Deadwood is astir over another old building threatened by development. Optima LLC, which owns Cadillac Jacks and Springhill Suites on the north end of Deadwood, wants to move the Fountain House from its property along Main Street, across from the Days of '76 Museum, down the street about a mile and a half, to just past where Sherman Street bends southwest, near the head of the Mickelson Trail.

This move wouldn't be a big deal if the Fountain House weren't a historic house built in 1890. The Deadwood Historic Preservation Commission is meeting this evening to discuss whether moving the Fountain House to the more southerly location will negatively impact the historic nature of the neighborhood.

The Deadwood Trust for Historic Preservation doesn't think the move is a good idea. They are filing this letter with the DHPC this evening to protest the move. They say the Fountain House should stay put. The Deadwood Trust asks the DHPC to reject Optima's request because a year ago, in its original application to move the house, Optima contended that the building couldn't be used for commercial purposes, but Optima now supports the application for this move by contending that the building can be used for commercial purposes.

A February 2014 letter (included in the Deadwood Trust's communication to the DHPC tonight) from CPA Paul J. Thorstenson to Optima manager Paul Bradsky of Rapid City doesn't say the Fountain House is unusable for commercial purposes. CPA Thorstenson says says that the best commercial use for the Fountain property is a parking lot and that getting a return on investment from using the house in its current location would require charging renters three times the fair market value. If my impression of town serves me properly, parking isn't nearly as tight at the south end of Sherman, away from the big Main Street casinos.

But the Deadwood Trust still has a case to make. The entire city of Deadwood is a National Historic Landmark. Every building Deadwood lets deteriorate into uselessness, every building the casinos knock down for parking, takes away history and leaves Deadwood a little less unique and little more like every place else.

8 comments

Arizona/South Dakota billionaire T. Denny Sanford is using $25 million of his usury-gotten fortune to keep South Dakota state government from coming up with more of its own money to address workforce development. How very nice.

I suppose it's impolite to pester an elderly benefactor about the literal content of statements made in a fit of boosterism. But permit me to look at a few words from the gift horse's mouth, uttered yesterday at the rollout of the new Build Dakota vo-tech scholarship plan:

"I'm proud of everything that South Dakota stands for," Sanford said. "Productivity, a great health system and South Dakota Works. And it works in a good way. Not only do people work harder and have a better work ethic, but the system works. We've got a system unequal to anything else I've seen. We've got to get the people here to do it."

..."Go forward, South Dakota; let's get it done," Sanford said. "I know you will because everything we do here works" [Jodi Schwan, "Sanford, State Pledge $50 Million for Workforce Needs," that Sioux Falls paper, 2014.12.17].

Everything we do here works... that statement makes it hard to explain why we need this scholarship program in the first place. What happened to the New South Dakotans program that was Governor Daugaard's first big swing at workforce recruitment? Oh yeah: it didn't work. And if everything we have here works, why do we have a teacher shortage? And a road-repair shortage?

But we South Dakotans still work harder than everyone else, right? We have a better work ethic, right?

  1. A Bureau of Labor Statistics report from 2010 says that in 2008, South Dakota ranked 47th for average weekly hours and 51st for average hourly earnings in private industry.
  2. From 1977 to 2000, 25 states had higher annual labor-productivity growth than South Dakota. Our labor-productivity growth improved from 2000 to 2004, thanks to our riding out the 2001 recession a little better than the rest of the country, but 13 states still beat us on that metric in that period.
  3. This is a crude figure, but if you divide our gross state product by our population in 2013, you find that South Dakota ranks 22nd for economic output per person (see full chart below). However hard they are working, folks in 21 other states are generating more wealth per person than South Dakotans. The only neighboring state producing less wealth per person is Montana, which ranks 42nd in GSP per capita.
  4. Working harder isn't exactly a sign of progress. How hard do you think Mr. Sanford is working right now? American workers put in more hours than their European counterparts but report less life satisfaction.

I suppose the state's official position should be that Denny Sanford can say the sky is blue and Elvis is President, as long as he keeps the money coming. Denny Sanford can build our hospitals and schools and workforce... but let's not let him fabricate our facts.

