LIVE WORK GROW - Forward Sioux Falls

LIVE WORK GROW

Market Street brings original insights and clarity to the evaluation and revitalization of the places where people live, work and grow. Through honest and informed assessments, Market Street can equip you with the tools to create meaningful change. Our solutions successfully merge our experience and expertise with the economic and social realities of our clients. Market Street’s community clients are successful at creating stronger programs, increasing operational budgets, and creating new quality jobs that improve the quality of life in their communities.

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Competitive Assessment October 2009

Table of Contents

Introduction ............................................................................................................ 1 Executive Summary ................................................................................................ 3 People ................................................................................................................... 16

How is the region growing and changing? ......................................................... 16 How are Greater Sioux Falls’ residents doing? .................................................. 26 Do local education and training programs promote workforce competitiveness? . 33 Key Takeaway Points........................................................................................ 42

Prosperity ............................................................................................................. 43

What are the realities of the Sioux Falls Area’s economy? ................................. 43 How diversified is the local economy? ................................................................ 48 What opportunities and threats exist to business creation, expansion, and relocation?........................................................................................................... 55 Key Takeaway Points....................................................................................... 66

Place ...................................................................................................................... 67

How “livable” is Metro Sioux Falls? .................................................................. 67 What makes the area unique? ............................................................................ 73 Key Takeaway Points........................................................................................ 86

Conclusion ........................................................................................................... 87 Appendix A: Methodology ................................................................................... 89

Geography ..................................................................................................... 89 Data Sources ................................................................................................. 91 Stakeholder Input ......................................................................................... 91 Patent Data .................................................................................................... 91

Appendix B: Community Survey ........................................................................ 92

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Competitive Assessment 1 October 2009

INTRODUCTION There is much cause for optimism in the Sioux Falls Area. While many U.S. regions are suffering from the combined effects of employment and population loss, both these trends have been positive for the Sioux Falls region. A number of other indicators are also trending well for the community. However, the most dangerous path a region can take is the one that does not move forward. Economic development has never been more competitive than it is today. Communities are now battling for not only companies, but talented workers as well. Acknowledging the need to continue its forward trajectory, public and private leaders in Greater Sioux Falls have launched this Future Sioux Falls strategic visioning process to determine “what’s next” for the region, its businesses and its residents. As part of this comprehensive effort to continue to expand its competitiveness and livability for businesses and individuals, Forward Sioux Falls, the City of Sioux Falls, Minnehaha and Lincoln Counties, the Sioux Falls area Community Foundation, and the Sioux Empire United Way have retained Market Street Services, a national economic and workforce development consulting firm based in Atlanta, Georgia, to facilitate the creation of a new strategy that will enhance the economic and community development activities and programs in the Sioux Falls Area. The components of the Future Sioux Falls process are: Competitive Assessment: This report will present a breadth of research to

demonstrate the Sioux Falls Area’s competitive position to accommodate “visionary” growth and development. A combination of factors that determine a community’s strengths as a place to live, work, and do business will be assessed including indicators related to education and workforce development, infrastructure and land use, business costs, and quality of life.

Target Business Analysis: Building on the extensive research and data analysis

from the Competitive Assessment, the Target Business Analysis will blend quantitative and qualitative research with significant technical information including location quotients, economic base analysis, and industry-by-occupation employment data. The final product will produce a short list of clearly defined target sectors and the opportunities and challenges involved in effectively growing them.

Marketing Review: The next step in the process will focus on marketing

activities through a review and assessment of the Sioux Falls Development Foundation and Chamber of Commerce’s marketing efforts to determine if they reflect best practice methods for increasing awareness and investment in the


area. Current internal and external marketing program tools will be reviewed, including the Foundation’s website, advertising and collateral materials, inbound/outbound marketing events, public relations, trade shows, site selection professional visits, and branding and identity efforts.

Future Sioux Falls Strategy: The Strategy will represent the culmination of all

research completed and will present action items geared toward addressing challenges and capitalizing on opportunities for visionary growth. The Strategy will serve as a tool to unify the Sioux Falls area’s public and private leadership behind a consensus blueprint for the community’s future. The final Strategy will include best practices as well as benchmarks and performance measures.

Implementation Plan: While the Strategy represents “what” the Sioux Falls area

needs to do to achieve its preferred future, the Implementation Plan will determine “how” that will be done. This report will include a capacity assessment, a first-year action plan, a five year action plan, and will determine which organization(s) should lead plan implementation efforts.

The Future Sioux Falls process provides a tremendous opportunity for the region to come together around a shared vision for future progress and development. Coming to consensus on this vision is simply the first step, however. Realizing these ambitious goals will ultimately ensure that the successful path the Greater Sioux Falls region has followed continues steadfastly into the near- and long-term future.


EXECUTIVE SUMMARY This Competitive Assessment examines the issues that impact and determine economic competitiveness and community vitality. Key demographic and economic indicators for the Sioux Falls Area are compared to state and national trends. The metropolitan statistical area (MSA) is then compared to three similar communities that Sioux Falls competes with for jobs and workers: the MSAs of Des Moines, Iowa; Fargo, North Dakota; and Rochester, Minnesota1. The report’s key findings are discussed in terms of the three engines that influence an area’s competitiveness: its People, their Prosperity, and its quality of Place.

People

The following chart shows Sioux Falls’ performance compared to its peer metro areas, the state and the nation for key indicators related to demographic and socioeconomic trends. While the region leads the way in terms of population growth and domestic migration, it is comparatively less diverse, has lower educational attainment levels among its adults, and less higher education capacity than the benchmark regions. Of those survey respondents who had experience with the Sioux Falls Area’s public schools, most were very satisfied with the quality of education and dedication of educators. However, the lack of a major research university presence in the community adversely impacts Sioux Falls’ educational attainment and post-secondary opportunities. Lack of education was cited as one of the greatest weaknesses of the local workforce. As new people from every nationality and background move to Greater Sioux Falls, the community has been faced with rapid changes in terms of its diversity. The challenge this presents is daunting to some survey respondents and exciting to others. Many saw great potential in leveraging a new, diverse identity for the future of Sioux Falls while others felt that the immigrants’ presence negatively affected local education and community dynamics.

1 The selection methodology for these areas is included in Appendix A.


“1” is considered highest-performing, while “6” is the poorest performing among these geographies.

Note: Data sets presented throughout this report are at the metropolitan statistical area (MSA) level,

unless otherwise noted. Sources and methodology notes related to these indicators are detailed in tables throughout the People section of the report.

How is the community growing and changing?

Rapid population growth and increasing diversity: Since 2000, the State of South Dakota grew by 49,350 residents, with metro Sioux Falls capturing the majority of this growth (45,373 residents or 92 percent). The region has grown by 24 percent, surpassing the growth rates in most other growing Midwestern cities, including the benchmark communities. With this growth diversity has increased. Minority residents account for ten percent of the total

Sioux Falls,

SD

Des Moines,

IA

Fargo, ND-

MN

Rochester,

MN

South

Dakota

United

States

Population Growth

% 2000-08 24.5% 15.5% 12.2% 11.8% 6.5% 8.0%

Rank 1 2 3 4 6 5

Domestic Migration

Accounted for x% of 2000-08 population change 54.6% 37.6% 38.4% 13.6% 10.9% n/a

Rank 1 3 2 4 5 -

Diversity

% minority residents, 2008 9.6% 14.2% 8.2% 11.5% 13.9% 34.4%

Rank 5 2 6 4 3 1

Poverty

2007 total poverty rate 8.5 8.7 11.9 8.2 13.2 13.0

Rank 2 3 4 1 6 5

Bankruptcy

Bankruptcies per 1,000 residents, 2008 9.6 13.8 10.7 8.3 7.1 13.3

Rank 3 6 4 2 1 5

Per Capita Income

Per Capita Income, 2007 $38,551 $40,923 $36,459 $40,740 $35,760 $38,615

Rank 4 1 5 2 6 3

Educational Attainment

% of adults w/ an Associate's degree or higher, 2008 38.7% 42.7% 46.1% 47.6% 34.7% 35.2%

Rank 4 3 2 1 6 5

College Students

College students per 100 residents* 12.8 13.1 19.0 20.2 n/a n/a

Rank 4 3 2 1 - -

PEOPLE: Snapshot data


population, but fueled 22 percent of Greater Sioux Falls’ total growth since 2000.

In-migration dynamics suggest Sioux Falls is a community-of-choice for many families: Domestic in-migration feeds population growth in Sioux Falls. The region pulls most new residents from rural areas of South Dakota, Northwest Iowa, and Southwest Minnesota. The region is also able to attract new residents from other metro areas including Fargo, Bismarck, Duluth, Salt Lake, Los Angeles, Las Vegas, and Austin. It is interesting to note that international in-migration accounts for a smaller percentage of population change in Sioux Falls than in all of the benchmark communities, the state, and the nation.

Broad support for multiculturalism: Input gathered from stakeholders indicates support for the Multi-Cultural Center of Sioux Falls, Sioux Falls Public Schools, and area employers’ efforts to support multiculturalism. One input participant said, “I believe the business community here believes and understands that multiculturalism is good for Sioux Falls in terms of workforce competitiveness and conveying the message that we are an ‘open’ community that welcomes newcomers.” One survey respondent noted, “Sioux Falls is incredibly diverse but some people still have trouble welcoming new immigrants into our community. I wish this could improve.”

Reported “brain drain” issues: Since 2000, Greater Sioux Falls has lost a

net number of residents to Minneapolis, Omaha, Lincoln, Des Moines, and Denver. “There need to be more jobs for these young professionals and more advancement,” said one survey respondent. “All the great talent that the city might have had the chance to keep is just leaving.” Many other survey participants mentioned Sioux Falls’ lack of entertainment and retail amenities as a problem in attracting and retaining the “best and brightest.” However, as noted above, Sioux Falls has had positive net in-migration from Austin and Los Angeles, communities with relatively creative economies that attract young talent.

How are Greater Sioux Falls’ residents doing?

Solid per capita income growth, but comparatively less so in recent years: In 2007, metro Sioux Falls’ PCI was $38,551 nearing national PCI at $38,615. While growth in local per capita income has kept pace with the nation (29 percent since 2000), the state and benchmark communities’ per capita incomes grew at faster rates. This indicates that while Sioux Falls is in a strong position in terms of PCI, it is losing ground to its peer communities.


Increasing childhood poverty rates and a significant number of children whose families are “working poor”: Greater Sioux Falls’ child poverty rate grew from 7.9 to 10.2 between 2000 and 2007, rising faster than rates nationwide. In addition, approximately 32 percent of students in Sioux Falls Public Schools qualify for federal free and reduced price lunch programs (compared to 29 percent statewide). While this figure is still low compared to most U.S. regions, its rise is a concern. Children from families with incomes at or below 130 percent of the poverty level are eligible for free meals, suggesting many local families are “working poor.”

Educational attainment levels lag behind peer communities: Metro Sioux Falls has made great strides in improving educational attainment of adults. Since 2000, the number of adults ages 25 and older without a high school diploma dropped from 12 to seven percent, and the number holding only a high school diploma dropped slightly from 31 to 30 percent. Educational attainment of local adults is competitive with state and national standards; however, Sioux Falls lags behind its peer communities in terms of the proportion of residents who hold an associate’s, bachelor’s, and/or master’s degree.

Do local education and training programs promote workforce competitiveness?

Competitive public school systems, but concerns about keeping up with demand: Sioux Falls Public Schools report a lower per pupil expenditure than its comparison areas; however, composite ACT scores and student proficiency in Math and Reading (as determined by NCLB) are strong. Eighty-four percent of survey participants enrolled or with children enrolled in area schools rated the quality of the education as “very good” or “good”. With record elementary school enrollments in many metro districts, many stakeholders are concerned about the ability to keep up with burgeoning demand.

Comparatively smaller higher education capacity and limited workforce

development resources: Educational options at the two-year and four-year levels in the metro area are fairly limited. Even when considering state universities within an hour’s drive time, Greater Sioux Falls still has a smaller higher education capacity than its peer regions. Additionally, the state’s unique community and technical college structure limits workforce development opportunities available in Sioux Falls compared to many places that receive state funds for two-year colleges.

Multiple hurdles to higher education access: Funding issues for students

at the University Center, no-state funded community college, and limited degree program availability and flexibility within the metro area are concerns.


Creating and maintaining a pipeline of “knowledge workers” will be critical to the long-term competitiveness of Sioux Falls’ regional economy.

Prosperity

The following chart compares Sioux Falls’ performance in key economic indicators to its benchmark regions, the state and the nation. Metro Sioux Falls’ dynamic economy has produced strong job growth, low unemployment, and lucrative opportunities for entrepreneurs. The region performs less well in the areas of average annual wages and capacity for innovation.


Note: Data sets presented throughout this report are at the metropolitan statistical area (MSA) level,

unless otherwise noted. Sources and methodology notes related to these indicators are detailed in tables throughout the People section of the report.

What are the realities of Metro Sioux Falls’ economy?

Five-year employment growth rates are strong; however confidence in the economy is wavering: All geographies examined experienced negative

Sioux Falls, SD

Des Moines, IA

Fargo, ND-MN

Rochester, MN

South Dakota

United States

PROSPERITY: Snapshot data

Employment5-year change, Q2 2009 6.9% 5.5% 4.5% -0.5% 2.5% -0.8%Rank 1 2 3 5 4 6

UnemploymentUnemployment rate, July 2009 4.5% 5.5% 4.2% 6.3% 4.9% 9.7%Rank 2 4 1 5 3 6

Labor Force ParticipationLabor force participation rate, 2008 84% 86% 89% 86% 85% 76%Rank 4 2 1 2 3 5

WagesAverage annual wage, Q4 2008 $38,221 $46,079 $38,403 $49,197 $34,143 $47,804Rank 5 3 4 1 6 2

EntrepreneurshipAverage annual earnings, 2007 $41,296 $43,859 $40,125 $37,074 $36,652 $45,688Rank 3 2 4 5 6 1

Small BusinessSmall business loans per 1,000 residents, 2008 37 32 40 32 n/a n/aRank 2 3 1 3 - -

InnovationPatents per 100,000 residents, 2008 7.7 42.2 31.7 256.4 8.8 60.9Rank 6 3 4 1 5 2


job growth between Q2 2008 and Q2 2009. The Sioux Falls Area has outperformed the nation, state, and comparison communities in terms of five-year job growth rates, increasing total employment by 6.9 percent while the state grew by 2.5 percent and the nation declined by 0.8 percent. In general, stakeholders agree that confidence in the regional economy has wavered. A community input participant observed, “There is the sense that nothing is guaranteed anymore, and that now includes Sioux Falls.”

Low unemployment, but it is on the rise: In July 2009, the metro area’s unemployment rate was 4.8 percent compared to 9.7 percent nationwide. Sioux Falls’ one-year unemployment change between July 2008 and 2009 has increased by 2.0 percent, the same as the state. The increases in unemployment rates in the Des Moines, Fargo, and Rochester regions are 1.9, 1.4, and 1.9 percent, respectively.

Average wages lag behind peer communities and are growing at a slower

rate: Compared to the Des Moines, Fargo, and Rochester metros and the nation, the Sioux Falls Area’s average annual wages lag behind. In Q4 2008, the average annual wage in the region was $38,221 compared to wages ranging from $38,403 to $49,197 in the other places examined. Furthermore, while the Sioux Falls Area posted very strong five-year employment growth figures, its five-year growth rate in wages fell behind all benchmark communities, the state, and the nation.

Labor force participation is declining: Between 2000 and 2008, labor force participation declined slightly, from 78 percent to 76 percent nationwide. During that same period, labor force participation declined from 92 to 84 percent in Sioux Falls. This indicates that thousands of adults have dropped out of the local workforce. While this has loosened Sioux Falls’ relatively tight labor market, this is an issue of concern.

How diversified is the local economy?

Diverse range of solid, growing business sectors: While financial services and health care dominate the economic base of Greater Sioux Falls, all other business sectors saw growth over the past few years, most surpassing the national growth rate. However, some higher-wage potential sectors such as professional and technical services grew more slowly in metro Sioux Falls than at the national level; lower-wage sectors like construction and retail trade expanded more rapidly locally.

Legislative changes cause concern: Recent federal legislation in Congress, specifically the Student Aid and Financial Responsibility Act and the Credit CARD Act, will implement further regulations on the financial services


sector, slowing growth regionally and reportedly resulting in losses at some of Sioux Falls’ largest private employers.

What opportunities and threats exist to business creation, expansion, and relocation?

Local and state tax rates are competitive, but incentives could be strengthened: South Dakota and Sioux Falls remain attractive to businesses and individuals because of their significantly low tax burdens (the state does not collect corporate or income taxes). However, the region and state must compete in other ways to attract and retain businesses, including the provision of a range of incentives that can be individualized and packaged for new firms that could employ many residents.

Entrepreneurship generates wealth, but has a comparatively smaller impact on the regional economy: In 2007, non-employer average annual earnings in Greater Sioux Falls were $41,296 compared to $36,652 for the state and $45,688 for the nation. These dynamics mirror overall average wage trends. Compared to all of the geographies examined, metro Sioux Falls’ entrepreneurs are not as “high impact.” Their income accounts for a smaller percentage of metro GDP (4.7 percent) than the benchmark communities, state (6.5 percent), and nation (8.2 percent).

Limited capacity for innovation: In 2008, 7.7 patents per 100,000 residents were granted in Sioux Falls compared to 31.7 in Fargo, 42.2 in Des Moines, and 256.4 in Rochester. The lack of a major research university – or research institution like the Mayo Clinic in Rochester – in Sioux Falls is one significant weakness to achieving a higher rate of regional innovation.

Place

The following chart shows Greater Sioux Falls’ performance compared to the benchmark regions, state, and nation in key indicators related to quality of place. In each area (cost of living, home affordability, health care capacity, crime rates, charitable giving, and environmental quality) the Sioux Falls metro area outperforms the nation. Quality of life was the most commonly cited strength of the region by stakeholders who participated in the online survey, interviews, and focus groups. Overall, online survey respondents attributed Greater Sioux Falls’ high quality of life to low crime rates, ample outdoor recreation, and beautiful natural surroundings. Survey participants touted Greater Sioux Falls as a great place to raise a family, but repeatedly expressed concern over the lack of place-based amenities to attract and retain young professionals. Additionally, many survey respondents articulated a need for a more diverse housing stock at every price level.



*State data not available. Midwest figure used in lieu.

Note: Data sets presented throughout this report are at the metropolitan statistical area (MSA) level, unless otherwise noted. Sources and methodology notes related to these indicators are detailed in tables

throughout the People section of the report.

How “livable” is the Sioux Falls region?

Comparatively low cost of living: Costs of living in Sioux Falls and its peer metro areas are lower than the national average. Lower prices for groceries, housing, and transportation in Metro Sioux Falls offer the region a competitive advantage over higher cost markets.

Stable regional housing market, but critical need for affordable housing: Between Q2 2008 and Q2 2009, median home prices held steady in Metro

Sioux Falls, SD

Des Moines, IA

Fargo, ND-MN

Rochester, MN

South Dakota

United States

Cost of Living

C2ER Index (100=National average), Q2 2009 92.1 91.1 92.8 97.7 n/a 100

Rank 2 1 3 4 - 5

Home Prices

Median sale price of single family homes, Q2 2009* $146,000 $150,100 $141,200 n/a $146,800 $174,100

Rank 2 4 1 - 3 5

Health Care Capacity

Physicians per 100K residents, 2007 342 245 277 1,386 85 170

Rank 2 4 3 1 6 5

Crime Rates

Violent crimes (per 100K residents), 2007 253 333 121 181 201 455

Rank 4 5 1 2 3 6

Property crimes (per 100K residents), 2007 1,968 3,001 2,235 1,967 1,646 3,212

Rank 3 5 4 2 1 6

Philanthropy

Philanthropic revenue per capita, 2009 $13,524 $11,853 $5,561 $20,071 $7,203 $6,464

Rank 2 3 6 1 4 5

Environmental Quality

Facilities w/ hazardous waste activities (per 100K residents), 2009 207.4 277.8 301.5 490.9 n/a n/a

Rank 1 2 3 4 - -

PLACE: Snapshot data


Sioux Falls, growing one percent (from $144,400 to $146,000) during this time compared to a nine percent drop across the Midwest and a 16 percent drop nationwide. There were occasional price declines between these quarters that were earlier or later counterbalanced; however, such rebounds have not been typical in most communities given the current recession. Metro Sioux Falls’ home prices are affordable compared to most markets; however, many families cannot buy a home and need sliding-scale rent options according to their wages. With an approximately three-year waiting list for housing assistance in Sioux Falls, it is clear that affordable housing programs have not kept pace with rapid population growth and increasing demand for assistance.

Robust health care capacity: Greater Sioux Falls has a smaller proportion of uninsured residents than the state and the nation (eight percent compared to 12 and 15 percent, respectively) and is within range of its peer metro areas. With the exception of Rochester, where the world-renowned Mayo Clinic is located, Greater Sioux Falls has a comparatively high number of physicians per capita (342 compared to 170 nationwide). Investments by both Sanford Health and Avera ensure that health care will continue to be a vital component of the regional economy.

Comparatively higher crime rates: While per capita crime rates in the Sioux Falls region are higher than those for the state, they remain well below those for the nation. Greater Sioux Falls’ property crime rate is on the low-end of the spectrum compared to its peer metro areas; however, violent crime rates are markedly higher than Fargo and Rochester.

Pristine natural environment: Metro Sioux Falls has fewer potential

Superfund sites and fewer facilities per capita that release air pollutants, discharge into regional bodies of water, or report hazardous waste activities compared to the Des Moines, Fargo, and Rochester regions.

What makes that area unique?

Dynamic quality of life, but limited amenities for young professionals: Quality of life and family-friendly amenities were the most cited strengths of Greater Sioux Falls. The safety and variety of activities, health care amenities, quality of public schools, and “neighborliness” offered by the region’s communities make them attractive places to raise a family. However, most input participants agree that Greater Sioux Falls is not an exciting place to be for the young and/or single, which is why the region reportedly loses many residents to places like Denver and Minneapolis. Continuing to improve the Downtown area, increasing lifestyle options, and developing places with


“character” and “atmosphere” that are attractive to young professionals will help the region to be more competitive.

Events center potential: While many stakeholders agree that increased event-hosting capacity is needed, there is disagreement about whether to expand the existing Sioux Falls Arena or build a new events center Downtown. Some people involved in community development are also concerned about funding the Events Center and potential impacts on lower-income residents. The City’s Events Center Task Force will, most likely, release its findings sometime in November.

Strong culture of charitable giving, but need to strengthen civic participation: Together, the region’s non-profit organizations report over $3.15 billion in revenues, the equivalent of $13,524 in resources for each metro area resident. Since 2004, non-profit revenues have grown by 85 percent, which is the highest of all of the geographies examined. While many stakeholders agree that the Sioux Falls region has generous residents and a business community committed to philanthropy, lower confidence was expressed in residents’ civic participation. Many feel that residents and leaders have become complacent with the status quo.

How do development patterns influence commercial, residential, and industrial growth potential?

Transportation infrastructure inadequate for rapidly-growing population: Many stakeholders feel that the proposed new East/West beltline (Highway 100) should be a priority. “Get some big thoroughfares through the middle of town, along with expansion of a bus or train transit system to accompany it, so people can have access to all areas of town,” said one survey respondent. Such needed infrastructure improvements will be vital for Greater Sioux Falls to keep up with growth and to maintain its competitiveness as a place to live and work.

Limited transit coverage and service hours create access issues: The buses in Sioux Falls’ fleet are older, on average, than those in Des Moines, Fargo, and Rochester. Bus ridership appears to be comparatively lower in Sioux Falls as suggested by lower fare revenues, average bus miles traveled per capita, and trips per resident. Some stakeholders feel that the coverage and service hours of Sioux Falls’ bus system need to be expanded. One survey respondent stressed that the “public transportation situation is inadequate for people who are environmentally conscious and prefer not to drive cars in a climate not conducive to a lot of bicycling much of the year.”


