Biggest Sioux Falls business news of 2021

2021 — what a year.

Plenty of news shaped the nation, South Dakota and the Sioux Falls area this year, and a lot happened in the local business world.

This year was one of the ongoing pandemic, ongoing struggle to find more workers as well as ongoing supply chain issues, but the state also emerged with low unemployment and soaring business success.

Sioux Falls Business Journal was there to feature the trends, impacts, openings and closings of many of the Sioux Falls area’s businesses and industries.

Here’s a look at the top stories that dominated local headlines:

Sioux Falls lands Triple D appearance

2021 started off strong for Sioux Falls.

An appearance on popular national television show “Diners, Drive-ins and Dives” with host Guy Fieri gave the city a boost in morale and visibility to culinary travelers across the country in January.

The “South Dakota Smogasbord” episode, featuring three Sioux Falls area restaurants Urban Chislic, O So Good and Lalibela’s came just in time for many business owners struggling with a slow first 2021 quarter. Three other restaurants were featured in later episodes in early 2021.

Every business featured in Sioux Falls commented that the production team warned them to be prepared for an increase in business after their show aired.

Busier than ever: Restaurants struggle to keep up with demand after ‘DDD’ appearances

Regular reruns of the show translate into regular spikes in business, and popular apps and websites turn the restaurants into tourist destinations. Featured business owners were optimistic that the increase in foot traffic would help them overcome a drop in sales tied to the pandemic. But many of the businesses struggled with the increase in demand, limiting phone calls and take-out orders.

And the increased popularity and recognition was too much for one restaurant, with O So Good closing its doors by August due to compounding worker shortage, high demand and other issues.

National issues reach Sioux Falls: Housing, workforce & supply chain

Jobs were hard to fill in Sioux Falls in 2021.

Employers raised pay, offered sign-on bonuses and increased benefits in the hopes of filling open jobs throughout the Sioux Falls area.

State-sponsored bonds were issued for the formerly incarcerated to retailers tried to entice out-of-staters to move to South Dakota with $1,000 handouts.

Yet, the city-wide unemployment rate hovered around 2% throughout 2021, so there weren’t enough people applying to work.

‘Customers are getting less’: Restaurant prices jump, menus slim down as food prices skyrocket

That problem will only continue into 2022 as more jobs open across the city with businesses such as Amazon and Wholestone Farms opening in the next several months. 

On top of that, worldwide supply chain bottlenecks hit the middle of the U.S. and affected everything from Christmas trees to furniture to food, leading to increased prices and inflation at the grocery store, restaurants and just about everywhere in the city.

Some of it helped local businesses, especially at the holidays, to stay in business, but it changed shopping.

And it’s not just the workforce or the supply chain that’s been reeling in 2021. Real estate and home sales set records in Sioux Falls and across the country throughout 2021 with cash offers and bidding wars a common tale as homebuyers struggled in a high-demand, low-supply market.

While housing issues have relatively settled down for the winter season, experts are hesitant to say that the issue has passed. For the 12-month period spanning December 2020 through November 2021, pending sales in the Sioux Falls region were up 7.6% overall, according to local data.

In Sioux Falls alone, there are 4,500 people in the next five years who need affordable or subsidized housing, according to an Augustana Housing study.

Chick-fil-A opens to great fanfare

Love it or hate it, Chick-fil-A now has a home in Sioux Falls.

The fast food chain’s first South Dakota opening saw customers line up in the dark to be the first consumers of the fried chicken chain in the city. Chick-fil-A even closed its indoor dining for a time due to overwhelming demand.

More: Chick-fil-A halts daytime dine-in orders for now, still not offering mobile

Empire Place just north of the Empire Mall saw massive success overall in 2021 with the opening of Chick-fil-A and Crumbl Cookies as well. Lloyd Companies, which helped oversee its development, looks to replicate that success by adding a second building.

More: Here are 21 restaurants, bakeries and bars that opened in Sioux Falls in 2021

Let it Fly found a home in the former Turks & Caicos building off of Western Avenue, and saw huge lines at its opening. Mike Miller, a South Dakotan native and retired NBA player, oversaw the opening of the high-end sports bar and grill’s location in Sioux Falls.

From local to chain, more is set to build in 2022, if space can build out for restaurants fast enough.

