Sept. 1, 2022

Sioux Falls has set a record for annual building activity, surpassing $1.5 billion in permits, thanks to its strongest month ever in August.

Permits for the month totaled more than $450 million, driven by the top three projects of the year so far:

• Improvements and expansion to the Sioux Falls water reclamation plant, 4510 N. Sycamore Ave., $170.5 million.
• Sanford Health’s surgical tower expansion, 1508 W. 22nd St., $90 million.
• Parking ramp at the Sioux Falls Regional Airport, $62.6 million.

“I’ve never seen anything like it,” said Butch Warrington, the city’s chief building official. “It was a perfect storm where all these big projects came in within the same month.”

To put the record month in context, in 2011 building permits for the year totaled $291.2 million. In 2012, it was $490.5 million.

“So 10 years ago, this would have not quite made for the whole year,” Warrington said.

The previous annual record was $1.1 billion in 2021.

So far this year, there has been $961.9 million in new commercial construction, compared with $300.5 million for the same time last year.

Commercial additions and remodeling projects totaled $299.5 million through August, compared with $160.1 million for the same time last year.

New residential construction continues to lag behind 2021, totaling $201 million, compared with $217.1 million, and representing 546 homes, compared with 638 homes.

“In residential, I think they’re doing as much work as they possibly can,” Warrington said. “I think there’s a manpower issue, but I also think there’s a material issue … and I’ve heard through the grapevine that concrete it a big issue right now. I don’t know who’s getting all the concrete, but I’ve heard for smaller residential guys it’s getting really tough.”

Building permits have been issued for 2,873 apartment units compared with 1,479 last year.

Among other large permits in August, the city issued one for the third building at Cherapa Place, which will be a mix of retail and apartments, at $37.7 million. Two apartment complexes, Willows Edge Estates at 7501 E. 10th St. and a project at 85th Street and Brett Avenue, totaled $15.3 million and $14.7 million, respectively.

Another phase of the PowderHaus Apartments at 2901 S. Burnsfield Ave. was issued a permit for $9.4 million, and a renovation of Solberg Hall on the Augustana University campus came in at $7 million.

Looking at permits that are yet to be issued, there are some big projects in the pipeline but not necessarily enough to cross the $2 billion mark for the year, Warrington said.

“Even if we get a bigger project to come in now, they’re going to be pushing for footings and foundations because they’ve only got four months,” he said.

Other projects yet to be permitted include the Midco Ice Arena at Augustana University, the expansion for Dillard’s at The Empire Mall and the fourth mixed-use building at Cherapa Place.

“And we’ve probably got some apartments that are still going to go,” Warrington said.

“But this next month will be really interesting because last year about now is when the number of plans escalated in our queue to where you were two months behind to issue anything. We have an extra plans examiner this year, and that has really paid dividends, but we should start seeing plans where they want to get footings and foundations in this year. This next month is going to be really interesting to see what comes in.”

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