Oct. 24, 2022

One month shy of four years after the process began, an effort to construct an interchange at 85th Street and Interstate 29 is positioned to move ahead.

The Federal Highway Administration and state Department of Transportation have signed off on an environmental assessment that’s necessary before construction can begin.

“We’ve gone through a very thoughtful review,” said Mark Cotter, director of public works for Sioux Falls. “From the landowners all the way through the regulatory agencies, it’s been a really good working process. We wrote a very thorough and thoughtful environmental assessment that can now be put out so the public can see the study and ultimately take it through construction.”

There will be a public meeting to detail the plan in November with an opportunity for comments.

The environmental assessment looks at multiple impacts on the environment, from noise to wetlands, and concluded the interchange is cleared to move forward.

“That was a great call when he (Cotter) said that finally the EA had been approved,” said Jim Schmidt, Lincoln County commissioner. “That’s going to be a game-changer for Lincoln County and Tea and Harrisburg like no other.”

Getting to this point has involved a level of collaboration and funding essentially unheard of in the history of major transportation projects in the Sioux Falls area.

Going back to 2016, surrounding landowners upfronted funds to allow the federal review process to begin and initiate some preliminary design. Lincoln County then pledged up to $15 million if needed for construction. The city of Sioux Falls initiated improvements to the surrounding street network that are necessary to support the interchange. Later in the process, U.S. Sen. John Thune helped secure federal funding to advance construction.

“Those that really do watch economic development know the impact it has for everybody – for the communities, for the schools, counties, townships, you name it,” Schmidt said. “We got very creative, builders and investment people, and I can’t imagine what they will come up with when this is fully taken care of.”

The landowners have been uniquely collaborative, and they say the plan is to continue to do so as the area develops.

“It has everything you need – really a blank slate around there and the right group of people owning it and putting together a plan that makes sense,” said Jake Quasney of Lloyd Cos., which owns property in the area of 85th and Tallgrass Avenue. “I don’t think you get that opportunity very often, with that many acres and that many developers that have control of it where they’re willing to come together and do something collaborative and forward-thinking for the whole community.”

RMB Associates, which owns multiple large parcels in the area, has started construction of its Sage Meadows apartments, opening in late 2023 or early 2024, and has some commercial lots for sale along 85th and Tallgrass.

“It’s just such a relief (to have the EA approved). The group has been very cohesive, and we’ve had very good relationships,” CEO Joel Dykstra said.

“We’ve talked to a number of people because the lots are listed on the market, and I think most people are waiting for this event, and then they will decide if they want to be there in two or three years. They’ll have to buy a lot now because lots will start to sell.”

Concept plans could accommodate everything from big-box retail to hotels, he said.

“If you go back 10 to 12 years when the interchange idea was floated, the world was all about big boxes, and they talked about Bass Pro Shop and all that, but today retail is maybe less automatic,” he said.

Lloyd already has seen that apartments “have a ton of success” in the area, and “we’re right now planning a few different phases of housing projects, as well as large-scale commercial and office developments,” Quasney said.

“We’re looking to have development work get started in the next 12 to 18 months, and then from there we’d get going on hopefully some of the commercial-office land as the interchange starts to generate excitement. The goal is to get heads on beds out there sooner than later, so when it does open up it’s ready for really great commercial development. We’re working with the adjacent landowners to put a development plan together now. It’s been awesome to see the way that group works together.”

One of the biggest beneficiaries of the interchange likely will be the community of Tea, which anticipates building on the commercial momentum of its Bakker Landing project on the west side of the interstate. The land was developed by Sundowner Investments Group, led by Dan Lemme and being marketed by Harr & Lemme Commercial Real Estate.

“My building permits are going through the roof,” said Kevin Nissen, Tea’s planning and zoning administrator. “I don’t see it slowing down any time soon.”

Tea invested in sewer service on its north side to support the commercial interest, as well as tax increment financing to support development.

“As far as the 85th Street interchange, this is kind of a planner’s dream to some extent,” Nissen said. “You get raw land and a corridor, the 85th Street corridor, and work with Sioux Falls because they’ll be on the north side and we’ll be on the south, to plan for an area that will be a new corridor into basically both our cities into new areas. It’s just huge. We’re all excited about it.”

The Bakker Landing group continues to draw strong interest from “big clients they’re working with buying big chunks of land,” Nissen said. “Thornton (Flooring) is putting up a 90,000-square-foot building up there, and we’re doing even more behind Casey’s toward the interstate. We’re dealing with a new strip mall there … and we’ve got the Nine Mile Lake addition a half-mile to the west, and that’s got some commercial stuff along 85th Street that’s going to be mixed use – commercial and multifamily – and that’ll be closer to the Tea Ellis (Road) intersection.”

At some point, that also will become a major intersection “as we continue four lanes north and Sioux Falls continues four lanes south,” Nissen said. “In another 10, 20 years, it’s going to really look different. Maybe not that long.”

Next steps

The landowners continue to upfront funds to move design forward – money that ultimately will be credited back in their platting fees.

“We’re about probably 20 percent complete on the detail design,” Dykstra said. “Now they’re moving forward with detailed design, and they expect to have that done by early 2023, and they hope to go out to bid in the middle of the year.”

From there, it’s likely a two-year construction project to build the interchange.

“There’s more to do, but we’ve been progressively building Tallgrass from the (Avera) Heart Hospital south to 85th, and we built 85th from Louise to Tallgrass, and in some cases  you have to now wait for the interchange because of the scale of construction and the amount of earth work that needs to be done,” Cotter said. “But as people drive out, they’ll see significant development happening.”