Highly competitive utility costs: According to the C2ER Q2 2009 Cost of Living Index, residents in Sioux Falls pay (on average) about $116 per month for these services compared to $127 in Fargo, $145 in Des Moines, and $247 in Rochester. The median cost is $169 among the 320 metro areas, micro areas, and metro divisions studied by C2ER.

Record-high vacancy rates: A key challenge for local leaders to address is the surging office vacancy rate in the region. According to a recent market assessment, the Sioux Falls Area has a 16 percent office vacancy rate, amounting to over one million square feet of unoccupied state. With so much space on the market, it makes redeveloping existing Downtown buildings into mixed-use developments much more difficult.

Inadequate rail and air access: Nearly all input participants agree that

Metro Sioux Falls is a low-cost market. The number one challenge related to business costs is air service. A survey participant remarked, “Sioux Falls loses out on so many opportunities for airline passengers to Omaha and Minneapolis way too often.” High airfares impact local business’ bottom lines, leisure travel, and the ability for Sioux Falls to book conventions and major events. Rail access is another key issue related to infrastructure competitiveness. Compared to the benchmark regions selected for this report, Sioux Falls has access to just one Class I rail provider. Some stakeholders indicate that rail access is an issue due to a limited number of spurs in Greater Sioux Falls.

Participants in the online survey were asked what they perceive to be the area’s greatest strength and its most important challenge that must be overcome. The top responses for each question are listed below. Clearly, there are compelling reasons why people and businesses are attracted to Greater Sioux Falls. However, there are many challenges that need to be addressed so that the community can be optimally competitive and provide greater opportunities for all of its residents. Key points derived from the research gathered for this report help to clarify the challenges and opportunities in metro Sioux Falls, and will directly inform recommendations made in the Economic Development Strategy.


Sioux Falls’ greatest strength, according to survey respondents:

Sioux Falls’ most important challenge to overcome:

People/friendliness/commitment to

community111

Cost of l iving/low taxes 34

Work ethic 26

Safety/low crime 22

Small town feel/size 19

Cleanliness/natural environment/beauty 18

Private sector leadership 17

Quality of l ife 16

Health care 15

Accessibil ity/location 13

Parks/bike trails/recreation 13

Amenities 11

Schools 7

Family‐friendly 7

Roads/infrastructure 3

Infrastructure/roads/traffic 48

Expanding job opportunties 42

Small mindedness/fear of change 41

Low wages 29

Managing growth 27

Education 20

Housing options 20

Diversifying economic base 19

Socioeconomic issues 16

Diversity 18

Cost of l iving/taxes 17

Keeping young people and professionals 17

Amenities/entertainment 17

Public leadership 16

Climate 13

Crime 12

Funding projects and public services 9

Location 6

Apathy 4

Perception 3


Sioux Falls’ top opportunity to capitalize on:

Health care 33

Business climate 32

Event center 32

Low taxes 27

Workforce 20

Recreation/entertainment 20

Safety 12

Downtown 16

Location 11

Family friendly 9

Clean energy 5

Public and private sector leadership 5

Housing 3


PEOPLE It is critical that all project stakeholders embark on Greater Sioux Falls’ strategic process with a shared understanding of community dynamics and recent trends that can influence policy decisions. Assessing how Greater Sioux Falls’ population is growing and changing is the first step towards understanding its recent past and clarifying its future opportunities and challenges. This section analyzes the metro area’s population changes in terms of population change, socioeconomic wellbeing, and workforce dynamics.

How is the region growing and changing?

Greater Sioux Falls’ people are its greatest asset. Studying demographic and socioeconomic trends can help show how the region’s population is changing compared to other areas, and can clarify potential implications on workforce supply and needed services. Population dynamics can also raise questions about the quality of life or types of opportunities available to people of varying backgrounds within the community.

Population Growth

The following map shows net population change by county between 2000 and 2008 for the entire United States. A large proportion of counties in many Midwestern states including North Dakota, South Dakota, Nebraska, Kansas, and Iowa have shed residents. Growth that has occurred in these states has been concentrated in metropolitan areas which offer a greater variety of economic and educational opportunities, life style options, and cultural and entertainment amenities. A strong, diverse local economy and attractive quality of life have positioned Greater Sioux Falls for growth. Since 2000, the State of South Dakota grew by 49,350 residents, with Metro Sioux Falls capturing the majority of this growth (45,373 residents or 92 percent). The region has grown by 24 percent, surpassing the growth rates in most other growing Midwestern cities, including the benchmark communities. The Sioux Falls metro area is one of the fastest-growing MSAs in the country, and one of only two in the Midwest to make the top 50 in the nation.2 Most new residents are choosing to locate in the City of Sioux Falls, Minnehaha County, and Lincoln County. McCook and Turner County have actually lost small numbers of residents, despite their location within the Sioux Falls metropolitan area. 2 Sioux Falls Development Foundation. Community Profile 2009-2010.


Population Change by County 2000-2008

Source: U.S. Census Bureau

Population Change, 2000-2008


Note: Community names reflect MSA

2000 2008

Total

Number

00‐08

Percent

Average Annual

Growth Rate

Sioux Falls, SD 187,093 232,930 45,837 24% 2.8%

Lincoln County 24,131 39,713 15,582 65% 6%

McCook County 5,832 5,671 ‐161 ‐3% 0%

Minnehaha County 148,281 179,180 30,899 21% 2%

Turner County 8,849 8,366 ‐483 ‐5% ‐1%

Des Moines , IA 481,394 556,230 74,836 16% 1.8%

Fargo, ND‐MN 174,367 195,685 21,318 12% 1.5%

Rochester, MN 163,618 182,924 19,306 12% 1.4%

South Dakota 754,844 804,194 49,350 7% 0.8%

United States 281,421,906 304,059,724 22,637,818 8% 1.0%

Population 2000‐08 Change


Core City Population Change, 2000-2008


Participants in this project’s stakeholder input process feel that, while there are certainly challenges, rapid growth has brought many benefits to the area. The Sioux Falls Area is a growing market with nationally recognized corporations, strong business leadership, and an attractive, affordable quality of life. This reportedly makes recruiting people to the region an easy sell. As one participant said, “We have achieved a critical mass. We are at the point where we can attract people here and they aren’t worried about if there will be opportunities for their spouse or their children.” Concerns associated with growth which were cited include (1) the city’s ability to keep up with “quality of life” improvements; (2) the increasing need to be involved in regionalism and the willingness to work with leadership in Des Moines, Minneapolis, Fargo, and other communities on issues that affect the upper Midwest; and (3) the feeling that leadership has somewhat “rested on its laurels” by assuming growth and development will “just happen.” Some cited the need for more aggressive economic development efforts. Many online survey respondents expressed a desire to see a proactive approach to the region’s rapid population increases because “our infrastructure may have a hard time with accommodating a spike in growth.” “Plan now for becoming that larger size city,” said one survey participant. Another encouraged “growth and development using well-thought-out planning.”

Population change can occur through natural change (births minus deaths), international migration, and domestic migration. The following chart shows that Metro Sioux Falls’ population growth is fueled primarily by high domestic in-migration, and, secondarily, by births-over-deaths. It is interesting to note that international in-migration accounts for a smaller percentage of population change in Sioux Falls than in all of the benchmark communities, the state, and the nation.

2000 2007

Total

Number

00‐08

Percent

Average Annual

Growth Rate

City of Sioux Fa l l s , SD 123,975 154,997 31,022 25% 2.8% 68%

City of Des Moines , IA 198,682 197,052 ‐1,630 ‐1% ‐0.1% ‐2%

City of Fargo, ND 90,599 93,531 2,932 3% 0.4% 14%

City of Rochester, MN 85,806 100,413 14,607 17% 2.0% 76%

City

Growth as

% of MSA

Growth

Population 2000‐08 Change


Components of Population Change 2000-2008


Note: Community names reflect the MSA

Migration

Examining migration patterns can further clarify population changes within the Sioux Falls region. Migration patterns are an important part of community and economic development planning. Community leaders should understand who is moving into and out of the area in order to provide appropriate services for all of its residents, now and in the future. Internal Revenue Service (IRS) tax return data sets were used to analyze domestic migration patterns to and from Metro Sioux Falls between 2000 and 2007, the most recent year for which the data are available. Domestic Net In-Migration Sources: The following map shows source counties for migrants into Metro Sioux Falls in light orange, with the top ten source counties highlighted in dark orange. (The top ten source counties are also detailed in the accompanying table, since some fall outside of the mapped area.) The region pulls most new residents from rural areas of South Dakota, Northwest Iowa, and Southwest Minnesota. The region is also able to pull new residents from other metro areas including Fargo, Bismarck, and Duluth (as shown on the map) and Salt Lake, Los Angeles, Las Vegas, and Austin (located outside of the mapped area). Domestic Net Out-Migration Destinations: Destination counties for the region’s out-migrants are shown in light green on the following map. Top ten destinations for out-migrants are displayed in dark green; they are also listed in the accompanying table. The area has lost a net number of residents to the Minneapolis, Omaha, Lincoln, Des Moines, and Denver regions, which confirms input from stakeholders

38%48% 50%

63%

79%

64%

55% 38% 38% 14%

11%

8%14% 11%

24%10%

36%

0%

20%

40%

60%

80%

100%

Sioux Falls,

SD

Des Moines,

IA

Fargo, ND‐

MN

Rochester,

MN

South

Dakota

United

States

International Migration

Domestic Migration

Natural Change


regarding key markets with which Sioux Falls competes. The area also loses residents to more distant metros like Phoenix, Boise, and Houston.

Domestic Net Migrations to and from Metro Sioux Falls, 2000-2007

Source: Internal Revenue Service, Moody’s

Economy.com

Note: Migration coverage is more widespread than what is captured in this map. Due to privacy concerns, the

IRS suppresses migration data from/to counties in which less than five tax filers moved. Grey areas on the map are classified as “no migration” or “limited migration.”


Top Domestic Net In- and Out-Migration Locations: Metro Sioux Falls, 2000-2007

Source: Internal Revenue Service, Moody’s Economy.com

Age Dynamics

The following table shows population change by age group between 2000 and 2008. It is important to understand Greater Sioux Falls’ population age distribution for several reasons. Communities with sizeable and younger workforces often have more success sustaining long-term economic health. Additionally, they can clarify current and potential future demand for certain community services that specific age groups tend to utilize at higher rates, including public schools, child care, and transportation alternatives. Percent of total population, 2008: Compared to the nation, Greater Sioux Falls has a smaller proportion of residents ages 70 or older and a higher proportion of children. These dynamics are typical of many high-growth areas and suggest that Metro Sioux Falls has a robust workforce with strong “pipeline” of future workers.

Top Sources for Net In‐Migration Top Destinations for Net Out‐Migration

Rank Top Counties Rank Top Counties

1 Brookings County, SD (Brookings ) 1 Hennepin County, MN (Minneapol is )

2 Davison County, SD 2 Maricopa County, AZ (Phoenix)

3 Brown County, SD (Aberdeen) 3 Douglas County, NE (Omaha)

4 Yankton County, SD 4 Polk County, IA (Des Moines )

5 Codington County, SD (Watertown) 5 Lancaster County, NE (Lincoln)

6 Sioux County, IA (north of Sioux City) 6 Johnson County, KS (Suburban Kansas City)

7 Clay County, SD 7 Harris County, TX (Houston)

8 Woodbury County, IA (Sioux City) 8 Douglas County, CO (Denver)

9 Hughes County, SD (Pierre) 9 Ada County, ID (Boise)

10 Nobles County, MN 10 Olmsted County, MN (Rochester)

Top States Top States

1 South Dakota 1 Arizona

2 Iowa 2 Colorado

3 Cal i fornia 3 Idaho

4 Minnesota 4 Washington

5 North Dakota 5 Florida


Sixty-six percent of the region’s residents are between the ages of 18 and 69 (ages used to define the region’s available workforce), greater than the state and the nation (65 and 63 percent, respectively) and on par with metro Des Moines (66 percent). The proportion of workers (ages 18-69) to non-workers (children and retirees) is significantly higher in the Fargo (70 percent) and Rochester (75 percent) regions, suggesting the potential for greater productivity in these communities. Growth since 2000: In all of the geographies examined, the Baby Boomer age group (ages 45-69) experienced the greatest amount of growth, while the 35-44 age group experienced the slowest growth (or decline in many cases). Because of Greater Sioux Falls’ rapid population growth, increases in the region’s age cohorts generally exceeded those for the comparison geographies. However, there are some interesting underlying growth dynamics which set Greater Sioux Falls apart from national trends. Between 2000 and 2008, the Sioux Falls metro area has grown by 45,837 residents, over 10,000 of which were children. Children have accounted for nearly 1-in-4 new residents compared to less than 1-in-10 nationwide. Public school districts in Sioux Falls, Harrisburg, Brandon Valley, Lenox, Tea, and Baltic have all reported a “kindergarten boom” straining staff and facility resources in many communities within the metro area.3 Seniors have accounted for a smaller share of growth in Greater Sioux Falls (seven percent – or 3,030 of 45,837 new residents) compared to the nation (seventeen percent).

3 Verges, Josh. (August 30, 2009). Kindergarten boom challenges schools. The Argus Leader.


Age Distribution and Population Change by Age Group, 2000-2008


Note: Community names reflect MSA

0‐17 18‐24 25‐34 35‐44 45‐69 70+ Total

Sioux Falls, SD

2008 population 60,020 20,696 35,186 31,761 65,929 19,338 232,930

Percent of total population, 2008 26% 9% 15% 14% 28% 8% 100%

Numerical growth since 2000 10,127 1,877 7,568 535 22,700 3,030 45,837

Percent growth since 2000 20% 10% 27% 2% 53% 19% 24%

Des Moines, IA

2008 population 145,717 47,208 79,636 81,755 157,848 44,066 556,230


Numerical growth since 2000 20,468 3,394 6,916 2,754 37,937 3,367 74,836

Percent growth since 2000 16% 8% 10% 3% 32% 8% 16%

Fargo, ND‐MN

2008 population 44,319 30,642 31,260 24,873 49,400 15,191 195,685


Numerical growth since 2000 2,649 2,236 6,048 ‐1,648 10,671 1,362 21,318

Percent growth since 2000 6% 8% 24% ‐6% 28% 10% 12%

Rochester, MN

2008 population 46,115 15,218 25,369 25,820 54,084 16,318 182,924


Numerical growth since 2000 1,378 1,800 2,696 ‐2,667 13,611 2,488 19,306


South Dakota

2008 population 198,309 82,869 100,679 96,059 241,290 84,988 804,194


Numerical growth since 2000 ‐4,340 5,235 9,666 ‐19,327 54,133 3,983 49,350

Percent growth since 2000 ‐2% 7% 11% ‐17% 29% 5% 7%

United States

2008 population 73.9 mil 29.7 mil 40.9 mil 42.5 mil 78.0 mil 38.9 mil 304.1 mil


Numerical growth since 2000 1,648,036 2,613,765 1,039,841 ‐2,647,397 16,105,610 3,877,963 22,637,818



Diversity

Racial and cultural diversity is an important aspect of healthy communities. Many communities find that population diversity can provide good opportunities to enhance local cultural attractiveness and economic vitality. The following table presents information related to Greater Sioux Falls’ diversity, in terms of resident race and ethnicity. 4 Percent of total population, 2008: Sioux Falls’ population is predominately white; it has a smaller proportion of minority residents than Des Moines, Rochester, South Dakota, or the nation. Growth since 2000: While the white population accounts for 90 percent of the population, it accounts for a proportionally smaller share of growth. Between 2000 and 2008, the region’s white population grew by 36,112, accounting for 78 percent of the region’s total population growth during this time (45,837). Because (1) minority residents account for ten percent of the total population and (2) growth in communities of color within the region accounted for 22 percent of Greater Sioux Falls’ total growth since 2000, the region is clearly becoming – and will continue to become – more diverse. Between 2000 and 2008, the region’s black and Hispanic communities have doubled in size. There have also been sizable numbers of new American Indian and Asian residents. The Multi-Cultural Center of Sioux Falls estimates that the region’s immigrant populations represent more than 95 countries, including many in Africa, the Middle East and Asia, and Eastern Europe. Over 120 languages are spoken in Sioux Falls schools. In fact, the Center for Immigration Studies, a non-partisan research organization devoted to analyzing the economic and social impacts of immigration on the United States, has identified Minnehaha County as a “New Ellis Island” based on its number of and proportion of foreign born immigrants.5 To help address the needs of new residents and changing community dynamics, the City of Sioux Falls supported the establishment of a community and business leadership-led task force to explore potential solutions. The Multi-Cultural Center was founded in 1996 as a result of this process. The Center raises awareness about multiculturalism by sponsoring events in Sioux Falls public schools, hosing discussion groups, proving diversity training for employers and employees, proving interpreters and translators, and provides assimilation assistance in the areas like language, driving, housing, food and

4 “White” and “Black” and “American Indian” include only non-Hispanic persons. “Hispanic” includes all persons of the Hispanic ethnicity regardless of race. “Other” includes all non-Hispanic persons in the U.S. Census Bureau race categories of; Asian; Native Hawaiian and Other Pacific Islander; Some Other Race; and Two or More Races. 5 Camarota, S. and Keeley, J. (2001). The New Ellis Islands Examining Non-Traditional Areas of Immigrant Settlement in the 1990s. Center for Immigration Studies Research Brief.


nutrition, and computing. Center offers more than 25 programs, most of which have been identified externally as best practices.

Population Change by Race/Ethnicity, 2000-2008


Note: Community names reflect MSA; Percentages may not add due to rounding.

White Black

Hispanic or

Latino Other Total

Sioux Falls, SD

2008 population 210,679 4,820 7,958 9,473 232,930

Percent of total population, 2008 90% 2% 3% 4% 100%

Numerical growth since 2000 36,122 2,510 4,521 2,684 45,837

Percent growth since 2000 21% 109% 132% 40% 24%

Des Moines, IA

2008 population 477,346 22,669 33,228 22,987 556,230




Fargo, ND‐MN

2008 population 179,704 3,168 5,011 7,802 195,685




Rochester, MN

2008 population 161,874 5,555 5,672 9,823 182,924




South Dakota

2008 population 692,070 8,515 21,016 82,593 804,194




United States

2008 population 199. 5 mil 37.2 mil 46.9 mil 20.45 mil 304.1 mil


Numerical growth since 2000 3,915,973 2,858,743 11,637,795 4,225,307 22,637,818



Input gathered from stakeholders indicates support for the Multi-Cultural Center, Sioux Falls public schools, and area employers’ efforts to support multiculturalism. One input participant said, “I believe the business community here believes and understands that multiculturalism is good for Sioux Falls in terms of workforce competitiveness and conveying the message that we are an ‘open’ community that welcomes newcomers.” Many online survey participants acknowledged “racial tensions because of increasing diversity” in the community. Some expressed the opinion that residents may be “backward” and “narrow-minded” about new cultures in the community, while others were concerned about illegal immigration causing a drain on local social services and job opportunities. “We need to be able to incorporate the diversity of our community into how we function so that we can support and celebrate the diverse culture and all that that adds to the texture of our city's cloth,” wrote one respondent. Another observed, “I don't believe the majority of people realize what we have here and many of the individuals have much to contribute to the community if only given a chance.”

How are Greater Sioux Falls’ residents doing?

Demographic trends provide information related to numbers of residents. Socioeconomic indicators provide a more nuanced view of population statistics by showing how well people are doing. This section includes an examination of poverty rates, educational attainment, per capita income (PCI), bankruptcy rates, and the number of students on free and reduced price lunch programs. All of these indicators can help identify assets propelling residents forward or obstacles holding them back from reaching maximum success.

Poverty

Examining poverty rates is one of the best ways to help gauge a community or region’s socioeconomic prosperity. Poverty rates are estimated by the U.S. Census Bureau using income measures from annual population surveys. Information including family size, pre-tax income, and number of children help the Bureau determine poverty thresholds. If a family’s income is less than the poverty threshold, that family would be considered living in poverty. In 2007, the most recent year for which poverty rates are available, the poverty threshold for a family of four with two children was $21,027. The poverty threshold for an individual in 2007 was $10,590. The following chart shows that Greater Sioux Falls’ poverty rates for both the total population and children were lower in 2007 than those for the state and the nation. Local poverty rates are also lower than those in the Des Moines and Fargo regions but are higher than those in metro Rochester.


Although the community has comparatively low poverty rates, there is still cause for concern. Greater Sioux Falls’ child poverty rate grew from 7.9 to 10.2 between 2000 and 2007, rising faster than rates nationwide. In addition, approximately 32 percent of students in Sioux Falls Public Schools come from economically disadvantaged families and qualify for federal free and reduced price lunch programs compared to 29 percent statewide. While this is significantly lower than most U.S. regions, its rise is nevertheless a concern. Children from families with incomes at or below 130 percent of the poverty level are eligible for free meals. This indicates that, while a lower proportion of children live in poverty than statewide, a higher proportion of children come from families with incomes just barely exceeding poverty standards. It is important to address the economic social needs of not just families living in poverty but also the so-called “working poor” who may not qualify for certain assistance programs but are nonetheless in need.

Poverty Rates, 2007


Note: Community names reflect the MSAs. Rates reflect the number of people living in poverty per 100 residents. Percent of children eligible for free/reduced price lunch is reflective of the central city’s school district

in each metro area. These districts are: Sioux Falls Public Schools, Des Moines Independent Community School District, Fargo 1, and Rochester Public School District. State and national figures for free and reduced

price lunch eligibility are based on public school enrollment only.

Feedback from stakeholders who work in community development and social services indicated an increased demand for services since 2007, with more acute demand in recent months and a noticeable increase in repeat-service users. While joblessness, reduced hours, and low wages can create the need for assistance, domestic violence, methamphetamine use, and gambling addictions are other factors affecting socioeconomic wellbeing of area residents according to some community input participants. Survey respondents noted a shrinking middle class in the Sioux Falls Area as more families fall into poverty. One participant mentioned “the growing division between the 'haves' and 'have nots’” as one of the greatest threats to the community’s success.

2007 Rate

Change

since 2000 2007 Rate

Change

since

2000

% Children Eligible

for Free/Reduced

Price Lunch

(2006‐07)

Sioux Falls, SD 8.5 1.8 10.2 2.3 32%

Des Moines, IA 8.7 1.9 11.1 2.3 48%

Fargo, MN‐ND 11.9 3.5 11.3 1.7 22%

Rochester, MN 8.2 2.9 9.6 3.3 28%

South Dakota 13.2 1.8 17.5 2.4 29%

United States 13 1.7 18 1.8 41%

Total Population Children


Youth Dynamics

An important aspect of quality of life is ensuring that the community’s children and teenagers have the support they need both at home and at school. This is especially true in communities like Metro Sioux Falls, where a higher proportion of children live in economically disadvantaged homes. Since children make up such a critical part of the region’s community fabric, ensuring their wellbeing is key. Teenage pregnancy: High teenage pregnancy rates can highlight potential youth development issues in a community. They can also undermine the social and economic stability of a labor force’s next generation of workers. The South Dakota Department of Health’s method of tracking teenage pregnancy is unique. Instead of presenting annual estimates for teens ages 14-19, 15-19, and 17-19 (as many states do), data are presented as multi-year averages for teens ages 15-17 only. Because of this, local data could not be compared to the benchmark regions. The following chart shows the 2001-05 and 2003-07 average teenage pregnancy rates for Metro Sioux Falls counties and the State of South Dakota. While rates in the region’s largest county (Minnehaha) are higher than the state, they are still lower than the nation. In 2005, the most recent year which comparable data are available, the U.S. teen pregnancy rate was 41.5 pregnancies per 1,000 girls ages 15-19.

