Pandemic, Amazon, mergers and DDD: The biggest Sioux Falls business news in 2020 – Argus Leader


Makenzie Huber
| Sioux Falls Argus Leader

A pandemic, a nationwide racial reckoning, a fraught election year and there was even more happening in the local business world.

2020 — What a year.

This year was not what anyone planned, but the Sioux Falls Business Journal featured the trends, the impacts, the openings and the closings of many of the Sioux Falls area’s businesses and industries.

Here’s a look at the top stories that dominated local headlines:

The coronavirus impact

The coronavirus pandemic is the story of the year, no competition. From state shutdowns to more than 300,000 deaths nationwide, the pandemic forever changed the country and world. It also left its mark in Sioux Falls and South Dakota.

The first cases and death were announced in South Dakota on March 10, followed by some restrictions and guidelines to help curb the spread of COVID-19. 

Schools buildings closed. Rrestaurants switched to delivery or carry-out only. Sioux Falls was home to one of the country’s largest COVID-19 hot spots at the Smithfield meat packing plant, and businesses switched to working remote.

The pandemic restructured how people work, shop, eat and live in 2020. It’s changed their shopping habits, impacted the city’s economy and will continue to have a lasting change on the city’s growth.

More: Sioux Falls sales tax takes a hit in May as consumer spending slows

Sioux Falls’ overall sales tax as of November is steady compared to the year before, up by only .2% compared to year-to-date in 2019, according to the month’s report. But that stalled growth could have impacts later on. Sioux Falls took the biggest hit in May with a 13% drop compared to May 2019.

Some businesses are still worried about the ramifications the pandemic will have, especially restaurants and retailers. Eating establishments took a 10% hit in October, and the entertainment businesses took a 14.3% hit.

The lack of activity and spending affected not only tourism, retail and restaurants in Sioux Falls. Construction was also affected this year.

Major projects like the Sioux Steel project in downtown Sioux Falls and the construction of Dave and Busters at Lake Lorraine were postponed because of the coronavirus, with no updated timeline provided.

More: Rebuilding Year: Here are Sioux Falls’ largest construction projects for sluggish 2020

Year-to-date building permit valuations from the city’s monthly finance report was $670 million for November 2020. That’s a 8.2% drop from 2019’s $729.8 million this time last year, mostly because of a drop in commercial building permits.

But residential building permits are up. Apartment building permits skyrocketed to nearly 1,600 permits and house construction permits have increased as well, contributing to the city’s continued growth.

Amazon adds growth to northwestern Sioux Falls, Foundation Park

A $200 million building permit for Amazon’s new fulfillment center Dec. 22, 2020 ended up breaking the city’s annual building project valuation record though, despite a slow start to commercial projects.

News dropped in late August that Amazon was going to build a facility in Sioux Falls, committing to add 1,000 jobs and $200 million in private investment.

The Seattle-based tech giant plans to open the center in Sioux Falls’ Foundation Park, adding to the growth in the city’s northwestern corner. The 640,000 square-foot facility will be built on an 80-acre parcel, and company officials plan to launch the facility in 2022.

More: Amazon confirms fulfillment facility is coming to Sioux Falls in 2022

The announcement added to the growing industrial park, joining other major warehouses and businesses, such as Win Chill and Nordica.

“We are proud to have been selected by Amazon as their next fulfillment center location,» Sioux Falls mayor Paul TenHaken said. «Amazon’s decision to invest in our community reflects the company’s confidence in Sioux Falls’ economic climate and excellent workforce.»

The company said it offers wages starting at $15 per hour with benefits for full-time employees such as full medical, vision, dental and a 401(k), which will contribute to the city’s overall growth.

Sanford struggles through merger, leadership upheaval

And rumors swirled for weeks before a merger between Sanford Health and another major healthcare system was announced through a virtual press conference Oct. 26.

Sanford Health leadership announced its plan to merge with Intermountain Health, a Salt Lake City-based health system and Utah’s largest private employer.

The merger would have created a sprawling $15 billion health system spanning the western United States and the Midwest, and the alliance would have shifted leadership and headquarters to Intermountain.

Everything was to be ironed out by summer 2021.

But the arrangement fell through a little over a month after the announcement, signalling an unprecedented shakeup at Sanford as leadership shifted at the health system.

More: Sanford Health tries to move beyond month of upheaval

Longtime Sanford president and CEO Kelby Krabbenhoft resigned weeks before the merger talks stalled, following controversial comments made to medical staff and the media regarding mask use.

Bill Gassen was appointed as the organization’s new president and CEO shortly after, and decided to pause the merger. With Krabbenhoft’s departure, a raging pandemic and employee dissatisfaction, Sanford bailed on the merger Dec. 4.

Less than a week later, Sanford’s chief medical officer, Dr. Allison Suttle, parted ways with the organization also.

The stalled merger talks mark the second time in two years that Sanford Health’s plans to partner with another healthcare system fell through. In 2019, a planned merger with UnityPoint Health based in Des Moines, Iowa, never materialized. That time, though, it wasn’t Sanford Health that backed out.

Sioux Falls lands DDD appearance

However, Sioux Falls still managed to find a bleach-blond bright spot in 2020 with Guy Fieri’s visit to South Dakota to feature local restaurants in his «Diners, Drive-ins and Dives.»

The internationally famous restaurateur and DDD host had the city buzzing when he was spotted at several locations in the Sioux Falls area in late June. South Dakota was the last state he’d visited for the show, stopping at six area restaurants to get a taste.

Fieri sampled foods at O So Good in Garretson, Urban Chislic, Lalibela Ethiopian, Bread and Circus, Look’s Marketplace and Daily Clean Food and Drink.

More: ‘Diners, Drive-ins and Dives’ rolls into Sioux Falls with ‘South Dakota Smorgasbord’ episode

Appearing on DDD is «like hitting the jackpot» for restaurants, according to an Eater article about the show’s affect on featured businesses. Every business featured in Sioux Falls commented that the production team warned them to be prepared for an increase in business after their show airs — not just initially, but in general.

Regular reruns of the show translate into regular spikes in business, and popular apps and websites turn the restaurants into tourist destinations. Featured business owners are optimistic that the increase in foot traffic will help them overcome a drop in sales tied to the pandemic this year.

“Unfortunately, I’m seeing places close left and right,” said O So Good owner Omar Thornton. “I’m a little worried.»

The first episode, «South Dakota Smorgasbord» airs Jan. 1, 2021, featuring O So Good, Urban Chislic and Lalibela Ethiopian.

Next year is shaping up to be a better year than 2020 already.

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