State 2013 GSP $ Millions Population (2013) GSP/pop GSP/pop rank
Alabama 180,727 4,833,722 $37,388.79 47
Alaska 51,542 735,132 $70,112.58 2
Arizona 261,924 6,626,624 $39,526.01 41
Arkansas 115,745 2,959,373 $39,111.33 43
California 2,050,693 38,332,521 $53,497.47 13
Colorado 273,721 5,268,367 $51,955.57 18
Connecticut 233,996 3,596,080 $65,069.74 5
Delaware 58,028 925,749 $62,682.22 7
District of Columbia 105,465 646,449 $163,145.12 1
Florida 750,511 19,552,860 $38,383.69 46
Georgia 424,606 9,992,167 $42,493.89 37
Hawaii 70,110 1,404,054 $49,933.98 20
Idaho 57,029 1,612,136 $35,374.81 50
Illinois 671,407 12,882,135 $52,119.23 17
Indiana 294,212 6,570,902 $44,774.98 31
Iowa 150,512 3,090,416 $48,702.83 21
Kansas 132,153 2,893,957 $45,665.16 28
Kentucky 170,667 4,395,295 $38,829.48 44
Louisiana 222,008 4,625,470 $47,996.85 24
Maine 51,163 1,328,302 $38,517.60 45
Maryland 322,234 5,928,814 $54,350.50 11
Massachusetts 420,748 6,692,824 $62,865.54 6
Michigan 408,218 9,895,622 $41,252.38 39
Minnesota 289,125 5,420,380 $53,340.36 14
Mississippi 96,979 2,991,207 $32,421.36 51
Missouri 258,135 6,044,171 $42,708.09 35
Montana 39,846 1,015,165 $39,250.76 42
Nebraska 98,250 1,868,516 $52,581.83 15
Nevada 123,903 2,790,136 $44,407.51 33
New Hampshire 64,118 1,323,459 $48,447.29 23
New Jersey 509,067 8,899,339 $57,202.79 9
New Mexico 84,310 2,085,287 $40,430.89 40
New York 1,226,619 19,651,127 $62,419.78 8
North Carolina 439,672 9,848,060 $44,645.54 32
North Dakota 49,772 723,393 $68,803.54 3
Ohio 526,196 11,570,808 $45,476.17 29
Oklahoma 164,303 3,850,568 $42,669.81 36
Oregon 211,241 3,930,065 $53,750.00 12
Pennsylvania 603,872 12,773,801 $47,274.26 26
Rhode Island 49,962 1,051,511 $47,514.48 25
South Carolina 172,176 4,774,839 $36,059.02 49
South Dakota 41,142 844,877 $48,695.85 22
Tennessee 269,602 6,495,978 $41,502.91 38
Texas 1,387,598 26,448,193 $52,464.76 16
Utah 131,017 2,900,872 $45,164.70 30
Vermont 27,723 626,630 $44,241.42 34
Virginia 426,423 8,260,405 $51,622.53 19
Washington 381,017 6,971,406 $54,654.25 10
West Virginia 68,541 1,854,304 $36,963.19 48
Wisconsin 264,126 5,742,713 $45,993.24 27
Wyoming 39,538 582,658 $67,857.99 4
15 comments

My friend Frank Kloucek notes that neighbors in Tyndall and Yankton have a chance today to get educated about tax-based incentives. Kloucek sends a press release noting that Iowa State University economist David Swenson will speak today on "The Rationale, Rewards, and Risks of Using Property Tax-Based Tax Incentives in Rural Areas." Swenson presents twice today:

Tyndall Community Center, right next to the Eiffel Tower (?)

Tyndall Community Center, right next to the Eiffel Tower (?)

Kloucek says the topic is particularly relevant to the thirty-million-dollar rail facility that Cargill/Agrex Dakota Plains Ag Center is building west of Tabor. That project is getting tax increment financing (Bon Homme County Commissioner John Pesak greeted the project by saying, "We're just going to have to have a TIF"), plus getting the county and state to shoulder the majority of the cost of rebuilding the rail to the Napa junction near Yankton.

