- Associated Press - Monday, March 31, 2014

STURGIS, S.D. (AP) - At a Future Sturgis Town Hall meeting in 2009, residents told city officials they weren’t satisfied with the retail situation of their community.

The consensus was that Sturgis needed to overhaul its development process to make the city more business-friendly and annex areas around Sturgis, including Vanocker Canyon Road, for future development.

The meetings helped create a comprehensive plan that now guides the Northern Hills community through the year 2030. It provides a detailed action plan to advance the city’s economy, improve the lives of residents, and secure its status as a regional and national destination.

The process helped citizens and city officials realize that although hosting the annual Sturgis motorcycle rally has given the city international name recognition and pumps additional sales tax revenue into city coffers, Sturgis needed to become more than that.

It needed to become a more authentic community.

Sturgis has long had the reputation of having a limited retail business economy, a result of many downtown businesses being closed most of the year because they are owned by absentee landlords who open them for about a month in the summer during the rally.

Scott Peterson says he has seen the shift in attitude in Sturgis and that helped to make the decision easier for him and his wife, Susan, to invest in a new Ford showroom on 22 acres along Vanocker Canyon Road in Sturgis.

“I have seen from the citizens themselves all the way up to the city leadership and SEDC (Sturgis Economic Development Corporation) that they are hungry for year-round businesses. I think they realize the stability of this economy centers around year-round businesses,” Peterson said. “I think they have shifted their focus to that kind of thinking.”

Denny McKay of Properties Unlimited Realty in Sturgis was one of the real estate agents who offered a portion of the property that Scott Peterson Motors purchased. He said he and fellow realtor Jim Allison have believed all along that the Exit 32 area was the next business corridor to open up in Sturgis.

“We knew it would probably take someone local to get the vision and carry it out,” he said.

McKay says there are few options for retail expansion in Sturgis.

“There’s not a lot of land adjacent to Sturgis. This is some of the last developable property,” he said.

McKay called Vanocker Road a huge asset in future development.

“To this point, it’s really been a diamond in the rough, but polished up it’s going to be great for Sturgis,” he said.

The land on which the new Scott Peterson Motors Sturgis will be located is within the city limits as more than 50 acres to the south along Vanocker Canyon Road were annexed into the city in December.

Sturgis City Manager Daniel Ainslie said then that the annexation of the Davenport Development was a “watershed moment” in the community.

“Annexing this area shows a lot of additional growth and potential for our community,” he said.

Davenport Development is owned by Martha Ward and Katherine Martel. The two women are great-granddaughters of Joe Davenport, who is credited with establishing the first water system within the city of Sturgis.

The anchor to their development is the Belle Joli’ Winery production facility and tasting room. A five-acre vineyard is now growing grapes on the hillside adjacent to Vanocker Canyon Road.

Martel has big plans for other areas of the development. She says she hopes that a small development company could establish an outlet mall or several specialty stores on the platted area.

“We are certainly not going to attract anything like a Walmart or other big-box retailer. We need to do something different,” she said.

Martel, who owns JJ Davenports, a family restaurant on Junction Avenue in Sturgis, said the city is sorely in need of commercial growth to expand its tax base.

Sturgis is such a drive-through town when it comes to retail. We don’t have anything to capture visitors,” she said.

Although Martel wasn’t looking for a big box retailer for her development, the city of Sturgis has attempted to lure a national retailer and paid for a study in 2009 to find out who might be interested.

The city, along with the Sturgis Chamber of Commerce and the Sturgis Economic Development Corporation, hired consultants Buxton Retail to market the city’s development potential to national chains. Each group assumed one-third of the $20,000 cost at the time.

Buxton identified 10 preferred choices for the area to the south of Exit 32. The top three were Cracker Barrel Old Country Store, Big Lots! and Cinemark. Home Depot was the fourth choice. Rounding out the other top 10 selections were Dunham’s Sports, Unclaimed Freight Furniture, Ground Round Grill and Bar, Jo-Ann Fabric and Craft Store and a RAC (Rent-A-Center) store, which sells furniture, appliances and electronics.

In an effort to secure a move-in ready site for a potential big box retailer, Sturgis bought right-of-way surplus plots from the South Dakota Department of Transportation in 2009 adjacent to Exit 32. The city negotiated purchase of three parcels for a net cost of $72,500. One of those parcels was the old Dickson sawmill site.

The city paid $262,034 for the improvements on the site with money from its capital improvement fund.

Those lots are being offered by Sturgis Properties Unlimited Realty real estate agent Jim Allison.

Allison, who grew up in Sturgis and graduated from Sturgis Brown High School, had a perpetual smile during the Scott Peterson Motors announcement Thursday.

“This is the best thing that has come to town in a long time,” Allison said.

In addition to the land that was purchased by Scott Peterson Motors, Allison is offering the city’s 2.2 acres of land adjacent Exit 32 on the southwest side. The property is listed for $430,000.

“I don’t know where else in South Dakota you can get an exit for $430,000,” he said.

A renewed focus on improving Sturgis comes from four main partners - the city of Sturgis, the Sturgis Economic Development Corporation, the Sturgis Area Chamber of Commerce and Meade County. Officials with all the groups say that until recently they had not always worked well together.

Now that the four are all on the same page, things seem to be looking up.

In 2013, Gov. Dennis Daugaard presented Sturgis with the Governor’s Community of the Year Award for communities with a population of 5,000 or more. The award recognizes leadership in the area of economic development. It also recognizes achievement, innovation and growth resulting from community efforts.

Part of the reason Sturgis received the award was the formation of the Downtown Revitalization Task Force that was looking at ways to breathe new life into the city’s lackluster downtown. The cooperation between the four entities also was cited.

The county’s involvement in economic development comes with its tax incentive to new and improving businesses. In 2010, Meade County Commissioners adopted a tax formula that provides total abatement of property tax for five years on new industrial/commercial improvements or renovation over $30,000.

Pat Kurtenbach, president of the Sturgis Economic Development Corp., says the tax abatement has been a popular incentive in bringing business to Sturgis.

“We need to be constantly looking 10 years out,” Kurtenbach said. “We have to look to the future.”

She said Sturgis Economic Development Corporation’s community partners need to continue to work together to propel Sturgis forward.

“The outlook is good,” she said. “We have been on a continual incline. We have seen the validation that steps we are taking are the direction we need to be going. But eventually, we need to reset our bar to be even higher.”

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

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