Teenage Pregnancy Rates (per 1,000 females age 15-17): 2001-05 and 2003-07 Averages

Source: South Dakota Department of Health

Note: Teenage pregnancy rate is live births, fetal deaths, and abortions per 1,000 females age 15-17. *2003-07 data for McCook County were not available

Teenage idleness: The U.S. Census Bureau tracks teenage “idleness,” which is a useful indicator of youth development. Teenage idleness is defined as the percentage of 16-19 year olds who are neither enrolled in school nor participating in the workforce. In 2006, the most recent year which data are available for all of the

14

8.3

21.3

6.8

19.8

12.3

22.1

7.7

19.5

0

5

10

15

20

25

Lincoln County

McCook County*

Minnehaha County

Turner County

South Dakota

2001‐2005

2003‐07


geographies examined, 2.4 percent of Metro Sioux Falls’ teens of this age group were “idle” compared to 3.3 percent in South Dakota and 5.1 percent nationwide. Proportions in Sioux Falls’ three benchmark regions range between 1.7 and 2.8 percent.

Educational Attainment

Educational attainment is an important indicator of socioeconomic wellbeing. Not only is educational attainment related to earning potential and income levels, but it also is one of the key determinants of a workforce’s competitiveness. As shown in the following chart, Metro Sioux Falls has made great strides in improving educational attainment of adults. Since 2000, the number of adults ages 25 and older without a high school diploma dropped from 12 to seven percent, and the number holding only a high school diploma dropped slightly from 31 to 30 percent. The region’s workforce now includes higher proportions of adults holding two-year, bachelor’s, master’s, doctorate, and professional degrees than previously.

Metro Sioux Falls Educational Attainment, Adults (ages 25+), 2000 and 2008


The following chart compares educational attainment of adults within Metro Sioux Falls with the benchmark communities, the State of South Dakota, and the United States in 2008. Thirty-seven percent of adults in the Sioux Falls region have not graduated from high school or hold only a high school diploma. While this proportion is lower than the state (43 percent) and the nation (44 percent), it is higher than all of the benchmark communities (35 percent in Des Moines; 31 percent in Rochester; 30 percent in Fargo). Educational attainment of local adults is competitive with state and national standards; however, Sioux Falls lags behind its

12% 7%

31%30%

24%24%

8%10%

19%21%

4% 5%

2% 3%

0%

20%

40%

60%

80%

100%

2000 2008

Doctorate or Professional degree

Master's degree

Bachelor's degree

Associate degree

Some college

High school diploma

No diploma


peer communities in terms of the proportion of residents who hold an associate’s, bachelor’s, or master’s degree. Because many of today’s highest-value employers see educational attainment as a proxy for workforce skill, Greater Sioux Falls’ lower relative degree attainment capacity can risk the effective retention, expansion, and attraction of technology and information-based jobs.

Educational Attainment of Adults (ages 25+), 2008

Source: U.S. Census Bureau; community names reflect the MSA

“Lack of education” was identified by online survey respondents one of the top weaknesses of the Sioux Falls Area’s workforce, referring to high school graduate preparedness as well as availability of employees with advanced degrees. Many attributed this low rate of educational attainment to the limited higher education and other degree and training opportunities immediately available in the community.

Per Capita Income

Raising the quality of life for local residents is a key focus of community and economic development. To this effect, per capita income (PCI) is one of the best measurements of a community’s progress in economic development because it is an important indicator of economic stability and potential buying power. Per capita income measures the total personal income of a place divided by its total population. As shown in the following chart, in 2007 Greater Sioux Falls’ PCI exceeded that for metro Fargo and the State of South Dakota, was nearly equal to that for the nation, and was less than PCIs in the Des Moines and Rochester regions. While growth in local per capita income has kept pace with the nation (29 percent since 2000), the state and benchmark communities’ per capita incomes grew at faster rates. This

7% 8% 6% 7% 10%15%

30% 27%24% 24%

33%29%

24%22%

23% 21%

23% 21%

10%10%

11% 12%

10% 8%

21%24% 26%

22%

18%17%

5% 6% 6%8%

5% 7%

3% 3% 3% 6% 3% 3%

0%

20%

40%

60%

80%

100%

Sioux Falls, SD

Des Moines, IA

Fargo, ND‐MN

Rochester, MN

South Dakota

United States

Doctorate or Professional degree

Master's degree

Bachelor's degree

Associate degree

Some college

High school diploma

No diploma


indicates that while Greater Sioux Falls is in a strong position in terms of PCI, community wealth is growing at a slower rate than its peer communities. These dynamics could be tied to the types of jobs that have been added to the regional economy during this time.

Per Capita Income, 2007

Source: U.S. Bureau of Economic Analysis; Note: Community names reflect the MSA

Per capita income comes from three sources: 1) wages and earnings; 2) transfer receipts, which includes social security, retirement income, public assistance, and other government assistance; and 3) dividends interest and rent – sometimes referred to as investment income. In 2007, only 11 percent of income in the Sioux Falls region came from transfer receipts compared to 11-12 percent in the benchmark regions, and 15 percent at the state and national levels. Communities with the strongest economies draw more heavily on wages and investment income than transfer receipts.

Components of Per Capita Income, 2007

Source: U.S. Bureau of Economic Analysis; community names reflect the MSA

Percent Amount

Sioux Falls, SD $29,995 $38,551 99.8% 29% $8,556

Des Moines, IA $31,498 $40,923 106.0% 30% $9,425

Fargo, ND‐MN $27,582 $36,459 94.4% 32% $8,877

Rochester, MN $31,040 $40,740 105.5% 31% $9,700

South Dakota $25,723 $35,760 92.6% 39% $10,037

United States $29,847 $38,615 100.0% 29% $8,768

2000 2007

2007 as a

% of U.S.

PCI

2000‐07 Change

Wages

Investment

Income

Transfer

Receipts

Sioux Falls, SD 69% 20% 11%

Des Moines, IA 74% 15% 11%

Fargo, ND‐MN 71% 17% 12%

Rochester, MN 72% 16% 12%

South Dakota 63% 22% 15%

United States 68% 18% 15%


Impacts of the Current U.S. Recession: Homeownership and Bankruptcy

Homeownership: Homeownership is an indicator of the wealth of an area’s residents relative to the availability and affordability of that area’s housing stock. With a low housing vacancy rate, solid homeownership rates, and stabilized housing values, the Greater Sioux Falls’ housing market has remained relatively stable compared to national trends. Additionally, according to the Federal Reserve Bank of New York, mortgage delinquency rates in counties within the Sioux Falls MSA range from 1.27 to 1.63 percent.6 Delinquency rates have reached up to 33 percent in some areas of the state.

Housing Markets – Key Information

Source: U.S. Census Bureau and the National Association of Realtors. Community names reflect the MSA.

Note: Median Sale Price is for existing single family homes. Data were not available for the Rochester, MN MSA or the State of South Dakota.

Bankruptcies: U.S. District Courts keep records of bankruptcy filings throughout the country. While filing for bankruptcy can offer people a way to get back on track with their personal finances, a high rate of bankruptcy filings within a community can indicate a gap between lifestyle costs (money out) and income (money in). The following chart shows the number of bankruptcies per 1,000 residents filed in 2000, 2007 and 2008. Between 2000 and 2007, Federal laws were changed making it harder for many people to file for bankruptcy (which explains the drop in rates across all geographies examined). Similarly, all geographies experienced a spike in filings in 2008 with the onset of the current U.S. recession. While bankruptcy rates are higher in Sioux Falls than they are statewide, local rates remain below those for Des Moines, Fargo, and the United States.

6 Mortgage delinquency rates are defined by the Federal Reserve as the percent of residential mortgage loans delinquent for 90+ days.

Vacancy

Rate 2008

Homeownership

Rate 2008

Median Home

Sale Price

Q2 2009

% Change in

Prices Q2 08 ‐

Q2 09

Sioux Falls, SD 6% 69% $146,000 1.1%

Des Moines , IA 7% 73% $150,100 ‐4.2%

Fargo, ND‐MN 5% 59% $141,200 0.7%

Rochester, MN 8% 79% n/a n/a

South Dakota 11% 69% n/a n/a

United States 12% 67% $174,100 ‐15.6%


Bankruptcies per 1,000 Residents

Source: U.S. District Courts; Moody’s Economy.com aggregated.

Community names reflect the MSA.

Do local education and training programs promote workforce competitiveness?

In today’s economy, competitive advantage is heavily based on quality of education and availability of a skilled workforce. Because competition for talent will heighten even more in years to come, economic growth will increasingly rely on the community’s ability to meet the workforce needs of employers. Therefore, it is essential that communities make wise investments in education and training programs.

Pre-K–12 Education

The quality of a community’s Pre-K–12 school systems is often related to its overall economic competitiveness. Business relocation decisions are regularly tied to the performance of a community’s public Pre-K–12 systems. Typically, communities that succeed in educating their children have a strong workforce and are more competitive in the global economy. Central city school competitiveness: Often times, residents of metro areas can show preference to suburban school districts over central city districts because of either real or perceived differences in quality and student performance. The following table shows key information for the following school districts: Sioux Falls District 49-5, Des Moines Independent Community School District, Fargo School District No. 1,

15.4

13.2

11.9

7.2 11.4

18.1

8.3 11.4

7.8

6.4

6.3 10.3

9.6

13.8

10.7

8.3 7.1

13.3

‐

4.0

8.0

12.0

16.0

20.0

Sioux Falls, SD

Des Moines, IA

Fargo, ND‐MN

Rochester, MN

South Dakota

United States

2000

2007

2008


and Rochester Public School District. Data from the National Center for Education Statistics were used for many indicators to ensure accurate comparisons across states. More recent data from state departments of education were used for indicators tracked by No Child Left Behind (NCLB), which requires uniform reporting across districts. The following table shows that, compared to the central city school districts in the benchmark regions, Sioux Falls Public Schools report a lower per pupil expenditure; however, composite ACT scores and student proficiency in Math and Reading (as determined by NCLB) are strong. While graduation rates and the proportion of economically disadvantaged students are causes of concern for many, they are within range of the benchmark central city school districts.

Central City School Districts – Key Information

Source: National Center for Education Statistics; South Dakota Department of Education; Iowa Department of

Education; Minnesota Department of Education; and North Dakota Department of Public Instruction. Note: No Child Left Behind dictates calculation of graduation rates as the total number of graduates

(completers) divided by the total number of graduates (completers) plus the 9th, 10th, 11th and 12th grade dropouts.

One public input participant noted, “My kids are in private school and every day we wonder if they shouldn’t be in public schools. Sioux Falls has great public schools.” Stakeholders generally agree that Sioux Falls Public Schools and districts in the suburbs all offer a superior education with a variety of AP courses at the high school level, a focus on multiculturalism, talented teachers, and open enrollment which provides options for families. Over 72 percent of online survey respondents identified the area’s quality K-12 education as an advantage for future success. Furthermore, some of strengths of the school system mentioned included high rate of parental involvement and diverse programming. One respondent listed the

Sioux Falls,

SD

Des Moines,

IA

Fargo, ND‐

MN

Rochester,

MN

Tota l Schools , 2008 50 58 22 41

Tota l Student Enrol lment, fa l l 2008 21,157 31,613 10,646 16,019

Student/Teacher Ratio, 2006‐07 15.1 14.3 14.3 16.9

Per Pupi l Expenditure, 2005‐06 $7,922 $10,612 $11,459 $11,346

Free/Reduced Price Lunch El igible, 2006‐07 30% 48% 22% 28%

Graduation Rate, 2008 84% 65% 87% 93%

Average Composi te ACT Score, 2007‐08 23.0 21.2 23.0 23.7

NCLB Proficiency in Math (a l l grades), 2008 78% 64% 80% 74%

NCLB Proficiency in Reading (a l l grades), 2008 85% 59% 76% 77%


following qualities: “Involved administrators, personal interest in students academically and involvement. High parent engagement as well.” Another said, “We loved having choices like All City Elementary. Parental involvement is a great thing in a school and the fact that the Sioux Falls School District respects that is wonderful.” Others listed the diverse options available to younger learners but wished for more choices in the middle and high schools. However, some survey respondents remarked on the perception of school quality. “As a community we talk about it a lot and the need for quality education - however - I am not entirely sure what we are doing about it,” said one participant. “I see and hear a lot about quality,” said another, “But, I really never see any major push or public awareness drive to make it a reality.”

Higher Education

Institutions of higher education provide significant economic impact within their regions. They educate existing residents, draw young people from outside the region, create value and innovation through research and development, often revitalize surrounding neighborhoods, and support existing businesses and industry clusters through targeted training and degree programs. Institutions and enrollment: The following list shows the fall 2008-09 enrollments (according to the National Center for Education Statistics) for the largest public and not-for-profit private institutions of higher education in Metro Sioux Falls

Kilian Community College: 330 Southeast Technical Institute: 2,138 University of Sioux Falls: 1,589 Augustana College: 1,754 South Dakota Public Universities & Research Center: 2,250

While educational options at the two-year, four-year, and graduate levels within the metro area are fairly limited for a community of its size, Greater Sioux Falls benefits from reasonable proximity to other state and private universities and colleges. Accessing educational resources further from the metro area can constrain many students and workers who would otherwise utilize them. However, Sioux Falls’ location on the I-29 corridor between University of South Dakota in Vermillion and South Dakota State University in Brookings helps to guarantee the region a solid “pipeline” of future workers if they are effectively attracted to opportunities in Greater Sioux Falls. The following table provides a comparison of college enrollment within a reasonable commuting distance of downtown Sioux Falls (approximately one-hour drive time) versus its benchmark communities. In addition to the colleges and universities located in the Metro area, South Dakota State University, University of South Dakota, and Dakota State University were included in this portion of the analysis. Even with


the inclusion of outlying state universities, the ratio of college students per 100 residents is still comparatively lower in Sioux Falls. The Des Moines region benefits from the presence Iowa State University (21,607 enrollment), while Fargo has many North Dakota and Minnesota two-year and four-year campuses within a reasonable commuting time; Rochester has both several public institutions as well as private institutions including St. Olaf’s, St. Mary’s, Carlton College, and the degree programs at the Mayo Clinic. South Dakota is unique because it does not publicly fund community colleges; they are locally and/or privately funded throughout the state. South Dakota’s public vocational and technical schools are governed by local K-12 school districts and are not designed or funded as community colleges. To further complicate access issues, no state funds are used to support students attending the University Center, to provide need-based scholarships, or to support to nontraditional students. These dynamics create several hurdles to improving educational access. A variety of educational and training opportunities must exist for diverse constituencies within the Greater Sioux Falls workforce and business community in order for the region to remain competitive in the long-term.

Estimated Total College Enrollment within One-Hour Drive Time: Fall 2008

Source: National Center for Education Statistics. Community names reflect the MSA.

Note: Includes only public and private not-for-profit institutions within a reasonable driving distance of the MSA core city (about 1-hour).

Degrees awarded: The availability of quality graduates with the educational backgrounds to fill vacant positions in the region is paramount to the success of its businesses. The following chart shows the degrees awarded by discipline area for the 2007-08 academic year (the most recent year available from the National Center for Education Statistics) at public and not-for-profit private institutions of higher education located within the Greater Sioux Falls area. These institutions include University of Sioux Falls, Augustana College, Kilian Community College, and Southeast Technical Institute. The highest number of certificates and degrees in are awarded in business, health care, education, and computer and information sciences. Comparable data are not available from the University Center, although its largest programs align with these discipline areas. Because the Center features local

Total

enrollment 2‐year schools

4‐year

schools

College students

per 100 residents

Sioux Falls, IA 29,772 2,468 27,304 12.78

Des Moines, IA 72,691 29,594 43,097 13.07

Fargo, ND‐MN 37,117 11,736 25,381 18.97

Rochester, MN 36,883 16,876 20,007 20.16

Enrollment


programs from external state institutions, degree attainment data is not broken out by location but rather is applied to the home universities’ totals.

Degrees Awarded 2007-08 Academic Year

Source: National Center for Education Statistics

Note: Includes only University of Sioux Falls, Augustana College, Kilian Community College, and Southeast Technical Institute. Data were not available for the South Dakota Public Universities & Research Center.

Certificate

Associate's

Bachelor's

Master's

Total

Agriculture, agriculture operations, and related sciences 0 31 0 0 31

Area, ethnic, cultural, and gender studies 0 1 0 0 1

Biological and Biomedical Sciences 0 0 49 0 49

Business, management, and marketing 9 168 146 40 363

Communication, journalism, and related programs 0 0 18 0 18

Communications technologies 0 30 0 0 30

Computer and information sciences 51 34 5 0 90

Education 12 1 88 77 178

Engineering technologies/technicians 10 57 0 0 67

English language and literature/letters 0 0 22 0 22

Foreign languages, literatures, and linguistics 0 0 5 0 5

Health professions and related clinical sciences 192 24 60 3 279

History 0 0 18 0 18

Liberal arts and sciences, general studies and humanities 0 17 8 0 25

Mathematics and statistics 0 0 12 0 12

Mechanic and repair technologies/technicians 0 78 0 0 78

Parks, recreation, leisure, and fitness studies 0 0 30 0 30

Philosophy and religious studies 0 0 20 0 20

Physical sciences 0 0 8 0 8

Precision production 9 6 0 0 15

Psychology 0 1 26 0 27

Public administration and social service professions 0 7 11 0 18

Science technologies/technicians 0 0 0 0 0

Security and Protective Services 0 27 17 0 44

Social sciences 0 1 43 0 44

Theology and religious vocations 0 0 3 0 3

Visual and performing arts 0 0 14 0 14

Total 283 483 603 120 1489


While the University Center is viewed as a strong asset, many stakeholders feel growing its campus needs to be a major focus among community leaders. One participant said, “We have not committed the resources to growing the University Center. It will take local pressure at the state level to make things happen.” Many feel that a vision and strategy to achieve progress is needed. Some participants of the public input process also noted that, because Sioux Falls’ schools are so strong, local graduates are aggressively recruited by universities in Nebraska, Minnesota, and Iowa. There is a sense that local and state colleges and universities might not be doing enough to retain the region’s “best and brightest” high school graduates. When asked what higher education programs the area lacks, one online survey participant answered, “Full service public university. That Sioux Falls does not have a full, self-contained, four year public university is a shame. Sioux Falls has nearly 20% of South Dakota's population and is the leading area for the state in health care and finance, yet going to college requires that students leave.” Continuing need for Knowledge Workers: A 2008 study commissioned by the University Center predicted the need for knowledge workers in the metro area economy in the coming years. It was estimated that over 30,000 jobs would be created between 2006 and 2016 which would require a bachelor’s degree or higher. Many of these jobs will be created in health care, professional services, finance and insurance, and logistics and trade. While workers with a four-year degree or higher are more likely to be relatively new arrivals to the region, continuing to expand local higher education capacity will be critical to the competitiveness of the Sioux Falls region. Continuing education and degree programs that offer flexibility, affordability, and advanced degree options for residents and workers need to be available locally. Greater Sioux Falls must be able to continue to attract and retain a quality labor force (which helps facilitate the continuing expansion of the regional economy) in the long-term. After Forbes magazine ranked Sioux Falls as a “Best Place for High-Technology,” the Forward Sioux Falls Technology Committee commissioned a report to study high-tech opportunities in the region. The lack of a major research university with electronics, computer science, and engineering programs and opportunities for advanced study was identified as a key hurdle to developing high-tech businesses in the long-term.


Greater Sioux Falls Job Creation Estimates, Degreed Workers (Ten-Year Estimate)

Source: Corona Research, Inc. (prepared for the University Center, 2008).

Sioux Falls Knowledge Worker Trends and Analysis.

While members of the business community feel that the region’s higher education community is responsive to their workforce development needs, they are concerned about the limited advanced degrees options and opportunities for professional development. One stakeholder pointed out that the community has been very successful in attracting young families to the region; however, local advanced degree programs (e.g. MBA) offer no “fast track” and very limited flexibility that working professionals and parents often need. There is also concern about the capacity of Southeast Technical Institute and its ability to handle worker training needs as the region continues to grow. Online survey respondents also identified a range of Master’s and Ph.D. programs as the most-needed post-secondary education programs in the area. There is a “shortage of skilled workers needed for positions requiring advanced degrees and special licensure” and “not a large enough portion of the workforce with advanced education.”

Sector

Total

Jobs,2006

Estimated Jobs

Held by 4‐yr

Degree or Higher

Workers, 2006

Annual Job

Growth of 4‐Yr or

Higher Degreed

Workers

New 4‐yr Degree

(or Higher) Jobs

Created in Next

Ten Years

Agriculture, forestry, fishing, hunting, and mining 5,875 759 6.4% 500

Finance, insurance, and real estate 23,463 8,824 5.1% 5,180

Arts, entertainment, accommodation, and food

services 15,423 2,556 5.0% 1,168

Construction 12,416 948 0.8% 71

Education, health care, and social assistance 27,785 12,936 5.9% 13,260

Information 3,573 1,511 9.8% 2,682

Manufacturing 14,157 1,297 ‐6.7% ‐823

Other Services 10,489 4,696 3.0% 839Professional, technical, and scientific services;

management; administrative and waste services 14,600 5,291 7.7% 5,090

Public administration 13,007 5,970 4.6% 1,383

Retail trade 21,748 3,970 3.4% 1,379

Transportation and warehousing; Utilities 6,431 1,147 6.4% 1,174

Wholesale trade 7,908 1,016 ‐10.2% ‐470

Active Duty Military 1,456 209 0.0% 0

Grand Total 178,331 51,130 5.0% 31,433


Workforce Development Resources

Ideally, workforce development exists as a seamless system, with school-age children made aware of local opportunities and prepared either to transition to a two- or four-year college or directly to the workplace through public school career education programs. Education and training curricula are developed in partnership with local companies to ensure that skills developed by students and adults are consistent with employer needs. The following entities comprise the key workforce development infrastructure in Metro Sioux Falls.

South Dakota Department of Labor (SDDOL): The Sioux Falls office of the South Dakota Department of Labor helps match job and internship seekers with employers in the region. To achieve this, SDDOL sponsors educational workshops, training sessions, job fairs, and provides job search assistance through the promotion of SDWORKS, the state’s largest job database. The Sioux Falls local office of SDDOL serves Lincoln, McCook, Minnehaha, and Turner counties.

o Career Learning Center: Located in Sioux Falls’ Volunteers of

America complex, SDDOL’s individualized and self-paced career curriculum is designed to focus on clients’ personal interests and aptitudes. Under the guidance of career specialists, clients will create an employability plan that includes job searching and retention skills. Many programs charge tuition; however, eligible applicants may receive subsidized services through federal, state, and local grants.

o Job Assistance Program: This free weekly workshop presents information for navigating a job search and achieving career goals.

Business and Industry Training (BIT): Southeast Technical Institute offers

a Business and Industry Training program intended to assist regional employers. Current offerings include training programs in health care, computer applications, construction and transportation, corporate and small business, and manufacturing. A customized training curriculum is available for specialized high-demand areas of need. There is a fee for participation in most training sessions and the classes are not-for-credit. For eligible businesses, South Dakota Workforce Development grants can be applied to the cost of BIT training programs.

Sioux Falls Development Foundation, Workforce Development Program: Because greater workforce development capacity was cited as a critical need by the Forward Sioux Falls strategic planning process, the Development Foundation and the Chamber of Commerce jointly fund the Workforce Development Program. Key actives include referral services, regional workforce forums, sponsoring a large, annual job fair, coordinating the Interns in Industry program and job shadowing opportunities, and assistance


with recruiting workers to Greater Sioux Falls. Additionally, they support the efforts of the Sioux Falls Recruiting Cooperative, an initiative of the region’s largest employers to provide one-stop-job search resources for people interested in relocating to the Sioux Falls region.

Some feel that Greater Sioux Falls’ reputation as a place with a robust, growing economy has attracted a lot of unskilled (and sometimes unemployed) people to the region. One employer said, “Many unskilled workers don’t have basic ’soft skills‘ like showing up to work on time, answering the phone in a professional manner, and such. To my knowledge, we don’t have a training program for this. If it does exist and I don’t know about it, than this is an issue!” Another issue raised by some stakeholders is the need to more fully integrate immigrant workers into the local economy. Specific workforce development efforts may be needed so that a variety of job opportunities are open to new foreign-born residents.


