Jan. 16, 2023

A developer whose portfolio includes downtown redevelopment projects in Des Moines is negotiating with the city of Sioux Falls to develop some of the remaining former rail yard property downtown.

Iowa-based Christensen Development is planning a development with several buildings on 4.6 acres south of Eighth Street, including office, retail and apartments.

“We’re in the early stages, but we’re in exclusive negotiations with Christensen Development and negotiating with them to receive a formal proposal,” said Jeff Eckhoff, the city’s director of planning and development services.

Jake Christensen, who founded the firm in 2003, had been looking to expand from Des Moines into another market for several years and was introduced to Sioux Falls by ISG, which is designing the Cherapa Place expansion and locating its office there. The two had worked together previously, “so when they introduced me to Sioux Falls, it was a warm handoff, and I have to say I’m super impressed with the business community,” Christensen said. “Even competing developers have been welcoming.”

Christensen Development worked with ISG on the firm’s Des Moines office.

The two communities are similar, he said, pointing out their financial services sectors, history of weathering economic downturns and “just the overall attitude of the business community being very bullish on progress and development. We’re really excited about the opportunity of this location and what’s going on around it and what the future holds for that part of Sioux Falls.”

The property is being leased for parking while Cherapa Place is under construction. The lease ends this spring. Christensen’s concepts for the land are still evolving, but involve four buildings. One that would front Eighth Street is currently about 60,000 square feet and is attracting interest from office users, he said.

“We have very active conversations with two groups who would like to locate there, so it would be the most probable outcome that we have a mixed-use building,” he said. “And then yet-to-be-determined uses for the balance of the three buildings, but I don’t expect all four buildings to be residential.”

Right now, they’re designed for at least 150 apartments total and in five-story buildings, but that could go higher based on demand, he said. There is some capacity for underground parking, and Christensen is working with neighboring Pendar Properties and the city to create connectivity within the developments and to the city’s recreation trail.

“The experience we’ve had in Des Moines with how housing ebbs and flows has been really helpful in terms of gauging what can happen,” Christensen said. “I think Sioux Falls is going through a similar downtown renaissance that Des Moines went through 10 years ago and what occurred was ‘more was more’ – so every year, supply increased and demand followed suit, and I think what we’ve seen so far in downtown Sioux Falls is the same thing will occur.”

Christensen and Eckhoff said they expect the proposal to be brought forward soon, at which point “we can get into more serious negotiations,” Eckhoff said, which would lead to a development agreement “hopefully by spring sometime or early summer.”

While the city received interest in the property from multiple developers, Christensen’s vision for the area, reputation and experience led the city to begin negotiations, Eckhoff said.

“We went to Des Moines and toured his projects, met with a couple councilors, met with my counterpart in Des Moines who has done a lot of work with Jake,” he said.

 “We learned a lot about how Des Moines does downtown development and specifically their experience working with Christensen, and they all had great things to say. What I liked about him is it’s not cookie-cutter. Every project is unique to what he’s taking on, and he embraces the character. He’s got a nice sense of what fits in the downtown environment and has great experience and is financially solid and proven. His proposal by far brought the most density and energy to the site.”

Christensen’s portfolio includes projects in Iowa City, Omaha and Phoenix in addition to Des Moines. His specialty is infill development and historic restoration, with projects that include Des Moines’ City Hall block, which is a four-building, $110 million development that’s anchored by retailer West Elm.

“I think that has the most similarities (to the Sioux Falls concept),” he said. “A significant amount of our work has been in Des Moines’ East Village, and it’s predominantly been mixed use (from the) ground up. There’s a lot of similarities to Des Moines’ East Village in the East Bank area of Sioux Falls.”

Christensen Development converted this development in Des Moines’ East Village from warehouses to restaurants and retail, including Peace Tree Brewing.

In Sioux Falls, ISG has been named the architect for the downtown project and Journey Group as the general contractor.

Assuming the plans move forward, there could be a groundbreaking yet this year, Christensen said.

“That’s very possible,” he said. “We are honored with the reception we’ve received in Sioux Falls, and we look forward to working with the business community. While we have some definitive plans, not everything is set in stone.”