Commissioner of economic development focused on growing South Dakota

Farm Forum

LEAD — Attendees at the fifth annual First Interstate Bank Lead-Deadwood Community Fund Business Luncheon on Nov. 15 heard from keynote speaker and Commissioner of the Governor’s Office of Economic Development Scott Stern, regarding his office’s focus areas for the near future.

Stern said there are four areas that require attention, in order to grow South Dakota’s economy, including: business development, workforce recruitment, community education, and local infrastructure.

“We have to grow the businesses in the state,” Stern said. “What’s important is the businesses we have here. For the 20,000 or so businesses we have in the state, in our office, we apply the 80/20 rule. Eighty percent of our time should be spent expanding and helping each of these businesses in the state … our greatest opportunity to grow is right here.”

Stern said that because there is a huge demand for workforce in South Dakota, his office worked to bring in 23,500 non-farming industry employees over the last five years.

“Workforce recruitment is very important,” Stern said. “That is the biggest challenge we have when people look at expanding their operations to South Dakota. They say we don’t have enough workers.”

In order to address the worker shortage, the governor’s office has instituted a program to encourage the 70,000 or so students who have embarked on a secondary education career and never finished, the chance to do so.

“The state of South Dakota spent $1 million last year on workforce recruitment,” Stern said. “We did it through digital, social and belly-to-belly guerrilla workforce recruitment.”

His fourth and final focus point mentioned, Stern said the state would continue to support local infrastructure capabilities.

“The leadership we have right now believes in frugality,” Stern said. “Our partners … how we will get this done, includes each one of you in this room, along with local banks and economic development corporations … remember that emotional currency you can’t put a price tag on that I talked about earlier? What sells your communities is you.”

Expanding on the idea of emotional currency and the types tools of economic development tools available and used across the state, Stern set forth the example of the low-interest Revolving Economic Development and Initiative (REDI) Fund, created in 1987 as a way to promote job growth in South Dakota and the type of state assistance used most prolifically in the Northern Hills area.

From 2003-2013, six REDI loans have been issued in the area in the amount of $3.1 million, which have generated $10 million in projects.

“The state supplies up to 45 percent of a project’s total cost to be used for such things as land, construction, and equipment,” Stern said. “The other 55 percent comes from banks and other financial institutions.”

There is currently $52 million in the revolving fund, with $18 million committed and a total in the REDI loan fund of approximately $70 million.

Stern also mentioned the Community Development Block Grant, where monies go toward infrastructure support services.

“These are federal grant monies,” Stern said. “In the last 13 years, $4.3 million in grants have been received in this area, resulting in $12 million in expansion projects.”

Project locations for the block grant funds have included the Sturgis library, storm sewer projects in Whitewood, Lead, and other towns, and the Belle Fourche rail infrastructure.

Stern also shared the main components of the state’s strategic plan focus areas.

“The Governor’s Office of Economic Development’s vision includes growing the South Dakota gross domestic product, expanding the property tax base and improving the quality of life of all South Dakotans,” Stern said. “Collectively, South Dakota’s gross domestic product is $46.7 billion. Property tax base expansion helps us fund schools, cities, counties and the services they provide … If we can create opportunities for a South Dakota mom or dad to have a better job in order to enjoy a better quality of life, that’s what we do.”

Deadwood Mayor Chuck Turbiville said he thinks the state is very fortunate to have someone like Stern.

“He has taken over an extremely important position and brings a wealth of knowledge and expertise,” Turbiviille said. “I think he is going to be a major asset in years to come.”

Deadwood Lead Economic Development Director Lori Frederick said the Governor’s Office of Economic Development has been a great partner and resource for local economic development and bring great value in assisting in all their programs and offerings.

During the question and answer portion of the program, Jerry Apa, former mayor of Lead, asked if Stern thought the closure of the visitor centers on this end of the state might impact tourism and hinder economic development.

“Using a football metaphor, I want to punt that,” Stern said. “But those decisions were made before me.”

He then offered to provide the data that drove those decisions.

In response to a question regarding whether or not the governor will put an emphasis behind vocational schools in this area, Stern said Daugaard is very committed to the vo-tech schools and has provided 300 full-scholarship grants to two-year programs for students across the state.

“We had 1,300 applications, and we could only give out 300,” Stern said. “I wish we had more money to provide more … the likelihood that these students will stay in South Dakota is extremely high. If we can get them to stay here, there is a huge demand for those types of workers.”

Lead-Deadwood Schools Superintendent Dr. Dan Leikvold said that four students from Lead-Deadwood High School were recipients of the grants last year and are attending welding school.

Leikvold explained that Stern was invited to speak after a board discussion and suggestion to feature Stern from community fund board member Casey Derflinger.

The Lead-Deadwood Community Fund, founded in 2010, is a non-profit organization designed to support area charitable, recreational, and educational organizations, as well as individuals living within the boundaries of the Lead-Deadwood School District.

“The biggest thing our benefactors like is that anything that’s raised here, stays here, within the Lead-Deadwood School District boundaries,” Derflinger said.

Their goal is to raise $250,000 over the next five years to help fund the grant program.

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