Gateway gives North Sioux a whole new look
By Dave Dreeszen, Journal business editor, Copyright 2007 Sioux City Journal | Posted: Monday, December 17, 2007
NORTH SIOUX CITY -- After Gateway came to town, this southeast South Dakota city on Sioux City's border took on a whole different look.
The arrival of the fast-growing personal computer maker in 1990 ushered in a prolonged boom in industrial and commercial construction for North Sioux City, population 2,288.
Shedding its traditional image as a place where out-of-staters came to drink beer, buy fireworks or bet on greyhound races, the once-sleepy little town turned into a major economic player, competing and often beating its larger Iowa and Nebraska neighbors for new and expanding businesses.
In the mid-1980s, Iowa Public Service Co., a predecessor to MidAmerican Energy Co., laid the groundwork for a major diversification of North Sioux City's economy, which had little commercial or industrial development at the time. The utility's economic development arm carved a 137-acre business park out of corn and soybean fields on the west end of town, near Interstate 29.
In Gateway 2000, the upstart founded by Ted Waitt and Mike Hammond in a Sioux City farmhouse in 1985, the new business park landed its first major tenant.
With its sales exploding, Gateway had outgrown its Sergeant Bluff plant, where it had moved in 1988 from Sioux City's Livestock Exchange Building. That set off a high-stakes dual between Iowa and South Dakota, with governors from each state making personal visits and generous offers of financial incentives.
A more business-friendly climate in South Dakota, which has no personal or corporate income tax, easily tipped the scales in favor of North Sioux City.
The company, which left Sergeant Bluff with about 200 workers, went on a hiring and building spree almost immediately after holding the grand opening for its first 33,000-square-foot North Sioux City plant on Jan. 15, 1990.
"The day they dedicated it, they announced they planned to double in size,'' recalled Glenn Ivarsen, a retired MidAmerican executive who played a key role in bringing Gateway to North Sioux City. "Of course, the growth continued tremendously after that point.''
Following a half-dozen years of nearly continuous construction, Gateway's sprawling campus grew to nearly 1 million square feet of office, manufacturing and warehouse space. The company, which acquired 80 acres, or nearly two-thirds of the land, in the Gateway Business Park, also bought or leased additional buildings on the outskirts of the park's boundaries.
By the late 1990s, Gateway's employment peaked at about 5,700, more than double the city's population.
The presence of a Fortune 500 firm fueled additional growth and new construction as the city landed more new industries, including a pet-food manufacturer and a hydraulic-cylinder maker. The taxable value of property in the city exploded, from $22.5 million in 1990 to $133.5 million in 2003, according to the state Department of Revenue and Regulation.
A number of vendors that supplied computer components came to town to be closer to Gateway's factory. Hotels, fast-food restaurants and other service-oriented business also popped up near the complex and its multitude of workers.
"When they first started up, they had no cafeteria on their premises, so a great number of the Gateway employees left the building and came to various businesses for lunch,'' said Joanie Christiansen, owner of the Skyline, a local video lottery casino.
Christiansen, who has lived in North Sioux City since 1966 and served on the city council for the past 16 years, recalled what the town was like in its pre-Gateway days.
"There were not many places to eat and not much to do,'' she said. "There were some empty buildings on Main Street. I think we were viewed by outsiders as a bedroom community, and I think the reputation of the 'fighting' in the '50s and '60s still prevailed.''
During the 1950s and 1960s, 18-year-old Iowans and Nebraskans, too young to legally drink in their own states, flocked to North Sioux City bars, where they could buy beer with 3.2 percent alcohol content. Inevitably, some fights ensued.
For decades, out-of-state visitors also were drawn to North Sioux City's many fireworks stands along the interstate and to Sodrac Park, a since-closed dog track. In 1989, another form of legalized gambling quickly took its place, after South Dakota lawmakers approved the nation's first video lottery system.