Key Takeaway Points Strengths/Opportunities

Rapid population growth and increasing diversity. In-migration from a variety of domestic locations and region’s status as a “new Ellis Island” for

foreign born migrants and refugees. Reportedly broad support for multiculturalism from residents and the business community. Improvement in the region’s educational attainment levels. Solid per capita income percentages derived from wages and investments as opposed to transfer

receipts. Strong homeownership rates, comparatively low residential vacancy and mortgage delinquency

rates, and stabilized home values. Competitive public school systems that promote high student achievement.

Weaknesses/Threats

Reported “brain drain” to Minneapolis, Denver, Omaha and other large regions that offer what are said to be a greater variety of amenities and lifestyle options.

The challenge of keeping up with booming elementary school enrollment. Increasing childhood poverty rates and a significant number of children whose families are

“working poor.” Educational attainment levels, while ahead of state and national trends, that lag behind peer

communities. Slightly slower growth in per capita income compared to benchmark communities. Comparatively smaller higher education capacity and limited workforce development resources. Potentially compromised ability to continue to attract and retain “knowledge workers.” Multiple hurdles to educational access including no state funding assistance for students at the

University Center, no state-funded community college, and limited degree program availability within the metro area.


PROSPERITY This section of the Competitive Assessment examines the community’s recent history in terms of employment and wage growth, workforce activity, and entrepreneurship rates. The most recent federal data from the Bureau of Labor Statistics and the Census Bureau were utilized throughout the majority of this section. These data will help Sioux Falls Area stakeholders gain a broad understanding of recent economic changes within the region, and whether they differ or are reflective of trends within the Sioux Falls MSA, benchmark communities, the state of Sioux Falls, and the United States.

What are the realities of the Sioux Falls Area’s economy?

If there is one truism in economic development today, it is that success does not come easy – particularly with the recent upheavals in the U.S. housing and financial markets, unprecedented in their scope and impact. Most economists agree that job losses and rising unemployment will continue through the rest of 2009 and into 2010.

Total Employment

The following tables show total employment between Q2 2005 and Q2 2009, the most recent quarter with available data. All geographies examined experienced negative job growth between Q2 2008 and Q2 2009. The Sioux Falls Area has outperformed the nation, state, and comparison communities in terms of five-year job growth rates, increasing total employment by 6.9 percent while the state grew by 2.5 percent and the nation declined by 0.8 percent.


Total Employment: 5-year Trends

Source: U.S. Bureau of Labor Statistics

Note: Community name reflects the MSA.

Though growth in recent years has been strong, stakeholders generally expressed wavering confidence in the regional economy. “There is the sense that nothing is guaranteed anymore, and that now includes Sioux Falls.” While the region’s diverse economy with strong health care, manufacturing, and financial services sectors offers quality jobs, these sectors have been left vulnerable in the wake of the current recession and pending federal financial legislation.

Average Annual Wages

Compared to the Des Moines, Fargo, and Rochester metros and the nation, the Sioux Falls Area’s average annual wages lag behind; although they do surpass the state’s wages. In Q4 2008, the average annual wage in the region was $38,221 compared to wages ranging from $38,403 to $49,197 in the other places examined. Furthermore, while the Sioux Falls Area posted very strong five-year employment growth figures, its five-year growth rate in wages fell behind all benchmark communities, the state, and the nation.

Average Annual Wages: 5-year Trends


Q2 2005 Q2 20061‐year

changeQ2 2007

1‐year

changeQ2 2008

1‐year

changeQ2 2009

1‐year

change

5‐year

change

Sioux Fal ls , SD 117,134 120,092 2.5% 124,659 3.8% 127,188 2.0% 125,200 ‐1.6% 6.9%

Des Moines , IA 283,412 293,234 3.5% 298,586 1.8% 302,339 1.3% 299,010 ‐1.1% 5.5%

Fargo, ND‐MN 110,575 112,006 1.3% 114,960 2.6% 118,068 2.7% 115,577 ‐2.1% 4.5%

Rochester, MN 98,646 98,225 ‐0.4% 99,393 1.2% 98,625 ‐0.8% 98,129 ‐0.5% ‐0.5%

South Dakota 417,556 424,472 1.7% 432,444 1.9% 436,194 0.9% 428,005 ‐1.9% 2.5%

United States 141,662 144,221 1.8% 146,039 1.3% 146,166 0.1% 140,592 ‐3.8% ‐0.8%

Amount Percent Amount Percent

Sioux Fal l s , SD $38,221 $324 0.9% $5,525 16.9%

Des Moines , IA $46,079 $1,046 2.3% $7,476 19.4%

Fargo, ND‐MN $38,403 $821 2.2% $7,012 22.3%

Rochester, MN $49,197 $2,872 6.2% $10,496 27.1%

South Dakota $34,143 $676 2.0% $5,394 18.8%

United States $47,804 $931 2.0% $7,746 19.3%

Q4 20081‐year change 5‐year change


According to stakeholders, higher wages in other markets, like Denver and Omaha, are a key factor luring workers away from Sioux Falls. “Low pay” was identified by online survey respondents as the greatest weakness of the local workforce. Many agreed that “cost of living does not coincide with wages.” Some survey participants noted that the community in the past has been marketed as a place with low wages in order to attract business. “This city does itself a huge disservice by selling itself as a cheap place to do business instead of a great place to do business,” remarked one respondent. “Stop making the case that Sioux Falls is a cheap workforce,” wrote another. “The community needs to be a high value, not just low cost, destination for these and other high skill, high wage activities and industries.”

Unemployment and Labor Force Participation

Examining local unemployment rates compared to state and national trends provides a good barometer for the stability and health of a community’s economy. The U.S. Bureau of Labor Statistics reports unemployment rates, tracking people month by month in the civilian labor force who were available for work, made specific efforts to find employment, or who were waiting to be recalled to a job from which they had been laid off.

As shown in the following chart, during 2008 and 2009 the Sioux Falls Area’s monthly unemployment rates remained below those for the state and the nation. In July 2009, the metro area’s unemployment rate was 4.8 percent, compared to 4.9 percent in South Dakota and 9.7 percent nationwide. With the exception of Fargo, Sioux Falls has maintained lower monthly and annual unemployment rates than the benchmark areas, a notable observation considering the historically low unemployment rates in the Great Plains regions. Sluggish local job growth and regional job losses during this time (predominately in the finance sector) likely contributed to the spike in Greater Sioux Falls’ unemployment between January and February 2009. However, labor force participation data suggest the slight decline in unemployment in May 2009 is not simply due to job growth but is also attributed to an increasing number of adults who have given up looking for a job, thereby falling off unemployment insurance rolls. Additionally, Greater Sioux Falls’ one-year unemployment change has increased by 2.0 percent, the same as the state. The increases in unemployment rates in the Des Moines, Fargo, and Rochester regions are 1.9, 1.4, and 1.9 percent, respectively.


Monthly Unemployment Rates, 2008 and 2009


Not seasonally adjusted.

Annual Unemployment Rate, 2000 to 2008


Not seasonally adjusted.

2.8% 2.4%

3.4%

4.9% 4.8%

0%

2%

4%

6%

8%

10%

Sioux Falls, SD

Des Moines, IA

Fargo, ND‐MN

Rochester, MN

South Dakota

United States

2.1%

2.8%

3.4%

2.7%

0%

1%

2%

3%

4%

5%

6%

7%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Sioux Falls, SD

Des Moines, IA

Fargo, ND‐MN

Rochester, MN

South Dakota

United States


Unemployment Rate


Not seasonally adjusted

Labor force participation rates (LFPR) offer a more nuanced view of employment dynamics within a given area. Unemployment rates only measure those adults who are actively seeking work and receiving unemployment benefits. Yet many eligible workers may not be employed or may not be receiving benefits for any number of reasons. Labor force participation rates measure the percentage of the potential workforce that is employed or looking for work divided by the total working aged population (ages 18 to 69). The remaining adults comprise the so-called “hidden workforce” because they have either totally dropped out of the workforce or have given up looking for a job.

Between 2000 and 2008, labor force participation declined slightly, from 78 percent to 76 percent nationwide. During that same period, labor force participation declined from 92 to 84 percent in Greater Sioux Falls. This indicates that thousands of adults have likely dropped out of the workforce both locally and nationally. Metro Des Moines and Rochester and South Dakota all saw declines in labor force participation but these were not as significant as the Sioux Falls region’s drop. The high rate of participation in metro Sioux Falls’ labor force in 2000 and an eight percent drop over eight years could be due to the strength of the local finance sector in the early part of the decade and the impact of the sector’s recent collapse on local economies. Members of Greater Sioux Falls’ workforce are dropping out of the labor market more quickly than in the state or nation.

Sioux Falls,

SD

Des

Moines, IA

Fargo, ND‐

MN

Rochester,

MN

South

Dakota

United

States

July 2008 2.5 3.6 2.8 4.4 2.9 6

January 2009 4.6 5.3 4.7 7 5.1 8.5

July 2009 4.5 5.5 4.2 6.3 4.9 9.7

1‐Year Change 2.0 1.9 1.4 1.9 2.0 3.7


Labor Force Participation Rate, 2000 and 2008

Sources: U.S. Bureau of Labor Statistics; U.S. Census Bureau, Population Estimates

Note: Community names reflect the MSA.

Members of the business community agreed that the quality of the workforce is one of the region’s most compelling selling points. One stakeholder said, “The local work ethic, in my view, is better than anywhere else I have been.” “Work ethic” was overwhelmingly identified by online survey participants as the greatest strength of the local workforce. While members of the business community understand that the onset of the nation’s current recession has eased the region’s tight labor market, they are still concerned about maintaining a sustainable pipeline of skilled workers. One input participant said, “We effectively market to young professionals within a 150 mile radius of here. We need better national recognition to be able to compete for young talent on a broader level. This is necessary to ensure our long-term competitiveness.”

How diversified is the local economy?

Economic diversification and job and wage growth are primary barometers of health and stability for a local economy. Job opportunities for workers with a broad range of skills within a variety of industry areas not only make a community more attractive to workers but also help protect local economies in times of recession and industry change. Creating and retaining jobs that offer good wages, benefits, and opportunities for advancement should always be strived for over net job growth goals.

92%88% 88%

91%87%

78%

84% 86%89%

86% 85%

76%

0%

20%

40%

60%

80%

100%

Sioux Falls, SD Des Moines, IA Fargo, ND‐MN Rochester, MN South Dakota United States

2000 2008


Economic Structure

Analyzing the economic structure of the Sioux Falls Area can provide insight into its economic diversity, opportunities, and challenges. The following chart shows employment by business sector in Q4 2008 (the most recent period which data are available) compared to Q1 2005 for Sioux Falls and the United States as a percentage of total employment. Only business sectors that account for at least two percent of total local employment are highlighted in this chart. Jobs were gained in every sector in the period examined. Construction jobs grew at a rate of 29.1 percent between Q1 2005 and Q4 2008, but a recent report by the Associated General Contractors of America shows that the Sioux Falls Area has suffered a 6 percent decline in construction employment between August 2008 and August 2009. The construction growth of the past four years was largely fueled by commercial rather than residential building, according to a 2009 market outlook by Bender Commercial. Residential constructions dropped 13 percent in 2008 and are expected to face similar declines through 2010. Additionally, 2008 was the first in thirteen years that multi-family residential units surpassed single-family units.7 However, higher wage subsectors posted promising growth figures; these include health care and social assistance (up 13.1 percent, adding 2,551 new jobs, the highest number increase of any other sector), finance and insurance (up 9percent, adding 1,222 jobs), professional and technical services (up 25.5 percent, adding 970 new jobs), and information (up 15.4 percent, adding 418 new jobs). Growth in these service and knowledge sectors demonstrates the increasing demand for educated professionals. “Other services” was the only sector in Sioux Falls to grow at a rate slower than the nation. The U.S. Census Bureau defines other services as, “primarily engaged in activities such as equipment and machinery repairing, promoting or administering religious activities, grant-making, advocacy, and providing dry-cleaning and laundry services, personal care services, death care services, pet care services, photofinishing services, temporary parking services, and dating services.” While manufacturing sector employment was not disclosed in Q4 2008 by the Bureau of Labor Statistics, existing studies note that Sioux Falls’ economic structure has shifted along with national trends to become less dependent on manufacturing. The South Dakota Business Review reports that manufacturing as a percent of total Sioux Falls employment was 11 percent in 2002, down from 11 percent in 1969.8

7 Sioux Falls Economic Overview: Market Outlook 2009. Bender Commercial. 8 Brown, Ralph J. “A Tale of Two Cities: Sioux Falls and Sioux City.” South Dakota Business Review. December 2004.


Metro Sioux Falls Sector Employment (as a percent of total employment), Q4 2008


*Data not disclosed in Q1 2005. Note: Chart includes private sectors accounting for at least 2% of local employment in Q4 2008. Data not

disclosed for the following sectors: manufacturing, transportation and warehousing. Q1 2005 was selected to compare recent data to because too much data were not disclosed in Q4 2006.

The following tables shows Greater Sioux Falls’ employment by business sector for Q4 2008 (the most recent period which data are available) compared to the United States, and a list of the region’s largest employers. Compared to the nation, Metro Sioux Falls has a larger proportion of jobs in health care and retail trade, which is typical for regional service hubs. State legislation, which made it attractive for credit card providers to operate in South Dakota, facilitated the growth in financial services over the last two decades. Jobs in finance and insurance around for 14.4 percent of all jobs within the region, compared to 5.2 percent nationwide. While Greater Sioux Falls has enjoyed significant growth in the finance subsector in the past, the national financial meltdown has put strain on local employers in the region. Recent legislation passed by the U.S. House of Representatives for implementation in early 2010 to more stringently regulate the private student lending industry may further weaken employment in Sioux Falls’ finance companies, especially Wells Fargo and Citigroup and its subsidiaries such as Student Loan

TotalPercent of

Total

Number

Change% Change

U.S. %

Change

Total, all industries 102,798 25,413 5.0% 4.3%

JOB LOSS

None

JOB GROWTH

Health care and social assistance 22,091 21.5% 2,551 13.1% 11.6%

Retail trade 17,070 16.6% 1,086 6.8% 3.4%

Finance and insurance 14,833 14.4% 1,222 9.0% ‐0.9%

Accommodation and food services 10,553 10.3% 991 5.3% 7.3%

Construction 7,810 7.6% 1,759 29.1% 3.0%

Wholesale trade 6,758 6.6% 555 9.0% 4.2%

Administrative and waste services 5,016 4.9% * * 2.9%

Professional and technical services 4,781 4.7% 970 25.5% 11.8%

Other services, except public administration 3,545 3.4% 180 5.0% 5.1%

Information 3,131 3.0% 418 15.4% ‐3.0%

Arts, entertainment, and recreation 2,288 2.2% 391 20.6% 11.9%

Business Sector

Employment Q4 2008 Change Q1 2005 ‐ Q4 2008


Corporation. The Student Aid and Fiscal Responsibility Act of 2009 intends to administer all new federal student lending directly, instead through private lenders subsidized by taxpayers. The elimination of private lenders through student loan reform could result in job losses from some of Greater Sioux Falls’ largest employers.9 Additionally, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (or Credit CARD Act), will go into effect in February of next year. This legislation will impose interest-rate caps and other new regulations that, as a result, will likely cause many of the region’s financial service outlets to cut back their sales calls. This will not only likely result in slower future growth within this sub-sector, but also risks layoffs throughout the region. That said, recent news reports have quoted local financial executives who have said the opportunity exists to reposition these at-risk workers into other corporate divisions.

Metro Sioux Falls: Employment by Business Sector, Q4 2008


Note: Chart includes private sectors accounting for at least 2% of local employment in Q4 2008. Data not disclosed for the following sectors: manufacturing, transportation and warehousing.

9 King, Ledyard. “Student loan reform could cost South Dakota.” Argus Leader. 18 September 2009. <http://www.argusleader.com/article/20090918/NEWS/909180321/Student-loan-reform-could-cost-S.-Dakota&referrer=FRONTPAGECAROUSEL>.

1.7%

2.6%

4.0%

6.9%

7.0%

5.2%

6.1%

10.0%

5.2%

13.7%

14.0%

2.2%

3.0%

3.4%

4.7%

4.9%

6.6%

7.6%

10.3%

14.4%

16.6%

21.5%

0% 5% 10% 15% 20% 25%

Arts, entertainment, and recreation

Information

Other services

Professional and technical services

Administrative and waste services

Wholesale trade

Construction

Accommodation and food services

Finance and insurance

Retail trade

Health care and social assistance

Sioux Falls United States


Metro Sioux Falls: Major Employers, 2009

Source: Sioux Falls Development Foundation

A concern held by some online survey respondents was that the larger employers in the community are hiring workers from outside of the Sioux Falls Area for their more skilled or upper-management positions. ”Existing large companies that supply the majority of jobs don't have enough local representation in high level management positions. Most of our high level corporate positions are held by outsiders in other states,” stated one participant. “Local companies and government are tending to send work out of state,” commented another. “Architecture for instance is one of the biggest markets in this area that is being hit hardest by companies…hiring architects from Minnesota instead of local talent.” However, many survey respondents also believed that the pool of applicants in Sioux Falls is not large or diverse enough for many employers and acknowledge the “brain drain” of professionals and young educated adults. The Sioux Falls Recruiting Cooperative is an example of a program that recruits workers from outside of the Sioux Falls region for professional and technical positions.

Location Quotient Analysis

Location quotients are an effective means of determining the comparative strength of an employment sector in a community compared to a larger area. Location quotients (LQ) are ratios representing the strength of a local business sector in relation to the national average. They are represented formulaically as:

LQ = (Metro Employment in Sector/Total Metro Employment) (National Employment in Sector/Total National Employment)

If a location quotient is greater than 1.00, the area has a larger share of employment in that sector than the nation. A LQ greater than 1.00 suggest sectors for which the economy has developed strength, indicating a possible comparative advantage. Conversely, if a location quotient is less than 1.00, this indicates a smaller local share of employment than the nation. Just because a sector has a location quotient below 1.00 does not preclude it from being a target business cluster for the community. Similarly, a LQ over 1.00 does not automatically mean the community should aim for

Sanford Health 7,225 Sioux Fal l s School Dis trict 49‐5 3,000

Avera 4,884 City of Sioux Fal l s 1,121

Wel ls Fargo 3,615Department of Veterans Affa irs

Medica l & Regional Office 860

John Morrel l & Company 3,200 United States Posta l Service 588

Citigroup 3,000 Minnehaha County 520

Major Private Sector Employers Major Public Sector Employers


that sector. A number of factors, including national trends, local support services, and regional clusters, contribute to the viability of a local business sector. As shown in the following chart, the Sioux Falls Area has eight LQs higher than 1.0 and seven LQs under 1.0 in its major sectors. This suggests that the area’s economy is quite diversified and yet growth potential exists in many subsectors, especially higher wage subsectors. Because of slower growth in health care jobs locally compared to the nation, this subsector’s location quotient only grew by 0.01 despite high growth in employment. Focusing economic development efforts on subsectors that pay higher average annual wages and which will provide greater diversity in the types of jobs offered by the region will help to raise the region’s per capita income.

Metro Sioux Falls: Location Quotients by Business Sector


Data related to employment in government was suppressed to protect privacy and are not included in the calculation of these figures.

Note: Data for the following subsectors are not included because each accounts for less than 1/2 percent of total employment: agriculture, forestry, fishing, hunting; mining; utilities; and unclassified. Q1 2005 was

selected to compare recent data to because too much data were not disclosed in Q4 2006.

A survey respondent noted, “I see Sioux Falls continuing to be driven by a diverse economy with health care and financial services as key industries but think that we need to continue to evolve with our core industries and go after emerging businesses that will complement our existing ones.” Participants stressed often the need for “another employment sector…or diversification outside of health care, financial services, and ag.” “This city is a credit card/banking area – a little diversity in some businesses of operation would be nice.”

Business Sector Q1 2005 Q4 2008 Change

Finance and insurance 2.56 2.80 0.24

Health care and socia l ass is tance 1.52 1.53 0.01

Arts , enterta inment, and recreation 1.26 1.35 0.09

Wholesa le trade 1.21 1.25 0.05

Construction 1.18 1.24 0.06

Reta i l trade 1.18 1.21 0.03

Information 0.98 1.16 0.18

Accommodation and food services 1.01 1.03 0.02

Other services , except publ ic adminis tration 0.87 0.87 0.00

Management of companies and enterprises * 0.80 *

Real estate and renta l and leas ing 0.86 0.80 *

Educational services 0.64 0.74 0.10

Adminis trative and waste services * 0.70 *

Profess ional and technica l services 0.60 0.67 0.07

Agricul ture, forestry, fi shing and hunting * 0.32 *


Wages by Business Sector

Average annual wage is a good indicator of the wealth-generating potential of local jobs. Cross-referencing average wages with location quotients can help show if a community is competitive in relatively high or low-wage business sectors. As shown in the following chart, most Sioux Falls Area sectors have experienced solid nominal wage growth – double digit growth in many cases – including professional and technical services, wholesale trade, construction, real estate and rental leasing, and health care and social assistance. Health care and social assistance, information, retail trade, and arts, entertainment, and recreation all grew wages at a slower rate than the nation, while finance and insurance and educational services experienced wage losses in the time period examined. The average annual growth rate for all sectors was 17.0 percent in metro Sioux Falls, while the national average annual wage grew by 18.4 percent.

Metro Sioux Falls: Average Wage by Business Sector, Q4 2008

Source: U.S. Bureaus of Labor Statistics

*Data related to employment in government was suppressed to protect privacy. Note:Q1 2005 was selected to compare recent data to because too much data were not disclosed in Q4 2006.

Q4 2008

Change

since Q1

2005

% Change

since Q1

2005

Q4 2008

% change

since Q1

2005

Management of companies and enterprises $78,888 n/a n/a $93,695 ‐2.2%

Professional and technical services $57,221 $16,631 41.0% $83,484 37.1%

Wholesale trade $56,581 $13,394 31.0% $66,542 22.3%

Construction $48,228 $15,090 45.5% $54,717 40.5%

Health care and social assistance $45,629 $7,307 19.1% $45,933 33.0%

Finance and insurance $45,356 ‐$428 ‐0.9% $81,794 ‐9.8%

Information $44,253 $312 0.7% $70,737 9.3%

Real estate and rental and leasing $32,007 $10,393 48.1% $45,830 19.0%

Agriculture, forestry, fishing and hunting $30,345 n/a n/a $27,906 27.4%

Other services, except public administration $26,593 $5,322 25.0% $30,229 22.8%

Administrative and waste services $25,930 n/a n/a $33,972 25.7%

Educational services $25,181 ‐$2,151 ‐7.9% $41,423 19.9%

Retail trade $24,724 $3,356 15.7% $26,652 12.1%

Arts, entertainment, and recreation $15,207 $1,854 13.9% $40,240 50.6%

Accommodation and food services $13,574 $2,496 22.5% $16,995 16.3%

Manufacturing n/a n/a n/a $56,878 16.3%

Transportation and warehousing n/a n/a n/a $44,938 20.3%

$37,812 $5,503 17.0% $47,804 18.4%Average Annual Wage (all sectors, private)

Sioux Falls Area United States

Wages above area average

Wages below area average

N/A


What opportunities and threats exist to business creation, expansion, and relocation?

Companies carefully consider the cost of doing business in a locality before relocating, expanding, or starting a new enterprise. Every business must factor in the cost of doing business and opportunities for partnerships and growth into their plans. Knowing this, local and state governments can focus on the best way to provide support to their business communities. Businesses of various sizes and scopes need different support mechanisms; thus, flexibility in assistance programs on both the state and local levels is vital.

Tax and Incentives

A key business cost that consistently ranks high on companies’ priority location concerns is the local tax climate. Communities with non-competitive tax structures risk driving away companies that are already located in the area. They also risk discouraging prospective companies that commonly select from a number of communities, many with highly competitive tax rates. The following chart shows income, corporate income, sales tax, and property tax rates for the comparison communities and/or their home states. South Dakota is competitive due to its lack of individual income and corporate taxes. The Tax Foundation ranks South Dakota as having a lower per capita burden of state and local taxes ($3,079, or a 7.9 percent ratio) than the states of the benchmark communities. South Dakota ranks 45th out of the 50 states for city and local sales tax burden, one of the lowest in the nation.


