July 16, 2018

The first project to redevelop part of the downtown rail yard is envisioned as a mix of commercial and residential that would enhance the area around 8th & Railroad Center.

The development will be owned by Black Iron Railyard LLC, which is led by David R. and Erika Billion. Erika Billion owns and operates several properties in the area, including 8th & Railroad Center, the Crane Centre and The Frank building.

It will occupy four of the 10 acres the city purchased from BNSF Railway in 2015 using federal dollars.

Located south of Eighth Street on the south parcel of the redevelopment, the first phase will include a six-story building combining commercial and residential space that’s at least 100,000 square feet.

The city spent a year negotiating with the developers, according to Mike Cooper, the city’s director of planning and building services.

“It’s going to fit extremely well with the concept and vision of what this rail yard is going to be,” he said.

The first phase must be started by June 2019, according to an agreement between the city and the developers, and mostly done by the end of 2020. The developers have until the end of 2030 to finish the second phase, which will include a mix of uses. A rendering shows two buildings connected by a sky walk.

“We know that the market conditions can change from year to year,” Cooper said, noting that’s why the timeline is flexible.

Mayor Paul TenHaken called the project a chance “to breathe new life into downtown and put our generation’s stamp on the skyline.”

“It’s humbling to be here today,” said TenHaken, who marks 60 days in office and credited staff and prior elected officials for moving the project forward.

“This has been a long time in the making. With the completion of their investment in the East Bank, the Billion family is carrying out the legacies of a lot of people. This is obviously going to be a signature project.”

Billion credited his wife for the vision for the area.

“It’s been over 14 years ago she took a warehouse that was probably about 60 percent occupied and continued to develop within that,” he said. “She’s invested a lot of time, talent and energy into making this East Bank what it is.”

Billion mentioned his wife’s track record of landing quality tenants and said there’s a good opportunity to continue that.

“Everything is really owed to my wife and the hard work, dedication and time she spent developing the East Bank and making the East Bank what it is today.”

The announcement comes 13 years after Sens. Tim Johnson and John Thune first secured $40 million in federal funding to purchase land and remove track to relocate a portion of the BNSF Railway as well as the switching yard.

The city of Sioux Falls bought the rail yard property for  $27 million in late 2015 and began soliciting interest from developers in early 2017.

Developers who met minimum qualifications were asked to submit proposals in April.

In November, BNSF completed construction of siding tracks along Rice Street and connecting track downtown as its lease on the rail yard property expired, and the city took full possession.