Jan. 8, 2019

The downtown Huey Apartments building will not be renovated into lofts and a restaurant as developers had envisioned. Instead, the plan is to return to subsidized housing through the U.S. Department of Housing and Urban Development.

Green Acre Cos. had proposed a $13 million project in the 40-year-old building at 112 N. Phillips Ave. that would have doubled it in size and added a bar, restaurant and event space.

The deal ran into difficulty when the Sioux Falls City Council denied a proposal to declare city-owned property behind the building as surplus. Neighboring property owners and tenants opposed the plan, citing concerns about access.

Green Acre was set to buy the building this month.

“We’re not exercising the option to purchase,” Green Acre partner Josh Aberson said. “We strived to be very transparent throughout the entire process regarding the details of the deals, but varying outside influences and circumstances that were widely reported ended up rendering the project unviable. It’s unfortunate. It would have been a great addition to downtown Sioux Falls.”

Building owner Paul Stenholtz is planning to sell the building to Angel Jarzebczyk, who has managed it for him the past two years as part of her business, Dakota Property Management.

“She got along with the tenants great, and I just think she’s going to make a good owner,” he said.

The building will be remodeled but still include 44 one-bedroom apartments.

“We’ll put in new flooring and new paint and just make sure everything is nice and clean and shiny,” Jarzebczyk said. “I have a plan for the outside. It’s just going to depend when it fits in the budget.”

The property needs to be approved again by HUD for Section 8 income-qualified housing – a process that’s temporarily on hold because of the government shutdown. Section 8 provides housing vouchers for people with very low incomes and incomes up to 80 percent of the area’s median.

Jarzebczyk, who has a family member living in the building, said she’s glad to be able to offer the subsidized rent.

“I know there’s a need, so I’m glad to be able to do something about it,” she said. “If it was just conventional housing for anyone who could afford it, I’d be less interested.”

There are 14 tenants remaining in the building, so apartments for them will be renovated first and then she will start leasing others. There also is 4,000 square feet available on the main level for a commercial user.

Jarzebczyk can be reached at 605-359-0374 by potential tenants.

HUD contracts are given in five-year cycles, so the property likely will remain in the program for that long – if not longer.

“My guess is at a minimum I’ll keep doing it until I retire, and that will be 20 years,” Jarzebczyk said. “But it depends on HUD and what the federal government does.”

In the meantime, Green Acre hasn’t given up on doing a downtown development.

“We have a handful of downtown properties we’re in discussions with, as well as other markets in the upper Midwest,” Aberson said. “We’re refocusing and moving ahead.”