Insider's Guide
The next piece of former downtown rail yard land is about to be transformed into new places to live, work and spend time downtown.
The Switchyard development breaks ground at 11:30 a.m. Friday, July 10, along Eighth Street east of the 8th & Railroad Center.
The 4-acre project is led by Iowa-based Christensen Development, marking the company’s first major project in Sioux Falls.
“It’s a long time coming, and we’re excited about it,” founder Jake Christensen said. “Our focus recently has been on our leasing to reach enough occupancy to go vertical.”
Christensen plans to finalize the land purchase from the city this week. The design team has been finalizing layouts for the first multistory office and retail building, along with determining access points and signage opportunities so tenants have clarity as they make commitments.
Leasing is being overseen by Marcus Mahlen and Gregg Brown of NAI Sioux Falls and Steve Watson of TetonRidge Consulting.
“We’re in active conversations with several tenants,” Mahlen said. “We’re highly optimistic a financial services tenant will be leasing most of the second floor, with a retail presence on the first floor, and we’re significantly progressing in lease negotiations with a tenant who could take the fourth and fifth floors.”
The first floor likely will include a bar/restaurant from out of state, which is working through lease negotiations. Depending on how much space it takes, there could be some additional retail area available.
“Our goal has been and continues to be an active main tenant on the east end of the building that engages the bike path and adds to the amenities on Eighth Street,” Christensen said.
Office interest has included diverse businesses, from architecture and engineering firms to marketing agencies and trust companies, Mahlen said.
“For users looking for new Class A office space, there are very few options downtown, especially in the size suites we’re able to offer,” he said. “This project is the most ready to go for downtown redevelopment. It’s fully designed, so we’re seeing the interest play out based both on our timing as well as our location.”
The building is expected to be available by late 2027 or early 2028.
Each floor offers 12,000 square feet, and leasing interest is such that the building could add a story for a total of six, Christensen said.
“We’re still at a stage where we have some flexibility, so I’d encourage any business looking for Class A space to reach out soon,” he said. “We have strong activity, but there’s still room for others. I want people to realize we have real conversations going, and it could be spoken for relatively soon.”
Additional plans for The Switchyard development include two more buildings, with underground parking and more multifamily living options on the way.
“We’re excited to see this project move forward to redevelop an underutilized property but also for the mix of uses it’s going to bring to this area of downtown,” said Brandon Hanson, CEO of Downtown Sioux Falls Inc.
“The apartments being built here will offer a more affordable starting rent and open the door for people who maybe have been hoping for a downtown address. And the office space is ideal for smaller and midsized businesses looking to make a move downtown or expand their presence here.”
The development is supported through a tax increment financing district approved by the City Council, which will support site development and parking that will be open to the public on nights and weekends.
“TIF is an important tool because the inflationary increase we’re experiencing consistently outpaces rent growth,” Christensen said. “And Sioux Falls is a strong market with rent growth. I can point to markets where even with a TIF you wouldn’t be able to make this project work, but there’s no chance we could do it even here without one.”
The tool is key for encouraging downtown redevelopment, Hanson said.
“DTSF has been an advocate for this project receiving TIF funding because it is the mechanism necessary for economic activity to occur in areas that are more challenging to redevelop,” he said.
“Most importantly, these are funds generated by the increased property tax paid at The Switchyard, allowing the developers to be reimbursed with that money for the improvements they made. It does not require use of existing tax dollars, and when the TIF is complete, our entire city benefits from the overall increases in taxes that will be paid ongoing.”
The Switchyard is using local design and construction teams, including ISG, Sayre Associates and Journey Construction.
From the start, Christensen added, the city and his downtown neighbors have been welcoming and supportive.
“We’ve had really good conversations with all the downtown property owners. The Scherschligts at Cherapa Place from the beginning have been great ambassadors for Sioux Falls, and we’ve really enjoyed working with the on-site manager at 8th & Railroad Center,” he said.
“The city has been a strong partner with us, and I especially appreciated Councilor Curt Soehl, who was a champion for the project and truly wanted to see this happen.”
Uniquely, Friday’s groundbreaking will include officials from both the current City Council and newly elected leaders.
“This is a project that transcends administrations and underscores the need for long-term planning to help guide major reinvestment efforts like this,” Hanson said. “It will be powerful for our departing leaders to celebrate what they made happen and for our new ones to understand the benefits of this work as they begin their leadership.”
The groundbreaking is open to the public.
