Smithfield: Tri-Valley school board members were among the roughly half-dozen people who spoke out against tax incentives for Smithfield's proposed relocation during a planning commission meeting Wednesday.

Why it matters

  • The planning commission was the first public entity to take action on a proposed nearly $90 million tax-increment financing (TIF) district to help offset construction costs for a new, $1.3 billion pork processing plant in Foundation Park. The commission voted unanimously to advance the proposal to the City Council.
  • City and economic development officials have said a TIF is one of the only economic incentives they can offer Smithfield, which employs about 3,200 people, noting that it wasn't a guarantee that the company would stay in Sioux Falls.
  • But two school board members from Tri-Valley, the district that'd be impacted by the TIF, said they weren't contacted at all during the year-long behind-the-scenes planning process between Smithfield, the governor's office, the Sioux Falls Development Foundation and the city.
"Not one of us was contacted beforehand ... It's very disheartening the way it worked out," board member Jeff McAreavey said. "A good neighbor would come to the actual other entity involved, and there's none of that happening."

Tell me more

Smithfield announced last month plans to relocate to the northwest side of Sioux Falls after more than a century operating downtown.

Everything we know so far about Smithfield’s move and downtown’s future
Smithfield Foods this week announced plans to build a brand new, state-of-the-art facility in northwest Sioux Falls estimated at $1.3 billion. The move also opens up 120 acres of downtown for redevelopment.
Sioux Falls SimplifiedMegan Raposa

Following the announcement, the city began releasing details on the TIF plans, which would use additional property tax revenue at the new Smithfield facility to fund construction costs – namely, the in-house wastewater treatment.

What is a TIF? And how does it relate to the Smithfield move?
Tax-increment financing, or TIF, is going to come up a lot in the coming weeks as the city looks to approve a $90 million TIF district to offset Smithfield’s relocation costs. So, let’s unpack it.
Sioux Falls SimplifiedMegan Raposa

The Smithfield building is expected to generate an additional $4.5 million in property tax revenue, which would mean close to $3 million in additional revenue for the Tri-Valley School District each year.

  • With the TIF in place, though, that extra $4.5 million will go back to Smithfield for either 20 years or until they hit their $89.9 million in reimbursement.

Tri-Valley school board member Mindy Hill urged the planning commission to consider students before approving the TIF.

"While economic development is important," Hill said, "we have to ask whether providing public subsidies to a large, established corporation is the best use of limited community resources – especially when our schools are already operating in tight budgets."

This conversation comes after multiple years in which the state has fallen short of South Dakota state law's funding requirements for K-12 schools.

What happens next?

The TIF is expected to have a first reading in front of the Sioux Falls City Council on Tuesday, with second reading to follow March 17, if passed.

Additionally, the city of Crooks is having a public meeting Monday night to discuss Smithfield's move and its impact on the neighboring community.

McAreavey said the Tri-Valley school board is also expected to meet with city leadership next week to discuss any concerns.