Officials defend efforts to recruit Verifications

In the wake of an announcement Thursday that a local office will close before the end of the year, city development officials say they do not regret bringing the company to town.

Verifications opened
Bonny Culhane, who was president of the Mitchell Area Development Corp. at the time, greets then-Gov. Mike Rounds in this October 2006 photo during a ribbon-cutting ceremony for the opening of Verifications Inc. in Mitchell. It was announced last week that the office is closing.

In the wake of an announcement Thursday that a local office will close before the end of the year, city development officials say they do not regret bringing the company to town.

Verifications Inc., a human resources services company, will close its Mitchell and Aberdeen locations before the end of 2012 and move the jobs to other facilities in Arizona, India and the Philippines.

The closures will affect approximately 140 employees in South Dakota, with 79 of those in Mitchell. The company's Watertown location will remain open.

"It's a dual-edged sword when somebody leaves town," said Mitchell Area Development Corp. Regional Development Director David Lambert. "We hate to see them leave, but it opens up an opportunity for someone to move in to one of those properties."

Verifications leases its Mitchell facility from MADC and will be required to pay about $152,000 annually in rent until March 2018, according to MADC Executive Director Bryan Hisel. Verifications Executive Vice President of Operations Bill Wilder said Thursday the company will honor its obligation.


"Once we get a building up, it becomes an asset to the community," Hisel said. "The building doesn't leave."

The 18,400-square-foot-building is located at 1308 W. 15th Ave., just off the state Highway 37 bypass.

MADC broke ground at the site, with Verifications management present, in October 2005.

It was constructed using $1.5 million in loans, including $500,000 from the city of Mitchell and $700,000 from the state Revolving Economic Development and Initiative (REDI) Fund.

"Do I regret it? No, I think we would have done it again," Hisel said of the effort put into attracting the company to Mitchell. Verifications chose the city over other possible locations in Yankton and Rapid City.

Despite the recent setback, Mitchell should continue to recruit outside companies as well as growing its own businesses from within, Hisel said.

"You need both to have a healthy economy," Hisel said. "External companies can be terrific partners in your communities."

Hisel referenced the Chicago-based consulting firm Navigant Consulting Inc. as an example of an outside company growing in South Dakota. Navigant announced March 26 it will open a new location in Vermillion. The company expects the expansion will bring 120 jobs to the area by the end of 2013, a news release says.


Navigant's new location will be its third in South Dakota. The company already has facilities in Mitchell and Plankinton.

"It is always more fun to introduce when a business is coming to town than when one is leaving," said Mitchell Mayor Lou Sebert.

Mitchell needs to continue to attract outside companies, Sebert said.

"If you stop recruiting companies that aren't home-based here, then I think you're going backward," he said.

Commissioner of the Governor's Office of Economic Development Pat Costello said he believes a recent change to the state's REDI Fund program will make South Dakota a more attractive location for businesses.

The interest rate for new loans from the REDI Fund was lowered from 3 percent to 2 percent on April 23.

"We expect it will be a more desirable incentive," Costello said. "We will be able to put together more desirable packages for companies."

The loan program was started in 1987 and has created more than 30,000 jobs in South Dakota, a news release says.


The REDI Fund loan given to MADC for construction of the Verifications building was repaid earlier this year, Costello said.

"A good businessperson does not dwell on failures, they dwell on successes," Sebert said. "When you have a business leave here, it means you don't drop over dead, you move on to something else."

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