The Skyline, the North Sioux City bar that Christiansen and her late husband, Joe, had acquired in 1983, was among the first local businesses to install the slotlike video machines. Today, more than a dozen video lottery casinos operate in North Sioux City. Most are along Military Road, which forms a Las Vegas-style strip just across the Iowa border.
The simultaneous growth in video lottery and Gateway's computer sales contributed to robust local sales taxes for the city. In 2000, collections hit a high of $4.6 million, according to state figures.
Christiansen said the flush receipts kept local property taxes low while at the same time allowed the city to build a new city hall, pave virtually every street in town and make other infrastructure improvements.
As Gateway downsized and stopped assembling computers in North Sioux City, local sales tax receipts slowed dramatically. But the $1.9 million that the city collected in 2006 still ranked as the second-most among cities with populations of 5,000 or less, Kory Menken, executive director of North Sioux City Economic Development Corp., noted.
Menken said the city has weathered Gateway's downturn, which led the company to shed nearly 5,000 local jobs in recent years. As the result of two sales involving the company this fall, the remaining workforce essentially has been split in two. Taiwan-based Acer, which acquired the consumer part of Gateway's business, employs about 400 people. Another 450 employees now work for Nampa, Idaho-based MPC Corp., which bought Gateway's professional unit and kept it in North Sioux City.
MPC leases space on the second floor of Gateway's former Argentina building. The first floor is home to Chino, Calif.-based Alorica's contract call center, which has grown into the city's largest employer in just a year's time. Alorica is in the process of hiring 300 more workers for its 850-employee center, which has contracts with Gateway and AT&T Wireless.
A long list of other companies also has moved into buildings Gateway owns or previously leased. Chris Bogenrief, a local commercial Realtor, said the city's large inventory of turnkey buildings turned into an asset.
"Vacant buildings attract businesses because they don't cost as much as new buildings,'' Bogenrief said. "It allowed a lot of new companies to take over those vacated spaces.''
Among the new businesses occupying former Gateway space: MachineryLink, a leaser of combines and other farm machinery; Portionables, a food processor; Hantover, a distributor of supplies to the food industry; and Frito Lay, a snack food distributor. The new arrivals also include several businesses started by former Gateway employees, such as Dakota PC Warehouse, a discounter of computers and consumer electronics, and Radiosophy, a maker of HD radios.
The city is also growing beyond the vicinity of the Gateway campus. Earlier this summer, Nutraferma announced plans for a $8 million biotech facility in Flynn Business Park, a newly created light industrial park on the north edge of town. The plant, a partnership between Sioux City-based Nutra-Flo Protein and South Korean-based Genebiotech, will manufacture soy-based animal feeds with cutting-edge technology.
Menken noted that North Sioux City has added 2,800 jobs in the past four years. At the same time, the local economy has become more stable and diverse.
"If we continue to maintain the current pace of economic activity, we will replace the number of jobs lost at Gateway in a shorter period of time than it took to create them,'' he said. "More importantly, all our eggs will not be in one basket. We won't be living and dying by the ups and down of a single industry.''
Here are some new employers that have moved into former Gateway space
MPC, the new owner of Gateway's professional sales division. Retained about 450 former Gateway employees.
Alorica, an 850-seat call center. Currently hiring about 300 more workers.
Lincare, a 40-seat billing center.
Edge Teleservices, a 300-plus-seat call center.
Mass Marketing, a 60-plus-seat call center.
Frito Lay, a snack food distribution center, employing 20 to 30
Portionables, a food processor with plans to create about 100 local jobs
MachineryLink, a leaser of combines and other farm equipment, with plans to create about 100 local jobs
Hantover, a distributor of supplies to the food industry, with about a half-dozen local jobs
Here are some existing businesses that have expanded into former Gateway space
Prince Manufacturing, a manufacturer of hydraulic cylinders and components
Fimco Industries, a manufacturer of agricultural sprayers
Mars Inc., (formerly Menu Foods), a manufacturer of pet food
The arrival of the fast-growing personal computer maker in 1990 ushered in a prolonged boom in industrial and commercial construction for North Sioux City, population 2,288.
