Raven has 'no intention' of leaving as downtown Sioux Falls tax increase approved

A proposal to raise taxes on some properties in downtown Sioux Falls has passed the city council two weeks after downtown businesses raised concerns, with Raven Industries assuring the council Tuesday night they have "no intention" of leaving, despite previous claims.

Downtown Sioux Falls President Joe Batcheller has told councilors the tax assessment formula for the city's Main Street Business Improvement district hasn't been altered in three decades, which has prevented them from putting in place a number of improvements to the area.

More:Sioux Falls councilors defer downtown tax hike amid concerns from Raven, other businesses

With the increased funding coming in from the new formula, Batcheller has said downtown Sioux Falls could see more retail businesses recruited to the area, increased hiring of "ambassadors" and improvements to maintenance and event support.

At the council's Dec. 6 meeting, Delia Druley, an attorney representing Raven Industries, said the company had "some concerns about the precedent it could potentially set," citing a 377% increase she said would be added to the current assessment.

While Raven's new assessment was not outlined, a 377% increase over the assessment's current cap of $1,700 would come to $8,109.

Druley also said the company was accountable to shareholders and the board, adding "it's harder to justify its presence in downtown Sioux Falls as expenses increase relative to the benefit they get."

Raven Industries General Manager Eric Shuman and internal counsel Nicole Tupman, though, took a significantly different tone when they spoke before councilors Tuesday.

Both Raven representatives and Batcheller said good conversations had taken place between the two sides, and there had been discussions about how the two organizations could work better together.

"Downtown Sioux Falls has been part of Raven's history since the 1960s," said Shuman. "Just want to put it on the record that we have no intention of leaving the downtown area, just to clear the air on that."

Batcheller added he'd also spoken with representatives from Sunshine Foods and Norberg Paints, two other businesses that had voiced concerns at the Dec. 6 meeting.

Pendar Properties President Jeff Scherschligt also spoke in favor of the tax increase, noting that he was one of the people who would likely be most affected by it.

More:DTSF president: Downtown improvements being held back by decades-old tax rate

"Who isn't proud of downtown Sioux Falls?" Scherschligt asked, adding that he believed the money would be used effectively.

"I believe my tenants are willing to pay that difference," Scherschligt said. "I'm willing to pay that difference to continue to make that progress, and make Sioux Falls and downtown a beacon for a lot of people to keep coming here."

How much will this tax increase bring in?

As for how much money they'll have to make that progress, Batcheller has said the change would affect 88 buildings in the district and bring in another $160,000 per year, and estimated that Cherapa Place's expansion and the Sioux Steel district could account for another $115,000.

The previous formula placed a $1,500 cap on building value and $200 cap on land value, so whether a building was valued at $1 million or $10 million, owners couldn't be charged more than $1,700.

As changed, the formula will retain the ratio of $1.50 per $1,000 for the first $1 million of a building's value, along with the ratio of $1 per $1,000 for the first $200,000 of the land's value.

But a new tier of the tax is now set at $0.50 per every $1,000 of a building's value over $1 million, and $0.50 per every $1,000 of the land's value past $200,000.

This article originally appeared on Sioux Falls Argus Leader: Raven has 'no intention' of leaving after downtown tax hike passes