoln and Minnehaha county communities, housing has seen huge growth numbers. Pictured is a new neighborhood in Lennox.

Brandon Assistant City Administrator Dennis Olson said he is one of the only original members of the MCEDA organizing group still involved in economic development. He´s seen the community of Brandon grow from a population of 3,159 in 1986 when he first started working there to today´s estimated population of 9,884, making it the 12th largest city in South Dakota and the growth in those years alone larger than 97 percent of the rest of the state´s communities, he said.

"I left that first meeting thinking to myself, ‘I´m good with new things, but this won´t work,´" Olson said. "But it did. And it´s been very helpful, especially for Brandon."

The formation of these organizations has led to a heightened degree of economic growth for the region by drawing attention to the assets available to businesses and industries looking for long-term sustainable growth options. The LCEDA and MCEDA Executive Director partners with the Sioux Falls Development Foundation, the Governor´s Office of Economic Development and other economic development organizations to create a strong regional economy. LCEDA and MCEDA are funded by the communities and counties served, as well as by support from banks, utility companies and other businesses serving the member communities.

The MCEDA/LCEDA concept is not unusual – there are other regional economic development organizations across the country; in some cases the regional base is larger, depending on the size of the metro area. MCEDA and LCEDA serve different roles in the community from chambers of commerce and development organizations, with all working together to elevate communities and promote positive growth. Some of the communities in each of those organizations have a chamber of commerce or development organization or both.

"The importance of having those chambers and development foundation groups is that as our region is growing fast, you have to work harder to create a sense of community," said MCEDA/LCEDA Executive Director Nick Fosheim. "So when you have a group whose focus and dedication is creating and promoting the local business community, that´s important."

Planning for the Future

In the next month, these organizations will kick off a year-long strategic planning process. By March, Fosheim anticipates the groups will be holding meetings across the region. Residents, businesses and MCEDA/LCEDA representatives will all be able to participate. The goal is not to make a list of what the groups are doing right or doing wrong, Fosheim said.

"The question is, ‘what kind of community do you want to be?´ followed up by ‘how can we help you get there?´" he said.

The community engagement process will rely on input from stakeholders across the region. After 25 years, it´s important for MCEDA/LCEDA to see if the organizations are meeting the needs of their member communities. Fosheim sees his role as assisting the communities but they need to be the ones who carry out the actions. Olson agrees with Fosheim and credits Brandon community leaders for the foresight to be pro-growth.

"City fathers at that time were astute enough that communities with residential housing only don´t pay enough to school system – you need the other side of the equation," Olson said. "If you want to build communities, first you need to provide the primary jobs, eventually you´ll have workers build houses and after that the retail will come. What we have now (in Brandon) is absolutely amazing."

Jenni White with the City of Tea and President of LCEDA is looking forward to seeing what the people who live in the LCEDA communities want for their respective communities in order to better help the organization plan. Being a part of LCEDA has assisted Tea in having a representative serve as a go-to for projects outside the city limits, she said. Much of the industrial business in the Tea area is actually outside the city limits. White is hopeful that the city borders will reach those areas in the next five years and that building relationships now, through LCEDA, will benefit down the road.

"Those businesses are a huge plus for our community. The people who work there may shop here or live here and they are a part of our community," she said.

Fosheim hopes the planning process will develop both short- and long-term goals for the region. In the meantime, MCEDA and LCEDA will keep doing what they´ve been doing.


Prospecting

What they do is really about partnerships, Fosheim said.

"We need to leverage our resources so we can be on the radar of more companies, collectively. And part of that leverage includes working with Sioux Falls," Fosheim said.

For many companies outside the region looking to expand or move here, the natural place to start in this area is Sioux Falls, Fosheim said. But sometimes, Sioux Falls isn´t the best fit for a company´s needs. A regional community may meet those requirements while also offering the benefits of being near Sioux Falls, he said.

In the summer of 2015, the Sioux Falls Development Foundation announced the creation of Foundation Park, the state´s first megasite. Created in partnership with the Governor´s Office of Economic Development, the City of Sioux Falls and Forward Sioux Falls, the 800-plus acre Foundation Park lies at the intersection of Interstates 90 and 29. Located within minutes of the Sioux Falls Regional Airport and full service by the BNSF railroad, the new development park is at a regional transportation crossroads.

