The miracle on the plains

Sioux Falls, South Dakota, is something of an economic and social miracle that has most people scratching their heads.

Since 1990, the population has grown nearly 70 percent to more than 250,000. The city doesn’t have a major university while the state capital of Pierre (pronounced PEER for those from out of the state) is more than three hours away. Once known for its meatpacking industry, only one major employer, Smithfield Foods, remains.

This equation does not sound like a recipe for economic success in the early 21st century, but Sioux Falls is undeniably booming.

As I attended my high school reunion in Sioux Falls earlier this month, I am pleased to see how far the city has come since my glory days there.

What did Sioux Falls do to encourage such rapid growth? The city convinced Citibank to move its entire credit-card operation in the 1980s. Other card issuers followed, attracted not only by the ability to charge as much interest as they pleased but also by low taxes. South Dakota has no corporate or personal income tax.

Sioux Falls and South Dakota also have a good workforce. College graduates make up a smaller share of the adult population there than nationwide, but the state ranks near the top in the percentage of people with high school diplomas and associate degrees.

The credit card industry provided Sioux Falls with a billionaire sugar daddy. Minnesotan T.  Denny Sanford had founded and sold a company representing manufacturers of construction materials. Sanford has reportedly donated nearly $1 billion to one of the two Sioux Falls-area hospital systems, which is now called Sanford Health and bills itself as “the largest rural, not-for-profit health care system in the nation.” One of its affiliates, Sanford Research, employs 200 medical researchers in Sioux Falls, making the city a regional health center second only to Minneapolis, which is three hours away.

Since 1987, an initiative called Forward Sioux Falls has been relying on donations from local businesses to finance most of the area’s economic development efforts. As a result, the downtown has been revitalized over the past decade.

I still remember the chilly winters and many inches of snow, but it’s nice to see Sioux Falls get recognized for the city it has become.