SEPTEMBER 23, 2024:
Hegg Construction is doing work on their property along Sioux Avenue in Pierre….. and it’s going to alter the traffic flow for about two weeks.
A spokesperson for Hegg says between Highland Avenue and Pawnee Street the two eastbound lanes will be closed and traffic will be shifted to the west bound lanes. The closure starts Monday (Sept. 23, 2024) at approximately 10am and is scheduled to continue until Oct. 3.
Photo credit: DRG Media Group.
AUGUST 27, 2024:
Adjustments are being made to the plans to redevelop the area where Pierre’s old city hall building used to be.
While he was giving a budget request presentation during Tuesday’s (Aug. 27, 2024) Pierre City Commission meeting, Commissioner Vona Johnson asked Pierre Economic Development Corporation COO Jim Protexter for an update on the Hegg Companies project.
Johnson then asked about the rest of the development space along Sioux Avenue, to which Protexter replied that Hegg Companies is reworking their plan.
Protexter said the Sioux Falls-based Hegg Companies project is “fully intended to proceed.”
The original plan, unveiled in spring 2022, included an 80-room hotel, 60-room apartment complex and a commercial building. The development agreement also includes creation of a Tax Increment Financing District where the City of Pierre will set aside up to $5.45 million of the new property tax collected on the hotel to help finance the project. In alignment with City policy, up to $200,000 of the new sales tax collected at the hotel property would be rebated back to Chapelle to assist with financing the construction of the hotel.
TIFs are economic development tool that are used throughout the state. They have been used successfully in Pierre for the Menard’s development, Clubhouse Inn and Suites development and the strip mall that houses Arby’s and Papa Murphy’s.
NOVEMBER 10, 2023:
At this week’s meeting (Nov. 7, 2023), the Pierre City Commission had a public hearing and first reading for an ordinance to establish Business Improvement District #3 and to establish an occupancy tax for that district.
BID #3 would apply only to the hotel planned for development at the site of old City Hall along Sioux Avenue. As proposed, people staying at the yet-to-be-built hotel would pay a BID #3 fee of $2 per room, per night. Those fees are then obligated to pay development expenses.
Pierre Mayor Steve Harding says a Business Improvement District is an economic development tool that allows government to facilitate economic growth without putting additional burden on tax-payers.
Construction of the new hotel along Sioux Avenue is scheduled to begin this year. It’s part of a larger development, led by Hegg Companies of Sioux Falls, including a 60-room apartment complex and commercial building.
The ordinance will come back to the City Commission for consideration and action at their meeting next week (Nov. 14, 2023).
OCTOBER 19, 2023:
Dakota Avenue in Pierre from Highland Avenue to Pawnee Street is closed. It will stay closed for approximately three weeks for utility work to be completed. Traffic should detour south to Missouri Avenue. Access will be maintained to impacted businesses and residents.
The closure is in place to accommodate construction being done at the site of the new hotel, apartment complex and commercial building being built in the area of the old Pierre City Hall building.
Sioux Falls-based development firm Hegg Companies is behind the project.
OCTOBER 14, 2023:
The outside, eastbound lane of Sioux Avenue in Pierre between Coteau and Pawnee Streets will close Monday (Oct. 16, 2023). The closure is in place to accommodate sidewalk work at the site of the new hotel, apartment complex and commercial building being built at that location.
The lane is scheduled to reopen by Thursday.
SEPTEMBER 28, 2023:
The Pierre City Commission has approved two separate steps that will keep the progress of the old City Hall development project moving forward.
City Planner Emeline Hoblick asked that they allow the site to be separated into three different lots.
Commissioner Jamie Huizenga asked Hoblick about the strategy behind replatting the site into three independent lots.
The commission also set a Nov. 7, 2023, public hearing on a Resolution of Intent to create Business Improvement District #3.
Financial advisor Toby Morris says creating BID #3 is a compliment to the existing business improvement districts.
The hotel will be the first piece of the development built. Construction is scheduled to begin later this year.
Unveiled in spring 2022, the site of the old Pierre City Hall along Sioux Avenue, as well as the adjacent block of Chapelle Street and the land immediately to the east of that block are being redeveloped to house an 80-room hotel, 60-room apartment complex and a commercial building.
Sioux Falls-based development firm Hegg Companies is behind the project.
WRITTEN VERSION:
At this week’s meeting (Sept. 26, 2023), the Pierre City Commission acted on two separate steps to continue progress of the old City Hall development project.
First, they approved the motion to separate the site into three different lots -one for the hotel, one for the apartment building, and one for the commercial building. Splitting the site into three independent lots provides the opportunity for each lot to have different ownership throughout the lifespan of the properties.
At Tuesday’s night’s meeting, the commission also set a public hearing for the Resolution of Intent for Business Improvement District (BID) #3. A BID is a self-imposed fee applied to room bills at the new hotel.
