Governor hosts golf classic

According to an age-old saying, no one should mix business with pleasure.

There's an exception to that rule. Another popular adage notes that some of the best business deals are struck between people competing and socializing during a round of golf.

Gov. Dennis Daugaard speaks at the Governor’s Golf Classic at the Dakota Dunes Country Club in Dakota Dunes Wednesday.  State and local economic development officials met with business executives at the gathering for a mixture of business and golf, hoping to bring more jobs to South Dakota. (Photo by David Lias)

That's the main premise that supports the Governor's Golf Classic, which kicked off with meetings and an evening meal at the Dakota Dunes Country Club in Dakota Dunes Wednesday.

The event continued throughout Thursday, with breakfast, morning meetings, and an afternoon round of golf on the beautiful Dakota Dunes Golf Course.

Participants beside Gov. Dennis Daugaard include state and local economic development officials and business executives from South Dakota and several midwestern states. Daugaard noted that even officials from a couple European countries were in attendance.

"We have just under 30 companies that we've been meeting with that are looking to either expand in this area because they are already here," the governor said, "or move to this area and do some business here in South Dakota."

Much of the activity of the golf classic occurred around conference tables rather than on the golf course.

"I've been very pleasantly surprised. Within the past couple days, we've had seven or eight orchestrated, formal meetings," Daugaard said.

During one of those meetings, it appeared a company was perhaps considering doing business in South Dakota.

"It was very clear by the end of the meeting they have made a decision," the governor said. "They will be here; they are already meeting with a realtor, they are already looking at locations."

Just as a golfer may ask a caddy to hand him a special club to land the ball close to the cup, the governor and other state officials are wielding an array of tools to hopefully attract business prospects to the state.

"We offer them relationships because it's surprising how key that is," Daugaard said. "Existing, successful businesses are represented here, because they are looking to those newcomers as potential new business for themselves as well."

An array of financial incentives are also spelled out to interested industries, ranging from low interest REDI loans, and 2 percent loans for equipment or buildings, to SBA loans.

"We also put a package together this morning that includes Dakota Seeds, which is a program which helps businesses pay for interns that come and work in their plants. We also provide training funds. If a business needs to bring an employee in, and his or her job requires specialized training beyond what you typically find in a more classic training environment … then we will help with some of those training expenses."

Daugaard said that during the last year, approximately $2 million has been spent in South Dakota by state and local economic development efforts designed to boost employment opportunities in the state.

"Between those efforts and others, we're trying to encourage business to find a home here in Siouxland and do well here," he said.

The governor wouldn't specifically reveal which businesses were being courted on the Dakota Dunes links. "Some of them are existing businesses here who are looking to expand, and some of them don't really want it to be known that they are looking because they have other competitors that they don't want to be aware of that.

"It's very interesting, because in some cases, we are dealing with companies who are competitors with one another," he said. "Suffice it to say, it's really a range of companies – from manufacturing, to bio, to professional services and information technology. It's really quite a diverse mix of companies."

Daugaard said the golf classic offers opportunities for valuable "face time" between government and community officials and business representatives.

"It's very important. We have one company whose business was impacted by the lean finely textured beef publicity and the unfortunate consequences of that," Daugaard said. "We connected them with an alternate firm with whom they are hopeful of doing some significant business and regaining some of the workforce that they had to lay off.

"These kinds of things evolve as you have opportunities for relationship building," he said. "Sometimes it's with existing companies that just don't know one another, and sometimes it's with new companies coming in that are looking for local companies to help them establish themselves and access services that are already being provided here in Siouxland."

More than just the opportunity to play on the renowned Dakota Dunes links lured businesspeople from throughout the nation to the event.

"South Dakota really offers a very good tax environment," the governor said. "We have no corporate income tax, no personal income tax, no business inventory tax and no inheritance tax. Our low tax environment is very attractive.

"Companies want to come where they are welcomed, and South Dakota has its doors open to business," he said. "Plus, our good environment for business is likely to be that same good environment in the future."

Daugaard noted that South Dakota is today in good fiscal conditions by addressing budget problems in the last year.

"We also have no long term problems that are going to force us to raise taxes," he said. "We have one of the best-funded employee benefit plans in the nation. Illinois is in deep trouble with employee benefit problems. Some states have promised public employee retirement health commitments that they can't fulfill. South Dakota doesn't follow that path; we allow our public retirees to participant in our health plan but they pay their way. They pay a premium just as any of us would pay a premium for our health insurance."

South Dakota also doesn't have any general obligation debt on its balance sheet, unlike other states.

"So, even though other states may be able to say they have a good environment today, I question whether that good environment may be as good tomorrow when they have to somehow meet their financial obligations somehow – likely through raising taxes," Daugaard said.

The governor said that "by most measures," South Dakota has recovered from the recession, with a 4.3 percent unemployment rate.

"At the same time, I think we need to look at employment numbers, because the unemployment rate only looks at those people who are looking for work. It fails to look at those people who have become discouraged and have stopped trying and are no longer counted in the unemployment numbers," he said.

When the recession hit the nation in late 2008, South Dakota experienced 18 out of 19 months in a row through 2009 and into 2010 in which its job numbers fell, when compared to the same months a year earlier.

"Since that time, we've had over 20 months in a row where we've seen an increase," Daugaard said. "We've seen those job numbers recover, and this last month, June, for the first time we exceeded the 2008 peak from which we fell.

"By that measure, you may say we've recovered," he said. "However, I want to see that continue to happen. I want to see the July (2012) number beat last July's number; I want to see August (2012) beat our August (2011) peak before I say we're fully recovered."

Businesses that would hire anywhere from 30 people to hundreds of people are currently eyeing South Dakota, Daugaard said.

"It's all over the board, and we know a good mix of business includes a mix of sizes," he said. "You don't want too many very large employers because then one large employer can have too much of an impact on a community. It's better to have a diverse mix of smaller to medium-sized companies, and let them grow."

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