Feb. 3, 2020

The nearly $200 million Sioux Steel redevelopment will move forward as envisioned thanks to a unanimous City Council vote to approve a tax increment financing district for the property.

The project, anchored by a Canopy by Hilton hotel, will include the seven-story hotel and conference center, a nine-story mixed-use building and a parking ramp surrounded by 100 apartments.

The developer, Lloyd Cos., is working through the design process and the plan is to start construction later this year.

The hotel is scheduled to open in 2022. The 217-room property will include a bar overlooking Falls Park, a coffee shop, a restaurant connected to a pedestrian alley, a ballroom that will seat up to 500 people and multiple smaller meeting spaces to host conventions or corporate events.

Canopy is an “upper upscale” brand focused on locally inspired stays that launched in 2014 and is mostly expanding only in the top 50 cities worldwide. The closest one to Sioux Falls is in the Mill District of Minneapolis.

The $21.5 million Lloyd Cos. received in tax increment financing will be used to support the parking ramp. Lloyd will own and maintain the ramp, along with guaranteeing its financing. That makes the structure of the deal different from the city’s public-private partnership involving a parking ramp on Village on the River, which failed to develop as planned.

Some parking will be available to the public for a fee during the week and for free on nights and weekends consistent with the city’s parking system.

The 11-acre Sioux Steel property currently pays about $57,000 in annual property taxes. The proposed development on 7 acres of it is projected to pay $1.6 million.

“The amount of tax difference pre- and post-TIF are significant in addition to the jobs and the investment,” said Jeff Eckhoff, the city’s director of planning and development services.

Because of the amount of development planned on the site, “they technically could ask up to $50 million (in TIF financing) on this particular project,” council member Rick Kiley said.

“They’re requesting less than half of that. It just makes sense to do it, not to even mention the revenue this is going to generate from the hotel and the apartments and the shops and everything else it’s going to bring to the area.”

The TIF expires in 20 years.

“I want to thank the city for working alongside us to do this,” said Jake Quasney, Lloyd’s executive vice president of development.

“It was great to work through the project.”