This is the second step in the process to activate the BID and serves as notification to both the developer and the public of an upcoming public hearing. That hearing is set for Nov. 7, 2023.
Unveiled in spring 2022, the site of the old City Hall along Sioux Avenue, as well as the adjacent block of Chapelle Street and the land immediately to the east of that block are being redeveloped to house an 80-room hotel, 60-room apartment complex, and a commercial building. Hegg Companies, a Sioux Falls-based development firm, is behind the project.
The hotel will be the first piece of the development built. Construction is scheduled to begin later this year.
AUGUST 23, 2023:
By approving boundaries and a board, the Pierre City Commission took the first step to establish Pierre’s third Business Improvement District (BID).
The BID boundaries include the yet to be built hotel at the old city hall development site located along Sioux Avenue. The board consists of five members; all are employees of Hegg Companies, the private development firm building the hotel, retail building, and apartments at the old city hall site.
“State law provides several tools to encourage private development,” said Pierre Mayor Harding. “A BID district is one of those that allows government to facilitate economic growth while holding taxpayers harmless.”
A BID works as a self-imposed fee, often levied by the visitor industry. In the case of BID #3, people renting rooms at the new hotel would pay a BID fee. Those fees are then obligated to cover development expenses.
“The developers basically agree to set aside part of their room charges – the BID fee – to generate positive development of the community,” said Mayor Harding.
Next, the City Commission will consider a resolution of intent for the BID; it’s part of a two-step process for the formal establishment of the BID. The process involves a public hearing.
Construction of the nearly 80-room hotel is scheduled to begin later this year.
MAY 24, 2023:
The Pierre City Commission approved two agreements to help transform a portion of the old City Hall site into an 81-unit hotel.
The first agreement is a development agreement between the City and Chapelle Investments. Chapelle Investments is affiliated with Hegg Companies, the private development firm that is building the hotel, as well as an apartment complex and commercial building at the site.
The agreement outlines the responsibilities of both the City and Chapelle as they relate to the TIF (Tax Increment Financing) that will be used for the development. Specifically, it states that the City will set aside up to $5.45 million of the new property tax collected on the hotel to help finance the project. In turn, Chapelle will develop the property in a lawful and responsible way and shall bear all the financial risk.
The second agreement is between the City of Pierre and PEDCO (Pierre Economic Development Corporation). It outlines how PEDCO will facilitate the use of the City’s Sales Tax Rebate program for the project. In alignment with City policy, up to $200,000 of the new sales tax collected at the hotel property will be rebated back to Chapelle to assist financing of the hotel construction.
Pierre Mayor Steve Harding says that the two agreements are great examples of how economic development tools can be used.
“Both the TIF program and the Sales Tax Rebate program were designed to help spur progress in communities,” said Mayor Harding. “The development of the old City Hall site will breathe new life into that corridor of Pierre, and it wouldn’t be possible without these financing pieces.”
Mayor Harding also stressed that tax payers are held harmless by these two programs.
“No existing tax dollars, property or sales, are lost by using these programs. Both tools help increase tax revenue that is eventually realized by the City, the County, the School District and ultimately our citizens.”
Redevelopment of the old City Hall lot and adjacent properties was announced in May 2022; the estimated $33.4 million private development includes an 81-unit hotel, 60-unit apartment building, and an office building.
MAY 18, 2023:
The Pierre City Commission has approved (May 16, 2023) a replat combining the old Pierre City Hall lot and adjacent properties into one parcel.
The request involves the old City Hall lot along Sioux Avenue, the vacated portion of Chapelle Street and the former Pryntcom and Hughes County Health buildings. Chapelle Investments, which is affiliated with Hegg Companies, is developing an urban infill project that includes an 81-unit hotel, 60-unit apartment building with underground parking and an office building.
The replat allows Chapelle to establish an access plan for moving traffic on and off of Sioux Avenue and sets the stage for underground utility work to begin.
Construction work is expected to begin this summer and start with placement of electrical, water, wastewater and storm sewer infrastructure.
Redevelopment of the old City Hall lot and adjacent properties was announced in May 2022. Since then a variety of commission action has taken place to allow the project to continue. This includes, the sale of city-owned property to Chapelle Investments, vacating a portion of Chapelle Street to provide enough adjoining land for the planned development, and development of a Tax Increment Financing District at the site.
MAY 9, 2023:
A replat combining the old Pierre City Hall lot and adjacent properties into one parcel is the next step for an urban infill development project near downtown Pierre.
The Pierre City Commission heard a first reading last night (May 9, 2023) of a request to combine the old City Hall lot along Sioux Avenue, the vacated portion of Chapelle Street and the former Pryntcomm Properties and Hughes County Health buildings. If approved by the commission at next week’s meeting (May 16), the action will form one large lot where Hegg Companies plans to build an 81-unit hotel, 60-unit apartment building with underground parking and an office building. The replat request was heard and approved by the City Planning Commission earlier this week (May 8).
