Economy
Retailers discover the Hills.
By Dan Daly
Journal Staff Writer
National retail chains and commercial developers have apparently discovered what local merchants have long known: Rapid City is the center of a broad retail market area that stretches in all directions.
No fewer than four major retail development projects are at various stages of planning and development. Together they would add more than 3 million square feet of retail space to the city.
The Rapid City Metropolitan Statistical Area, which includes Pennington and Meade counties, has a population of just 90,000. But the Black Hills retail trade area stretches far beyond the Black Hills. Shoppers come here from Gillette, Wyo., Chadron, Neb., Dickinson, N.D., and everywhere in between. In addition, Rapid City sees an estimated 3 million tourists a year, probably a lot more.
In 2006, shoppers in Rapid City spent $1.94 billion, according to state sales tax figures.
Here are the projects at hand:
- The Meadows of Black Hills could cover nearly 1 million square feet along the north edge of Interstate 90 between exits 59 and 60. Developer RH Johnson Co. claim to have commitments from Home Depot, Bed, Bath & Beyond and Sam’s Club.
- Outdoor retail giant Cabela's and its partner, Foursquare Properties of California, are laying the financial groundwork for a Cabela’s-anchored retail project at Exit 61. The 80,000-square-foot store would also house a Visitor Information Center operated by the Black Hills, Badlands & Lakes Association under the current proposal.
- Dirt work is under way at Rushmore Crossing along the southern edge of Interstate 90 between Exits 59 and 60. Midland Atlantic Properties, based in Cincinnati, is developing this project. The proposal will cover 900,000 square feet of retail space.
- Scheels All Sports, the North Dakota sporting good chain, has agreed to locate its 100,000-square-foot store — larger than Cabela’s — in Rushmore Crossing. Other reported tenants include Dillard’s, Target and Barnes & Nobel. The first half is scheduled to open in the fall of 2008.
- Wal-Mart, which has a Wal-Mart Supercenter and a Sam's Club on La Crosse Street, is quietly working on plans to build a second Rapid City Supercenter, this on U.S. Highway 16 at the south edge of Rapid City.
Despite the regional draw of retail, an economy needs diversity. And it needs the kind of economic generators that import new money into the region. To that end, local economic developers have been working to promote the region’s potential for science, military, medical services and call center services.
Science and technology
The big thing on the horizon is a possible National Underground Laboratory in the former Homestake mine near Lead.
When the Homestake mine closed its doors in 2001, state and regional officials began the push to land the underground lab in the abandoned 8,000-foot-deep mine. The National Science Foundation is looking at possible sites to build such a lab, where various types of research on subatomic particles could be undertaken. The project remains on hold, at least for now. Homestake is one of four candidates for the National Underground Lab.
An underground lab would give a huge boost to another initiative, the Black Hills Technology Corridor. A local group named Black Hills Vision is working on a number of projects that they hope will help create such a technology corridor, fostering as many as 1,000 small research-and-development firms here.
Military
Since it was founded in World War II, Ellsworth Air Force Base has taken on a number of jobs in defense of the United States. It began as a training base for air crews. As the Cold War set in, Ellsworth became home to a fleet of bombers, refueling aircraft and airborne command centers. It also commanded an arsenal of 150 missile silos scattered across western South Dakota.
Today the base, which in 2005 narrowly escaped closure by the Pentagon, remains home to a fleet of B-1B bombers and about 3,500 military and civilian personnel.
And it’s getting a new role: financial services.
The Air Force Financial Services Center, the first phase to open this fall, will have a central processing center and a round-the-clock call center that eventually could employ about 775 military and civilian personnel. The center will conduct financial-services transactions and respond to calls from military personnel around the world.
Medical
Rapid City’s biggest private sector employer, Rapid City Regional Hospital, continues to get bigger. The hospital is part of a Rapid City-based health care network that includes nine hospitals. Among them are hospitals in Spearfish, Sturgis, Deadwood and Custer. The organization also includes clinics, nursing homes and assisted-living facilities. In all, 4,500 employees in western South Dakota, eastern Wyoming and the Nebraska panhandle are employed by Rapid City Regional Hospital and its affiliated facilities.
The hospital serves a wide geographic region and has helped turn Rapid City into a major regional medical service center.
Call centers
And Black Hills-based call centers continue to play a role in the region's economy.
In Rapid City, call centers operated by Mileage Plus/United Airlines, Advanced Services Inc./General Electric, General Electric Consumer Finance and Green Tree Servicing and newcomer N.E.W. Corp. are taking calls from across the country. In Spearfish, the Premier Bankcard call center is one of the biggest employers.
Job growth
The number of jobs in the Rapid City MSA has been increasing consistently over the past 15 years, going from 43,100 in 1990 to 60,400 in the spring of 2007.
From April 2006 to April 2007, the Rapid City MSA nonfarm wage and salaried worker levels increased 2.4 percent, according to the South Dakota Labor Market Information Center.
By category, workers in the Rapid City MSA were working in the following industries in April 2007.
- Financial activities, 3,700 workers, up 8.8 percent.
- Transportation, warehousing and utilities, 2,000 workers, up 5.3 percent.
- Wholesale trade, 2,200 workers, up 4.8 percent.
- Retail trade, 8,800 workers, up 4.8 percent.
- Other services, 2,700 workers, up 3.8 percent.
- Leisure/hospitality, 7,800 workers, up 2.6 percent.
- Professional business services, 4,500 workers, up 2.3 percent.
- Natural resources, mining and construction, 4,800 workers, up 2.1 percent.
- Education/health services, 9,000 workers, up 1.1 percent.
- Government, 10,200 workers, up 1 percent.
- Information, 1,100 workers, even with last year.
- Manufacturing, 3,600 workers, down 5.3 percent.
The Rapid City MSA’s unemployment rate in 2007 ranged from 3.8 percent in January to 3.1 percent in April.