July 25, 2024

A multistory development including Southeastern Behavioral Health and income-qualified apartments is planned to replace the vacated building on the so-called Mercato Block.

The existing building on the 600 block of West 11th Street would be demolished and replaced by a three-story building with Southeastern Behavioral Health on the first floor and 55 apartments designated for low-income residents on the floors above.

The property, which includes three parcels, has been owned by KFP LLC, an investment group, since late last year. Lloyd Cos. will be the developer and general contractor on the redevelopment, with Southeastern ultimately owning it.

“We’re rezoning it from commercial to mixed-use,” said Luke Jessen, Lloyd Cos. vice president of development. “It falls in one of the corridors the city is pushing to convert to mixed-use zoning, which allows the building to be built closer to the property line and allows for more urban parking requirements and things of that nature.”

Southeastern will provide 24-hour services there, including addiction, mental health and counseling services. The nonprofit moved out of its longtime building at Fifth Street and Phillips Avenue early this year and now is located at 600 S. Cliff Ave. Residents of the apartments — which will include single-resident occupancy, studio, one- and two-bedroom floor plans, will not have to be clients of Southeastern to live there.

A neighborhood meeting Wednesday drew about a dozen people, Jessen said.

“Everyone is excited to see something new happen on this block,” he said. “A lot of people expressed past frustrations with the cleanliness and the state of the property, and a lot of people were excited to see that something new was coming and very excited to see Southeastern being there to provide services to individuals that live in that neighborhood or pass through that neighborhood.”

Lloyd Cos. plans to request the rezoning from the Sioux Falls Planning Commission in early August, followed by the Sioux Falls City Council.

The hope is to demolish structures on the block yet this fall, Jessen said. That includes the main building and several garage structures.

Ultimately, the plan requires elements of public funding, including approval of housing tax credits from the state of South Dakota — a process that will occur this fall. Assuming it all comes together, the hope is to begin construction early next year, Jessen said. From there, it’s estimated construction will take 12 to 14 months.