Shedding its traditional image as a place where out-of-staters came to drink beer, buy fireworks or bet on greyhound races, the once-sleepy little town turned into a major economic player, competing and often beating its larger Iowa and Nebraska neighbors for new and expanding businesses.
In the mid-1980s, Iowa Public Service Co., a predecessor to MidAmerican Energy Co., laid the groundwork for a major diversification of North Sioux City's economy, which had little commercial or industrial development at the time. The utility's economic development arm carved a 137-acre business park out of corn and soybean fields on the west end of town, near Interstate 29.
In Gateway 2000, the upstart founded by Ted Waitt and Mike Hammond in a Sioux City farmhouse in 1985, the new business park landed its first major tenant.
With its sales exploding, Gateway had outgrown its Sergeant Bluff plant, where it had moved in 1988 from Sioux City's Livestock Exchange Building. That set off a high-stakes dual between Iowa and South Dakota, with governors from each state making personal visits and generous offers of financial incentives.
A more business-friendly climate in South Dakota, which has no personal or corporate income tax, easily tipped the scales in favor of North Sioux City.
The company, which left Sergeant Bluff with about 200 workers, went on a hiring and building spree almost immediately after holding the grand opening for its first 33,000-square-foot North Sioux City plant on Jan. 15, 1990.
"The day they dedicated it, they announced they planned to double in size,'' recalled Glenn Ivarsen, a retired MidAmerican executive who played a key role in bringing Gateway to North Sioux City. "Of course, the growth continued tremendously after that point.''
Following a half-dozen years of nearly continuous construction, Gateway's sprawling campus grew to nearly 1 million square feet of office, manufacturing and warehouse space. The company, which acquired 80 acres, or nearly two-thirds of the land, in the Gateway Business Park, also bought or leased additional buildings on the outskirts of the park's boundaries.
By the late 1990s, Gateway's employment peaked at about 5,700, more than double the city's population.
The presence of a Fortune 500 firm fueled additional growth and new construction as the city landed more new industries, including a pet-food manufacturer and a hydraulic-cylinder maker. The taxable value of property in the city exploded, from $22.5 million in 1990 to $133.5 million in 2003, according to the state Department of Revenue and Regulation.
A number of vendors that supplied computer components came to town to be closer to Gateway's factory. Hotels, fast-food restaurants and other service-oriented business also popped up near the complex and its multitude of workers.
"When they first started up, they had no cafeteria on their premises, so a great number of the Gateway employees left the building and came to various businesses for lunch,'' said Joanie Christiansen, owner of the Skyline, a local video lottery casino.
Christiansen, who has lived in North Sioux City since 1966 and served on the city council for the past 16 years, recalled what the town was like in its pre-Gateway days.
"There were not many places to eat and not much to do,'' she said. "There were some empty buildings on Main Street. I think we were viewed by outsiders as a bedroom community, and I think the reputation of the 'fighting' in the '50s and '60s still prevailed.''
During the 1950s and 1960s, 18-year-old Iowans and Nebraskans, too young to legally drink in their own states, flocked to North Sioux City bars, where they could buy beer with 3.2 percent alcohol content. Inevitably, some fights ensued.
For decades, out-of-state visitors also were drawn to North Sioux City's many fireworks stands along the interstate and to Sodrac Park, a since-closed dog track. In 1989, another form of legalized gambling quickly took its place, after South Dakota lawmakers approved the nation's first video lottery system.
The Skyline, the North Sioux City bar that Christiansen and her late husband, Joe, had acquired in 1983, was among the first local businesses to install the slotlike video machines. Today, more than a dozen video lottery casinos operate in North Sioux City. Most are along Military Road, which forms a Las Vegas-style strip just across the Iowa border.
