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September 10, 2017 10:13 PM

Garth's Impact On Sioux Falls' Economy

When Garth Brooks takes over the Denny Sanford PREMIER Center the next two weekends, he'll bring with him a $12.5 million dollar direct economic impact according to the Sioux Falls Convention and Visitors Bureau.

That will provide a big boost to slowing sales tax growth in town, but it won't solve the issue.

Have you heard? Garth Brooks is coming to Sioux Falls soon. City Finance Director Tracy Turbak bought tickets to one of nine sold-out shows and he isn't alone. 

"Yeah absolutely. Who isn't going? I think they've got 100,000 tickets that have been sold. There will be a lot of people enjoying the show," Turbak said. 

From ticket sales to concessions at the events, a lot of money will be spent, and all of it will benefit sales tax revenues in town. Turbak says the "multiplier" happens when people open their pocketbooks around the city before and after the concerts. 

"A real shot in the arm for the local businesses and of course the city gets a cut of that too with the sales tax revenues off that," Turbak said. 

With $6 billion in taxable sales annually in Sioux Falls, most of which is retail sales, Turbak says these upcoming weekends won't drastically move the needle when it comes to annual growth. He points to online sales and agriculture as two reasons why growth is slowing. Still, there's a lot to cheer about says Chris Semrau, Assistant General Manager at the Denny Sanford PREMIER Center. 

"We will never see this again and it should be something that is celebrated over the next two weeks," Semrau said.

Semrau says if the 11,000 people attending each show spend at least $10 on food, beverages or memorabilia, that's roughly $1 million in taxable sales alone. Getting the events center ready to handle the demand will be a challenge. That's why extra staff will be on hand. 

"We're going to have multiple loading dock bays ready with trucks stocked with extra product. And we'll be ready to flip between concerts. We're going to have less than one hour, between clearing out the previous afternoon show and opening the doors for the evening show, to have the venue cleaned, reset and restocked with product so those evening guests don't even realize there was a performance in the afternoon," Semrau said. 

The quick reset will be taking place elsewhere as well. Ted Hilleson with the Best Western Plus Ramkota Hotel says most of his guests are staying just one night. He loves the business during a slow time of year and says there are only a few rooms still available. 

"It has been a little bit of a down summer, but this helps a lot. It will be a big draw for the city and across the board, restaurants, bars, hotels," Hilleson said.

On top of sales tax, hotels collect a $2 occupancy tax that goes to the CVB to promote Sioux Falls. Through June, that overall room tax number is down. That's why local hotels are trying to make the most of Garth's visit. 

"We have a restaurant and a bar. We'll do some food specials, drink specials for them. We offer complimentary shuttle service to the event so the guests don't have to worry about driving or parking. They can just relax and have a good time," Hilleson said. 

With more than half of ticket sales going to people outside Sioux Falls, there will be a lot of new business coming to town during the Garth weeks. 

"I just encourage people to take advantage of the food and beverage while they're at the show. If they're inclined to stay in town for an extra night, do that, and spend a little more money," Turbak said. 

In addition to sales tax, Turbak says Sioux Falls has an entertainment tax that brings in roughly $7 million a year. That tax is on restaurants, alcohol, hotel stays and ticket sales. It all gets reinvested into entertainment venues such as the Sioux Falls Arena and the Washington Pavilion. 

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