State and Local Tax Rates, 2008

Sources: Federation of Tax Administrators, the Tax Foundation, Sioux Falls Development Foundation, county tax assessors’ websites

Many residents and leaders in the business community expressed satisfaction with the competitiveness of local and state tax structures. The lack of personal and corporate income taxes makes Greater Sioux Falls an attractive place to live and do business. Among online survey respondents, low taxes were identified both as one of the area’s greatest strengths and one of its top opportunities on which to capitalize. However, many feel that the state’s lack of diverse and flexible incentives limits economic opportunities. There is a “lack of people willing to use tax dollars to improve community,” said one online survey respondent. “Our tax structure limits the amount of money we are able to invest in infrastructure.” Additionally, “financing of education is in conflict with the tax climate.” Provision of incentives has become a prominent component of economic development strategies throughout the U.S. They can come in many different forms and are typically presented as a variety of benefits offered by local and state government to businesses they are hoping to lure to their communities. While some types of incentives are seen as more effective than others, they have nonetheless become an integral part of business and industry recruitment. They can also be used to support small and existing businesses interested in growing locally. Sales taxes in South Dakota are generally collected at the state level only and are the state’s primary source of revenue; few counties and cities are granted state approval

South Dakota Iowa North Dakota Minnesota

Individual Income Tax None 0.36 ‐ 8.98% 2.1 ‐ 5.54% 5.35 ‐ 7.85%

Corporate Income Tax None 6.0 ‐ 12.0% 2.6 ‐ 6.5% 9.8%*

Sales Tax Exemptions NoneFood and

prescription drugs

Food and

prescription drugs

Food, prescription,

and non‐

prescription drugs

Average State/Local Tax Burden

Per Capita$3,079 $3,589 $3,637 $4,688

Tax Burden: Per Capita Income

Ratio7.9% 9.3% 9.2% 10.2%

City/Local Sales Tax Rate Ranking

(1=highest amount)45 31 33 12

Commercial Property Taxes ‐ City

(for a $1,000,000 property)$20,274 $20,617 $22,952 $34,396

Residential Property Taxes ‐ City

(for a $200,000 home)$2,945 $4,123 $4,131 $2,714

Taxes as % of median home

values‐ Statewide average1.24% 1.24% 1.4% 0.94%

Rank (1=highest ratio of tax:

value, statewide)27 28 25 19


to levy additional sales tax. At the state level, voters and ballot initiatives, rather than government officials, play the primary role in the decision to increase local taxes to raise revenue. Municipalities in the Sioux Falls Area may not raise taxes to pay for improvement programs and projects; instead, residents may vote through referendum on whether they are willing to opt out of the state-imposed tax levels and funding to raise additional revenue. Available local incentives and financing mechanisms include the following:

Revolving Economic Development and Initiative Fund (REDI): The South Dakota Governor’s Office of Economic Development provides the REDI Fund to promote primary job growth in the state. This low interest loan fund is available to start-ups, businesses that are expanding or relocating, and local economic development corporations for up to 45 percent of project costs. Companies must secure matching funds and be able to provide a 10 percent minimum equity contribution. Eligible costs include the purchase of land and associated site improvements; construction, acquisition, or renovation of buildings; fees, services, and other costs associated with construction; and the purchase and installation of machinery and equipment.

MicroLOAN: This loan program is available to South Dakota small businesses and residents and provides loan assistance for working capital, equipment, real estate, or other fixed asset project costs.

Bond Financing: Designed for more capital-intensive manufacturing projects, this pooled loan program offered by the State of South Dakota provides small businesses access to larger capital markets for tax-exempt or taxable bond issuances. To lower the cost of issuance, projects can be pooled or they can be funded individually. The borrowers are able to take advantage of the low interest rates available as a result of the State’s “A” rating by Standard and Poor’s.

South Dakota Workforce Development Program: This program by the Governor’s Office of Economic Development provides grants to companies for the training of both new and existing employees in hard skills, soft skills, and basic academic skills.

Property Tax Abatement: Ordinances in Minnehaha and Lincoln counties allow forgiveness for a portion of property taxes for both new construction or major additions and renovations to existing industrial and commercial structures, resulting in a significant savings of property tax otherwise paid during the first five to six years following construction.

Southeast Development Foundation Regional Revolving Loan Fund: The revolving loan fund offers assistance to individuals and businesses


lacking the start-up capital required to expand or own a business and conduct an entrepreneurial endeavor. The maximum loan amount is $150,000. Additionally, the SDF assists with job creation and retention in the region.

Minnehaha County Economic Development Association Revolving Loan Fund (RLF): The RLF assists with economic growth creation in Minnehaha County, with priority on job creation. The revolving loan fund finances up to 30 percent of project costs with a maximum of $30,000.

Rural Electric Economic Development Fund (REED): The REED Fund is a non-profit corporation formed through a partnership of the rural electric cooperative members of East River Electric Power, Inc. Its mission is to provide financing of up to $30,000 and help leverage private investment in small communities and rural areas in Minnehaha and Lincoln counties.

Foreign Trade Zone (FTZ): The FTZ provide special customs procedures to Sioux Falls companies engaged in international trade-related activities. Items that are processed in FTZs and then re-exported received duty-free treatment, and duty payment is deferred on items until they are brought out of the FTZ for sale in the U.S. market. The federally-approved Foreign Trade Zone includes part of the Sioux Falls Regional Airport, Sioux Empire Development Parks III and IV, and two warehouse facilities.

City of Sioux Falls Downtown Development Incentives: The City of Sioux Falls provides many incentives to promote the development of its downtown, including:

o Downtown Property Tax Abatement: The five-year property tax break

applies to any new construction or renovations that increase a property’s assessed value by $30,000 or more. No taxes are paid on the increased value during year one; during the following four years the property taxes phase in at 20 percent increases. Commercial, office, residential apartment, and industrial uses are eligible.

o Downtown Economic Development Incentive Fund (DEDIF): Managed by Main Street Sioux Falls, the fund offers gap financing for low interest loans to leverage new development and to assist new and growing downtown retailers and businesses.

o Historic Façade Easement Program: The program is designed to enhance, revitalize, and preserve historic building renovation projects by providing resources to help restore the original exterior appearance of the structures. The City purchases the façade of the building, and the property owner allocates the purchase price to the restoration of the original exterior appearance.


o Historic Preservation Tax Incentives: Administered by the South Dakota State Historical Society, this program also promotes the restoration and preservation of historic properties. Expenses eligible for incentives are those incurred in the rehabilitation of the building, including roofing, mechanical systems, window repairs, tuck pointing, and foundation repairs. Two incentives are offered: the state Property Tax Moratorium of eight years and the federal income tax credit of 20 percent.

o Tax Incremental Financing (TIF): TIF is a development incentive for blighted core areas. TIF assists local governments in attracting private development and new businesses into these core areas.

Communities that have effectively utilized local incentives for economic development have (1) flexible incentive packages that are focused on specific types of businesses that might not be able to relocate, open, or expand otherwise; (2) staff members who can quickly respond to inquiries; (3) a long-term vision which helps to sort out deals that are good for the community versus those that are not; and (4) clawback provisions which revoke incentives from businesses that do not meet performance and investment benchmarks.

Entrepreneurship Small businesses help diversify and strengthen local economies and buffer the community against the closing of large companies. This is why small business development and entrepreneurship are two important components of strong economic development strategies. In the Sioux Falls Area, the highest percentage (13.6 percent) of self-employed individuals provide “other services.” This sector of entrepreneurs is followed by retail trade (13.0 percent), construction (12 percent), and professional and technical services (11.3 percent). There are similarities between sector concentrations in the Sioux Falls Area and the state and nation.


Entrepreneurs by Business Sector, 2007



The following chart shows growth in average income for entrepreneurs between 2003 and 2007. Local entrepreneur average earnings in Greater Sioux Falls are higher than metro Fargo and Rochester and the state but lower than the Des Moines region and the nation. In 2007, non-employer average annual earnings in Greater Sioux Falls were $41,296 compared to $36,652 for the state. However, the average regional entrepreneur income has risen by less than one percent in Sioux Falls as well as Fargo and Rochester, while Des Moines, South Dakota, and the nation have experienced more significant growth in earnings.

Sioux Falls,

SD

South

Dakota

United

States

Total entrepreneurs 16,006 57,777 21,708,021

Percent of all entrepreneurial firms

Other services (except publ ic administration) 13.6% 14.1% 13.7%

Reta i l trade 13.0% 13.2% 9.1%

Construction 12.6% 13.2% 12.2%

Profess ional , scienti fic, and technica l services 11.3% 9.6% 14.0%

Heal th care and socia l ass is tance 9.4% 9.0% 8.1%

Real estate and renta l and leas ing 9.2% 8.4% 10.7%

Adminis trative support and waste management services 6.2% 6.2% 8.3%

Finance and insurance 6.0% 4.6% 3.5%

Arts , enterta inment, and recreation 5.4% 5.2% 5.2%

Transportation and warehous ing 5.0% 5.4% 5.0%

Educational services 2.2% 2.2% 2.4%

Wholesa le trade 1.5% 1.6% 1.9%

Manufacturing 1.3% 1.5% 1.5%

Agriculture, forestry, fi shing and hunting 1.3% 3.1% 1.1%

Information 1.2% 1.0% 1.4%

Accommodation and food services 0.8% 1.6% 1.4%


Entrepreneur Average Annual Earnings, 2003 and 2007


Note: For Fargo, data unavailable for NAICS 72 – Accommodation and food services sector. Note: Community name reflects the MSA.

Entrepreneur Income as a Percent of Gross Metro Product, 2006

Sources: U.S. Bureau of Economic Analysis and U.S. Census Bureau


Individuals who start and grow small businesses are the third lynchpin of local economic success, complementing companies recruited from outside the community and jobs retained and expanded at existing firms. Providing the resources and support necessary to enable entrepreneurs and small business people to effectively launch and sustain companies is a necessary and vital component of local economic

$41,222

$40,410

$39,757

$36,983

$34,905

$44,496

$41,296

$43,859

$40,125

$37,074

$36,652

$45,688

$0

$10,000

$20,000

$30,000

$40,000

$50,000

Sioux Falls, SD Des Moines, IA Fargo, ND‐MN Rochester, MN South Dakota U.S.

2003 2007

4.7%5.1%

6.4%

5.2%

6.5%

8.2%

0%

2%

4%

6%

8%

10%

Sioux Falls, SD Des Moines, IA Fargo, ND‐MN Rochester, MN South Dakota United States


development programming. The Sioux Falls Area’s entrepreneurial and small business support services and entities include:

Sioux Falls Business Information Center (BIC): The Sioux Falls BIC combines the services of the U.S. Small Business Administration, the South Dakota Small Business Development Center, and SCORE. The Business Information Center offers free and confidential services for business start-ups and existing businesses, including business planning, cash flow management, securing capital, and marketing assistance.

o U.S. Small Business Administration (SBA): The SBA’s South Dakota district office is located in Sioux Falls. Program areas in this office include faith-based and community initiatives, rural outreach, women’s businesses, youth initiatives, and Native American affairs. The SBA offers assistance with government contracting and procurement, loans, legal counsel, business counseling, and training.

o Sioux Falls Small Business Development Center (SBDC): The SBDC

is a partnership of the University of South Dakota, the U.S. SBA, and the South Dakota Governor’s Office of Economic Development. The regional office in Sioux Falls serves the counties of Clay, Lincoln, McCook, Minnehaha, Turner, and Union. The Center helps new entrepreneurs launch businesses and assists existing businesses in their efforts to remain competitive through professional, confidential, and free business consulting services to individuals starting a business or looking for ways to improve an existing business. SBDC assists entrepreneurs in making more informed business decisions through preparation, management, and financing. Services including one-on-one counseling and training.

o Sioux Falls SCORE: The Sioux Falls office of SCORE is part of the

national non-profit association dedicated to entrepreneur education and the formation, growth, and success of small businesses. Sioux Falls SCORE provides free, individualized, and confidential business advice and counseling as well as affordable workshops for new and existing entrepreneurs.

South Dakota Technology Business Center (SDTBC): The Forward Sioux

Falls Technology Program created the SDTBC with the purpose of giving early-stage high tech firms in the region a necessary boost to grow into self-sustaining and successful members of the business community. Companies may lease office and lab space from the 38,000 square foot center and are expected to “graduate” successfully in three years to a space of their own. In addition to space, firms may take advantage of services such as business consulting, a shared network of professional services, assistance in obtaining equity funds and grants, education series, and the opportunity to network


with entrepreneurs and SDTBC graduates. SDTBC is first in a series of initiatives to diversify the economic base of Sioux Falls by providing services to start-up technology businesses. The Center is a 501(c)(4) corporation.

Sioux Falls Cultural Economy Institute: SFCEI is an incubator that intends to promote and strengthen the development of entrepreneurial arts endeavors, including artists and small arts organizations. The Institute is also a think tank that collaborates with city officials, the business community, education organizations, and other groups in order to increase and develop opportunities for economic growth through the arts by connecting the arts and business communities.

Another important resource to note is the so-called “informal network” many entrepreneurs can tap into in Metro Sioux Falls. One public participant said, “People are accessible here. That is an important issue related to cultivating small businesses. If you need something, all you need to do is pick up the phone.” Social networks are often said to be very important in helping small businesses to find workers. “Often times you hire someone who knows someone.” On the online survey, networking opportunities with other entrepreneurs was ranked the most highly of components of Sioux Falls’ entrepreneurial climate. It is important to ensure that these networks are open to all residents, including those of different races, ethnicities and cultures.

Access to Capital

The resources available to finance a new business or expand an existing one impact a community’s ability to create jobs. A wide variety of financing methods must be available to serve the needs of all types of entrepreneurs and business owners, from the small home-based business to the high-risk, high-growth start-up venture. In the world of economic development, ensuring that financing methods are available to meet the needs of local businesses is vital to promoting economic growth. Under the Community Reinvestment Act, commercial and savings banks having at least $250 million in assets must report their small business lending activity. As shown in the following table, the average amount of loans granted per capita to Greater Sioux Falls small businesses is higher than in the Des Moines and Rochester regions, but lower than the per capita loans granted in metro Fargo. However, Greater Sioux Falls has seen slightly slower growth in the total amount lent between 2000 and 2008 than in the comparison communities, despite its significant population growth. Even with this slower growth, the average loan amount declined less rapidly (–18 percent) than in the three other regions and, at $53,810, remains much higher than Des Moines’ and Rochester’s average regional small business loan amounts.


Small Business Lending Activity of Commercial and Savings Banks, 2008

Source: Federal Financial Institutions Examination Council


While over 53 percent of online survey respondents rated availability of small business capital as good to average, 8.9 percent believed it to be excellent. “Sioux Falls has thrived and is known for being small business-friendly,” remarked a participant. “It continues to be the life-blood of our success.”

Innovation Capacity

The number of patents issued is another indication of the innovative and technological activity occurring in a community. The United States Patent and Trademark Office provides information on patents issued. The main type of patent is a utility patent, which is a “patent for invention.” As shown in the following table, the Sioux Falls Area has produced far fewer patents than the Des Moines, Fargo, and Rochester regions. The 7.7 patents per 100,000 residents in Greater Sioux Falls are also lower than South Dakota’s 8.8 patents per capita. The lack of a major research university in Sioux Falls – or research institution like the Mayo Clinic – is one significant weakness to achieving a higher rate of innovation in the community.

Utility Patents (by Inventor Location), 2008

Source: U.S. Patent and Trademark Office; Note: Community name reflects the MSA.

Loans made

2008

Per 1,000

Residents

Change

2000‐08

Total

Amount

2008 (000s)

Change

2000‐08

Average

Loan

Amount

Change

2000‐08

Sioux Falls, SD 8,728 37 53% $469,654 55% $53,810 ‐18%

Des Moines, IA 17,626 32 99% $665,045 63% $37,731 ‐29%

Fargo, ND‐MN 7,756 40 78% $479,398 56% $61,810 ‐22%

Rochester, MN 5,909 32 139% $195,591 64% $33,101 ‐38%

Number of Loans Total Amount Lent Average Loan Amount

2000‐08

PatentsPatents per 100K

residents

Average Number of

Patents Granted

Annually

Sioux Falls, SD 18 7.7 23

Des Moines, IA 235 42.2 256

Fargo, ND‐MN 62 31.7 53

Rochester, MN 469 256.4 359

South Dakota 71 8.8 96

United States 185,246 60.9 181,696

2008


Despite the low issuance rate of patents in Sioux Falls, the community is still exhibiting its capacity for innovation and research through its major health care providers, Sanford Health and Avera. Key research at each facility is outlined below. Sanford Health

Sanford Research/USD: Sanford Health and the University of South Dakota School of Medicine and Health Sciences partner under the non-profit research organization Sanford Research/USD. Since its creation in 1998, Sanford Research/USD has contributed major research to the fields of cancer biology, pediatrics, metabolism and nutrition, cardiovascular heath, genomics, women’s health, and disparities. The ambitious Sanford Project focuses on the study of beta cell regeneration to discover a cure for Type 1 diabetes.

Sanford Children’s Health Research Center: The SCHRC operates two campuses in Sioux Falls and La Jolla, California. Currently, the Sanford Children’s participates in a wide range of national and international research, including collaborative studies with the Children’s Oncology Group, the Mayo Clinic, the Center for Disabilities, and other national pediatric research groups. Faculty at Sanford Children’s are also engaged in research on fetal alcohol syndrome and chronic childhood diseases such as diabetes, asthma, and cystic fibrosis.

Sanford Research Park: The development is planned for 185 acres in south Sioux Falls, intended to be the home of the Sanford Research/USD center expansion and the hub of biomedical research and academic opportunities in the region. Mixed-use amenities will also be developed in this complex.

Sanford Health in Sioux Falls is also home to the National Institute for Athletic Health and Performance and research centers in the following fields: Cancer Biology, Cardiovascular Health, Health Disparities, Signal Transduction, and Women’s Health.

Avera Research Institute

Basic Research Division: This sub-department explores the functions of cells and organs in Phase II-IV clinical research studies. The Basic Research Division houses the Kidney Research Center and Neuroscience Research Center.

Applied Research Division: The Applied Research Division focuses on commercialization and innovating marketable products. Through the division’s novel photochemical tissue bonding technology, researchers have developed products with ophthalmology and dermatological applications.


Clinical Research Division: With a concentration on full coordination of clinical research studies, the Clinical Research Division operates four centers: the Avera Center for Medical Nutrition, the Clinical Drug Research Center, the Clinical Medicine Research Center, and the Health Management Research Center.


Five-year employment growth rates are strong. Unemployment rates consistently remain lower than benchmark, state, and national rates. Higher wage and more sustainable business sectors are experiencing employment growth. Diverse range of solid, growing business sectors exists. Local and state tax rates are highly competitive. Entrepreneur earnings are higher in Greater Sioux Falls than in the benchmark regions. Hundreds of millions of dollars invested in research capacity in local hospitals and the University

Center can potentially greatly impact Greater Sioux Falls’ innovation-based economy. Private health care facilities present a growing capacity for major biomedical research.

Weaknesses/Threats

Average annual wages in Greater Sioux Falls lag behind those of benchmark region and the nation and are growing at a slower rate.

One-year change in unemployment rates is a higher rate than comparison metros. Labor force participation rate is declining. Legislative changes in the private student lending and credit card industries may further

threaten some of Greater Sioux Falls’ largest employers. Low number of utility patents indicates a currently low rate of innovation capacity, potentially

due to the lack of a large research university presence. Local and state tax rates are competitive, but incentives could be strengthened. Communities in South Dakota are not allowed to self-tax for local improvements without state

and voter approval.


PLACE Quality of life is a subjective term that means different things to different people. In general, quality of life includes factors like location, cost of living, community safety, access to recreational and cultural amenities, and overall “livability.” Because businesses and workers are more mobile than ever, quality of life and sense of place are increasingly important factors for economically competitive communities. This section examines some of these concepts associated with Greater Sioux Falls’ quality of place and their implications on its competitiveness as a place to live, work, and grow.

How “livable” is Metro Sioux Falls?

Livability refers to a place’s ability to support and enhance residents’ activities in day-to-day life. Measuring and assessing certain conditions of a community’s public realm can help gauge livability. Such conditions include cost of living, housing and rental costs, health care access and affordability, land use, and transportation infrastructure. Generally speaking, affordable and attractive places that offer basic services and provide the infrastructure to move efficiently between “point A” and “point B” are more livable (and attractive) than those places that do not. Quality of life and family-friendly amenities were the most cited strengths of Greater Sioux Falls. The safety, variety of activities, health care amenities, quality of public schools, and neighborliness offered by the region’s communities make it an attractive place to raise a family. However, most input participants said that Sioux Falls is not an exciting place to be for the young and/or single, which is why the region loses many residents to places like Denver and Minneapolis. Continuing to improve the Downtown area, increasing lifestyle options, and developing places with “character” and “atmosphere” that are attractive to young professionals will likely help the region to be more competitive.

Cost of Living

C2ER (formerly ACCRA), a national community and economic development research organization, publishes quarterly cost of living indices for metropolitan communities across the nation. A cost of living (COL) index can provide useful information about how expensive it is to live in a community or region because it considers not only home values, but also the cost of groceries, utilities, transportation, health care, and miscellaneous goods and services. The COL index can affect relocation decisions and a household’s expected standard of living in a new community.


The following chart show the cost of living index scores for the Sioux Falls MSA and the benchmark metros relative to the national average, represented by an index value of 100. Cost of living in Greater Sioux Falls is comparable to Des Moines and Fargo, and comparatively lower than Rochester; however, all of these regions offer a lower cost of living than the national average. Lower prices for groceries, housing, and transportation in Metro Sioux Falls offer the region a competitive advantage over higher cost markets.

Metro Area Cost of Living, Second Quarter 2009

Source: Council for Community and Economic Research

100 = National Average Percentage each category contributes to the overall cost of living: Total (100%), Grocery (13%), Housing (30%),

Utilities (9%), Transportation (9%), Health Care (4%), and Miscellaneous Goods & Services (35%).

While cost of living is relatively low in Sioux Falls and makes the area attractive to outsiders moving in to the community, many online survey respondents remarked on the low wages that make the area increasingly unaffordable for them. “Cost of living versus wage is poor, it is expensive to live here, and our wages are low.” “Cost of living either needs to go down or wages need to go up.”

Housing and Rental Costs

For a community to be economically competitive, it must have housing that is both affordable and attractive to its workforce. Because regional economies have workers of all pay scales, it is important to have housing options to suit the needs of all types of workers, families, and individuals. The following table shows average home sale prices, furnished by the National Association of Realtors. Between Q2 2008 and Q2 2009, median home prices held steady in metro Sioux Falls, growing one percent from $144,400 to $146,000 during this time. While prices did decline between these quarters, such rebounds have not been typical in most communities given the current recession. Public input respondents noted that the metro area did not experience the spikes in housing prices that other regions did, so the market is more stable relative to housing value. Metro Fargo’s housing market followed a similar trajectory during this time, while that of the Des Moines region experienced a four percent decline. Median sale prices of existing homes fell 16 percent nationwide and nine percent across the Midwest.

Composite

index Grocery Housing Utilities

Transport‐

ation

Health

Care

Misc goods

and

services

Sioux Falls, SD 92.1 89.4 85.7 91.6 88.1 101.3 99.0

Des Moines, IA 91.1 89.1 87.4 93.5 93.8 90.2 93.6

Fargo, ND‐MN 92.8 101.7 83.8 89.7 95.3 100.0 96.6

Rochester, MN 97.7 90.1 86.5 110.4 101.0 105.5 104.6


Change in Median Sales Price of Existing Single Family Homes (in $1,000s)

Source: Source: National Association of Realtors


The U.S. Department of Housing and Urban Development estimates fair market rental (FMR) rates throughout the nation’s metro areas under the assumption that a household can afford to spend up to 30 percent of its pre-tax income on housing. The following chart shows the change in fair market rental rates for tw0-bedroom apartments in metro Sioux Falls and the benchmark regions in 2005 and 2009. Both FMR and increases in FMR over time in Greater Sioux Falls are within range of benchmark region trends.