The replat plan was requested by Chapelle Investments. Chapelle is affiliated with Hegg Companies, the private development firm behind the commercial development project.
Pierre City Commissioner Jamie Huizenga says the replat allows the developer and the state Department of Transportation to formalize access points between the future development and Sioux Avenue which is, a state highway.
Demolition work of the vacant buildings at the development site was completed last fall; construction work is expected to begin this summer.
Redevelopment of the old City Hall lot and adjacent properties was announced in May 2022. Since then a variety of commission action has taken place to allow the project to continue. This includes, the sale of city-owned property to Chapelle Investments, vacating a portion of Chapelle Street to provide enough adjoining land for the planned development, and development of a Tax Increment Financing (TIF) District at the site.
MARCH 8, 2023:
The Pierre City Commission has approved the establishment of a new Tax Increment Financing (TIF) District for the redevelopment of the old City Hall lot.
Last spring (2022), Sioux Falls development firm Hegg Companies revealed their plan to build an apartment complex, hotel and commercial building at the site.
The TIF sets aside $5.4 million of the property tax collected from the estimated $33.4 million private development project to be used for a limited amount of time to help finance the project improvements. The TIF plan was previously approved by the City Planning Commission. The TIF District is bordered on the north by Sioux Avenue and on the south by Dakota Avenue; it’s east and west borders are between Highland Avenue and the alley to the east of Chapelle Street.
TIFs are economic development tool that are used throughout the state. They have been used successfully in Pierre for the Menard’s development, Clubhouse Inn and Suites development and the strip mall that houses Arby’s and Papa Murphy’s.
Engineer depiction of what the proposed development in Pierre will look like.
NOVEMBER 22, 2022:
Demolition has begun in the area where an urban infill development project will be built in downtown Pierre.
City Administrator Kristi Honeywell says the action started this morning (Nov. 22, 2022).
Mayor Steve Harding says the development is years in the making.
The developer, Hegg Companies from Sioux Falls, plans to turn the space into an 80-room hotel, a 60-unit apartment complex, an office building, retail space and a parking area.
Photo credit DRG Media Group.
Photo credit DRG Media Group.
Photo credit DRG Media Group.
Photo credit DRG Media Group.
Photo credit DRG Media Group.
Photo credit DRG Media Group.
OCTOBER 26, 2022:
The Pierre City Commission has laid out its expectations for the development of the old city hall property through a Memorandum of Understanding with Chapelle Investments. The MOU also outlines the economic development tools Chapelle, the developer and affiliate of Hegg Companies, will request for the project.
Mayor Steve Harding says the agreement says the property will be used for commercial, retail and residential development and that use of the City’s Tax Rebate Program, Tax Increment Financing and a Business Improvement District (BID) will be requested by Chapelle. The MOU does not approve the use of the economic development tools. Harding says each will require action by the City Commission at a later date. The City and Chapelle investments will now begin due diligence for those tools to determine feasibility and impact.
Harding says these tools exist by state law for the sole purpose of spurring economic activity; they hold our taxpayers and our local governments harmless. He says they take away no existing revenue.
The redevelopment plan for the former Pierre City Hall lot was made public in May 2022. The development plans include an 80-room hotel, a 60-unit apartment complex, an office building, retail space and parking.
Demolition of old city hall building is expected to begin yet this year.
Tax Rebate Program
The City’s Tax Rebate Program was established in 2018 and rebates up to 1.25 percent of new sales tax collected on a development for a finite amount of time. Program use will be requested only for the hotel portion of this development, not Starbucks or other commercial property in the development.
Tax Increment Financing (TIF)
When a piece of property is developed or redeveloped, it drives up the property value. For example, undeveloped a piece of property might be taxed at $100 a year. Once developed, the tax value might jump to $500 a year. That $400 spread is considered “the tax increment.” When a TIF is used, that increment can be leveraged to cover infrastructure costs like underground utilities or curb and gutter. That increment does eventually go into the tax coffers, but not until the TIF either reaches a predetermined time limit, or pays off a predetermined percentage of infrastructure costs –whichever comes first. TIFs were successfully used for the Menard’s development, the Clubhouse development, and for the strip mall that houses Papa Murphy’s and Arby’s.
Business Improvement District (BID)
In this instance, a BID will be requested to establish a self-imposed visitors’ tax that is passed on to hotel patrons by way of an additional charge per room, per night. Those dollars are collected by the development owner, for a finite amount of time, to help offset costs related to parking lots, parking garages and other eligible costs. Additionally, the hotel portion of the old City Hall development will participate in the existing BID that provides a funding stream to promote the visitor industry in Pierre.
