Why It Matters
South Dakota is committing substantial public resources to keep a major meat-processing operation anchored in Sioux Falls, backing what state officials are calling the largest private capital investment in state history. The decision has direct implications for agricultural supply chains, thousands of jobs, and the future of a large downtown industrial site.
What Happened
The South Dakota Board of Economic Development voted to approve up to $29,975,400 in sales tax rebates for Smithfield Packaged Meats Corp., clearing the way for the company to relocate its Sioux Falls pork processing operations from downtown to a new facility in the city’s northern corridor near the interchange of Interstates 29 and 90.
Smithfield’s planned facility carries an estimated price tag of $1.29 billion and will incorporate advanced automation and updated processing technology to replace its existing downtown plant. The state’s total financial commitment to the project now stands at approximately $42 million, which includes $12 million in Future Fund grants previously directed to the Sioux Falls Development Foundation for land acquisition and site preparation.
Bill Even, addressing the board, described the undertaking as “the largest private capital investment in South Dakota history” and said it “reinforces the critical role agriculture and food processing play in our economy while supporting thousands of South Dakota families and producers.”
Smithfield operates as a subsidiary of WH Group, a publicly traded company headquartered in Hong Kong.
The Broader Financing Picture
Public and private funding is converging on the project from multiple directions. The Sioux Falls City Council separately approved a $90 million Tax Increment Financing district tied to the relocation. Philanthropist T. Denny Sanford has pledged $50 million to the development foundation to fund acquisition and demolition of the current 120-acre downtown Smithfield site, which is expected to free up significant urban land once the company vacates.
The downtown redevelopment angle has not been without controversy. Opponents of the project have filed a lawsuit against the city challenging both the relocation plan and the TIF district approval.
By the Numbers
- $1.29 billion — Smithfield’s estimated total project cost
- $29,975,400 — sales tax rebates approved by the Board of Economic Development
- $42 million — total state financial support, including prior grant commitments
- $90 million — Tax Increment Financing district approved by Sioux Falls City Council
- $50 million — private donation from T. Denny Sanford toward downtown site redevelopment
- 120 acres — size of the existing downtown Smithfield footprint
Other Board Actions
The same board meeting produced several additional decisions. A $7.5 million REDI Fund loan was approved for Elevate Rapid City to acquire and develop 128 acres north of the Uptown Rapid Mall for business park use. Lake County received a $500,000 Local Infrastructure Improvement Program grant to support reconstruction of County Road 17, a project connected to the Dakota Ethanol facility near Wentworth.
In a separate action, the board canceled a $1.3 million Reinvestment Payment Program incentive that had been committed to Gevo Inc., a Colorado-based renewable fuels company that had planned to build a sustainable aviation fuel plant near Lake Preston. The project stalled after South Dakota’s Public Utilities Commission denied a permit to Summit Carbon Solutions, a carbon sequestration pipeline operator whose infrastructure Gevo’s project relied upon. State lawmakers also approved a ban on the use of eminent domain for carbon pipeline construction, further complicating the project’s prospects. Gevo has since redirected its development focus to North Dakota. A separate large-scale energy storage project is also under review in South Dakota, reflecting growing interest in the state’s energy sector.
What’s Next
With state and city financing now largely in place, attention will shift to construction timelines for the new northern Sioux Falls facility and legal proceedings surrounding the downtown TIF district challenge. The fate of the 120-acre downtown parcel — and what replaces Smithfield’s current operations there — will likely become a significant planning question for Sioux Falls in the months ahead. South Dakota’s economic development actions have increasingly drawn legal scrutiny, a pattern that may extend to this project as well.