SIOUX FALLS, S.D. (KELO) — The city of Sioux Falls just added a six-story parking ramp with about 525 spaces to the downtown area in 2020.

Now, it appears well on its way to removing a flat surface parking lot at 400 S. 1st St. in the city’s downtown.

The city council approved on Oct. 18 to discontinue the use of the parking lot to make way for a planned mixed-use $28 million development on the site.

A flat surface parking lot is typically not the best use of downtown property, Dustin Powers of the city’s planning and zoning department said in an interview with KELOLAND News.

“We like to see more density in the downtown,” Powers said. That means increasing residential development such as apartments, he said.

It’s also important to add retail and commercial development to additionally boost the economy to the downtown, the city and county, Powers said.

If the city removes the 50 spaces in the 400 S. 1st St. lot, there will still be available parking for those who lease spaces in the lot, Powers said. The lot is about 70% occupied, he said.

The holders of lot permits would be transferred to another lot, Matt Nelson said during the Oct. 18 council meeting. Nelson is city’s public parking facilities manager

In the scheme of parking, “it’s not a large number of spaces,” Powers said of the surface parking lot.

According to Downtown Sioux Falls and the city of Sioux Falls, the downtown area has more than 1,000 on-street parking spaces and 2,500 off-street parking spaces. Many of those off street spaces are in ramps such as the new ramp. Also in general, there is a fee to park in off-street spaces from Monday through Friday until 5 p.m.

As of May 19, the 2020 parking ramp from the failed Village on the River project was “performing exactly as projected,” Nelson said in a KELOLAND News story. “We projected to have 300-plus leases and we have approximately 300 leases.”

The development proposed for the surface parking lot would have 150 apartments and 5,000 square feet of retail space on the first floor, Powers said.

Tenant parking would be underground, Powers said.

The development would be a major addition to the southeast portion of the downtown. In comparison, much of the recent development has been to the north near 8th and Railroad Center and toward Falls Park.

“We’re excited to have further development close to our store,” said Zane Hoffelt, the manager of Norberg’s Ace Hardware in the downtown. Ace Hardware is across the street from the 400 S. 1st St. parking lot.

The additional retailers will be good for Ace but also other nearby businesses, Hoffelt said.

“If there are 150 residents living across the street, that’s exciting for us,” Hoffelt said.

Powers said metered off-street parking spaces are available in the proposed development area as well as a parking ramp.

Hoffelt said Ace has its own parking lot but shoppers come in throughout the day to get change for the meters.

“They are already using the street metered parking spots and parking ramps,” Hoffelt said.

He doesn’t expect the proposed development to stress available parking.

“I realized there are those who lease spaces but there is a parking ramp a block away,” Hoffelt said.

The city has a second surface lot for sale at 301 N. Main St. in the downtown.

The decision to try and sell the two parking lots stem from the Downtown 2025 plan, the 2014 parking needs analysis by Walker Parking Consultants and a 2014 Downtown Market Study.

The 2014 Walker study identified nearly 3,000 unoccupied parking spots during peak weekday need in the city’s downtown. “Many of the unoccupied parking spaces are located in areas with lower development density and beyond what some people may consider an acceptable walking distance to the core Central
Business District,” the study said.

The 2014 market study projected at least 1,900 new residences, at least 190,000 square feet of retail and restaurants and at least 1 million-square-feet of office space would be added to the downtown over 20 years.

The Walker study also said if the projected 190,000 square feet of commercial space and 1.0 million square feet of office space were added to the downtown over the next 20 years, parking needs would also increase. The study recommended adding spaces to accommodate future needs.

Powers said during the Oct. 18 meeting that pieces of the projected growth are happening and the city is keeping up with parking needs.

The Downtown 2025 plan was developed when Mike Huether was mayor. It identifies specific areas of attention and potential growth.

The Downtown 2025 plan said three distinct district’s “will add to downtown’s vitality over the next ten years.” Those districts are Falls Park, Phillips Avenue and the River Greenway.

The plan also identified the Railyard and Weber corridor and several other areas as potential areas for development.

Powers said the proposed four-story project on an existing parking lot fills needs and goals identified in the Walker study and Downtown 2025 plan.