$425 million mixed-use projects coming to downtown Sioux Falls
Construction is underway in downtown Sioux Falls for two mixed-use developments valued at a combined $425 million.
A massive crane sits on the lot of the $225 million Cherapa Place project, while fences covered in banners of architectural renderings mark the site of the $200 million Steel District complex.
The projects epitomize the "work, play, live" trend that blends housing with retail, office space, restaurants and recreation.
"It's really going to be something that is an amenity for the community," Jake Quasney, chief operating officer of Lloyd Companies, said of the Steel District.
The projects also reflect a commitment to downtown Sioux Falls.
"Sioux Falls is such a dynamic community that you have things building all the way on the outskirts of town," said Jeff Scherschligt, president of Pendar Properties, which is building Cherapa Place. "We've got to dedicate back to this core. The strength of a community is the core."
Scherschligt and Quasney spoke about their projects Monday during a meeting of the Downtown Sioux Falls Rotary Club.
The Steel District will include three buildings on 11 acres along the Big Sioux River at the site of the former Sioux Steel Company.
It will have luxury condos and apartments, a boutique hotel from Canopy Hilton, convention center, retail shops, and office space. Residents and workers will have access to a fitness center, and all three buildings will be connected with a skywalk.
C&B Operations — a John Deere dealer — is leasing the top two floors of the office building, Quasney said. And popular restaurant owners from the Twin Cities are opening three restaurants offering burgers, seafood, and Mexican food with a tequila bar.
"We really wanted to create something that was one, walkable, and two, it evolves, it's something that is multigenerational," Quasney said. "It's a place you can go grab a cup of coffee, it's a place that you're doing happy hour in the afternoons. And then we've got the late night atmosphere that we're trying to create."
Cherapa Place is also located along the Big Sioux River, near the Arc of Dreams Sculpture.
It's already home to Cherapa I, a building with a restaurant and office, retail and parking space. Pendar Properties is adding three additional buildings and a public courtyard.
The buildings will have luxury condos and apartments, a conference center/event space, a fitness center, and office, retail and restaurant space. Future tenants include Bancorp, MarketBeat, ISG and Eide Bailly LLP.
"I felt very strongly that if we could do an office tower and attract a major tenant like a Bancorp, it really would make a difference to downtown and bring that employment down here and then as you get the other tenants, and they stay downtown or they're new to downtown, that drives all of the retail," Scherschligt said.
TIF-financed parking structures
The Steel District and Cherapa Place are both building parking structures that will be financed with the help of tax increment financing districts approved by the City of Sioux Falls.
For a limited period of time, some of the tax dollars generated by the developments will help pay for the projects rather than go toward local governments.
The Steel District's TIF is worth $21.5 million, while Cherapa Place's TIF is worth $25 million.
Scherschligt and Quasney said TIF projects ultimately benefit everyone.
"I mean I could go and put five apartment buildings on that project and self-park them, but we as taxpayers have to recognize you're foregoing substantial revenues into the future because I only built an $80 million project where I could build a $220 million project," Quasney said.
"South Dakotans, everybody wants to park 10 feet from the front door, that's just our nature when it comes down to it," Scherschligt said. "It takes the city government through TIF to really provide the parking. So the bulk of the TIF that's involved in our two projects are all paying for downtown ramp parking, and ramp parking is five times as expensive as surface parking, so that makes it uncompetitive for your tenants."
The Steel District and Cherapa Place are expected to be complete within the next few years.
Note: SDPB rents its Sioux Falls studio from Lloyd Companies.