Swenson's research has found that TIFs are not clearly associated with economic growth or expanding tax bases, particularly in smaller communities. In his 2012 summary of his Iowa research, Swenson says public subsidization of private development has become "inefficient, imprecise, and inevitable." TIFs, says Swenson, have become an entitlement program for business.

Swenson makes the news elsewhere casting doubt on the job projections and other wishful economic thinking of the Dakota Access Bakken oil pipeline that will cut across East River and Iowa and whose corporate fathers have apparently used the same deceptive "job-year" statistics as Keystone XL backers.

Come ask Swenson your economic development questions this afternoon in Yankton and this evening in Tyndall.

5 comments

The Nee York Times turns some socioeconomic statistics into a map of the quality of life in every county in the United States. Looking at "education (percentage of residents with at least a bachelor’s degree), median household income, unemployment rate, disability rate, life expectancy and obesity," the Times calculates that much of South Dakota is in the top quarter of the nation's 3,135 counties. Lincoln County actually ranks 8th nationwide (if NYT included the impact of being Todd Epp's neighbor, Lincoln County would've made the top five).

Alas, the big islands of orange trouble amidst South Dakota's healthy blue on the NYT map are Indian Country. Shannon/Oglala Lakota County is not the worst in the nation, but it's down there, ranking 3,080 out of 3,135. That's still better than the ten worst counties by this measure, six of which are in eastern Kentucky in the Appalachian Mountains and all ten of which are in the South.

But Oglala Lakota County likely would have come out worse with a closer look at unemployment. NYT says unemployment on Pine Ridge is 13.7%. Some would argue that 13.7% is closer to the employment rate, not the jobless rate, on Pine Ridge.

Whatever the actual numbers, the gross disparity between economic metrics in Indian Country and the rest of South Dakota should call the Legislature to action. Instead of fussing about who wrote which parts of science curriculum standards, legislators (especially those from districts with large Indian communities) should focus their attention on the number-one economic development problem in South Dakota: providing infrastructure, jobs, and better quality of life on Pine Ridge, Rosebud, Standing Rock, and the rest of our Indian reservations.

4 comments

In somewhat better local economic news, Madison's movie theater is reopening next week. Owner Todd Frager shut the West Twin Theater down at the beginning of October to give the place its first real renovation since it opened back in the late 1970s. The main upgrade is to digital projection equipment, but we can hope the renovation has also upgraded the movie house itself, which over four decades had declined to an embarrassing state of disrepair.

Alas, the rechristened Madison Theatre loses the distinction of being a two-screen cineplex. Evidently we're down to a one-screen house... which is fine, because really, how many good movies are out there?* Update 2014.11.13 09:32 CST: Mistake on my part! Cinema manager Carol Frager calls me today after hearing some confused stories about this blog post at the Community Center and tells me that her son Todd Frager has not gutted the interior and consolidated screens. The newly rechristened Madison Theatre still has two screens! But during this first reinaugural week, the Madison Theatre will show just one film.

The cinema grandly reopens with a special early showing of The Hunger Games: Mockingjay Part 1 on Thursday, November 20, at 8 p.m. (for seven bucks!).

Note that this community cultural preservation is brought to you by government intervention, in the form of an economic development loan coordinated by the Lake Area Improvement Corporation. LAIC director Julie Gross says the theater renovation "coincides with the mission of the Madison Downtown and Beyond taskforce, which is committed to enhancing the vitality of the Madison area." Emphasis on Beyond, of course, since the Madison Theatre is located one mile west of downtown, at the back of a gravel parking lot, along a state highway with no sidewalks where kids can ride their bicycles.

Comments Off on Madison Movie Theater Reopens with Digital Shows

The Governor's Office of Economic Development and Madison's Lake Area Improvement Corporation score another coup, bringing Iowa sexy bra manufacturer Best Darn Guns (should a company really force us to swear?) to town:

Best Damn Guns website, http://bdguns.corecommerce.com, screen cap, 2014.11.13

Best Damn Guns website, http://bdguns.corecommerce.com, screen cap, 2014.11.13

In a brilliant example of vertical (or is it horizontal, or cross-your-heart?) integration, the LAIC announces it is also bringing the closely associated Wilt Manufacturing, whose subsidiary Wilt Wire and Fabrication does something with Wire EDM, which is obviously connected to the the supporting industry of making underwires.

