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Incentives: They were considered to bring big box store to Jamestown

Jamestown’s effort to lure a big box home improvement store is similar to efforts in Yankton, S.D. Yankton used a combination of more than $10 million in financing and incentives to bring a Menards to its community two years ago.

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Of the regional communities with home improvement stores, Yankton was found to have the most similarities to Jamestown.

The city of Jamestown has entered into an agreement with The R.H. Johnson Company to attempt to lure a big box home improvement store to Jamestown. The Johnson Company is continuing to negotiate with unidentified retail stores for the city.

Yankton has a similar population as Jamestown and is the home of the State Hospital for South Dakota. Many of its residents traveled to Sioux Falls for at least some of their purchases.

“We created a tax increment district for the public infrastructure for the project,” said Dave Mingo, community development director for Yankton. “The district is larger than just that project and is for $6 million.”

Projects utilizing tax increment financing pay an amount equivalent to property taxes on the project improvements. The land associated with the project is taxed normally. The funds associated with the tax increment financing do not go to the normal government entities as taxes would but are used to pay the costs of the public infrastructure involved with the project.

Mingo said the community did a study and found that it was losing potential home improvement sales when residents traveled to Sioux Falls for purchases.

Mingo said Yankton is also rebating to Menards 1 percent of its 2 percent city sales tax for up to 20 years with a limit of $4 million. Yankton made no cash payments to the developers in the project but did transfer title to lots valued at $600,000 to the developer.

Jamestown Mayor Katie Andersen said both options of funding are possible to lure a home improvement retailer to Jamestown.

“We don’t know what options the businesses would find most attractive,” she said. “Tax increment financing and sales tax rebates are options. It is interesting to see what other communities similar to us have done. There is no need to reinvent the wheel.”

Andersen said she hoped Jamestown’s costs could be kept under the $10 million paid in Yankton.

“That sounds like a large number,” she said. “Our parcels have water and sewer service, which should reduce costs. There are still trees to remove and roads are not inexpensive. But a lot of things are possible to control costs.”

Andersen said rebating some of the city’s sales tax could be discussed.

“We would not try to capture any of the 1 percent going to the school,” she said. “But the half percent dedicated to infrastructure could be captured from that development and used to pay for the development (infrastructure) of that project.”

She also said the half percent of sales tax used for economic development generated in that project could be used for incentives within the project.

The former Jamestown mayor criticized the project being negotiated behind closed doors.

“There are too many questions,” said Clarice Liechty. “Why is the city involved in the deal, why was there so much secrecy to it. The thing is, the city should not be a driving force for this.”

Andersen said confidentiality was necessary.

“It was confidential to begin with to preserve the price of the land,” she said at a meeting of the Jamestown/Stutsman Development Corp. Monday.

Following an Aug. 7 executive session of the Jamestown City Council, the council, after leaving the executive session, voted to enter into an unspecified agreement with unspecified parties. A full copy of the developer’s agreement, dated Aug. 14, was not made available to the public or to The Jamestown Sun until Monday.

The agreement specifies that The R.H. Johnson Company would act on the city’s behalf for the development of a site suitable for a “big box” retailer and ancillary ‘pad sites” for associated retail and service businesses. The contract specifies the city will pay the Johnson Company an initial payment of $100,000 with additional payments of up to $800,000 depending on the company’s success in luring stores to Jamestown.

On Oct. 10, Drew Snyder, president of Woodsonia Real Estate Group and an associate of the Johnson Company, announced that one of the three major big box home improvement stores, Menards, Lowes or Home Depot, was showing interest in coming to Jamestown. He also announced that his group had negotiated a purchase agreement with Liechty Associates for a 65-acre parcel of land west of R.M. Stoudt Inc.

Currently, the purchase agreement is between Liechty Associates and the developer with Jamestown not owning any property in the potential development. Andersen said the land could be transferred to the city in the future.

“It depends how the development develops,” she said. “We want to do it the easiest way to attract business.”

Andersen said the developer’s fees and all other costs will ultimately come from the businesses that utilize the development.

“The stores that are coming in could pay us cash,” Andersen said. “Or special assessments are possible.”

Andersen said it is more likely that all the costs of the project will be included in any financing and incentive package the city and future stores may agree to.

Andersen said engineering work is continuing on the project.

“There is a lot of movement in the site plan,” she said. “We are making presentations of site layouts to a number of stores.”

Andersen said a number of smaller stores have shown interest in locating within the development. 

“The next step is detailed conversations with those stores,” she said.

No announcements from any retailer are expected until after the first of the year, Andersen said.

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at