Fair Market Rental Rates for Two-Bedroom Apartments

Source: U.S. Department of Housing and Urban Development


Sioux Fa l l s , SD $144,400 $146,000 1% $1,600

Des Moines , IA $156,600 $150,100 ‐4% ($6,500)

Fargo, ND‐MN $140,200 $141,200 1% $1,000

Rochester, MN

Midwest $160,700 $146,800 ‐9% ($13,900)

United States $206,400 $174,100 ‐16% ($32,300)

not avai lable

Q2 2008 Q2 2009 1‐Year Change

$607

$657

$551

$745

$673

$727

$620

$844

$‐

$100

$200

$300

$400

$500

$600

$700

$800

$900

Sioux Falls, SD Des Moines, IA Fargo, ND‐MN Rochester, MN

2005

2009

11% or $6611% or $70

13% or $69

13% or $99


Many stakeholders cited a critical need for more affordable housing within the region. It was noted that the Sioux Falls Housing and Redevelopment Commission has a three-year waiting list for housing assistance. The majority of housing assistance is facilitated through the Section 8 program. Population growth has outpaced growth in affordable housing, which has reportedly created a serious need in this regard. Housing options were listed as one of the area’s most important challenges to overcome in the online survey.

Health Care

Accessibility to quality health care services is one of the most important factors affecting a community’s overall quality of life and competitiveness. Two useful measures that give indications of the comprehensiveness of health care services available in a community are physicians per capita and the percent of uninsured residents. Greater Sioux Falls has a smaller proportion of uninsured residents than the state and the nation (eight percent compared to 12 and 15 percent, respectively) and is within range of its peer metro areas. With the exception of Rochester, where the world-renowned Mayo Clinic and research centers are located, Greater Sioux Falls has a comparatively high number of physicians per capita. Sioux Falls is home to two large medical centers, Sanford Health and Avera, the main campus of the University of South Dakota Sanford School of Medicine, as well as several specialty hospitals including Children’s Care Hospital (which is rehabilitation focused), Sioux Falls Surgical Hospital, Select Specialty Hospital, and Veteran’s Memorial Hospital.

Health Care Capacity

Source: Sperling’s and U.S. Census Bureau


Based in Sioux Falls, Sanford Health is the largest health care system between the Mayo Clinic in Rochester, Minnesota and Denver, Colorado. Its 23 hospitals and 128 clinics provide care for residents in a five-state region. Sanford Health is in negations to merge with Merritt Healthcare in Fargo, North Dakota, which will expand its service base even further. Located in Sioux Falls, its flagship institution, Sanford

Percent uninsured

(under age 65),

2008

Physicians per

100,000 residents,

2007

Sioux Falls, SD 8% 342

Des Moines , IA 8% 245

Fargo, ND‐MN 9% 277

Rochester, MN 6.0% 1,386

South Dakota 12% 85

United States 15% 170


USD Medical Center, is a 500-bed not-for-profit hospital which serves an average of over 50,000 patients on an annual basis. Formerly the Sioux Valley Hospitals and Health Systems, the system was renamed for T. Denny Sanford, a local prominent businessman and philanthropist, in 2007 after he donated $400 million to help the system achieve its vision of becoming a major research institution for children’s health. The donation will help the health system expand its current patient base in the Midwest and may include up to five pediatric clinics in North America. Additionally, new and aggressive research projects have been announced including, most notably, the Sanford Project, which will focus on finding a cure for Type 1 diabetes. Future Sanford/USD research will take place at the Sanford Research Park, a 185-acre planned mixed-use development what will include not only laboratories and offices but also retail, convention space, residential developments, and lifestyle amenities. To help further establish Sioux Falls as the premiere location for children’s health care services and research, the Sanford Children’s Hospital opened earlier this year. The 146-bed so-called “Castle of Care” is the region’s only free-standing children’s hospital. Avera is a regional health care system with five centers located in South Dakota and Minnesota including its flagship institutions, Avera McKennan in Sioux Falls. The 545-bed facility offers emergency and tertiary care services, including behavioral health, cancer treatment, cardiac care, organ and bone marrow transplants, and wellness and rehabilitation services. Opening in the fall of 2010, the Avera Cancer Institute will offer eight operating rooms, an outpatient surgical center, and cutting-edge treatments and technologies. The facility will be LEED-certified by the U.S. Green Building Council. Avera partners with pharmaceutical companies and educational institutions on research initiatives including running clinical trials at the Avera Research Institute. Its Board of Directors has pledged financial support to South Dakota State University to fund collaborative health sciences research and educational programming. Survey respondents were very pleased with Sioux Falls’ medical amenities, citing health care as the area’s top opportunity to capitalize on. “We are on the verge of being a national center for quality health care, another Rochester or Cleveland Clinic.”” The future of Sioux Falls as I see it is the Health Care system. But it is not unified. In order to carve our niche we need to unify our systems.” This notion of unification may be related to what many stakeholders claimed is an increasingly antagonistic relationship between the region’s two flagship health care systems.

Crime Rates

Another of the most important factors contributing to the attractiveness of a community for existing and potential residents is public safety. In certain urban areas, perceptions about crime and safety are localized to specific neighborhoods. The U.S. Bureau of Justice Statistics reports both property and crime at the


community, state, and national level. While per capita crime rates in the Sioux Falls region were higher than those for the state, they remain well below those for the nation. Greater Sioux Falls’ property crime rate is on the low-end of the spectrum compared to its peer metro areas; however, violent crime rates are markedly higher than Fargo and Rochester.

Crime Rates per 100,000 Persons, 2008

Source: U.S. Department of Justice FBI Crime Statistics

Note: Comparisons of local data over recent years cannot be made due to municipal annexations and/or incomplete data. Violent crimes include manslaughter, rape, robbery, aggravated assault, and murder.

Property crime includes burglary, larceny, and motor vehicle theft. *2005 were the most recent data available at the metro-level fro Fargo and Rochester.

Public safety and low crime rates were consistently mentioned by survey respondents as some of the area’s most attractive qualities. “Despite its population, it manages to be relatively crime free when compared to other areas of the country.” However, some participants expressed fear that as Sioux Falls’ population increases, so will its incidences of crime. Local leaders will need to continue to address both the reality and perception of crime as the Sioux Falls Area experiences further growth.

Environmental Quality

Environmental health is an important consideration for any business because it affects employees’ health as well. There are long-term health consequences that can increase regulations on businesses in areas with poor air and water quality. The following chart summarizes the number of facilities that release pollutants in the area, as recorded by the U.S. Environmental Protection Agency (EPA). Metro Sioux Falls has fewer potential Superfund sites and fewer facilities per capita that release air pollutants, discharge into regional bodies of water, or report hazardous waste activities compared to the Des Moines, Fargo, and Rochester regions.

Violent CrimeProperty

Crime

Sioux Falls, SD 253 1,968

Des Moines , IA 333 3,001

Fargo, ND‐MN* 121 2,235

Rochester, MN* 181 1,967

South Dakota 201 1,646

United States 455 3,212


EPA Envirofacts (per 100,000 residents), 2009

Source: EPA Envirofacts; community names reflect the MSA

What makes the area unique?

Recreational, Cultural, and Entertainment Amenities

Local leaders are well aware of the importance of having a community that is rich in cultural, entertainment, and recreational activities. Each piece of the puzzle helps to bolster local overall quality of life, an increasingly important issue of community competitiveness. The following area attractions are dynamic assets that together help to enhance the attractiveness of Greater Sioux Falls as a place to visit, work, retire to, or raise a family. Recreational Amenities

Falls Park City-wide greenway trail network Great Plains Zoo Local sports and sport tournaments

o SkyForce (NBA Development League Team) o Stampede (U.S. Hockey League Team) o Storm (United Indoor Football Team) o Canaries (Northern League Baseball Team) o Dakota Lawdawgs (North American Football League Team)

Hiking, biking, hunting, fishing, and other recreational opportunities Cultural and Historic Assets

The Washington Pavilion of Arts & Science Orpheum Theater SculptureWalk The Multi-Cultural Center

Total

Facilities

that

produce

and release

air

pollutants

Facilities

that have

reported

hazardous

waste

activities

Facilities

issued

permits to

discharge

to bodies of

water

Potential

Superfund

sites

Sioux Fa l l s , SD 23.6 207.4 21.0 587

Des Moines , IA 236.6 277.8 30.0 3,028

Fargo, ND‐MN 29.1 301.5 31.2 708

Rochester, MN 39.9 490.9 35.5 1,036

Per 100,000 residents

Metro Area


South Dakota Symphony Orchestra Sioux Empire Community Theatre Buffalo Ridge, Cowboy Ghost Town Delbridge Museum of Natural History

The Argus Leader’s “Sioux Falls Next” visioning process has whittled down hundreds of response and inputs to create a list of priorities for city leaders. Final recommendations will be made in a public, televised town hall meeting on October 22, 2009. At this point, proposed priorities include such developments as new ice hockey rink, a public indoor swimming pool, and a sports and entertainment events center complex. 10 Input garnered from stakeholders indicates that in addition to these suggestions, the community may need to enhance entrance point gateways and signage. Some stakeholders feel that the Visitor Information Center at Falls Park needs to be expanded as well. “Falls Park is our community’s namesake. This needs to be a signature center – spacious and inviting with a large glass wall to view the falls, space for educational videos, and space for press conferences. We need to think bigger.” The City of Sioux Falls is currently considering proposals related to expanding its event capacity. One proposal involves building a new events center Downtown. Many stakeholders support this option and feel it will give visitors more options to get out and explore Downtown Sioux Falls. A Downtown events center would also to help boost foot traffic, something many small businesses rely on for success. The second proposal involves relocating the Howard Wood Field (owned by the school district) to make room for parking and expanding the existing arena-convention center on Russell Street. A 12,000-seat arena would be attached to the west side of the existing center and could accommodate sporting events, concerts, large meetings, and other such events. Developers hope that a hotel and retail development will also be built onsite.11 While many stakeholders agree that increased event-hosting capacity is needed, there is disagreement about whether to expand the existing facility or build a new events Center Downtown. Some people involved in community development are also concerned about funding the events center and potential impacts on lower-income residents from loss of programmatic revenue. The City’s Events Center Task Force will most likely release its findings sometime in November.

10 Staff reporters (October 5, 2009). Sioux Falls Next: What You Suggested. The Argus Leader. 11 Walker, Jon (October 5, 2009). Events center considers parking: Only 425 new spots with Wood removal. The Argus Leader.


Downtown Development

Momentum related to Downtown Sioux Falls redevelopment has increased in recent years. Many older buildings have been renovated into mixed-use developments that include office and office space and loft style living. To preserve and enhance the character of Downtown, the City of Sioux Falls, Downtown Sioux Falls, and other partners have been proactive in securing façade easements on older buildings, developing small business assistance programs to help increase vitality Downtown, and cementing a clear vision for the Downtown area. Expansion of the City’s main library, planning a Downtown greenway, establishment of a farmer’s market, development of additional festivals and special events, rehabilitating and reopening of the Orpheum Theater, and increasing the opportunities for outdoor dining and night life all provide examples of recent successes related to Downtown revitalization. A key challenge for local leaders to address is the surging office vacancy rate in the region. According to a recent market assessment, the Sioux Falls area has a 16 percent office vacancy rate amounting in over one million square feet of unoccupied space. Between December 2008 and 2009, the region experienced a 98 percent decline in office absorption and analysts predict it will be at least another year before the tide turns.12 With so much space on the market, it makes redeveloping existing Downtown buildings into mixed-use developments much more difficult. Most public input participants agree that Downtown development has been very exciting in the past five years. They are encouraged by the City’s vision for developing a river greenway and focusing more development along the riverfront. Others are excited about the opportunities to experience urban living. One stakeholder said, “Living in a loft downtown is an incredible experience.” Another noted, “One thing that keeps me in Sioux Falls is the prospect of watching it grow. I’m encouraged by the efforts of the City, Chamber, and downtown groups. It’s exciting.”

Civic Capacity

Volunteer activities and charitable donations are forms of civic participation that underpin all stable, vibrant communities. The number of non-profit 501(c)(3) organizations per 1,000 residents is 3.7 in Greater Sioux Falls, a larger number than all of the benchmark communities and the nation. Together, the region’s 864 non-profit organizations report over $3.15 billion in revenues, the equivalent of $13,524 in resources for each metro area resident. Only metro Rochester has a greater depth of resources per capita; however, the presence of the Mayo Foundation and many other health care foundations likely account for this. Since 2004, non-profit revenues in Greater Sioux Falls have grown by 85 percent, which is the highest of all of the geographies examined. While rapid population growth accounts for some of this, the

12 Thurman, Kelly (September 16, 2009). Highest office vacancy rate seen in city’s history. The Argus Leader.


Sioux Falls region reportedly has a strong culture of giving. The Sioux Empire United Way chapter is ranked second among national chapters for per capita giving. Its last campaign received donations from over 31,000 residents and 700 businesses.

Registered Non-Profit Organizations, 2009

Sources: National Center for Charitable Statistics and U.S. Census Bureau

Includes organizations that filed Form 990 (including 990EZ and 990PF) within the last 24 months. Organizations that file a Form 990 are tax-exempt non-profits that have incomes of more than $25,000.

While many stakeholders agree that the Sioux Falls region has generous residents and business community committed to philanthropy, lower confidence was expressed in residents’ civic participation. Citing the most recent school board election which had a 3.55 percent voter turnout, many feel that people have become complacent. Related to this, one stakeholder said, “We are good at identifying things we need to do in Sioux Falls, be we don’t sell it. The Chamber needs to better engage its membership to ‘sell’ support for certain issues in the community.” Additionally, the need for philanthropic services has increased in the recent past, reportedly putting further strain on current non-profit organizations. “There is a lot of charity, but there is too much need for charity,” said one survey respondent.

Number

Per 1,000

Residents Total ($1,000s)

Per

Resident

Growth

since 2004

Sioux Falls, SD 864 3.7 3,150,040$ 13,524$ 85%

Des Moines, IA 1,610 2.9 6,593,080$ 11,853$ ‐1%

Fargo, ND‐MN 461 2.4 1,088,232$ 5,561$ 53%

Rochester, MN 403 2.2 3,671,537$ 20,071$ 58%

South Dakota 4,003 5.0 5,792,573$ 7,203$ 54%

United States 875,594 2.9 1,965,591,228$ 6,464$ 34%

Organizations Revenue


How do development patterns influence commercial, residential, and industrial growth potential? The ability to develop land easily and in a cost-effective way is critical to enabling growth within a community. However, facilitating unplanned or haphazard growth can result in an undesirable community which lacks cohesion, character, and attractive aesthetics. From a business perspective, a certain level of planning is necessary because it must be easy for workers to commute and access airports for travel and for businesses to easily move freight. This section explores the competitiveness of the Sioux Falls Area’s infrastructure, including highways and roads, public transit, utilities, and air and rail facilities.

Highways and Roads

Connections to major arterials are important because they provide workers greater job and housing options through easier access and are critical for the rapid and efficient movement of goods. Sioux Falls is connected to other major metro areas via east/west Interstate 90, which runs from Boston to Seattle, and north/south Interstate 29, which connects Kansas City and Winnipeg. The following map shows Sioux Falls’ connections via interstates and state highways. The City of Sioux Falls has a key location at the intersection of the two Interstates that cross South Dakota. Interstate 229 is a traffic-reducing loop that connects I-29 to I-90 and runs south and east of the City of Sioux Falls.


Source: South Dakota Department of Transportation

Many stakeholders feel that the proposed new East/West beltline (Highway 100) should be a priority. Such needed infrastructure improvements were said to be vital for Sioux Falls to keep up with growth and to maintain its competitiveness as a place to live and work.

Public Transportation

Sioux Falls’ public transit system is operated by the City of Sioux Falls. The system has 13 fixed bus routes that provide service Monday through Saturday and three “school tripper routes” that run on weekdays during the K-12 academic year. The following map shows Sioux Falls Transit System’s bus services.


Sioux Falls Transit Bus Service Routes

Source: Sioux Falls Transit

The following chart compares the urban public transportation systems in the City of Sioux Falls and the comparison cities in 2007, the most recent year data is available. Sioux Falls Transit is larger than the Fargo and Rochester systems in terms of population served and fleet size, but smaller than Des Moines and Rochester in square miles of service. The average age of its buses is 8.2 years, older than buses in the benchmark community systems on average. Bus ridership appears to be lower in Sioux Falls, as suggested by the lower fare revenues, average annual bus miles traveled per capita, and trips per resident compared to Des Moines and Rochester.


Comparison of Public Transportation Systems, 2007

Sources: National Transit Database; transit system websites

Some feel that public transportation is an issue that needs to be addressed. One stakeholder said, “We have an abundance of resources, but the bus coverage and service hours makes it difficult for people to access all that we have to offer in our community to assist people.” Other suggestions include offering free fares to school-aged children so they can reliably access recreational and after school programs and summer school. Some stakeholders pointed out that increased transit and para-transit services may also benefit the region’s growing share of senior citizens. Many survey respondents cited the smaller transit system as a hindrance to attracting young professionals pursuing sustainable lifestyles. “Public transportation situation is inadequate for people who are environmentally conscious and prefer not to drive cars in a climate not conducive to a lot of bicycling much of the year,” said one young participant. Another remarked, “If I leave [Sioux Falls] it will be because of poor public transportation; I don't drive and find the bus system difficult to use.”

Sioux Falls Des Moines Fargo Rochester

System

Operator

Centra l Ci ty OperatorSioux Fal ls

Trans i t

Des Moines Area

Regional Trans i t

Authori ty (DART)

Fargo Metropol i tan

Area Trans i t (MAT)

Ci ty of Rochester

Publ i c

Transportation

Estimated Population

(2000)144,000 369,143 125,000 104,230

Square Miles 68 140 45 147

# Operated or Contracted 50 193 23 31

Average Bus Age (in yrs) 8.2 7.4 5.7 4.3

Adult Fare (as of Oct.

2009)$1.00 $1.50 $1.00 $2.00

Operating Expense per

Passenger Mile$0.71 $0.68 $0.98 $0.63

Total Fare Revenues $627,586 $6,485,654 $615,454 $1,723,453

Trips Per Res ident 6.5 11.8 8.1 15.2

Annual Passenger Miles

(mi l l ions)5,280,435 29,962,094 3,371,666 6,394,664

Average Annual Miles

Per Res ident37 81 27 61

Usage

Data

Service Area

Data

Bus Data


Utilities

Businesses cannot operate effectively without adequate, low-cost utilities. While many residents and businesses take for granted there will be consistent supplies of basic utilities, communities must never grow complacent about insuring that capacity exists to serve local businesses well into the future. C2ER collects data on residential electric, natural gas, heating oil, other energy sources, and telephone land line prices under the umbrella of “utility prices.” According to the C2ER Q2 2009 Cost of Living Index, residents in Sioux Falls pay (on average) about $116 per month for these services compared to $127 in Fargo, $145 in Des Moines, and $247 in Rochester. The median cost is $169 among the 320 metro areas, micro areas, and metro divisions studied by C2ER. As shown in the following table, Sioux Falls ranks 5th in the nation (out of 320 areas) for utility rates, one of the lowest costs.


Utility Cost Index (by Market Area), Q2 2009

Source: The Council for Community and Economic Research (C2ER)

Market areas include MSAs, micro areas, and metro divisions (100=National Average)

Air Service

The Sioux Falls Regional Airport (also known as Joe Foss Field) is the largest in South Dakota. The airport is currently served by seven commercial airlines, the largest of which are Northwest, Delta and Delta Connection, United, and Allegiant Air. These carriers provide nonstop service to eight major travel hubs: Minneapolis/St. Paul, Chicago, Denver, Atlanta, Los Angeles, Las Vegas, Orlando, and Phoenix. According to the Bureau of Transportation Statistics, the Sioux Falls Regional Airport ranked 37th out of 828 U.S. airports for total passenger volume for the period of July 2008 to June 2009. In terms of cargo movement, the airport moved approximately 76 million pounds of goods in the same year. Both passenger service and cargo service declined since the previous year (down by roughly 14 percent, and 11 percent,

Rank Cost

1 Springfield, MO $106.64

2 Dodge City, KS $112.46

3 Pryor Creek, OK $112.91

4 Broken Arrow, OK $115.01

5 Sioux Falls, SD $115.74

6 Sa l t Lake City, UT $115.84

7 Seattle, WA $119.28

8 Logan, UT $121.09

9 Olympia, WA $123.04

10 Hastings , NE $123.82

15 Fargo, ND $127.17

69 Des Moines , IA $144.92

299 Rochester, MN $247.08

311 San Jose, CA $266.23

312 Cambridge, MA $273.58

313 Erie, PA $275.39

314 Worcester, MA $284.49

315 New York, NY $297.04

316 Honolulu, HI $298.92

317 Brooklyn, NY $308.63

318 Boston, MA $311.52

319 Queens , NY $317.29

320 Fa irbanks , AK $327.79

Lowest Cost Markets

Benchmarks

Highest Cost Markets


respectively). The recession and airline cutbacks may have contributed to the dips in both passenger and freight service usage, as both individuals and businesses cut spending.

Passenger and Cargo Traffic, July 2008 – June 2009

Sources: Bureau of Transportation Statistics; airport websites

Work on an airport master plan is underway. Planned and ongoing improvements include expanding the ticketing wing and concourse of the terminal building, upgrades to the access control system for terminal doors to centralize control of airfield gates, a rehabilitation of the north terminal ramp, baggage claim expansion, expansion of terminal parking, and short-term improvements to the airport entrance along Minnesota Avenue. Nearly all input participants agree that Metro Sioux Falls is a low-cost market for business. The number one challenge related to business costs is air service. One participant said, “Air service costs are a huge concern. Travel is one of the biggest expenses for my business. This is a huge issue for a lot of businesses, but especially for small firms that make frequent sales calls to other market areas.” There is concern about competition from nearby markets. “If it’s just me flying, or me and my wife, then I will fly out of Sioux Falls. If we’re taking the kids somewhere, then it’s worth it to drive to Omaha for the lower fares.” Said one survey respondent, “Biggest problem for me is cost of passenger air service. Sioux Falls loses out on so many opportunities for airline passengers to Omaha and Minneapolis way too often.” Air fares also impact the Convention and Visitor’s Bureau’s efforts to bring events and meetings to Greater Sioux Falls. Using incentives to increase service offerings and aggressively recruiting a low-cost carrier to Sioux Falls were two potential strategies cited to help improve cost competitiveness.

Rail

Sioux Falls is served by Burlington Northern Santa Fe (BNSF). Customers are provided access to the full breadth of BNSF’s North American route system through the railroad’s expansive network of destination cities and short-line service partners. Sioux Falls, as seen in the following map, has closest access to a trunk line extending east-west through Northern South Dakota and the Southwest corner of North Dakota.

Commercial

airlines

Daily

departuresCities served

Total

passengersLbs. of cargo Distance to other major airports

Sioux Falls, SD

Sioux Fal ls Regional (FSD)

Des Moines, IA

Des Moines Municipa l (DSM)

Fargo, ND

Hector International (FAR)

Rochester, MN

Rochester Municipa l (RST)

76 to Minneapol i s , 268 to

Chicago, 478 to Detroi t16 mil l ion269,00043

7

3

232 to Minneapol i s , 260 to St.

Louis , 299 to Chicago173 mil l ion1,713,00018628


Chicago, 627 to Denver1,729,000658,000818


Chicago, 483 to Denver76 mil l ion673,000824

15


BNSF South Dakota Rail Lines, 2009

Source: BNSF

Many industrial areas in the metro have access to rail. The City is also served by a smaller South Dakota-based rail line, Ellis and Eastern, which provides rail access within the Sioux Falls city limits. Compared to the benchmark regions selected for this report, Sioux Falls has access to just one Class I rail provider. Detailed in the following table, Class I service in the comparison regions ranges from three providers to one. Both Des Moines and Fargo have at least two Class I rail providers and a major inter-modal facility.