Or not. Once I get past the crass and gratuitous disembodiment and oversexualization of the female body, I realize Best Darn Guns makes gun parts. But their advertising makes clear the real psychology behind South Dakota's gun nuttery. Carrying guns and now building local economic development makes us real men and gets us action.

Welcome to South Dakota, Best Darn Guns and Wilt Manufacturing! We look forward to your billboards.

10 comments

Republican U.S. Senate candidate Mike Rounds repeated in Thursday's SDPB candidates' debate that his EB-5 program brought over $600 million and over 5,000 jobs to South Dakota. Aberdeen attorney Rory King, who provided legal counsel to bankrupt EB-5 project Northern Beef Packers, says Rounds drew $400 million and created "directly or indirectly" over 8,000 jobs.

Journalist Bob Mercer questions all of these fat numbers being thrown around to distract from the malfeasance committed under Rounds's administration of EB-5. He reviews available data and concludes Rounds's and King's numbers are exaggerated at best:

There weren’t “over 5,000 jobs created.”

Instead, there might be just hundreds of new jobs, many of them in dairy operations in the I-29 corridor and at the casino complex in Deadwood.

And there might have been hundreds of jobs preserved — but that we really don’t know, at least not at this time [Bob Mercer, "Analysis: EB-5 Jobs Data Highly Elusive," Aberdeen American News, 2014.10.24].

Voters, Mercer comes to the same conclusion I came to last month from real South Dakota jobs data: there is no hard evidence to support the claims Mike Rounds is making about EB-5's economic benefits. In other words, voters, Rounds is telling you things that he can't prove are true.

Related Reading: Meanwhile, by Denise Ross's diligent calculation, Joop Bollen may have generated $13 million for himself in fees from running EB-5 through his private company while he was still on the state payroll and operating from a state-funded office in 2009. Stay tuned!

28 comments

Campaign manager Rob Skjonsberg has had an awful time explaining away his boss Mike Rounds's foibles. Now he has to explain his own. The Nation's Lee Fang discovers that Skjonsberg used his position on the state Board of Economic Development to funnel taxpayer dollars to a company he and Rounds have invested in.

In 2012, Skjonsberg formed Lake Sharpe Investments, which invests in new companies. Mike Rounds had over $50K in Lake Sharpe Investments in early 2013. Lake Sharpe has invested in Novita LLC, a company hoping to build a plant near Brookings to produce oil and livestock feed from ethanol processing by-product. (Remember, Skjonsberg worked for Poet Ethanol.) In September 2013, Novita got a $771K grant from the Board of Economic Development. And Skjonsberg, appointed to the Board of Economic Development by Governor Dennis Daugaard in January 2013, voted for that grant.

Read that back: a guy invests in a company. Guy gets on public board. Guy votes to send public dollars to that company. Guy has a conflict of interest, right?

Conflict of interest. No member of the board or the GOED staff may participate in or vote upon a decision of the board concerning an application in which that member has a direct personal or financial interest. [South Dakota Administrative Rule 68:02:09:13].

Skjonsberg turns Republican relativist and says there's just a perception of a conflict of interest:

I am a member of a LLC. That LLC is subsequently invested in a separate fund. That separate investment fund, twice removed, has their own independent management and they make their own investment decisions. I am not fully versed on the investments, now three times removed, made by this separate fund—but nonetheless I’ve come to understand that the perception of a conflict has arisen. I’ve advised both the commissioner and the board chair that I have taken steps to ensure the perceived conflict is avoided in the future [Rob Skjonsberg, in Lee Fang, "Revealed: A New Ethics Scandal Involving the GOP’s South Dakota Senate Candidate," The Nation, 2014.10.23].

John Tsitrian sees through that relativism and challenges Skjonsberg to explain how voting for that grant and two extensions for Novita's construction delays is anything other than a conflict of interest. But we know Skjonsberg's style from the Rounds Senate campaign: he'll probably just ask to change his answer but still expect never to be held accountable for violating the public trust for his personal benefit.

86 comments

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