Sioux Falls-area communities seeing solid growth despite pandemic

July 23, 2020

By Jesse Fonkert, executive director of the Minnehaha County and Lincoln County Economic Development Associations.


If you’re seeking a silver lining in the events of this year, consider the effect that COVID-19 is having on our smaller communities.

In Tea, sales tax revenue was up 108 percent in June compared with the same time one year ago.

In Garretson and Colton, it was up about 40 percent.

In Dell Rapids, it was 30 percent.

Baltic, Canton and Lennox also saw solid double-digit increases.

In Sioux Falls, unfortunately, sales tax fell 9.4 percent year-over-year.

We’ve always known there’s a symbiotic relationship within our region – with Sioux Falls providing employment and spending opportunities and residents from surrounding communities taking advantage of them.

The shift in spending as people have stayed closer to home definitely supports that idea. It also shows what’s possible for these same communities as they continue to grow their own employment bases.

Daytime population has been the reason many communities just outside Sioux Falls have struggled to attract much retail – a classic struggle of so-called bedroom communities.

With COVID-19, daytime populations swelled essentially overnight. As I’ve visited these communities and talked with many local leaders and businesses in recent months, they’re telling me they see more people in town during the day. Because they’re spending more time in town, they’re spending more money in town, which has allowed many retailers to at least maintain their status quo or in some cases even grow their visibility.

Hometown grocery stores are thriving. We’ve had some restaurants that were struggling a bit pre-COVID that have experienced an influx in new customers. These consumers previously were going to Sioux Falls for their shopping and dining. Now, they’re staying closer to home, and it’s helping hold communities together.

It shows the strength and buying power of those hometown shoppers and their impact on our regional economy.

All these towns, including Sioux Falls, have been fantastic about supporting those in need and supporting one another, including businesses, and that has been a very positive development.

Within our communities, leaders also are using this time to plan.

In Crooks, they’re working on a future industrial park, with a mayor who is strategically making moves to help the community long term.

In Canton, residents just passed a bond to build a community swimming pool, and they’re doing fundraising to help support the balance of the cost. They’re really focused on their quality of life, making sure they’re keeping people in the community and upgrading their facilities while working on adding housing.

The city of Garretson is in the early planning stages to determine the scope and feasibility of a new community center, and they’re engaged in planning for the future of Palisades State Park.

All of this groundwork is going to pay off – possibly sooner rather than later. We’re seeing a record number of requests for information and project proposals coming through the state of South Dakota from out-of-state businesses. There’s a lot of promise, and in some cases there aren’t enough buildings to even go around. These are businesses looking for substantial buildings and are ready to move now.

Across the state, we’ve heard from smaller communities that there is increased interest from businesses in moving into more rural areas. They’re more open to remote work, and they like the many benefits that come with a move to our state.

The resiliency of our communities and the way they are adapting and planning despite the pandemic also give businesses confidence. The diversity of our business base, blending farming with value-added ag, Main Street retail, housing construction and manufacturing, has balanced budgets, permitted consistent infrastructure improvements and kept hometowns humming for years – and especially this year.

In the coming months, I’ll be more intentionally looking at MCEDA/LCEDA as a organization – its brand and how it can and should serve our communities in ways they need and want to be served. We have a terrific track record of success, but I want to make sure we’re providing the best value we can and finding new, creative ways to help plan for the future.

Stay tuned: Like our communities, we’re planning for the future as an organization and excited about what it holds.

Want to stay in the know?

Get our free business news delivered to your inbox.

Sioux Falls-area communities seeing solid growth despite pandemic

From sales tax growth to planning: How the pandemic has offered opportunities for smaller communities.

News Tip

Have a business news item to share with us?

Scroll to top