With two new schools, major hospital projects and the steady addition of new restaurants and retail spaces, the 2019 construction season in Sioux Falls is shaping up to be another record-breaker.
Sioux Falls constant population growth and outward expansion fuels development across the sectors, and a couple of the year’s biggest builders so far – Sioux Falls public schools and Avera Health – chock up their multi-million-dollar projects to capacity concerns and a desire to meet the future needs of the community.
With June in the review mirror, a mid-year progress report for Sioux Falls construction industry would point to another strong year, but with some shifting trends, according to building permit data at City Hall.
“I think anytime you have those large substantial investments it says a lot about the confidence people have to make that type of investment and the type of growth that is expected,” City Planning Director Jeff Eckoff said.
Diverse mix fueling big construction year
The seven biggest projects so far in 2019 show the city’s physical growth is being driven from a diverse mix of economic influences, as building trends continue to shift from last year. Builders have been issued permits for $350.5 million worth of construction so far this year in Sioux Falls, on pace for a record year.
Projects such as Avera’s remodel of the operating rooms on the second-floor of its main, central Sioux Falls hospital have contributed to a spike in the commercial remodel category tracked by City Hall. A January-June report released this week by city officials shows the combined value of commercial remodels year-to-year are up nearly $34 million.
The value of retail, restaurant and other commercial projects so far this year have also jumped, compared to the mid-year report for 2018, thanks in part to projects such as four-story Hyatt hotel heading to the Lake Lorraine development in western Sioux Falls.
Local builder a big-project powerhouse
Due to its successful bids for the Avera projects and the Sioux Falls School District’s two new schools, Journey Group is again a winner so far in 2019, involved in three of city’s top seven projects.
Journey has gained the trust of Sioux Falls developers with consistency and efficiency, a company representative said in an emailed statement.
“We are continuously finding ways to improve and make our projects and processes more efficient, and in the end saving our customers time and budget,” company spokeswoman Dawn Andel said in an emailed statement.
The other four projects on this list are all managed by out-of-state contractors.
But 2019 isn’t finished. The rest of the year will bring plenty more activity across the city, and some of the numbers reported by the city’s permitting office will change as the 2019 construction season continues.
While there has been a steep drop off in the combined value of educational-institutional projects, school district officials plan to file more building permits for work on the new Jefferson High School. There also hasn’t been a single permit pulled for Ben Reifel Middle School, which is also heading for early phases of construction and is expected to open in 2021, the same year as the district’s new high school.
The top projects of 2019 so far as as follows:
No. 7: Nordica warehouse
Price: $6 million
Contractor: Hander Construction
The last project on this list is a warehouse, but it’s a big project not only in size but also in importance to the government-subsidized industrial park in the northwestern edge of Sioux Falls.
The massive scope of Nordica Warehouse Inc.’s nearly 200,000-square foot facility at Foundation Park is beginning to take shape.
[Nordica Warehouses Inc. is the third tenant at Foundation Park. Construction continues though the nearly 200,000-square-foot facility has mostly taken shape.]
Nordica Warehouses Inc. is the third tenant at Foundation Park. Construction continues though the nearly 200,000-square-foot facility has mostly taken shape. (Photo: Patrick Anderson)
Both state and city officials supported the development of Foundation Park, which was announced in 2015 but failed to find an anchor tenant until 2017 until it landed Win Chill Cold Storage. A year later, Nordica announced it was joining both Win Chill and local trucking firm Dakota Carriers by opening a facility at the park.
No. 6: Avera Human Performance Center (interior finishes)
Price: $8.13 million
While work finishes on Avera’s new orthopedic hospital in southwestern Sioux Falls, it is another facility just to the south that appears on this list due to extensive interior finishes.
Avera’s sports science and training facility will join the hospital and an addiction recovery center as part of the Avera on Louise campus, Flicek said.
[Construction workers move materials through the future volleyball courts at the Avera Human Performance Center on Louise Ave. on Tuesday, July 2, in Sioux Falls.] Buy Photo
Construction workers move materials through the future volleyball courts at the Avera Human Performance Center on Louise Ave. on Tuesday, July 2, in Sioux Falls. (Photo: Erin Bormett / Argus Leader)
The Avera Human Performance Center will include seven volleyball courts, fitness facilities, therapy pools, underwater treadmills and a medical clinic. It is set to open in January, 2020, after the hospital and the addiction recovery center.
“It will be a busy fall,” Flicek said.
The health care group has roughly $174 million worth of projects ongoing, he said, including work on the main campus in central Sioux Falls.
Construction continues on the Avera Human Performance Center on Louise Ave. on Tuesday, July 2, in Sioux Falls. (Photo: Erin Bormett / Argus Leader)
No. 5: Hyatt Place Lake Lorraine
Price: $8.9 million
Contractor: Lexstar Construction, Fargo, North Dakota
The developers behind Lake Lorraine have high hopes for Sioux Falls’ first Hyatt hotel, and say the project has already helped spur interest from other retailers.
