REED Loan Facilitates Parkston Business Park Development

The Parkston Area Development Corporation (PADC) in Parkston, South Dakota, recently secured a $1 million loan from the Rural Electric Economic Development (REED) Fund to develop a 42-acre parcel just South of the community. The parcel has been converted into an 11-lot business park and is expected to create 17 full-time jobs in the Parkston area. 

“This project is bringing jobs and vitality to the community of Parkston,” says Chad Kinsley, Chief Executive Officer at Southeastern Electric Cooperative, Inc. “It shows that city leaders are willing to invest in the community.”

Southeastern Electric is a contributing member of the REED Fund. While the industrial park does not fall within its service area, the cooperative assisted PADC in securing a REED loan because of the park’s proximity to its members. New investment in the area can create jobs and attract businesses that benefit Southeastern Electric members.

A separate housing project also benefits from the business park’s development, as the infrastructure for that project will supply the utilities necessary for creating a 12-unit apartment complex. This increases the housing options for the 1,500 residents of Parkston while also supporting workforce growth.

The total Trojan Business Park project costs $6.65 million, with $4.96 million coming through tax increment financing (TIF). Learn more about this project and how it can bring new opportunities to the Parkston community. 

The Project Supports Manufacturing and Value-Add Agriculture

By developing 11 commercial lots, PADC can market the parcels to commercial businesses and light manufacturing firms. The project improved infrastructure, added asphalt and concrete to the lots, and connected them to local utility providers. Existing development makes it easier for companies to move in, speeding up time to market because they don’t have to wait for basic operational elements to be installed.

The investment in the project is already bearing fruit. Kaylor AgriServices, a local value-add agriculture company, was able to expand its business to include both a commercial fertilizer facility and a 1.5 million bushel soybean roasting facility thanks to this investment.

“Although the infrastructure is not yet complete, contractors made significant progress this fall, allowing Kaylor AgriServices to begin operating both their fertilizer and soybean-roasting facilities,” says Drew Muntefering, President of PADC.

Other potential businesses are already considering the new lots at Trojan Business Park, which will bring new industries and companies to the community. 

Most of the Project Used Tax Increment Financing 

Along with the REED loan, the City of Parkston utilized Tax Increment Financing to cover the project's costs. This is a program that allows communities to fund public projects based on the tax revenue they will provide in the future.

“This is not the first time Parkston has used TIF as an economic development tool to help cover the cost of infrastructure development. It’s one of the most effective tools for financing both commercial and residential development in our community,” says David Lambert, Regional Development Director for PADC.

Not only will the businesses moving into the Trojan Business Park provide immediate job opportunities for residents, but they will also contribute tax revenue to support the City of Parkston for decades to come.  

“This is an investment to help Parkston grow and bring jobs to the community,” says Kinsley. “These investments can keep the next generation living in or near the towns where they grew up.” 

The REED Loan Helped With the Rest of the Funding

The REED Fund is designed to support communities in their economic development efforts, whether they are increasing childcare options to support the local workforce or improving city infrastructure. A project like the Trojan Business Park, which is designed to attract business investment, create jobs, and increase housing inventory, aligns clearly with REED’s goals.  

“REED’s finance officer, Angie Neises, made the process smooth and easy to understand and negotiate,” says J.D. Bormann, Vice President of Farmers State Bank and a PADC board member. “We truly appreciate their flexibility and will definitely use the fund on future projects.”

This project also builds trust with Parkston residents. They can see how the City and PADC are actively working to bring opportunities to the region that directly benefit the community. When a project like the Trojan Business Park is successful, residents can feel comfortable supporting other economic development activities in the area. 

Explore Other REED Projects

REED supports community projects across its electric cooperatives in South Dakota. It covers a wide range of economic development activities, including quality of life improvements and healthcare. Check out some of the most recent projects funded through REED loans and the difference they will make in their communities. If you’re ready to turn your project plan into a reality, request an application today.