July 1, 2024

Sioux Falls building activity lags behind the past two years through the first half of 2024, but a billion-dollar year is still in sight.

Through June, the value of building permits in the city totaled $485.1 million, compared with $570.6 million in 2023 and $868.5 million two years ago.

That’s without very many large projects to start the year, said Jeff Eckhoff, the city’s director of planning and development services.

“Right now, there are only four projects over $10 million. … Obviously, there’s just a lot of smaller projects, so the activity level is pretty high,” he said. “To me, that’s impressive.”

Commercial activity totaled $257 million through midyear, compared with $307.4 million last year and $586.4 million two years ago.

A permit for the largest project so far this year was issued in June: $32 million for the Minnehaha County Juvenile Justice Center at 4200 S. West Ave.

The other projects of more than $10 million this year are all apartments:

• Maple Rock Apartments at 3100 E. Autumn Blaze St. for $15.1 million.
• Yukon at Benson Apartments at 3700 N. Yukon Ave. for $10.9 million.
• Spring Creek Apartments at 1801 E. 77th Circle for $10 million.

Other large projects that received permits in June include the 49-unit Foss Flats senior apartments at 1050 S. Foss Ave. for $6 million and a renovation project to add 10 inpatient beds at Avera McKennan Hospital & University Health Center for $4 million.

“We know there’s a number of large projects — some that have been announced, and some that haven’t, and we know they’re working on it,” Eckhoff said of permits to come yet this year.

Projects that could receive partial permits yet this year include the new LifeScape campus in northwest Sioux Falls, the gastroenterology building from Avera McKennan at the Avera on Louise campus, as well as Avera McKennan’s new tower for women’s and children’s hospital services on its main campus. The proposed redevelopment of city-owned rail yard land by Christensen Development also could start this year, and Schwan’s Co. has said it plans to start work on an Asian food production facility at Foundation Park.

New residential construction totals $91.7 million through the first half of the year, up from $73.1 million last year and down from $162.6 million in 2022. That represents 271 single-family homes, compared with 181 last year and 434 for the first half of 2022.

“We’re pleased to see the increase over last year in single-family homes,” Eckhoff said. “And even though still behind where we normally are, compared to the national trends, our builders remain cautiously optimistic. But interest rates continue to be a headwind, and presidential elections can have a wait-and-see effect on economic activity.”

The city has issued permits for 563 multifamily units through June, compared with 1,109 last year and 1,830 two years ago.

“That continued demand from multifamily and a bounce back on single-family underscores that we must still be seeing growth in population,” Eckhoff said. “We’ll find out at the end of the year, but that signals that population growth is fairly strong.”

Reaching $1 billion in building activity likely is “a new standard,” he added. “Some years we might not quite hit it, and some years we’ll exceed it, but that’s kind of what we look at every year for the next standard benchmark.”