For Sioux Falls business, 2021 was summed up by the ongoing coronavirus pandemic and the economic recovery surrounding it, Amazon and other major businesses coming to the city and big moves for major Sioux Falls companies.
The new year will only expand on those storylines using the lessons learned from the past year as Sioux Falls continues to grow and change.
From marijuana to metro area growth to continued workforce shortages, here is a look at just five stories we’ll be following in the new year.
Medical marijuana enters the market
Five businesses have been chosen to sell medical cannabis in Sioux Falls, Minnehaha County is still reviewing four applications for its first and only marijuana dispensary and Lincoln County is reviewing one business’s application for a license to manufacture, grow and dispense marijuana.
But there’s plenty more work to be done before dispensaries can begin selling. And for those that need a conditional use permit, the public will have a chance to share their thoughts as well.
If there are no problems with the Sioux Falls applications in each case, medical marijuana will be sold almost entirely in southern Sioux Falls, with one dispensary located in the northern part of the city and Genesis Farms’ Minnehaha location on the eastern edge of Sioux Falls along Arrowhead Parkway.
More:What hot-button issues will play out in 2022? The Argus Leader has you covered.
After applications are processed and everything is in order, medical marijuana could officially be available in Sioux Falls by the first half of 2022, which will shift how the drug is exchanged, treated and viewed across the state.
While the South Dakota Supreme Court striking down Amendment A set back recreational marijuana across the state in late 2021, one organization is actively gathering petitions to again put the question before voters in the November election. With more than 15,000 already collected with months to go before a deadline, odds are that the group will be successful.
And if recreational marijuana is approved by voters come November, dispensaries across the city and counties could have a head start in the recreational field.
More:Minnehaha County gets 4 applications for first and only marijuana dispensary
Childcare crisis: Public, private players work to fix broken system
Childcare is a broken business nationally, and Sioux Falls’ lack of affordable childcare sets families and providers up to fail — with a big impact on the workforce.
Heading into 2022, state leaders and private players are starting to tackle the issue before it overwhelms local and state economies. Gov. Kristi Noem even called for $100 million for daycare grants and to offset costs for start-up daycares in her proposed 2022 budget.
The move comes after years of compounding issues, including childcare becoming increasingly unaffordable for many households and childcare provider numbers dwindling across the state. Nearly 65% of state-licensed childcare providers in Sioux Falls run at a deficit, according to a 2021 report from Augustana Research Institute.
An Argus Leader investigation in 2019 found the number of registered daycare centers and in-home facilities dropped by more than 25% in the decade prior. And in Sioux Falls specifically, there was a 40% drop in licensed in-home daycares over that time. Another 70 in-home daycares and childcare centers have closed in the past two years.
With 75% of Sioux Falls children under 6 years old having both parents in the workforce, that means Sioux Falls’ economic foundation depends on parents working.
As Sioux Falls continues to grow, drawing in thousands of jobs at facilities such as the Amazon fulfillment center or the Wholestone Farms pork processing plant, those new workers require care for their families and children.
Government-supported pre-K is the only government program supported by most small business owners in the Sioux Falls area, said Jeff Griffin, president and CEO of the Greater Sioux Falls Chamber of Commerce.
Other daycare providers, such as Little Tykes University owner Corri Poore, are pushing for state legislators to review and change state requirements for childcare centers, easing restrictions on how many children such centers can care for at a time.
“At some point maybe there was a reason for those laws, but when I’m looking at the climate now and things we can change immediately to open things up, this is something we can do,” Poore said. “Hopefully, if that changes then that can make a difference in childcare infrastructure for years to come.”
More:Gov. Noem’s budget calls for workforce raises, high-dollar projects for local economies
Workforce woes continue, especially for South Dakota’s healthcare systems
Jobs were hard to fill in Sioux Falls in 2021, and they’ll be hard to fill in 2022 as well.
South Dakota’s unemployment rate decreased to 2.7% in November 2021, leaving 12,800 people unemployed throughout the state. In Minnehaha County and Lincoln County, that number sat at 1.9% and 1.7%, respectively.
And South Dakota isn’t alone. The workforce shortage is a national and global issue that will continue to affect job openings especially in the service, health and education industries.
Health services has seen the most notable decreases in staffing throughout 2021, with 1,400 workers leaving the health care and social assistance industry across South Dakota.
Registered nurses, nursing assistants and licensed practical and vocational nurses account for the top occupations advertised online across the state with more than 3,100 job openings posted on the South Dakota Department of Labor and Regulation website as of Dec. 28.
The labor shortage and great resignation spurred by the coronavirus pandemic will continue to have a domino effect across the economy in 2022, leading to supply chain shortages and transportation bottlenecks across the system that will affect consumers.
Development, construction continue strong year in 2022
Construction has already begun on major developments across Sioux Falls, including the Steel District, Cherapa II and the Sanford Sports Complex expansion.
These projects come as Sioux Falls broke a record amount of building permit valuations in 2021, surpassing $1 billion in building permits in November. The milestone is evidence of a robust residential and commercial development in Sioux Falls, with no evidence of slowing in 2022.
Construction will begin on the 700,000-square-foot CJ Foods processing facility in the northwestern side of town and Wholestone Foods will begin the permitting process head of construction on its $500 million pork processing plant.
Not to mention, new apartments are set to pop up in every corner of the city over the new year to meet rental demands and lots for new construction homes are still in high demand.
This year’s building valuation is more than 40% ahead of the 3-year average as of November. Some of the biggest ticket items in this year’s total include:
- $60.9 million: 3-million-square-foot Amazon fulfillment center called “Project Stampede”
- $27.15 million: 330,000-square-foot FedEx Ground in Foundation Park called “Project Puma”
- $26 million: The Carlton mixed-use apartments near Dawley Farms
- $24.1 million: Win Chill Phase III in Foundation Park
- $22.88 million: City’s Edge Apartments
- $22 million (estimated) Furniture Mart to expand among South Dakota’s largest buildings
- $21.6 million: Avera Behavioral Health addition
Housing for low-wage workers plays catch-up while prices increase
If you’re all-in on a mortgage, searching for a home or just trying to find a place to rent next year, you’re not alone. Housing was a top issue of concern in 2021, and will remain one again in 2022 as well.
More:How to rent in a packed Sioux Falls apartment and townhome market
Even if leaders, realtors, brokers and others can’t agree if homes are in a “bubble” the likes of which we saw during the Great Recession just over a decade ago, housing is in short supply all around. Scam text offers even are going around to homeowners who find themselves courted in real life with offers on their house.
More:Is there a housing bubble in Sioux Falls? Yes and no, experts say
In 2021, South Dakota played catch-up to the housing market, which has been booming across the country and in the growing city of Sioux Falls. Housing will likely continue to rise, even if interest rates aren’t as fantastic as they’ve been for cheaper mortgages. Workforce housing won’t be solved soon either.
With a proposed $600 million from Noem for workforce housing at her budget address and a plethora of promises, even funding, from owners of new companies to city leaders to address the issue, housing for those making around, or less than, $15-per-hour will continue to be a problem. Even a Catholic monastery is building housing for aging South Dakotans now, so the issue will be one to watch all next year.
Large housing saw the largest jump in prices. So those with homes worth more than $500,000 who sold this year saw a large amount of bang for their buck, and we’ll watch to see if that continues. If you’re investing, watch for coverage from Sioux Falls Business Journal on interest rates, trends and dips.
2022 will shape up to be another big business year of coverage. We’ll keep our pen to the page to check the pulse of Sioux Falls and more. Email mhuber@argusleader.com and sswink@argusleader.com with story tips.