The simultaneous growth in video lottery and Gateway's computer sales contributed to robust local sales taxes for the city. In 2000, collections hit a high of $4.6 million, according to state figures.
Christiansen said the flush receipts kept local property taxes low while at the same time allowed the city to build a new city hall, pave virtually every street in town and make other infrastructure improvements.
As Gateway downsized and stopped assembling computers in North Sioux City, local sales tax receipts slowed dramatically. But the $1.9 million that the city collected in 2006 still ranked as the second-most among cities with populations of 5,000 or less, Kory Menken, executive director of North Sioux City Economic Development Corp., noted.
Menken said the city has weathered Gateway's downturn, which led the company to shed nearly 5,000 local jobs in recent years. As the result of two sales involving the company this fall, the remaining workforce essentially has been split in two. Taiwan-based Acer, which acquired the consumer part of Gateway's business, employs about 400 people. Another 450 employees now work for Nampa, Idaho-based MPC Corp., which bought Gateway's professional unit and kept it in North Sioux City.
MPC leases space on the second floor of Gateway's former Argentina building. The first floor is home to Chino, Calif.-based Alorica's contract call center, which has grown into the city's largest employer in just a year's time. Alorica is in the process of hiring 300 more workers for its 850-employee center, which has contracts with Gateway and AT&T Wireless.
A long list of other companies also has moved into buildings Gateway owns or previously leased. Chris Bogenrief, a local commercial Realtor, said the city's large inventory of turnkey buildings turned into an asset.
"Vacant buildings attract businesses because they don't cost as much as new buildings,'' Bogenrief said. "It allowed a lot of new companies to take over those vacated spaces.''
Among the new businesses occupying former Gateway space: MachineryLink, a leaser of combines and other farm machinery; Portionables, a food processor; Hantover, a distributor of supplies to the food industry; and Frito Lay, a snack food distributor. The new arrivals also include several businesses started by former Gateway employees, such as Dakota PC Warehouse, a discounter of computers and consumer electronics, and Radiosophy, a maker of HD radios.
The city is also growing beyond the vicinity of the Gateway campus. Earlier this summer, Nutraferma announced plans for a $8 million biotech facility in Flynn Business Park, a newly created light industrial park on the north edge of town. The plant, a partnership between Sioux City-based Nutra-Flo Protein and South Korean-based Genebiotech, will manufacture soy-based animal feeds with cutting-edge technology.
Menken noted that North Sioux City has added 2,800 jobs in the past four years. At the same time, the local economy has become more stable and diverse.
"If we continue to maintain the current pace of economic activity, we will replace the number of jobs lost at Gateway in a shorter period of time than it took to create them,'' he said. "More importantly, all our eggs will not be in one basket. We won't be living and dying by the ups and down of a single industry.''
Here are some new employers that have moved into former Gateway space
MPC, the new owner of Gateway's professional sales division. Retained about 450 former Gateway employees.
Alorica, an 850-seat call center. Currently hiring about 300 more workers.
Lincare, a 40-seat billing center.
Edge Teleservices, a 300-plus-seat call center.
Mass Marketing, a 60-plus-seat call center.
Frito Lay, a snack food distribution center, employing 20 to 30
Portionables, a food processor with plans to create about 100 local jobs
MachineryLink, a leaser of combines and other farm equipment, with plans to create about 100 local jobs
Hantover, a distributor of supplies to the food industry, with about a half-dozen local jobs
Here are some existing businesses that have expanded into former Gateway space
Prince Manufacturing, a manufacturer of hydraulic cylinders and components
Fimco Industries, a manufacturer of agricultural sprayers
Mars Inc., (formerly Menu Foods), a manufacturer of pet food
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bill munro wrote on Dec 17, 2007 8:11 PM:
mr wrote on Dec 17, 2007 8:00 PM:
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