Raven merges with Italian agriculture giant

Raven Industries announced in July that the Sioux Falls-based company would be bought for $2.1 billion by international agriculture giant CNH Industrial. The announcement sparked surprise throughout the city, with many questioning what impact the merger would have on Raven’s history of civic engagement in Sioux Falls.

While the acquisition was completed Nov. 30, Raven CEO Dan Rykhus announced in August that the company’s precision agriculture division would stay in Sioux Falls. He didn’t comment on which other divisions would stay beyond the 600-person applied technology sector of Raven.

But, Raven’s role in Sioux Falls would be impacted, he said.

“It’ll be different. I’m not going to tell you that it won’t be,” Rykhus said. “CNH
is an ag company. They’re not a films or an aerospace and defense company. So those are likely to eventually be owned by somebody else. But they’re rooted here. They’re not going to move an engineered films division out of here. It’s here. All the leadership is here and the equipment is here and the team is here.”

Rykhus added that CNH is likely to double or triple their employment in Sioux Falls over the next three years.

$1 billion dollars: Development soars in Sioux Falls

Sioux Falls broke a record amount of building permit valuations in 2021 — ringing a feeling of déjà vu across the city.

Less than a year before, Sioux Falls broke a record amount of building permit valuations in 2020, sailing past $900 million in building permits. The city surpassed $1 billion in building permits this November — evidence of robust residential and commercial development in Sioux Falls.

This year’s building valuation is more than 40% ahead of the 3-year average as of November. Some of the biggest ticket items in this year’s total include:

And don’t expect the bustling development to go away in 2022 either. Construction has already begun on two major downtown developments, including the Steel District and Cherapa II, and construction is expected to be completed on the Sanford Sports Complex expansion in summer 2022 as well as other major projects throughout the city.

Sanford releases executive compensation amounts

Sanford Health filed its IRS form 990 in November, revealing that former CEO and President Kelby Krabbenhoft left with $49 million compensation package from the nonprofit organization in late 2020. 

The nearly 500-page document offers a glimpse into the nonprofit and its financial dealings, including that the Sioux Falls-based health organization brought in nearly $5 billion from operations amid the coronavirus pandemic. $207 million of revenue earned was through government grants, according to the filing.

Krabbenhoft left Sanford last year with about $15 million paid out as separation and another $29.3 million through an executive retirement plan, which was started in 1983 for Sanford executives. Krabbenhoft and Bill Marlette, most recently CFO and treasurer who received $5.9 million from the plan, were the only executives remaining on the plan in 2020.

Besides Marlette and Krabbenhoft, seven other Sanford executives who departed the organization in 2020 received either separation or payments. Daniel Blue, with 31 years at Sanford, received $5.3 million; Kim Patrick, with 21 years, received nearly $2.9 million; Nate White, with 16 years at Sanford, received nearly $3.3 million; Mark Lundeen, with 40 years, received $1 million; JoAnn Kunkel, with 28 years, received $6.8 million; and Allison Whierda-Suttle, with 19 years, received more than $2.3 million.

More: Sanford pays former CEO Kelby Krabbenhoft $49M in 2020, IRS documents show

In the weeks before the 990 was filed, three members of Sanford Health’s leadership team left the organization. Chief Marketing Officer Kimber Severson and Chief Philanthropy Officer Bobbie Tibbetts resigned a few weeks following the departure of former Executive Vice President Micah Aberson.

All three departures come within a year of Bill Gassen’s appointment as president and CEO of Sanford and former President and CEO Kelby Krabbenhoft’s departure.

In an email to Sanford employees and obtained by the Argus Leader, CEO and President Bill Gassen said that the information released in the 990 confirms his plan to run a smaller executive team and reduce administrative overhead. Gassen was paid more than $1.6 million in compensation, according to the 2020 filing — though that was only for just over half a year as Sanford’s president and CEO.

“We are making meaningful changes to improve transparency, strengthen culture and better support every member of the Sanford Family,” Gassen said in the email.

The Argus Leader compared Sanford and how it stacks up with pay compared to nearly a dozen other nonprofit hospitals. In short, on paper, Sanford pays the best.

South Dakota will set the stage for business standards in 2022

All of these stories shaped Sioux Falls and South Dakota in 2021, and more new bets on business growing, a departure from national COVID-19 standards and other news will shape company culture in 2022. Sioux Falls Business Journal and the Argus Leader will be there to cover it.

Thank you for reading.