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Sioux Falls Construction Boom

The city’s newest middle school, located near Southeast Technical Institute, will open in August 2014. At 170,000 sq. ft., it is similar to Memorial Middle School and will accommodate the city’s growing northwest side. The groundbreaking ceremony was held in August 2012. (Courtesy SF Chamber)
Courtesy SF Chamber
Courtesy SF Chamber
The city’s newest middle school, located near Southeast Technical Institute, will open in August 2014. At 170,000 sq. ft., it is similar to Memorial Middle School and will accommodate the city’s growing northwest side. The groundbreaking ceremony was held in August 2012. (Courtesy SF Chamber)

The numbers don’t lie: major investments are being made in new residential and commercial construction projects throughout the city. Sioux Falls is on tap to break construction value records, with more than $200 million in permits already issued in the first four months of the year.

Major construction projects started in 2012 are starting to take shape all across the city. From the Denny Sanford PREMIER Center to new schools in both the Sioux Falls and Harrisburg School districts.

The number of new hotels planned is encouraging for the visitor industry as well as the economy, said Sioux Falls Convention & Visitors Bureau Executive Director Teri Schmidt.

“It shows that the visitor industry is increasing … that the hotel’s owners believe there is potential for successful business in our city,” Schmidt said.

Schmidt said the increase in new facilities, like the Denny Sanford PREMIER Center, Sanford Pentagon, Scheel’s Iceplex and Community Indoor Tennis Center, there is a belief that Sioux Falls can host more visitors and events — requiring more hotel rooms. With the increase in hotels, Sioux Falls will be closing in on having 5,000 rooms.

“Because of the sports and events facilities being built, there is belief that many of the increased visitors will come to Sioux Falls to participate and/or attend these events,” Schmidt said. “There is great momentum for increasing the amount of visitor events in our community.”

Another factor is the increasing medical care offered in the community, Schmidt said, which also brings visitors who often need to stay in Sioux Falls. One of the proposed new hotel properties would be built on the Sanford Hospital & USD Medical Center campus.

“The hotel growth taking place in Sioux Falls is certainly a positive sign of growth,” Schmidt said. “The companies building these properties have done their homework on our community’s expanding market and obviously believe in the positive future potential and the importance of the visitor business in Sioux Falls.

Residential construction is also on the rise.

“Our members are busy, very busy,” said Julie Terrell, executive director of the Home Builders Association of the Sioux Empire (HBASE). “We’re hearing this from all aspects of the home building industry from the plumbers to the electricians to the framers. It’s great for our economy because when home building is strong, that financial kickback is felt throughout many other sectors of the local market as well.”

Statistics from the City of Sioux Falls show that single family units are up from 2012 and 2011, as well as townhomes and multiple family units. The total permits through the end of April this year for new residential construction— 975 — are up 345 percent above 2012 219 in 2012 and 176 in 2011.

Just like visitor spending, the economic impact of residential construction can be huge. According to Terrell, the estimated one-year economic impact of building 100 single family homes in Sioux Falls includes: $16.6 million in local income; $1.5 million in taxes and other revenue for local governments; and 272 local jobs. The additional, annual recurring impact of building those homes includes: $2.9 million in local income; $605,000 in taxes and other revenue for local governments; and 53 local jobs.

CONSTRUCTION STATS

New Nonresidential Buildings January - December 2012   Project Construction Value(in $millions) 1. Denny Sanford PREMIER Center $66.1 2. Sioux Falls Middle School $19.3 3. Sanford Pentagon $17.6 4. Harrisburg Middle School $14.5 5. Harrisburg Elementary School $14.5 6. Sanford Fieldhouse $9.3 7. Vance Thompson Vision $6.6 8. Fairfield Inn $5.0 9. Lumber Exchange $4.2 10. Animal Health $3.0 Source: City of Sioux Falls  

 

Nonresidential Building AdditionsJanuary - December 2012   Project Construction Value(in $millions) 1. Raven Industries (interior remodel) $6.2 2. Sanford Medical (interior remodel) $3.1 3. John Morrell & Co. (lagoon) $2.9 4. Raven Industries (extrusion tower) $1.9 5. Sioux Falls Regional Airport (restaurant remodel) $1.9 6. Harvey Dunn Elementary School (addition) $1.8 7. Oak Hills Baptist (classroom addition) $1.8 8. Fareway Foods (tenant finish) $1.5 9. Prairie Green Gold Course Clubhouse $1.5 10. Latter Day Saints (addition) $1.4 11. City of Sioux Falls (update) $1.4 Source: City of Sioux Falls  

 

Top Ten Projects Permitted in 2013   Project Construction Value(in $millions) 1. Scheels (addition/remodel) $6.2 2. Hilton Garden Inn Downtown $3.1 3. Empire Mall (updates/remodel) $2.9 4. University Hills (122 units) $1.9 5. Brooks Crossing (104 units) $1.9 6. Dakota Beverage $1.8 7. Glanbia Nutritionals Inc. $1.8 8. South Harmony (70 units) $1.5 9. Midcontinent Communications (addition) $1.5 10. Raven Industries (phase II remodel) $1.4 Source: City of Sioux Falls

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