The Development Foundation continues to lay the groundwork to get the park up and running, with planning for infrastructure underway and several companies solidifying their intent to locate at the site. Regional communities will benefit from this park, too, as the companies that locate at the park will need support services, supply chain vendors, logistics and other businesses to flesh out their operations. In addition, those workers may choose to live in some of the regional communities rather than in Sioux Falls.

"It´s sometimes hard when people think of regional development because communities are perceived to be competing with one another for the same business," Fosheim said.

White looks at economic development as a learning opportunity for all communities rather than a competition.

"We talk about what business´ needs are and what they want in a site. When a business chooses a community, it´s because that community had something we don´t and that´s why they picked it," she said. "We can all learn from each other. It´s enlightening hearing from other communities about things we can try in our community."

Growth = more revenue
(FY 2015)


113 new jobs created

$20 million invested by companies

187,000 square feet of commercial space constructed

7 projects completed/under construction in the two counties

$269 million Minnehaha County Total Taxable Sales

$201 million Lincoln County Total Taxable Sales

In Lincoln County, Tea led the taxable sales growth with a 21 percent increase over 2014, followed by Worthing, which was up 14.6 percent.

In Minnehaha County, Baltic led the growth with a 10.6 percent increase over 2014, followed by Humboldt, which was up nearly 6 percent.

Partnerships

The MCEDA/LCEDA organizations aren´t the only collaborative groups in the region. The South Eastern Council of Governments (SECOG) is one of six Planning and Development Districts in South Dakota. For more than 40 years, these districts have promoted regional cooperation and economical delivery of services. SECOG serves Clay, Lincoln, McCook, Minnehaha, Turner, and Union counties as well as the municipalities within those counties. It provides a range of services to its members to promote community planning and economic development in the region including land use planning and zoning, project funding, and GIS. SECOG also serves as the Governor´s House Sales Representative for homebuyers in the region.

In addition, through the Urbanized Development Commission (UDC), SECOG is the designated Metropolitan Planning Organizations (MPO) for the Sioux Falls urbanized area. Federal law requires that all urbanized areas in the U.S. with populations of more than 50,000 establish an MPO responsible for area transportation planning and programming activities. The metropolitan planning process establishes a continuous, comprehensive and cooperative framework for making transportation investment decisions in metropolitan areas. Program oversight is a joint responsibility of the Federal Highway Administration and the Federal Transit Administration. SECOG operates the South Eastern Development Foundation (SEDF), a regional revolving loan fund designed to strengthen communities and stimulate economic development by assisting individuals that want to create or expand a business in the region. SECOG also operates Dakota BUSINESS Finance (DBF), a certified development company that offers the U.S. Small Business Administration´s 504 loan program statewide as well as to numerous counties in Iowa, Minnesota and Nebraska. SECOG serves as staff for both SEDF and DBF.

On a more informal basis, representatives from area school districts and government entities get together monthly for a "Breakfast Club" meeting. This meeting, which the Sioux Falls Area Chamber of Commerce also regularly attends, is a way to share information with others in the region. A recent meeting in January discussed various school districts´ perspectives on the work of the K-12 Blue Ribbon Task Force and potential action that could take place during the legislative session.

From sharing of information to collaboration on things like lobbying or marketing materials, working together is the way to go to ensure a brighter future for all, Fosheim said.

"We´re still small towns," Fosheim said of the regional communities. "But collectively, we have a bigger impact."

Olson may have been skeptical of MCEDA´s beginnings but feels good about where Brandon is today because of concentrated economic development efforts. When people would ask him how Brandon has been able to be so successful, he would attribute it to luck. But he was corrected by someone who told him that people make their own luck. When carried a step further, the community of Brandon didn´t rely on luck – they worked for their success, Olson said.

"We provided good land, had utilities, made some efforts in marketing, built some stick buildings, had an active development foundation – there´s a number of things to do. No one thing will assure a company will come. But if you put an atmosphere together to do that, then you can get lucky," he said.

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