Oct. 16, 2022

Not all my ideas turn out to be good ones, but I had a hunch this would be one of them.

It came to me as I cautiously climbed the scaffolding leading to the 10th floor of the future Bancorp building at Cherapa Place downtown.

There’s little point to touring a 10-story project if you’re not going to see the view from the top, right?

And when I did, I knew who else would appreciate it even more than I did: Craig Lloyd, board chairman of Lloyd Cos., which is building downtown’s other massive redevelopment, The Steel District.

The thought turned into a tour, and one recent Friday morning the leaders of Lloyd Cos. and Pendar Properties, the developers of Cherapa Place, agreed to show one another, and me, each other’s respective projects.

There are few places in this country, I would bet – and even fewer communities our size – that have multiple high-rise construction cranes working on a combined half-billion-dollars’ worth of new development within blocks of each other downtown.

There are even fewer where the leaders of both companies would take one another behind the scenes of their projects and genuinely express their appreciation for what their counterpart is building.

For two hours, we crisscrossed downtown properties. Craig Lloyd, Jeff Scherschligt and their next-generation family leaders Chris Thorkelson and Anne Haber, along with several city of Sioux Falls directors, showed the incredible progress their buildings are making. Between them, there are nine multistory structures in various stages of construction, from office towers to a destination hotel, hundreds of new apartments and luxury condominiums in both projects.

“How are your condo sales coming?” Lloyd asked Scherschligt at one point in the tour.

“We’ve only got three left,” he said.

“Wonderful,” Lloyd replied.

“Wonderful?” And I could tell he meant it. In case you missed it, these guys technically are competing against each other for buyers, just as they did for office tenants and could for retailers and apartment tenants.

But that, in one word, captures what sets Sioux Falls apart.

I thought about it recently when talking to the consultants who were hired to do a market analysis as the city prepares its Downtown 2035 long-range plan.

They came away with a similar impression.

“We interviewed people from both those groups, and they just genuinely seemed to be parallel playing in the market,” said Ted Kamp, senior associate at Leland Consulting Group.

The two “are not competing, really,” agreed his colleague, Chris Zahas. “They both have pre-leased their buildings, and that’s also pretty unique. Ted and I work in communities like Sioux Falls that might have the demographics and the job base, but they don’t have anybody to actually build it. It takes a certain kind of developer to pull off a mixed-use project in a downtown.”

In many communities our size, developers with that skill set just don’t exist, and there isn’t enough to lure them from larger markets.

“You have talented developers doing big-city-style development in a medium-sized city, and they’re locally based, so they’re rooted in the community, and that’s an asset,” Zahas said. “That is a differentiator. Which cities head down the path of revitalization downtown and which don’t (depends on) do you have local-based developers to do that kind of development or don’t you? And the ones that do take off, and the ones that don’t go slower.”

The market analysis and long-range plan for downtown Sioux Falls are not finalized or approved yet, but the executive summary released recently begins to detail the possibilities as downtown looks to 2035.

I was particularly intrigued by the properties identified as potential redevelopment areas, including some we’ve not discussed much – the Wells Fargo block and the property just east of downtown currently used by the state of South Dakota for the Department of Labor and other offices.

Farther into the future, there could be other, even bigger opportunities.

“In 15 to 20 years, at some point it’s going to pencil out for Smithfield to build a brand-new plant somewhere,” Kamp said. “And that will open up a huge chunk of land. And the prison – not that anyone is talking about anything – at some point that too could go away and open up a giant chunk. So the north, in the longer term, could have potential.”

In the meantime, the city announced last week plans to solicit interest from developers in building around the parking ramp on 10th Street east of Phillips Avenue. That likely will create another mixed-use project, assuming the interest matches the city’s goals for the property.

“What’s most important is continuing the momentum,” Zahas said. “Stagnation kills everything, and the stigma of a failed project also can slow things down. Don’t have low standards but also don’t say no to something that would actually be really good, even if it’s not what you originally wanted.”

I will agree that continuing the momentum is important – but with one addendum.

What’s most important as we continue to build downtown and throughout this region is maintaining the same community-first spirit that I saw beneath the cranes as we toured Cherapa Place and The Steel District.

We’re fortunate these developers are talented enough to make things happen, committed enough to bet on our community and able to convince others to do the same. And while, of course, it’s an inherently competitive industry, at the end of the day, they genuinely want to see each other succeed.

That creates a ripple effect that draws other businesses, including The Bancorp, which we announced last week is moving its headquarters from Delaware to South Dakota. The business is the anchor tenant in Cherapa’s 10-story mixed-use building.

“We couldn’t be more excited to be part of this incredible development,” chief marketing officer Maria Wainwright told me. “We’re all helping each other grow and develop the Sioux Falls area, especially along the river. From an outside perspective of someone who does not live there but frequently flies there, it’s just a cool town and a cool city to be part of, and I just love where we’re at.”

Competition in business is healthy when it pushes everyone to bring their best. Government works optimally when it acts as a player in supporting growth and not a roadblock. Combine the two and put community above individual interests, and you’ve got the ultimate trifecta.

It feels like we’ve achieved that in downtown Sioux Falls at this moment in time. If we can continue it as we tackle the opportunities of 2035 and beyond, it would be – to quote Craig Lloyd, “wonderful.”

Downtown planning process finding opportunities to expand