Marshall Mitchell: Mitchell developer wants help for $20M lake project but says MADC unwilling

Yahoo

03-04-2025

Apr. 2—MITCHELL — A local developer is seeking to build a multi-million dollar senior living facility north of Lake Mitchell, but he says the Mitchell Area Development Corporation is unwilling to back installation of the infrastructure needed to make it happen.
"All I really ask for is getting sewer to the location," Justin Thiesse told the Mitchell Republic. "The development corporation has not been able to give me one dime."
Mitchell Mayor Jordan Hanson, during his state of the city address, said that Thiesse hopes to open a $20 million senior living center development at Lake Mitchell west of the South Dakota National Guard Armory.
The Mitchell Area Development Corporation (MADC) started on a grant for sewer, but stalled out, according to Thiesse. Communication from MADC has been lackluster, according to Thiesse.
"We don't have cash to give. That's the reason we work with our partners," MADC CEO Mike Lauritsen told the Mitchell Republic.
Lauritsen, who has worked for MADC since 2023, could not think of a time when MADC has done a cash infusion for anyone.
Instead, MADC is focused on a new industrial park and was awarded a
USDA Rural Economic Development Loan for the project, with backing by Central Electric Cooperative.
The goal is to recruit more businesses into the community, according to Lauritsen.
"To apply for that, we had to show we have the financial capacity to actually do that development, and so most of our funding is wrapped up in doing our own development park," Lauritsen said.
The majority of infrastructure needed to start the lakeshore development is on city property. Hanson estimated that sewer infrastructure will cost between $250,000 to $1.7 million "just to flush the toilet," with the high-end cost including a lift station to pump sewer uphill. The Mitchell Public Works Department will have to determine which option is best for the lakeshore development, according to Hanson.
The lakeshore development community plans include a gas station, senior living center, apartments, a wedding venue, duplexes and a marina. The proposed 25-acre development will have 98 individual units for housing, not counting the three-story senior living center.
"Obviously, that's something that's going to be years out, but there's really good things coming to Mitchell," Hanson said during the state of the city address.
The plot of land sold for $355,000 in December 2021, according to the Davison County property records. The location borders North Ohlman Street on the east, North Harmon on the south and west, and a nearly 40-acre plot to the north.
"I want to build in Mitchell because it's my hometown. And I want to grow Mitchell," Thiesse said.
Hanson was at a MADC board meeting the day after the state of the city address. The board sought more information about the Thiesse's proposed development and hoped to learn what Thiesse is asking of MADC. However, Thiesse was out of town during the meeting.
"A majority of them said this was the first time they ever heard of it," Hanson said.
The development has been in the works for the past six months. Thiesse said he shared a map of the proposed development with Lauritsen in December.
The $20 million senior living center, as part of the 25-acre development, will be run by a South Dakota-based care-giving business. Thiesse estimated 50 jobs could be created in Mitchell with a $3 million payroll through the senior living center.
Thiesse sits on the board for the Chamber of Commerce. MADC and the chamber have different boards of directors, but share staff.
There are other methods in which developers can utilize tax breaks and incentives to help complete a project. This includes tax increment financing (TIF), in which a city government, not a development corporation, sets aside property tax revenue from a certain geographical area near a proposed development in order to aid developers to pay off their loans over a 20-year period.
The senior living center could be built through a TIF, but there would not be enough monies generated through a TIF to cover bringing the sewer to the property, according to Thiesse. Securing the sewer needs to come before seeking the TIF, and if secured, Thiesse will break ground this fall.
"The city supports it. I just feel like I'm not getting help from the development (corporation)," Thiesse said. "They have a 10-person team. I hope this would be a priority for them."
Other towns in South Dakota are offering free land and free infrastructure, and are hungry for new jobs and new growth, according to Thiesse. A senior living center would secure jobs for nursing program graduates from Mitchell Technical College and Dakota Wesleyan University, he said.
Thiesse is seeking a commitment from the city or development board.
"I've talked with the council, they are very supportive of it. The problem is we're trying to use the (MADC), and I think they're supportive, they just don't have anything to offer," Thiesse said. "I can see why Mitchell's not growing."
MADC maintains an advisory role when educating business owners, Lauritsen explained.
MADC guides businesses through paths for low-interest loans through the South Dakota Governor's Office of Economic Development, offering a one-time-only 4% rebate program for equipment purchases, sales tax incentives, apprenticeship funding to add employees, and by making businesses aware of other financing options, including TIFs.
"Our goal is always to help businesses," Lauritsen said.
A typical meeting, according to Lauritsen, includes the South Dakota Governor's Office of Economic Development, and Dakota Business Finance, which is a U.S. Small Business Administration-certified development company that seeks loans from local lenders on behalf of small businesses. Depending on the project, low-interest loans are sought through Dakota Business Finance or from the state. MADC leaders also help prospective business owners go through the TIF process.
"Usually when they come to us is when they can't make the project go on their own, or sometimes they're just wondering whether there's low-interest loans or grants out there. There are really very few grants," Lauritsen said.
Infrastructure for the industrial park will cost $3.1 million and includes water, sewer, electrical, and roads. Once a business buys a lot within the park, MADC will be able to start paying off the loan, which is a $1 million loan for 10 years at 0 percent interest.
The city of Mitchell subsidizes MADC activities each year. During budgetary proceedings for the 2025 fiscal year, the city allocated $182,000 to MADC.
Hanson credited Thiesse with bringing small businesses to Mitchell at Commerce Park, a business park of about 40 businesses located north of Eighth Avenue and along North Ohlman Street, which Thiesse developed after buying storage units in that area.
Commerce Park is a "a nice incubator," which was built without incentives or tax increment financing, according to Thiesse.
"I brought businesses to town. I have given them a place to rent. I have taken considerable rent cuts to make it work for new businesses," Thiesse told the Mitchell Republic.
Some of Thiesse's business park renters outgrow the space they are in and expand. Echo Electric Supply started in one of Thiesse's smaller units and then expanded to two units. It later moved to two bigger units.
"They're the ones that are building on 15th (Avenue) right now," Thiesse said.
Kaiser Heating and Cooling expanded to Mitchell and is located at Commerce Park. Kaiser hired six people, according to Thiesse.
Thiesse's latest renter is a start-up business with five new batting cages in an indoor facility.
"They couldn't find a place to go. And I ended up giving them a cut on rent, so they could make it work," Thiesse said.