SIOUX FALLS, S.D. (KELO) — After Cherapa Place was built in 2008, new development quickly followed.
The six-story office complex sitting on the site of the old Zip Feed Mill on the Eastbank of the Big Sioux River in downtown Sioux Falls spurred more than $100 million in new development in the area, according to Jeff Scherschligt, a developer with Pendar Associates. Scherschligt noted the new development generated by Cherapa Place I before announcing plans for Cherapa 2, 3 & 4.
That kind of new development hasn’t come from the Denny Sanford PREMIER Center, which opened in 2014. In 2011, Sioux Falls voters supported building a new events center at the site of the convention center and Sioux Falls Arena. Since then, little more than $25 million of new development has occurred in the area around the PREMIER Center, the convention center, Howard Wood Field, Sioux Falls Arena, Sheraton hotel and Sioux Falls stadium.
Since the PREMIER Center opened, $15 million has been invested by Badlands Pawn, now the South Dakota Military Heritage Alliance building across Russell Street from the PREMIER Center location. An additional $10 million has been invested in a hotel and restaurant (Holiday Inn and Crooked Pint) at the intersection of Russell Street at Western Avenue.
In between Badlands Pawn and the Holiday Inn & Suites, the buildings standing were most-recently used as a Minnehaha County Work Release Center, an Armed Forces Reserve Center and an office building. On the southern end, Buffalo Wild Wings closed across the street from the baseball stadium.
In 2015 while Badlands Pawn was being built, owner Chuck Brennan told KELOLAND News he hoped it would spark more development in the area.
“We hope it can spark these hotels coming, restaurants and all that all the way from Minnesota (Avenue) to the interstate,” Brennan said.
In 2016, then Sioux Falls community development director Darrin Smith told KELOLAND News about the $10 million investment for the Holiday Inn and Crooked Pint restaurant. He believed development in the area in between Badlands Pawn and the hotel would soon follow.
“You can start to see these bookends between Badlands and our new hotel and restaurant at Elmwood. And then everything will redevelop in-between, I’d say over the next three to five years,” Smith said in 2016.
Comparing Cherapa Place and the PREMIER Center
Current Sioux Falls city council member Curt Soehl said it is important to consider different approaches to development from a private investment like Cherapa Place and a public facility like the PREMIER Center.
“I don’t think anybody is really touting the success going around there, because we aren’t coming with another event center,” Soehl told KELOLAND News. “The need to develop around the events center has never really fully come to the vision that was laid out to start with.”
Soehl added he’s excited to see what the future holds for development near Cherapa Place and the Sioux Steel site.
“It’s unreal for an old guy like me to see those places come alive like that,” Soehl said. “And it’s not the end. It’s going to continue to grow and it’s going to be great part of Sioux Falls.”
Sioux Falls Director of Finance Shawn Pritchett told KELOLAND News the Badlands Pawn building and Holiday Inn & Suites/Crooked Pint were the most significant new developed projects in the immediate vicinity. In his two years with the city, Pritchett has not seen an official development analysis of the area near the Events Center Campus.
“Development of the events and convention venues were certainly top of mind in the Events Campus Task Force work conducted within the last couple of years,” Pritchett said in an email. “Unfortunately, Covid had a significant impact on moving this work forward due to the impacts it had on live performances, hosting conventions, and both business and leisure travel.”
Pritchett said the city will look at strategies “to enhance and leverage these facilities and investments into further investments at the Events Center Campus and the surrounding area” after the pandemic impacts start to stabilize.
Soehl, who was a member of the 2019 Events Center Campus Study Group formed by Mayor Paul TenHaken, said that the 2019 study has been “put on the back burner” because of the COVID-19 pandemic. That study concluded there was not enough convention space on the Events Center Campus and a secondary hotel nearby was needed if the city were to attract NCAA Division I men’s basketball tournament games.
“Nobody is filling hotels right now and we don’t know going forward what the convention business is going to look like,” Soehl said. “We’re just going to have to see how this thing plays out in the next year, to two to three years, to see how quick we recover and if we recover to the same spot we were.”
What’s next for development near the PREMIER Center?
While new development hasn’t followed the PREMIER Center opening, more and bigger entertainment acts, concerts and events have come to Sioux Falls since the facility opened.
Headlining events held in the seven-year history of the PREMIER Center include pop rock star Paul McCartney, nine sold-out shows by country star Garth Brooks, the NCAA Division I men’s ice hockey regional tournament, a NCAA Division I women’s basketball regional tournament along with the annual Summit League basketball tournament.
“Certainly, the concerts have come, and the monster trucks have come and all that entertainment before the pandemic has come,” said Soehl, who added it’s tough for him to look back at what original developers envisioned. “They did expect more retail and other restaurants out in that area and that vision isn’t fulfilled yet.”
In 2020, the facility was scheduled to host 25 concerts, but only one actually happened before the COVID-19 pandemic hit. For any future growth, Soehl said he supports staying in a holding pattern to see what demand returns for concerts, conventions and other events.
“The crystal ball is really muddy right now,” said Soehl, who is also a member of the Sioux Falls Sports Authority Board. “I would be reluctant to make any huge investments in that area right now.”
But that doesn’t mean not to expect a boost in entertainment tax revenue. The Sioux Falls Canaries, Stamped and Storm are planning on full seasons in 2021. Concerts such as Little Big Town (June 19), Luke Combs (Sept. 18), Chris Stapleton (Oct. 16) and Brantly Gilbert (Dec. 17) are all planned for 2021.
Soehl said the demand for entertainment is high and future development may still come to the Events Center Campus.
“Some things go quicker than other things,” Soehl said.
Despite a 13% decrease in entertainment tax revenue in the 2020 city budget, the revenue during 2020 was still at the 2015 level, showing the growth of entertainment in the city. About 50% of the revenue from the entertainment tax comes from restaurants. Another large chunk comes from hotels.