Brookings Banter

Today Rapid City is voting on a attraction package for Cabellas and Mitchell is voting on increasing property taxes for a convention center.  Since Brookings has been through both issues with the Swiftel Center and Lowes I thought it would be interesting to do a quick review of the economic results in Brookings.

I use taxable sales as the biggest indicator of success.  Both event centers and retail should attract people to your town to spend money and keep residents spending money in town. 

Overall Brookings sales tax base has been growing on average 5% over the past thirteen years.  2006 saw a 18% increase over 2005 and so far for 2007 we are seeing a 27% increase over 2006.   So how much of an impact has Swiftel and Lowes been on these figures.

Let's start with the Swiftel Center.  Polticaly the issue with the Swiftel Center (then the Brookings Multiplex) was more about misleading the public on scope and cost then bonding the money to pay for it.  The question will always be did the promoters of the center know the public wouldn't go for the full cost or did the purpose of the center continue to grow. 

Bottom line - it is attracting people to Brookings and the community also enjoys many events without leaving the town.  The Center is busy and annual cost to the city has stabilized. And the extra penny sales tax on Alcohol, Hotels, and Prepared Food has increased.   It is impossible to prove the direct effect on taxable sales.   If you point to the Swiftel Center as the reason for the growth in visitors someone will counterpoint to the Ice Arena, Soccer Park, and SDSU athletics and arts.  Maybe the proof is Mitchell wants one.  I'm sure they noticed Brookings beat them out the fifth largest taxable sales ranking this year and would like to return to that spot.

On to retail attraction and Lowes.  For the record, I believe in retail attraction and voted for the ordinance to create the mechanism for funding but did not vote for the package offered to Lowes. I didn't agree with the terms.  The Lowes offer passed the Council on a 5-2 vote and then was refered to the electorate.  It was successful and Lowes opened late last year.

Again our taxable sales have grown in Brookings but you can't just point to Lowes.  The retail sector is not growing near as fast as service sector.  Although this years growth is 27%, retail has only grown 12%.  The resulting sales tax revenue from the 12% growth more than covers the bond payment for Lowes. Like visitor attraction many will point to other improvements and investments like Super Walmart, and Hy-Vee's renovation for the increases.   It will take a few more years before I'm convinced that the Lowes investment worked as presented.

I'm guessing that Mitchell's Convention Center will pass.  Rapid City's  Cabellas plan is much more at risk.  Like Lowes in Brookings the vote will be close.  There are two main groups that cancel each other out, those that are always for investing in economic development and the no big box, no corporate hand out group.  The decision will be made by those who weigh the costs versus outcomes.