Nine story lines in business for 2019

Jan. 7, 2019

Predictions for a new year can seem a little gimmicky or cliche.

So this year, rather than single out people or places we’ll be watching, we opted to share what we believe will be nine key story lines to follow in the Sioux Falls-area business community in 2019.

Broader themes, including targeted industry growth, workforce development and the balance between new development and reinvestment, are woven throughout this list.

We look forward to covering these and many other story lines in the coming year and encourage you to follow along as we do!

9. Higher education evolution

Places far beyond Sioux Falls are trying to figure out what the future model of higher education looks like, and we’re taking significant steps in this region as well. The coming year could bring details on Augustana’s 2030 vision, a clearer focus for the University Center and continued evolution of graduate and undergraduate programs within a one-hour radius of Sioux Falls.

Dakota State University will open its Madison Cyber Labs, or MadLabs building, for the start of the 2019 school year. USD will open a cutting-edge finance and analytics lab this fall. These are the types of initiatives that symbolize how higher education can lead directly to economic and workforce development in our region. Watching those ties between the business community and higher education continue to strengthen will be a story to track not just this year but well into the future.

8. Gage redevelopment

In the next couple of months, the century-old Gage Brothers Concrete Products site at 12th Street and I-29 will fully move its operations to the company’s new northeast Sioux Falls headquarters.

We recently shared an ambitious plan for how the 30-acre property could redevelop, but there’s nothing specific committed for it yet. Once demolition is done this winter, the property will truly be an open canvas, but the timing and nature of development there will tell a lot about the strength not necessarily of the Sioux Falls economy but the broader national one.

To fully develop a property like this likely will require buy-in from major retailers, hotels, offices and other commercial entities. Their comfort level and timing with this site will say a lot. If the economy is humming along, we could see building activity this year. If things are shakier, it could sit a bit.

7. USD Discovery District

The past year brought a long-anticipated announcement of the USD Discovery District’s first two tenants – Alumend and SAB Biotherapeutics – that will be part of an 84,000-square-foot multitenant research building, as well as the state’s first commercial cGMP, or Current Good Manufacturing Practice, biotherapeutics manufacturing facility.

It’s not expected to open until 2020, but in the meantime, seeing construction can’t hurt as the USD Discovery District attempts to secure more tenants for the 80-acre development.

At the same time, the companies scheduled to go into space keep moving through clinical trials and toward bringing their breakthroughs to the marketplace. Their success could spark additional bioscience development that will benefit not just the Discovery District but our entire metro area.

6. Core reinvestment

The foundational goals Mayor Paul TenHaken set for his administration in his first term include elements that will require investment in core neighborhoods.

Expect one of them – accessible housing – to receive attention and exposure early this year.

“Housing and workforce are like hand in glove. You can’t have one without the other,” TenHaken said late last year. “I think businesses that help find solutions for employee housing will find it’s a huge competitive advantage.”

Transportation also likely will be an area of focus. As with accessible housing, it’s key to core-neighborhood stability and revitalization but also presents a conundrum to many cities, not just ours. Innovative strategies and collaboration partnerships likely will be key to solving it.

5. Interchanges, regional growth

It’s possible that within a two- or three-year time span, the Sioux Falls area will add two new interstate interchanges. The first – at Interstate 90 and Veterans Parkway – is well under construction and will open in 2020. The second – at Interstate 29 and 85th Street – has cleared a federal milestone and is moving forward with design and required environmental assessment. In an ideal scenario, construction would start in 2021.

Those two projects will bring significant development to their surrounding areas, and we expect at least some projects could start announcing on the east side this year.

Concurrently, the communities around Sioux Falls are showing signs of growth that likely will only amplify once those interchanges are built. There are at least a half-dozen developers already working on projects in Harrisburg, there are major parcels of land starting development in Tea, and there continues to be solid commercial and residential activity in Brandon, just to name a few.

Regional growth is going to be a story for the foreseeable future, and it will be interesting to see who in business capitalizes on it.

4. Medical corridor

The area from 69th Street and Louise Avenue to the west  is evolving into a major medical corridor. Already the home of Avera headquarters, Avera Behavioral Health and the Avera Heart Hospital, more big health centers are coming.

In October, Avera will open the first phase of its Avera on Louise campus at 69th and Louise. It’s the first of many buildings coming to the 82-acre property. The Human Performance Center and the Addiction & Recovery Center will follow shortly after, and there’s still plenty of space for additional development.

Just to the west, Alabama-based Encompass Health will start construction on the 40-bed Encompass Health Rehabilitation Hospital of Sioux Falls. The company has enough land that its rehab hospital eventually could double in size.

And don’t forget, Sanford Health still owns land in the area of 69th and Tallgrass Avenue. While part of it was donated for the new Sioux Falls Lutheran School, the health system still owns property for development.

3. Retail evolution

If 2018 marked the year Sioux Falls got hit by retail’s department store closure trend, 2019 could be the year that symbolizes how strong the retail market here actually is.

Within months of Younker’s closure at The Empire Mall, Dillard’s had leased the space with plans to significantly expand it. The mall campus will see continued revitalization with Scandinavian Designs furniture moving into the old Toys R Us and Roam Kitchen + Bar filling the restaurant space at The District.

Don’t be surprised if the coming year brings announcements of a redevelopment at the Sears site and a plan for the former Sioux Falls Ford Lincoln property.

And then there’s the Sanford Sports Complex, which also is bringing a new generation of retail to town. Fleet Farm could serve as an anchor to attract other stores and restaurants when it opens this summer. Great Shots aims to become a visitor destination with its blend of entertainment and dining. And Will’s Training Table will have a new name, menu and much bigger presence by spring.

2. Sanford-Good Samaritan, other M&A activity

Now that Sanford Health and The Evangelical Lutheran Good Samaritan Society officially are one, the story line shifts. A $7.5 billion, 50,000-person organization could change the conversation when it comes to additional acquisitions, especially given Good Samaritan’s existing national footprint.

Sanford CEO Kelby Krabbenhoft has made it clear in the past that growing the health system is a goal, alluding to potential acquisitions or partnerships in the Chicago area, the Twin Cities, Rapid City and Arizona.

One or more of those could take a significant step forward in the coming year.

That doesn’t even count the continued World Clinic expansion, which has brought Sanford into eight countries, or the growing Profile franchise that now counts more than 150 locations open or soon to open in 30 states.

The growing Sanford organization will be a story to watch not just this year but every year for the foreseeable future.

1. Downtown redevelopments

The biggest story line of the year easily could be downtown Sioux Falls, as there are potential major stories virtually anywhere you look.

Some are easy enough to predict – the continued growth of Uptown with the opening of The Cascade and Levitt Shell – and progress for what will become the state’s tallest building, Village on the River.

We’re also looking forward to the redevelopment of the Howe building on East Eighth Street, which will bring more retail space to the east end of downtown.

But other developments are in flux. The city is resetting its approach to the first parcel of the downtown rail yard that had been set to develop, and it’s possible another parcel could develop first. And then there’s the Sioux Steel property, which many expected would have an announced plan by now if not dirt being moved. By all accounts, it’s still moving forward, so expect an announcement sometime before spring.

And don’t forget about the south end of downtown. The momentum of Washington Square likely will continue to spark additional investment in that area. There’s still one retail space left, planned for a restaurant, and there are other properties in the area that could see redevelopment in the coming year.

Nine story lines in business for 2019

This year, rather than single out people or places we’ll be watching, we opted to share what we believe will be nine key story lines to follow in the Sioux Falls-area business community in 2019.

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