A Village falls from 15 stories to a parking ramp

KELOLAND.com Original
City of Sioux Falls terminates agreement with Village River Group

SIOUX FALLS, S.D. (KELO) — The only thing raised in this village project was a parking ramp.

Back in 2017, city leaders and developers promised a stellar project that would transform the skyline of Sioux Falls. At one-point it was a planned 15-story building that would have parking, a hotel and commercial space at 10th Street east of Phillips Avenue. A 15-story building would be the tallest in Sioux Falls.

The hotel and commercial development hasn’t happened. But the six-story parking ramp is there and it has a firewall on the exterior in preparation for any future development next door.

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“It’s performing exactly as projected,” Matt Nelson, the city’s public parking facilities manager said of the parking ramp. “We projected to have 300 plus leases and we have approximately 300 leases.”

“It’s doing how we projected, minus any development. At some point we expect development (there),” Nelson said.

The planned project was called Village on the River. The city announced the project in Nov. 14, 2017. Within weeks the Village was in controversary with debate within the Sioux Falls City Council and in the public. The controversary and problems continued until on May 14, 2019, when the city terminated a development agreement and ground lease for the Village on the River project with the Village River Group. 

The project was to be a public and private partnership between the city and developers. The city would contribute about $21 million which included a parking ramp. Developers would provide about $30 million.

That was the first version.

Another version, increased the height of the project to 15 stories, making it the tallest building in the city. The developers added more motel rooms and upped the investment to $50 million for a total public and private investment of about $70 million, according to media reports.

But, like an elevator, the Village project went up and down and up and down.

But media reported that in May of 2019, the rooms were cut from 215 to 152 and the private investment would be about $45 million. The building would be 11 stories instead of 15. It was to have been a seven-story parking ramp with a four-story hotel.

Nelson said the $21 million from the city did included the completed parking lot but it also included costs for site design and related costs for the entire proposed project.

A change in the Village cast

There were a number of investors or people involved in the Village project. Legacy Development and Consulting LLC was the original developer and remained the guaranteers of the project when construction started in May of 2018, according to a May 7 KELOLAND News story.

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Legacy Development and Consulting sparked controversary because the Village’s project director was Aaron Hultgren of Hultgren Construction. Hultgren Construction was under criminal investigation for a death that happened when the Copper Lounge building collapsed in 2016 in downtown Sioux Falls. The death also prompted a lawsuit which was settled for $4.2 million in 2019 and involved Hultgren Construction and Legacy Development, according to a Aug. 8, 2019 KELOLAND News story.

Changes to the Village cast came in late 2018 when Village River Group LLC, was formed on Dec. 28. Jeff Lamont of Aberdeen was named the manager of the Village River project.

But that change didn’t end the scrutiny as reported in a January 2019 story by KELOLAND News.

Tall, tall work in the Village

But by October 2018, work had already started on the project. A 255-foot crane was to be a foretaste of the 15-foot building in the project, news reports said.

Crane Starts Work On One Of The Tallest Buildings In South Dakota

“You can see the crane even from the interstates,” Journey Group Project Manager John Reiser said in an Oct. 11, 2018, KELOLAND News story.

“This is the largest we’ve had in our area,” Reiser said in the news story.

Work continued on the project as of May 7 but days later, the city dropped a bomb on the Village project.

The Village River Group LLC had been in default on the project since April 1, the city announced on May 14. The city terminated the contract with Village River Group.

In July, the 255-foot crane was removed. Construction continued on the parking ramp after the council had discussed an additional $1.5 million needed for the ramp project.

Trouble in the Village; ramp goes up

In October 2019, the investors and the developers of the Village on the River project claimed the city breached its contract with the two groups and that they may now sue the city.

The group said in June 2020 that it needed more time on a decision to file a lawsuit, media reported.

Sioux Falls Mayor Paul TenHaken told KELOLAND News on May 19,2021, that the city was still working through the legal process related to the Village on the River Project.

After more discussion on the council in late 2019, a city official announced on April 21, 2020, that the parking ramp would be completed in June or July.

Village on the River project update

The parking ramp opened in July of 2020.

Nelson said that 60% of the 525 spaces are leased spaces. The first floor is open only to hourly parking with 39 spaces. The other floors are open to leased and hourly parking on a first-come, first-serve basis.

The ramp was not developed to add a large influx of new parking spaces, Nelson said. It was developed to create parking spaces in other lots in the downtown which can spark development, Nelson said.

There was a waiting list for the parking ramp near the Diner, for example, Nelson said. Now that there are available spaces, new businesses are being added to the downtown, he said.

“We’ve relieved some of the pressure…,” Nelson said.

While the parking lamp has been built, the Centurylink Tower, at 174 feet in the downtown, remains the tallest building in Sioux Falls.

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