Class I Rail Service & Intermodal Facilities, 2009

Source: BNSF, CN NA, CP, CSX, NS, UP

Sioux Falls,

SD

Des Moines,

IA

Fargo, ND‐

MN

Rochester,

MN

BNSF X X x

Canadian Pacific x x

CN North America

CSX

Norfolk Southern x

Union Pacific x

Inter‐modal facil ities NO YES YES NO


Some stakeholders indicated that rail access is an issue due to a limited number of spurs in Greater Sioux Falls. However, they are hopeful that the City’s “rail relocation project” that is funded through the federal stimulus package will help to improve Sioux Falls’ competitiveness in this regard. Tracks that run through Downtown will be relocated and a new rail yard, trestle, and connections in Sioux Falls will be constructed.

Sites and Buildings

To complement their external marketing and attraction efforts, Sioux Falls Area economic developers can offer prospects a number of project-ready sites and buildings. 13 One such site is the Sioux Empire Development Parks, owned and managed by the Sioux Falls Development Foundation and located in the City of Sioux Falls. With key access to both major Interstates as well as the Sioux Falls Regional Airport, these properties are zoned as light industrial or planned commercial. Most plots are fully-developed with complete utilities – water, sewer, electrical, natural gas, paved roads, and telecommunications. With 925 acres occupied, the Sioux Empire Development Parks have available about 310 acres of light industrial and 70 acres of commercial remaining.

Sioux Empire Development Parks

Source: Sioux Falls Development Foundation

13 A full analysis of Greater Sioux Falls sites, buildings and corresponding infrastructure will be included in the forthcoming Target Business Analysis and Marketing Review report.


The Brandon–Corson Development Park in Brandon is managed by the Minnehaha Economic Development Association. The park is located adjacent to the BNSF rail spur and is accessible by I-90 and State Highway 11. Approximately 140 acres of rail and non-rail sites are available. Incentives in this heavy industrial zoned park include property tax abatement and the Brandon Revolving Loan Fund; tax increment financing is available to qualified projects.


A dynamic quality of life inclusive of numerous cultural and recreational amenities. Comparatively low overall costs of living. Stable regional housing market. Robust health care capacity with specialty services and research niches which continue to

generate jobs. Access to two federal Interstate highways. Pristine natural environment including clean air and water. Strong philanthropic community and culture of giving. Momentum in Downtown Sioux Falls redevelopment, resulting in the development of a variety of

businesses and events. Highly competitive utility costs.

Weaknesses/Threats

Higher crime rate than the state and some peer metro areas. Addressing funding issues related to the events center proposals. Record-high office vacancy rates within the region. Rail and air access said to be inadequate for rapid growth. Limited amenities for young professionals. Reported need for more affordable housing. Need to strengthen civic participation and engagement. Limited public transit coverage and service hours. Need for an east-west highway to ease metro traffic congestion.


CONCLUSION What soon becomes clear after speaking with residents, business owners, workers and public officials in the Sioux Falls Area is the deep regard they have for the community. The earnestness with which people extol the area’s virtues and express excitement for the future is compelling. This is a region that people are proud of, encouraged by, and hopeful for. Quantitative research backs up much of this qualitative praise and shows a community that is – on the whole – changing for the better. Launching a strategic development process in this climate provides some inherent advantages in that the community has seen success and wants more. But that same success can be a challenge; some stakeholders might not understand the actual amount of hard work, investment and progressive thinking that is required to thrive in today’s economy. If the Sioux Falls Area has seen growth come relatively easy in the past, those days are over. For every community that stands still or takes a step back, a hundred more move forward with ambitious plans for continued regional re-invention. This Competitive Assessment is only the first stage of a months-long process to arrive at a future strategic vision for the Sioux Falls Area and an action plan to achieve it. While opportunities are great, challenges are many and resource capacity is a constant concern both in Sioux Falls and the state. Ultimately, the true degree to which public and private leadership – and the general population – are committed to implementing the Future Sioux Falls strategy will determine its chances for success.

Key Takeaway Points

Based on the quantitative and qualitative research conducted for this report, the following “key takeaways” emerged from the analysis of economic and demographic trends in Greater Sioux Falls:

Strong leadership – both public and private – has guided the Sioux Falls Area through many years of sustained growth in its population and economy.

o But the dynamics fueling this growth – regulations making the region

an attractive location for financial services companies; low-cost land and labor; infrastructure capable of supporting growth; low crime; great schools; dynamic quality of life; rural South Dakota residents looking to migrate to the region for better opportunities – are, in different ways, becoming strained.


To a great extent, the Sioux Falls region is at a crossroads; what will drive the next phase of its growth and what will that growth look like? The Sioux Falls Area is beginning to reach a stage of evolution that compels leadership to address tough questions:

o Will we grow smartly or keep sprawling?

o How will we manage rising poverty, compromised public safety, higher demands in social services, a more at-risk student population, and other issues that come with a region attracting diverse residents of all races, ethnicities, ages and incomes?

o How do we develop a workforce that is capable of retaining, expanding and attracting the technology-focused, information-based and innovation-intensive sectors and companies that are predicted to grow and add the most value in the future American economy?

o How do we continue to not only provide the family-friendly amenities we’re known for – good schools, ample recreation, negligible traffic congestion, strong health care, etc. – but also the resources sought by young professionals and talented workers who can choose to live anywhere they want?

o How do we thrive without a major research university?

o How do we better communicate our strengths and advantages to the nation and world?

Both the challenges and opportunities raised by these questions will be the raw materials for the creation of the Future Sioux Falls strategy. Research conducted on the most promising target business sectors for the region to pursue and the marketing programs necessary to effectively grow them will add even more shading to the picture that is forming of Greater Sioux Falls’ future. Taking this vision from image to reality will ultimately be the life’s work of this community, its residents, businesses, and the leadership that guides them.


APPENDIX A: METHODOLOGY This report comprehensively examines Metro Sioux Falls’ trends and competitiveness related to People, Prosperity, and Place compared to three other regions, the state of South Dakota, and the nation. The comparison communities are Des Moines-West Des Moines, Iowa; Fargo, North Dakota-Minnesota; and Rochester, Minnesota. This section describes the methodologies used in the research and data analysis of this report.

GEOGRAPHY This report examines trends within the Sioux Falls metropolitan statistical area (MSA), defined by the U.S. Office of Management and Budget (OMB). The current definition of the Sioux Falls MSA includes four counties: Lincoln, McCook, Minnehaha, and Turner.

Sioux Falls, South Dakota MSA (current definition)


In Market Street’s analyses Metro Sioux Falls is benchmarked against three comparison metropolitan areas: Des Moines-West Des Moines, Iowa; Fargo, North Dakota-Minnesota; and Rochester, Minnesota. These comparison communities were chosen based on total population, population growth, racial and ethnic composition, job growth, unemployment rates, per capita income, economic structure, educational attainment of adults, and regional university enrollment. The following chart shows how these metro area’s definitions have changed since the 1999 classifications used for the decennial Census. The Fargo metro area definition has not changed, but changes did occur for Sioux Falls, Des Moines, and Rochester. Market Street has aggregated data to match the most current MSA definitions.

Metro Area Definition Details

Source: U.S. Office of Management and Budget (OMB)

1999 Definition Counties

(as reflected in OMB definitions used

for 2000 Decennial Census)

Current Definition Counties

(as reflected in OMB definitions 2003‐2008)

Sioux Falls, SD Sioux Falls MSA Sioux Falls MSA

Lincoln, SD Lincoln, SD

Minnehaha, SD McCook, SD

Minnehaha, SD

Turner, SD

Des Moines, IA Des Moines MSA Des Moines ‐ West Des Moines MSA

Dal las , IA Dal las , IA

Polk, IA Guthrie, IA

Warren, IA Madison, IA

Polk, IA

Warren, IA

Fargo, ND‐MN Fargo‐Moorhead MSA Fargo MSA

Clay, MN Clay, MN

Cass , ND Cass , ND

Rochester, MN Rochester MSA Rochester MSA

Olmsted, MN Dodge, MN

Olmsted, MN

Wabasha, MN


DATA SOURCES Market Street used the most recent data available for this Competitive Assessment. Reputable and reliable private, non-profit, local, state, and national government data sources were leveraged, with every effort made to match methodologies and units of comparison across sources to provide the most accurate and informative analysis of Metro Sioux Falls’ demographic trends, economic structure, and the overall competitiveness of the community’s business climate. Major data sources for this report included the U.S. Census Bureau, the U.S. Bureau of Economic Analysis (BEA), and the U.S. Bureau of Labor Statistics (BLS). State and local resources were also used including data furnished by the Sioux Falls Chamber of Commerce, South Dakota Department of Health, South Dakota Department of Revenue and Regulation, and other resources referenced throughout this report. In many cases, the data are presented in a chart as the percentage each component represents of the total. In these cases, unless otherwise noted, if the summation of the percentages of all the components does not equal 100 percent, it is due to rounding.

STAKEHOLDER INPUT Market Street staff conducted three days of interviews and focus groups, with participants from diverse community and business groups. Thirty interviews, five focus groups, and an online survey garnered input from nearly 700 residents, stakeholders involved in regional economic and community development, and Metro Sioux Falls’ business community. Results from the survey can be found in Appendix B.

PATENT DATA Searches were done using the United States Patent and Trademark office’s searchable database for the number of patents issued in each metro area. The database is searchable by city. Metro areas were defined by their largest cities, which account for over 75 percent of the population in the MSA.


APPENDIX B: COMMUNITY SURVEY Critical to the success of this strategic process is the inclusion of feedback and opinions solicited from a broad range of community stakeholders. An online survey was posted at the project website (www.futuresiouxfalls.com) on September 12, 2009, to help garner input from stakeholders. The survey yielded 677 online respondents between September 12, 2009 and October 5, 2009. Additionally, five paper surveys were collected from residents without access to a computer, resulting in a total of 682 responses. Information about the survey’s respondents as well as the survey results is included in this Appendix. Specific comments from survey respondents are provided when available. These comments were randomly selected and may not be representative of overall respondent attitudes.


Respondent Information: 1. What is the zip code of your primary residence?


2. Do you live within the City of Sioux Falls’ corporate limits?

3. What is your age?

4. What is your race/ethnicity?

5. What is your employment status?

Response

Percent

79.8%

16.1%

4.1%

No

Yes

Don't Know

Response

Percent

0.3%

4.0%

28.4%

19.9%

22.2%

18.6%

6.6%

25‐34 years of age



Over 65 years of age


Less than 18 years of age


Response

Percent

96.7%

0.1%

0.3%

0.4%

0.1%

0.3%

1.5%

0.4%

Hispanic or Latino

Other (please specify)

Native American

African‐American

I choose not to answer

Asian‐American

Caucasian

Two or more races

Response

Percent

78.0%

1.3%

11.6%

0.3%

0.6%

1.6%

6.6%

Self‐Employed

Student

Unemployed

Retired

Active military service

Employed

Student and Employed


6. What is the zip code of your company or organization’s primary location?

7. How long have you worked at your current place of employment?

Response

Percent

9.6%

27.4%

13.3%

17.9%

31.3%

0.5%

10 years+

1 ‐ 3 years

6 ‐ 10 years

Less than one year

Doesn't apply to me

4 ‐ 5 years


8. How would you characterize your company or organization’s type of business?

9. How many employees work for your company or organization at all of its

locations?

Response

Percent

Finance and insurance 14.5%

Professional and technical services (legal, accounting,

engineering, design, scientific research, advertising, computer

services)

12.8%

Non‐Profit 12.5%

Health care services 7.3%

Government 7.0%

Other (please specify) 6.8%

Education services 6.5%

Construction 4.3%

Information (media, publishing, broadcasting, data

processing)4.3%

Manufacturing 4.3%

Real estate 4.3%

Retail trade 4.2%

Hospitality (accommodation and food services) 3.2%

Arts, entertainment, and recreation 2.7%

Wholesale trade 2.7%

Logistics (transportation and warehousing) 1.2%

Agriculture 1.0%

Administrative services and waste services 0.3%

Response

Percent

Fewer than 10 18.8%

10‐49 21.2%

50‐199 19.7%

200‐499 11.1%

500 + 27.4%

Don't know 1.8%


10. What is the primary market/service area of your company or organization? Please check all that apply.

11. What is your role in your company or organization?

12. Please rate the following components of the Sioux Falls Area’s small business

and entrepreneurial climate.

Response

Percent

Sioux Falls Metro Area 43.5%

City of Sioux Falls 41.9%

South Dakota 38.3%

Minnehaha County 32.4%

Midwest United States 29.0%

United States 17.4%

Global 9.1%

North America (U.S., Canada and Mexico) 5.9%

Response

Percent

Staff/Other 39.0%

Manager/Department Head 24.1%

President/CEO/Vice‐President/Director/Other Officer 22.4%

Entrepreneur or Small Business Owner 14.1%

Human Resources/Personnel Department 3.2%

Excellent Good AverageBelow

AveragePoor

Don't

Know

Networking opportunities with other

entrepreneurs19.0% 41.8% 25.3% 0.0% 1.3% 12.7%

Small business start‐up and development

assistance15.2% 32.9% 19.0% 3.8% 2.5% 26.6%

Business incubation or low‐cost business

space12.7% 24.1% 26.6% 5.1% 6.3% 25.3%

Availabil ity of capital 8.9% 16.5% 36.7% 8.9% 6.3% 22.8%


13. Please rate the following statements according to the degree to which you agree.

14. Please indicate if the following items are barriers to, or potential advantages for,

the existing and future ability of the community to be successful.

Strongly

AgreeAgree

Neither

Agree nor

Disagree

DisagreeStrongly

Disagree

Don't

Know

My business will remain in the Sioux Falls

Area in the long‐term.74% 19% 3% 1% 1% 2%

My business receives the support it needs to

grow.26% 45% 17% 7% 1% 4%

Labor costs are reasonable. 14% 53% 15% 2% 1% 15%

I have no trouble finding quality employees

for my business.13% 37% 20% 13% 3% 14%

The cost of uti l ities is reasonable. 12% 47% 20% 6% 1% 15%

The cost of commercial/industrial space is

reasonable.9% 36% 22% 7% 2% 25%

Significant

Advantage

Minor

Advantage

Little to No

Concern

Minor

Problem

Significant

ProblemNo Opinion

Tax climate 47.3% 22.6% 13.3% 7.1% 2.1% 7.5%

Quality of Pre‐K‐12 education 39.5% 32.8% 10.2% 7.3% 2.3% 8.0%

Public safety 38.6% 37.0% 16.7% 3.7% 1.2% 2.9%

Cost of l iving 36.0% 36.8% 14.8% 8.0% 3.1% 1.3%

Post‐secondary educational opportunities 35.9% 33.8% 10.8% 11.4% 3.3% 4.8%

Cost of doing business 30.3% 39.3% 14.6% 5.8% 2.3% 7.7%

Abil ity to attract young professionals 21.7% 20.0% 8.8% 31.3% 14.2% 4.0%

Retention of college graduates and young

professionals18.3% 20.6% 9.6% 27.7% 18.1% 5.6%

Infrastructure 16.3% 35.6% 19.6% 18.1% 6.0% 4.4%

Local elected leadership 10.7% 27.3% 30.5% 16.1% 8.3% 7.1%

State elected leadership 9.8% 28.5% 27.9% 18.5% 8.5% 6.7%

Cost and capacity of air service 8.9% 16.0% 16.2% 23.5% 28.7% 6.7%


Selected comments (Note: comments were randomly selected and may not be representative of overall respondent attitudes):

Growing University Center and securing expanded low cost air service need to be priorities.

Both public and private sectors are hiring phenomenal amounts of out of state professionals, overlooking the in-state talent. Professionals are or will be leaving in droves.

Cost of living versus wage is a large issue for young people. We need to expand our air service and get the prices more in line. We need

to be smart on how we grow so we can attract the right people and companies. We need to start with the core downtown area and build from there. Slow down Urban sprawl, because over time that kind of growth is expensive and unsustainable.

Sioux Falls is the economic engine that drives South Dakota. However, often state law proves to be an obstacle to SF prosperity and development.

15. Please rate the following elements of the Sioux Falls Area’s infrastructure.


AveragePoor

Don't

Know

Air quality and remediation costs 23.9% 35.2% 12.2% 1.5% 0.6% 26.6%

High‐speed telecommunications 16.3% 43.4% 21.8% 7.1% 1.0% 10.5%

Class A office space 13.4% 35.9% 18.0% 1.3% 0.2% 31.2%

Road and highway capacity serving

existing developed areas10.7% 46.7% 27.0% 9.6% 3.3% 2.9%

Industrial sites and buildings 10.2% 39.3% 19.2% 3.3% 0.2% 28.0%

Water and sewer capacity to support

growth9.0% 35.7% 25.0% 7.3% 1.9% 21.2%

Road and highway capacity serving

undeveloped areas3.8% 30.1% 40.0% 11.3% 2.3% 12.5%

Airport cargo capacity 2.9% 19.7% 17.4% 4.4% 1.9% 53.7%

Class A freight rail capacity 1.3% 14.8% 13.4% 5.4% 1.7% 63.3%


16. If you are a business owner or are involved in management/staffing decisions within your organization, please rate to what level you agree with the following statement.

Selected comments:

We work closely with the South Dakota Career Center and they have been valuable to us.

There is little to no demand for our workers at present. Having development resources does not equate to having the necessary

talent available for selection of workers Hard to find trained office workers who are motivate to do a good job.

17. What do you feel is the GREATEST STRENGTH of the local workforce?

18. What do you think is the GREATEST WEAKNESS of the local workforce?

Strongly

agreeAgree

Neither

agree nor

disagree

DisagreeStrongly

disagree

Don't

Know

I am aware of the region’s workforce

development resources that can help my

business find or train workers.

8.6% 33.7% 19.8% 7.4% 3.8% 26.7%

Hardworking/work ethic 202

Values/integrity 27

Education 26

Dedication/loyalty 26

Will ing to work for low wages 10

Availabil ity/quantity 9

Skil ls/training 7

Low pay 47

Lack of skil ls/training 46

Lack of education 44

Not enough workers 28

Poor work ethic 22

Retention 19

Lack of qualifications/experience 15

Close‐mindedness 14

Complacency 11

Insufficient advancement opportunities 8

Opportunities at every skil l level 7

Lack of diversity 5

Non‐English speaking 5


19. Do you have a child or children who are currently students in Sioux Falls Area public schools or an area college?

20. Where do you (or your child) attend school?

21. How would you rate the quality of the education that you (or your children) are receiving?

Response

Percent

26.9%

73.1%

Yes

No

Lincoln High School 12

Augustana College 11

Roosevelt High School 11

Patrick Henry Middle 9

South Dakota State University 9

Washington High School 9

Discovery Elementary 8

Sioux Falls Public Schools 7

Harvey Dunn Elementary 7

Robert Frost Elementary 7

Southeast Technical Institute 5

USDSU University Center 5

Rosa Parks Elementary 4

Mark Twain Elementary 4

Laura Wilder Elementary 4

Brandon Valley High School 4

University of South Dakota 4

Outside of South Dakota 3

University of Sioux Falls 3

Memorial Middle School 3

Edison Middle School 3

Anne Sullivan Elementary 2

Other School in Sioux Falls Area 21

Other School in South Dakota 2

Response

Percent

49.0%

35.0%

8.9%

3.2%

1.3%

2.5%

Very Good

Not Applicable

Average

Very Poor

Good

Poor


Selected comments:

I don’t feel there is an emphasis on preparing our students for the advancing technology used in the workplace and everyday life. They need more mathematics, science, computer training, and business training through their years beginning at day one.

I understand the no child left behind, but I feel that some of our students are not challenged enough because the teachers are concentrating on the slower students.

Involved administrators, personal interest in students academically and involvement. High parent engagement as well.

We loved having choices like All City Elementary. Parental involvement is a great thing in a school and the fact that the Sioux Falls School District respects that is wonderful.

22. What do you think needs to be done to improve your school or school district?

Selected comments:

Better communication from administrators to the parents and public. The teachers are excellent.

Increase the pay for our teachers and lower the student to teacher ratio in our classrooms allowing for more personal attention. Our students get lost in the system with the current classroom sizes. They need more time and attention and encouragement to focus on learning.

The school district needs to seriously consider changing the start date for school to being after Labor Day.

I think the SFSD should go to a year-round school schedule so that children retain information better. We do have a larger low income population in our community. This would most benefit those children. Research supports this and it would help prepare us for our future as a city with the increasing number of students of greater diversity in our schools. Additionally, it would benefit all children.

More schools on the East/ South East part of town- Make sure there is a busing system for elementary, middle, and high school

23. Do you feel there will be job opportunities available to you (or your child) in the Sioux Falls Area upon graduation from post-secondary institutions?

Response

Percent

58.6%

17.2%

24.2%

Yes

Don't know

No


Selected comments: Medical and Finance are major employers within community. Need more

diversity of career paths - leading towards science, research, and manufacturing. Need to be able to fall back on producing a product.

I see a narrowing in the availability of good jobs in our area. The options are primarily general labor, call center work, retail, or hospitality and food service. It would be nice to see Sioux Falls develop more job opportunities overall that offer a more competitive salary package and benefits.

Just not sure if it will be in the same field of interest -- Sioux Falls and South Dakota businesses tend to hire out-of-state companies to do work the local companies are certainly capable of. Look at SDSU, Sanford, USD, McKennan -- construction and design going to primarily out-of-state companies.

Post-secondary education in Sioux Falls and the entire state is weak. I plan to send my kids to more rigorous out of state colleges, and I do not expect them to return to Sioux Falls for limited career opportunities.

Too many graduates are coming out and not enough high-paying jobs. They need these higher-paying jobs to pay off their student loans so they will probably go out of state unless I want them living at home.

from medical perspective, looks very promising for the likes of Sanford and Avera expansions turning into a world class regional medical centers


24. Please rank the top ten (10) challenges the Sioux Falls Area faces in attracting and/or retaining residents with one (1) being the most important challenge. You may only vote once for each challenge.

Selected comments:

Hiring practices that respect local talent. For some reason there’s an idea that buying and hiring out from outside of our local communities is a good thing. It’s destroying us from the inside.

Greater social services infrastructure and civic participation Major institutions in Sioux Falls are still dominated by a 1950s-era old

boys’ network. There are not enough women in positions of authority, and status quo thinking is the norm. Young people are not attracted to communities with regressive institutions, and Sioux Falls cannot afford to wait for the over-60 crowd to die before becoming more socially progressive. We’ll know that Sioux Falls is making progress when women are no longer excluded from any events at the Minnehaha Country Club.

Stronger leadership to help get things done that are needed for the city. No more task forces made up of the same folks. New blood is needed.

