PIERRE, S.D. — Gov. Kristi Noem is using COVID-19 restrictions in other states to lure businesses to relocate to South Dakota. And while competition with South Dakota has always been a concern for businesses in southwest Minnesota, the timing of the ad campaign hurts, Marshall business and development groups say.

“The reason they’re doing this is, for the most part they’ve kept their businesses open,” said Marshall Area Chamber of Commerce president Brad Gruhot. This spring, businesses in Sioux Falls, S.D., stayed open without restrictions at a time when many Minnesota businesses were being shut down due to COVID-19 concerns. “Our business really took a hit.”

In an online ad, Noem tells business owners to “grow their company” in South Dakota where government will stay out of their way.

“When it comes to supporting growth and eliminating government heavy-handed interference, South Dakota means business,” Noem said in the ad from the Governor’s Office of Economic Development.

The Republican governor says Minnesota’s COVID-19-related restrictions, including a mandate to wear face masks in public buildings, has created an opportunity for businesses there to cross the border to South Dakota.

Noem says in South Dakota, people’s individual rights are respected and businesses won’t be shut down.

Noem has taken a relaxed approach to the pandemic. Even as Republican governors in states like Texas have moved to require people to wear masks, Noem didn’t require physical distancing or masks at the July 3 celebration at Mount Rushmore, which President Donald Trump attended.

Competition with South Dakota has long been a concern for economic development in southwest Minnesota, said Marshall EDA Director Lauren Deutz.

“Now, South Dakota seems to be taking a direct hit at us.” Deutz said. It’s something that’s on the EDA’s radar to address, she said.

Gruhot said Minnesota does present some challenges for business owners, like being a high-tax state.

“Minnesota doesn’t have a very friendly business environment. South Dakota does, and our businesses feel that,” he said.

While Minnesota doesn’t have the same tax and business climate as South Dakota, Deutz said the EDA and the Marshall area community can promote the things that make it a good place to be.

“We’re appealing to residents, not just businesses,” she said. Factors like a safe community and a willingness to help new businesses when possible are both positives, she said.

Gruhot said he thinks business in Marshall can recover from COVID-19, but it will take a lot of support from area residents to shop locally.

— The Associated Press contributed to this report