- Associated Press - Sunday, June 15, 2014

KEYSTONE, S.D. (AP) - A survey of experts who help businesses decide where to expand or relocate showed that only about 1 in 10 even considered South Dakota as an option.

That had some economic development officials worried that people outside the Midwest view South Dakota as a fly-over state with nothing to offer but farms, cows and cowboys. So when businesses search for places to expand or re-locate, South Dakota may not raise a blip on their radar screens.

Now, an effort is underway to change that.

Reasoning that a single roar draws more attention than a bunch of whispers, 21 different communities from six western South Dakota counties have banded together to launch the Rushmore Region Alliance, a new marketing group that will promote the Mount Rushmore region as a single entity instead of a collection of individual towns and economies.

“We think it’s more attractive to package ourselves as a region that gets along, that likes each other, that works together, that will share things with each other,” said Ben Snow, president of the Rapid City Economic Development Partnership. “We will share in the work and we will share in the prosperity and the harvest that comes from our work.”

The announcement of the new marketing campaign was recently made at the Black Hills Business Development Center in Rapid City. With the slogan, “Face-to-Face with Freedom: conduct business with the freedoms our Founding Fathers intended,” on a backdrop of Mount Rushmore. The campaign promotes the pro-business, anti-regulation climate of the area.

The slogan goes on to promise: “Less regulation, less red tape, less taxes, less trouble.”

The marketing strategy is centered on the fact South Dakota has no personal income tax, relatively low sales tax rates, few regulatory agencies, and plenty of business-friendly policies. That combination, officials say, is a powerful enticement to people who own a business.

And yet, none of those advantages matter if people don’t know they exist, said Bryan Walker, executive director of the Spearfish Economic Development Corporation, which is part of the new alliance.

Before launching the initiative, a survey of corporate real estate agents and industrial site selectors nationwide was conducted. It turned out just 12 percent of the clients even considered South Dakota viable, Walker said.

“What we found out very early was that many of them were not very knowledgeable about the Black Hills, they did not know what business advantages exist in South Dakota and never considered it as an option,” Walker said.

However, whenever Mount Rushmore was mentioned, eyes would light up since it was a landmark they could recognize, he said. That name recognition is why Mount Rushmore is featured prominently in all of the marketing materials and why they are calling it the Rushmore Region instead of the Black Hills.

In Walker’s experience, once a business owner or site locator came to the region and saw the business climate and natural beauty of the area, it wasn’t too hard to make a deal.

“Our problem has never been closing a sale,” Walker said. “Once people come here, talk to area business owners, see the sights, and experience the area, they become excited. We just need to get them here.”

In the past, individual towns in the six counties in the alliance - Pennington, Butte, Custer, Lawrence, Meade and Fall River - would try to market themselves individually. But that wasn’t effective due to limited resources.

With such poor name recognition, it’s not hard to imagine the challenges a small town in the Black Hills would have attracting new businesses.

Custer Mayor Gary Lipp said his city has a lot of unique opportunities for certain businesses, but couldn’t afford to reach out to them.

By being part of a larger entity, with more resources, Custer and other smaller cities will gain access to more prospects, he said.

The project is funded by Black Hills Vision, which is a separate economic development organization, and by the communities involved. About $90,000 has been spent on the project so far, Snow said.

From $300,000 to $400,000 is expected to be spent during the next few years after all participating communities and regional economic development organizations will chip in.

The same day the alliance was announced, the group launched the website www.rushmoreregion.com. The site outlines the state’s business friendly policies, shares success stories of businesses in the region, and profiles each of the 21 towns that fly the Rushmore Region banner.

Once a company starts looking at the area, it can easily learn what each individual town has to offer and pick the best place for its needs, Lipp said.

It’s not too difficult to find examples of businesses that have done well after moving to South Dakota.

Bar-Sto Precision Machine, a custom gunsmithing and pistol barrel manufacturer, is a perfect example.

Four years ago, owner Irving Stone moved his business from Twentynine Palms, California, to Sturgis, and he couldn’t be happier with his decision, Stone has said.

He said operating costs are about 30 percent less in South Dakota than in California, mostly due to favorable tax laws, he said.

But he never considered coming to the state until he met with South Dakota representatives at a trade show in Las Vegas in 2010.

If the Rushmore Region Alliance works as planned, that lack of awareness won’t be the problem it once was.

Other states may have larger markets, but doing business there can come with a hefty price. Just ask Duff Kruse, who has experienced the difference between doing business in South Dakota versus a state with a major metropolitan area and heavy government oversight.

Kruse is the president of the Rapid City-based Adams ISD, an industrial sales company that manufactures pressure vessels used in the oil boom in North Dakota and Wyoming. He graduated from the South Dakota School of Mines & Technology and spent much of his career working for various corporations in Denver.

He saw Colorado as an unfriendly state for business due to inventory taxes, corporate regulations and various government-related expenses.

“There’s a lot of government in Colorado quite frankly,” Kruse said. “The more government interference there is, the more it costs to run a business. South Dakota is unique in that the state government actually tries to help you be successful, unlike a lot of other states.”

That’s why he returned to the Black Hills as soon as he had the chance. The idea to promote the area as a region was hatched about three years ago by members of the Black Hills Business Council, who recruited local economic development organizations throughout the area.

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Information from: Rapid City Journal, https://www.rapidcityjournal.com

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