One thing that I often hear criticized about Midwestern cities is that they don’t think green enough, especially when it comes to overuse of personal vehicles. Sioux Falls already has a nice recreational bike trail, but it could

1 2 3 4 5 6 7 8 9 10

Creating more quality jobs 41.2% 11.1% 9.5% 11.8% 7.9% 5.7% 4.3% 4.3% 2.3% 2.0%

Cost of living/cost of doing

business13.0% 16.5% 8.6% 10.6% 6.8% 7.4% 6.2% 8.3% 8.8% 13.9%

Transportation and

infrastructure10.9% 13.9% 15.3% 15.3% 9.7% 11.4% 8.0% 5.6% 6.3% 3.4%

More entertainment amenities 10.8% 11.8% 13.3% 10.3% 10.3% 9.5% 6.5% 9.5% 8.8% 9.3%

Pre‐K‐12 capacity, financing,

and quality7.9% 10.3% 10.9% 9.4% 14.7% 11.5% 12.1% 9.4% 6.5% 7.4%

Quality development and

planning7.4% 11.4% 13.8% 13.1% 11.1% 9.6% 14.1% 10.6% 4.2% 4.7%

A more vital Downtown 6.0% 11.0% 8.0% 9.2% 7.7% 11.0% 9.2% 11.3% 11.6% 14.9%

Appearance of the city 5.7% 4.2% 7.7% 6.8% 12.2% 13.1% 10.4% 14.3% 14.0% 11.6%

Higher education capacity at all

degree levels4.7% 10.6% 9.4% 10.6% 7.6% 13.8% 10.9% 13.2% 12.1% 7.1%

More diverse housing stock 4.1% 4.1% 6.7% 6.0% 10.2% 7.0% 11.4% 14.6% 14.6% 21.3%

Local government collaboration

and cooperation4.1% 10.1% 9.3% 12.3% 16.9% 10.9% 10.4% 9.3% 9.3% 7.6%

More recreation amenities 3.0% 9.7% 13.6% 11.4% 10.0% 9.1% 11.6% 8.6% 11.9% 11.1%

Land use 2.6% 6.8% 4.5% 3.4% 8.6% 11.7% 15.8% 11.3% 18.8% 16.5%


definitely be improved upon by creating trails designed for commuters, as well as better accommodations for bikes in traffic. Other considerations taken towards greener lifestyles would make Sioux Falls appear much more progressive, responsible and “hip” to young people looking to relocate here.

25. The ability for local workers and families to find quality employment and build personal wealth is very important. Please rate your beliefs on how the Sioux Falls Area provides the following:

26. Do you feel sufficient programs and amenities are available for students and

young professionals in the Sioux Falls Area?

Selected comments:

All Sioux Falls institutions should be actively recruiting young members to belong and assume leadership positions. The average age of Sioux Falls Downtown Rotary members appears to be over 50, and they seem to like it just fine the way it is. Without leadership opportunities, ambitious young professionals will leave Sioux Falls for more progressive communities.


AveragePoor

Don’t

Know

Access to affordable

education/training programs8.3% 41.1% 37.4% 7.7% 2.0% 3.6%

Affordable housing options 7.3% 33.3% 38.4% 13.0% 5.9% 2.2%

Access to jobs that provide

health insurance benefits4.7% 29.9% 43.7% 11.8% 5.7% 4.1%

Access to jobs that provide a

l iving wage4.3% 30.6% 37.9% 17.3% 8.8% 1.0%

Access to affordable, reliable

public transportation options3.7% 21.9% 29.3% 24.4% 13.4% 7.3%

Access to affordable child

care2.0% 22.6% 35.5% 13.5% 6.0% 20.4%

Response

Percent

54.9%

19.3%

25.7%

Yes, there are many options for students and

young professionals here.

No, the region does not offer desired amenities.

No, but amenities are short drive away.


Higher salaries, less religious/racial/cultural intolerance, more diversity Shopping centers are outdated. State schools should be brought to Sioux

Falls in greater capacity to offer more work force, more recreational events/sporting events, etc...

Major entertainment, an available sports complex, better quality of food and grocery choices, more green choices and organics, an emphasis on environmental issues.

I would like to see more private entrepreneurs take a chance on providing entertainment opportunities for young people.

YPN is a great start. Higher-paying, higher-skilled jobs and more entertainment/arts events and activities would help greatly. We have to drive to Omaha or Minneapolis for concerts, but that is generally an issue with the overall size of the community, rather than lack of venues.

27. Are you a “young professional” (e.g. someone between the ages of 21–39 working in a professional occupation)?

28. Please respond to the following statement:

Selected comments: I moved back here to be near my family as I was born and raised here.

However, if I had a choice I would not have come back. There is a very limited outlook here for advancement and retirement security. The lifestyle isn’t organic or friendly to a green outlook. I still do the majority of my shopping online because the local merchants don’t offer a lot of what I need or want on a day to day basis. I fully expect to leave the area again as soon as it’s possible for me to do so.

Sooner or Later those young professionals will no longer have family living here locally. Sad to say it but our staying here is because of family and not jobs. We need to continue to grow slowly but steadily in order to maintain a fun vibrant, yet beautiful Sioux Falls.

I’ve lived in Sioux Falls my whole life, I’m 22 years old, I went to High School here. Sioux Falls is not an attractive place to live for someone my

Response

Percent

37.4%

62.6%

Yes

No

Strongly

agreeAgree

Neither

agree nor Disagree

Strongly

disagree

No

opinion

“The Sioux Falls Area is an attractive

and desirable place to l ive.”41.1% 45.3% 8.9% 3.1% 1.6% 0.0%


age. Cost of living versus wage is poor, it is expensive to live here, and our wages are low. Housing is a serious issue for people my age. Apartments in Sioux Falls are as much as $1000.00 a month. While even at a good paying job, I might only gross $2,000, over half of my pay check would be going to pay housing costs.

Sioux Falls is only attractive and desirable because the K-12 school system is decent, the community is safe and the cost of living is low. Without these advantages, nobody who has ever lived near a major city would put up with the regressive culture and lack of cultural amenities in Sioux Falls.

The recent growth of Sioux Falls has made the city very attractive. With a growing amount of shops and restaurants, we are beginning to get the amenities that larger cities offer without having to leave city limits.

29. What does the Sioux Falls Area need to do to attract and retain young

professionals? Select comments: As a community, private and public organizations need to support activities

and events that attract young people; keep an open mind when enterprising groups seek assistance in cultivating new and unfamiliar venues to the city.

Continue the work of the YPN by further expanding programming, developing more incentives for young professionals to join (discount cards, etc) and encourage Chamber employers to encourage employees to join and take part in YPN events. Recruit higher-paying, higher-skilled jobs. Continue to develop educational opportunities for young adults in lower-paying jobs to move up in their careers. Incentivize further downtown housing growth in apartments and lofts. Welcome diverse communities and become more gay-friendly, pushing for gay rights efforts such as non-discrimination legislation. BUILD THE EVENTS CENTER - downtown. Lobby for changes in state liquor laws to encourage business growth in bars/clubs/restaurants. Support smoking ban legislation. Recruit young professionals to return to Sioux Falls, and also recruit talent from colleges/universities in surrounding states.

The biggest challenge is providing professional career options. We have done a lot in the past to attract certain types of businesses (i.e. call centers), but these jobs are NOT desirable for someone graduating from college with an advanced degree. In addition, if you do happen to find a great professional job in Sioux Falls, there is little or no way to further your career beyond your present position. Sioux Falls is great for starting a career, but where do you go from here???

A modernized lifestyle with updated ideas and a forward thinking mentality. Open a Whole Foods, encourage living green, give the population more variety. We aren’t all living in the country anymore.


Four key things: 1) Develop and advertise an attitude/personality that puts Sioux Falls in the minds of people considering Madison, Lawrence, Rochester etc 2) better city planning with green zones and housing that fits younger professional needs 3) stop making the case that Sioux Falls is a cheap workforce as this reads “uneducated” or “boring” to any young professional 4) build world ties so that Sioux Falls becomes known as a Midwest city with a surprisingly worldly/informed populace

The area is going to need to develop a more highly visible technical (computers, engineering, sciences, etc.) sector to continue to attract the YP’s. The sector is here, but not highly visible.

30. Please respond to the following statement.

Selected comments:

The quality of our teachers in each school is excellent. Our overall standardized test scores are very good. We are building new schools to accommodate our growth.

As a retired teacher I feel the community has gone a long way to provide modern spacious buildings and is committed to improving technical and trades based education. The new tech center is welcome addition to the education for Sioux Falls students.

The teachers’ unions are too strong in this community. I believe that a merit pay system should be incorporated into the school system.

As far as public education goes, we offer a good program. As the City grows and the public tries to be all things for all people the quality will wane. There’s better public education in some of the smaller communities in the area, where accountability is more direct to the parents vs. boards and bureaucrats.

Excellent schools in the city and in surrounding communities. I suggest a little more help might be needing in bringing the surrounding schools and Sioux Falls schools together in a regional education advancement partnership.

We are falling short of the world market with science and technology. We can take the lead with proper funding and guidance.

Strongly

agreeAgree

Neither

agree nor

disagree

DisagreeStrongly

disagree

No

opinion

“Our community has a commitment

to quality, public K‐12 education.”24.3% 47.7% 12.9% 6.8% 1.4% 6.8%


31. Please rate the areas on which public K–12 schools in the Sioux Falls Area should focus.

Selected comments:

The school system needs to pre-plan for enrollment growth. The building of schools for functionality instead of aesthetics would save the taxpayers’ money and reduce the cost of the over beautified and expensive buildings.

Schools are currently stratified by the economic position of the families they serve, there is little social class mixing and a huge difference between poor neighborhood and middle class neighborhood schools -- We have a virtual night and day separation between advantaged and disadvantaged neighborhood schools

Provide more challenging curriculum for high school students who plan on attending four-year colleges

Get lower income kids involved in extracurricular activities. The schools do a poor job recruiting them and supporting them in this effort. It is sad how little effort is made by coaches, admin, etc.

Most

ImportantImportant

Of Average

Importance

Not

Important

Least

Important

Providing a safe environment 53.9% 31.6% 12.5% 1.9% 0.4%

Other 50.0% 30.0% 15.0% 2.5% 2.5%

Obtaining appropriate funding for

schools46.5% 38.3% 12.5% 1.9% 1.1%

Focused attention on STEM (Science,

Technology, Engineering, Mathematics) 35.7% 50.7% 13.5% 0.4% 0.6%

Providing leadership, professional, and

technical skil ls training32.8% 55.9% 10.4% 1.3% 0.0%

Providing career guidance and hands‐on

work experiences30.2% 50.3% 17.3% 1.9% 0.6%

Providing opportunities for advanced

academic education24.6% 46.4% 24.8% 3.8% 1.1%

Providing quality after‐school

programming19.7% 41.1% 30.4% 5.8% 3.4%

Reducing the drop out rate 16.2% 52.6% 27.0% 3.2% 1.1%

Providing alternative schools focused on

training for a local industry14.0% 40.6% 35.3% 8.9% 1.9%


32. Please rate the quality of the following Sioux Falls Area post-secondary educational institutions:

33. Please list any programs not currently offered in the region that you feel should be added to one or more of the above institutions’ curricula.


AveragePoor

Don't

Know

Augustana College 52.7% 28.4% 5.6% 0.6% 0.2% 12.5%

University of Sioux Falls 34.4% 36.5% 10.7% 2.3% 1.2% 15.0%

Southeast Technical Institute 33.5% 34.7% 14.8% 2.6% 0.8% 13.6%

South Dakota Public Universities &

Research Center (University Center)32.5% 34.4% 12.1% 1.6% 0.2% 19.2%

Sioux Falls Seminary 11.9% 22.3% 12.9% 2.2% 1.4% 49.3%

Mount Marty College 5.9% 20.7% 20.3% 3.9% 1.0% 48.2%

Colorado Technical University 3.7% 19.9% 23.6% 8.5% 3.9% 40.4%

Kilian Community College 2.2% 17.8% 25.5% 11.6% 2.9% 40.0%

National American University 1.4% 9.4% 19.9% 11.9% 4.5% 52.8%

Bellevue University 1.0% 4.1% 14.2% 7.0% 2.9% 70.8%

Globe University 0.6% 7.0% 15.6% 8.6% 4.9% 63.2%

More graduate programs 11

Engineering/architecture 8

Psychology/counseling/social work 5

Medical specialties 5

Electrician 3

Adult and continuing education 3

Law degree 3

Nursing 3

Business/economics 3

Full‐service university 2

Alternative/green energy 2


34. Please rate to what level you agree with the following statements:

Selected comments:

I think the vocal minority is too prevalent in Sioux Falls politics. The vast majority of people are engaged in family and work activities that do not allow them the opportunity to be as vocal as the activist citizens that sway political debate.

I think there are attempts to engage young professionals but in some areas there is still a tension between the more “experienced” professionals and the younger ones. Sioux Falls and South Dakota have a number of aging people in the population therefore, this can be an issue when it comes to mentoring and succession planning, etc. Some see that as a leadership/mentoring opportunity, others see the need to protect their turf. It would be nice to see more attention placed on the need to mentor young professionals and do succession planning in our SD & SF culture on an ongoing basis.

I don’t like how the current Events Center Task Force is coming to their conclusion. Wrong location and wrong type of financing. Listen to the consultants and build it downtown, fund it with B&B taxes, not sales.

Though I do not want to be naive I feel that SF is a very open community that allows people to be as successful as they are willing to work for. I know many people from diverse cultural backgrounds who have enjoyed great success and acceptance in SF.

Strongly

AgreeAgree

Neither

Agree nor

Disagree

DisagreeStrongly

Disagree

Don't

Know

There are opportunities to volunteer

your time for worthy causes49.0% 42.8% 6.8% 0.0% 0.4% 1.0%

New members of the community are

welcomed14.3% 50.5% 19.3% 9.1% 1.6% 5.2%

The public's opinions are valued by

government8.0% 33.9% 26.1% 19.3% 10.0% 2.8%

Young professionals are actively

engaged in leadership6.2% 37.6% 29.6% 17.9% 2.0% 6.8%


35. Please rate the following.

36. If you will not continue to live in the community, and/or you feel your children will not choose to live in the community, why do you feel this way?

37. Please rate the following statements.

Selected comments:

The city and county leaders need to work to consolidate services, coordinate budgets and better use of space, administrative services. There is often the appearance of protecting turf not to the overall benefit of the community.


AveragePoor

Don’t

Know

Likelihood you will continue to l ive in

the community55.8% 27.5% 10.4% 3.2% 2.4% 0.8%

Likelihood you will raise children in

the community44.9% 21.9% 10.2% 2.6% 8.5% 11.9%

Likelihood your children (once grown)

will choose to l ive in the community10.8% 25.7% 23.2% 10.0% 12.7% 17.6%

Likelihood you will retire in the

community29.2% 25.0% 20.2% 11.4% 10.2% 4.0%

Employment/earning opportunities 64

Climate 28

More diversity/progressiveness 15

Bigger city 14

Culture/entertainment 12

Family 10


Smaller town 6

Public transit/sustainability 3


AveragePoor

Don’t

Know

Quality of the Sioux Falls Area’s private

sector leadership26.5% 36.9% 21.8% 3.9% 1.6% 9.2%

Willingness of City, County, and school

leaders to work with private sector 12.2% 31.5% 32.3% 10.0% 3.3% 10.8%

Willingness of City, County, and school

leaders to work together11.3% 28.1% 34.6% 11.5% 5.5% 8.9%

Quality of your city’s public sector

leadership8.7% 41.2% 30.9% 8.3% 5.1% 5.9%

Willingness of the City, County, and school

leaders to work with local residents8.3% 28.2% 35.1% 13.6% 6.7% 8.1%

Quality of your county’s public sector

leadership5.3% 33.5% 38.0% 9.7% 5.3% 8.3%


There seems to be a perception that our local leaders “don’t listen” to the concerns of the citizens.

There are many strong, creative partnerships particularly between the city public sector and Minnehaha County public sector. Not so much between the two counties.

There is a lot of charity, but there is too much need for charity. Many people feel the situation of middle income and low income people is not given enough consideration by city government.

Greater oversight needed by public sector elected leadership to avoid recent budget missteps; need stronger leaders to motivate citizens toward necessary growth and change for a new events center, improved Fairgrounds, pools, parks, etc.

There are times when the City, County and school leaders seem to bend over backward to work with certain private sector leaders.

38. If you could make one recommendation for strengthening the effectiveness of your community’s leadership (within the public or private sector), what would it be? Selected comments:

Continue to stress and build upon public and private partnerships. In its drive to build Sioux Falls into a top-tier city, it’s important for

leaders at all levels not to move forward at the expense of the core functions of government: infrastructure and public safety. The cost and efficiency of the public sector should remain at sustainable levels so that they will not suffer in difficult times.

Leaders need to be more open to suggestions. Spend time in communities that they view as model cities and take the best things from there and apply them here.

People have to get engaged and mentored. We have leadership SF but nothing is ever done as a follow up. Today’s leaders have to take time to find and mentor future leaders and opportunities to advance need to be found. Many board have attitude that no one from within could be worthy and while sometimes this is true leadership should find opportunities to advance potential leaders even if it means outside of their business.

I would like to see the private sector more actively engaged in publicly supporting the public sector’s efforts to develop Sioux Falls--for example, I would like to see more business leaders testifying at public meetings, contacting the media with their support for public sector initiatives, etc.

Embrace the reality that Sioux Falls is and should be the regional leader in nearly every field and don’t be afraid to press that advantage. Sioux


Falls needs to push itself forward as a destination for entertainment and education. Even if that means upsetting some of the rest of the state.

39. Please rate the following components of quality of life in the Sioux Falls Area:

Selected comments:

Sioux Falls doesn’t do a great job of welcoming people to our community on major thoroughfares. When we talk with visiting friends/family/people on job interviews, they often point out how many vacant/rundown buildings there are on the way in to downtown, not to mention the ever-present “what’s the deal with all the casinos” remark


averagePoor

Don't

Know

Availabil ity of health care 70.2% 22.3% 5.0% 1.2% 0.2% 1.0%

Quality of air, water, and the environment 38.9% 46.6% 11.7% 1.4% 0.8% 0.6%

Sense of personal and property safety 30.6% 54.0% 12.7% 2.0% 0.6% 0.0%

Availabil ity/quality of shopping and dining

opportunities27.0% 45.5% 21.3% 4.5% 1.6% 0.0%

Overall community appearance 24.6% 55.4% 16.7% 2.7% 0.6% 0.0%

Pedestrian/bicycle "friendliness" 23.4% 34.3% 23.2% 10.4% 5.7% 3.0%

Affordabil ity of overall cost of l iving 21.2% 45.2% 23.2% 7.1% 3.4% 0.0%

Availabil ity/quality of recreational

opportunities16.3% 40.4% 27.8% 11.1% 4.2% 0.2%

Availabil ity/quality of cultural and arts

facil ities & programs15.2% 42.7% 23.8% 13.2% 3.3% 1.8%

Local levels of civic engagement (voting,

community engagement, etc.)12.1% 38.9% 33.2% 9.9% 3.4% 2.4%

Affordabil ity of all housing 9.0% 38.0% 36.1% 9.4% 4.5% 3.1%

Availabil ity of child care 8.8% 35.0% 22.0% 5.7% 0.8% 27.7%

Quality of child care 7.3% 34.8% 22.4% 5.7% 0.6% 29.3%

Availabil ity of quality rental housing 4.3% 24.3% 37.1% 10.1% 4.3% 19.9%

Cost and capacity of passenger air service 2.0% 10.9% 22.4% 32.7% 26.4% 5.6%

Availabil ity of passenger rail 0.4% 0.8% 2.2% 9.6% 58.2% 28.7%


(yes, that’s a whole ‘nother issue). We’ve sprawled as a community out to the west and south while leaving our core to deteriorate. You see it on the drive south from the airport on Minnesota Avenue, as well as from the east on 10th Street as well as on 12th from the west. The work to rebuild the Pettigrew Heights neighborhood has really improved things, and we need to take a look at the rest of our community, really take some pride and make our businesses and properties look more presentable. For example, owners of rental homes need to be held to higher standards on the upkeep of their properties. This may sound superficial, but people notice these things - first impressions are incredibly important.

Air Service is a problem. Too much leakage to MSP and OMA. Businesses need affordable and frequent flights to major destinations. Nothing direct to Houston or Dallas. Infrequent flights to Los Angeles. Nothing to New York or DC. Shopping Opportunities and dining opportunities should be broken out. Dining options great. Shopping limited in some respects.

Sioux Falls needs an attitude.. a rallying point around which locals can agree and young professionals can identify back to the city.. not talking “cheap workforce” here.. talking “the Midwest’s green city” or “city where everything is within reach”

The Bike trail is fantastic. However it’s all about recreation. Practical use of bicycles is a definite area to improve in future planning. Physically separate and dedicated bikes lanes to real destinations, etc.

Downtown needs to look more like the downtowns of larger cities if SF IS EVER GOING TO BECOME A LARGER CITY. Needs to be busy even in the evening. In larger cities downtown is where the night life is

40. Share with us a phrase, quote, or slogan that might be appropriate for the future of the Sioux Falls Area. Selected comments:

Big opportunities close to home. The Friendly City Sioux Falls: Grow Here–Bloom Here Sioux Falls – a Prize on the Prairie. Big city opportunity - small town charm. So Fine...Sure Fun...Sioux Falls! Rising Star of the Midwest


41. Share your vision for the future of the Sioux Falls Area.

Selected comments:

A community with adequate housing and transportation for all and a well planned strategy for infrastructure maintenance and growth.

Regional Health and wellness center, pro-active financial leadership, progressive city and county government, friendly giving citizens

To keep moving forward and growing but also keeping true to its small town roots and continuing to be a safe and welcoming community to live and raise a family.

We stand the opportunity to bigger than Omaha. We can make Sioux Falls a GREAT pass through/large city for the area. A clean beautiful city with lots to do where the local citizens work together and can afford to live well, but we are on the wrong track, and we must make changes before we fall into the same tracks as all the other Metro’s in the country with crime, corruption and drugs.

Growing city with a diversity of industries that provide challenging and high-paying jobs.

Need to brand all of the efforts that are occurring and focus them. I would like to see Sioux Falls continue to grow, but at the same time, I

worry about the “big city” problems that come with that growth. My vision would include controlled, sustainable growth that would allow us to adjust to growing pains while still keeping the “small town” feel.

Dynamic center for work, play, and rest. Key is using and challenging local talent to do more than they dreamed with the opportunities that local businesses and government create.

More development in all parts of town, attract larger businesses to establish themselves in Sioux Falls, create more affordable housing for single/married families, more entertainment (night life) and build an events center downtown to help anchor new business and living in that area (I learned that from living in Omaha).


42. In your opinion, what is the area’s greatest strength?

43. What do you think is the area’s most important challenge to overcome?

People/friendliness/commitment to

community111

Cost of l iving/low taxes 34

Work ethic 26

Safety/low crime 22

Small town feel/size 19

Cleanliness/natural environment/beauty 18

Private sector leadership 17

Quality of l ife 16

Health care 15

Accessibil ity/location 13

Parks/bike trails/recreation 13

Amenities 11

Schools 7

Family‐friendly 7

Roads/infrastructure 3

Infrastructure/roads/traffic 48

Expanding job opportunties 42

Small mindedness/fear of change 41

Low wages 29

Managing growth 27

Education 20

Housing options 20

Diversifying economic base 19

Socioeconomic issues 16

Diversity 18


Keeping young people and professionals 17

Amenities/entertainment 17

Public leadership 16

Climate 13

Crime 12

Funding projects and public services 9

Location 6

Apathy 4

Perception 3


44. What do you think is the area’s top opportunity to capitalize on?

45. Do you have any final comments on the Sioux Falls Area or this strategic process?

Selected comments:

I hope this process will find a direction for SF to go as we face the possibility of decreased employment in the credit card industry and changes in the health care industry. We need to identify a new industry which will grow alongside the existing ag, financial and health care such as call centers, operations such as ADP, and improved long distance air service, perhaps a hub for some airline. I hope we can begin to look at some sort of light rail system from Vermillion, through Canton, to Sioux Falls downtown and industrial park and on to the University Center and Brookings. This could give us the capacity to handle well in excess of 500,000 souls in the southeast area of the state with a good public transportation system to back up our existing road network.

I have high hopes for Sioux Falls…and high expectations. I believe anything can be done when we think, plan, and act as one.

Keep looking to the future. Do rest on our laurels. Always challenge ourselves to be better, while celebrating our strengths and quality of life.

Think Big! Sioux Falls can become an even greater place if we do not limit ourselves. Build off of strengths and step out of traditional norms to seek new ways to grow and improve

Being part of a small state gives us the advantage of having our state and national legislators accessible to enact changes that may create opportunities to grow and improve our community.

Health care 33

Business climate 32

Event center 32

Low taxes 27

Workforce 20

Recreation/entertainment 20

Safety 12

Downtown 16

Location 11

Family friendly 9

Clean energy 5

Public and private sector leadership 5

Housing 3

Documents

LIVE WORK GROW - Forward Sioux Falls