Construction on the four-story Hyatt Place hotel at Lake Lorraine is expected to begin yet this year. Lake Lorraine also the announced the addition of the state’s first Aloft brand hotel.
[A standard double queen room in the new Hyatt Place hotel in Royal Oak, Michigan, photographed Jan. 10.]
A standard double queen room in the new Hyatt Place hotel in Royal Oak, Michigan, photographed Jan. 10. (Photo: Mandi Wright, Detroit Free Press)
When they open, the development’s two hotels will help increase traffic throughout the area and the promise of higher volume have helped attract other big retail and entertainment brands, including the recently announced Dave & Buster’s, said Mike Van Buskirk, president of operations for Van Buskirk Cos.
No. 4: Jefferson High School (footing and foundation work)
Price: $9 million
Sioux Falls public schools will build two new buildings in the next couple of years, and the first permit filed is just blip compared to the overall price tag for both project.
It’s also enough to rank fourth on this list of Sioux Falls top 2019 projects.
Officials have approved footing and foundation work for the new Jefferson High School in northwestern Sioux Falls. (Photo: Patrick Anderson)
The initial permit for the new Jefferson High School is for preliminary stages of construction, and crews from Journey have already started moving earth where the school will someday stand along Marion Road, between Madison and Maple streets.
Jefferson and the new Ben Reifel Middle School will cost an estimated $123 million to build, and both are needed to make room for the growing number of children in the younger grade levels, said Jeff Kreiter, operational services director for the school district.
[Shown is the latest unofficial artist rendering of the main entrance to Jefferson High School, the newest Sioux Falls School District campus expected to open by fall 2021. The rendering was presented to the school board Tuesday, May 28, 2019, as part of the final design plans for the campus.]
“We’re going to be able to house our almost 1,200 students who are in the system but don’t have a home right now,” Kreiter said. “It will (also) take some of the pressure off of Roosevelt High School.”
No. 3: Village Cooperative of Sioux Falls
Price: $10.3 million
Contractor: Real Estate Equities Development LLC, Eagan, Minnesota
The Minnesota-based company behind the first residential project on this list specializes in senior living communities and after years of experience has landed on a formula designed to benefit the needs of its residents.
Village Cooperative of Sioux Falls will include 61 owner-occupied units designed to replicate the feel and space of a traditional single-family home, with the extra space and amenities.
A rendering of the Village Cooperative senior housing development heading to southern Sioux Falls. (Photo: Contributed by Village Cooperative)
Crews have yet to begin moving earth on the Village project, heading to a parcel south of the University of Sioux Falls’ sports complex near the intersection of 77th Street and South Cliff Avenue. The project will take between 13-16 months once work begins, according to the company.
No. 2: Avera Health main hospital (second floor renovation)
Price: $12 million
This project is two years in the making and part of the health care systems ambitious plans to add to its physical presence in its home city.
Under construction at Avera’s main central Sioux Falls campus, the $12 million remodel is removed from the new Avera on Louise campus but still serves the organization’s goal of opening up more space for patients, said David Flicek, president and CEO of Avera McKennan.
“We’re just trying to meet the needs of the community as it grows,” Flicek said. “We are continually trying to grow with the community so we don’t fall behind.”
An aerial view of Avera McKennan Hospital & University Health Center. (Photo: Briana Sanchez / Argus Leader)
The massive overhaul to the hospital’s second floor includes adding four operating rooms and 10 pre-op and post-op rooms.
Crews are overhauling 50,000 square feet of space at the hospital as part of the project, according to an email from Journey leadership.
The work also gives Avera a chance to go in and update all of the operating rooms with new technology such as ultraviolet lights that help kill bacteria when the room isn’t being used.
No. 1: Encompass Health
Price: $15.5 million
Contractor: Brasfield & Gorrie LLC of Birmingham, Alabama
The biggest single construction project approved by City Hall so far this year will make room for a new player in Sioux Falls’ already competitive health care industry.
Alabama-based Encompass Health Corp announced in May it was opening a 40-bed hospital in the Sioux Falls market and work is already underway on a patch of land in southwestern Sioux Falls.
A design of Encompass Health's Sioux Falls hospital. (Photo: Contributed by Encompass Health)
In fact, the publicly traded health care provider will be neighbors with Avera Health, opening at the corner of Tallgrass Avenue and 69th Street next to Avera’s inpatient mental health hospital, Avera Behavioral Health.
For Sioux Falls, the project will help fill out one of the yet-undeveloped intersections in southern Sioux Falls – an increasingly rare commodity in that part of the city.
Crews started working on the project in May and Encompass leadership expects to construction to finish by May, 2020. Sioux Falls’ newest health care provider plans to offer what its representatives described this spring as cost-effective rehab services for Sioux Falls patients.
- Patrick Anderson - Sioux Falls Argus Leader - https://www.argusleader.com/story/news/business-journal/2019/07/03/sioux-falls-construction-biggest-projects/1617519001/