OCTOBER 19, 2022:
The Pierre City Commission has approved the transfer of the town’s former City Hall property and a small parcel at the corner of Chapelle Street and Dakota Avenue to the Pierre Economic Development Corporation (PEDCO).
The move is part of a multi-step process to redevelop the lot and surrounding area into a commercial space that will house a hotel, apartment complex and retail building.
Mayor Steve Harding says because PEDCO is an economic development entity, they are allowed to transfer city-owned property to them, which then allows PEDCO to then sell that property to the developer. Once PEDCO and Hegg Companies close on the property, PEDCO will turn the proceeds over to the city.
The redevelopment plan was made public by in May 2022. Since then, Pierre has vacated one block of Chapelle Street between Sioux and Dakota Avenues, allowing the new development to expand from Highland Avenue on the west to the alley located east of Chapelle Street.
Demolition of old City Hall is expected to begin yet this year.
Front side, old Pierre City Hall.
Photo credit DRG Media Group.
Back side, old Pierre City Hall.
Photo credit DRG Media Group.
Green space and PryntComm building.
Photo credit DRG Media Group.
Back side of Hughes County property.
Photo credit DRG Media Group.
PryntComm building.
Photo credit DRG Media Group.
Looking south down the block of Chapelle from PryntComm to the Hughes County property. This is the block that will be vacated.
Photo credit DRG Media Group.
Looking south down the block of Chapelle from green space to former Pierre City Hall building. This is the block that will be vacated.
Photo credit DRG Media Group.
Engineer depiction of what the proposed development in Pierre will look like.
L to R: Hegg VP of Development and Finance Jared Vilhauer, Hegg Construction President Wade Behm, Hegg President and CEO Paul Hegg and Pierre Mayor Steve Harding stand with preliminary images of Hegg’s proposed urban infill project in Pierre.
Photo credit DRG Media Group.
AUGUST 31, 2022:
After no opposition spoke during last night’s (Aug. 30, 2022) public hearing, the Pierre City Commission approved the vacation of one block of Chapelle Street to pave the way for a major downtown redevelopment plan that was announced this spring.
The block of Chapelle Street, stretching from Sioux Avenue to Dakota Avenue, will be split down the middle; the property owners on the east and west sides of the street will gain the portion of the street adjacent to their property. The City currently owns all the property to the west, and a small piece of property on the east side of the vacated street. Hegg Companies, a Sioux Falls real estate development company, owns the remainder of the property on the east side of Chapelle.
Mayor Steve Harding says this move frees up the additional land needed to fully realize the development planned near the old City Hall property. He says by vacating the street, we can make one large lot stretching from the alley east of Chapelle all the way to Highland Avenue.
Hegg Companies plans to build an 80-room hotel, a 60-unit apartment complex, an office building, and retail space on that large lot.
With the vacation of Chapelle Street, the Pierre will transfer its property to the Pierre Economic Development Corporation, who can sell that property to Hegg and transfer the proceeds back to the City.
Harding says once all the land has been transferred and sold, demolition work can begin at the site. He says if the schedule remains intact, we’ll start to see that happen yet this year.
In 2018, Pierre City Hall relocated from 222 E. Dakota Avenue to its current location at 2301 Patron Parkway.
AUGUST 10, 2022:
Pierre is moving forward with the next step for the redevelopment of the old city hall property along Sioux Avenue.
The City Commission has scheduled a public hearing for Aug. 30, 2022, at 5:45pm to take comments on vacating the block of Chapelle Street between Dakota and Sioux Avenues. The hearing will take place at City Hall.
Mayor Steve Harding says as announced this spring, Hegg Companies has plans to build an apartment complex, a hotel and an office space at the site of old city hall. He says to move this development along, the next step is to vacate the street.
Harding says the street vacation was on hold until Hegg Companies closed on private property to the east of Chapelle. He says when a street is vacated, the street is split down the middle; each half of the street is turned over to the adjacent property owners. In this situation, if the action is approved, the lion’s share of the east half of the street will go to Hegg Companies. The remainder will become part of the city-owned properties adjacent to Chapelle Street.
Procedurally, Harding says there are quite a few steps that need to be taken for this project. After the street is vacated, he says the city will then look to transfer its property to the Pierre Economic Development Corporation. PEDCO will then sell the property– including the old city hall lot, its portion of the street and the county property at the corner of Dakota and Chapelle– to Hegg Companies.
As an economic development corporation, PEDCO has the ability to accept and sell government property and transfer proceeds back to the government. The current plan is for site work to start by the end of this year. Once complete, the development will include an 80-room hotel, a 60-unit apartment complex, an office building, retail space and parking.
In 2018, Pierre City Hall relocated from 222 E. Dakota Avenue to its current location at 2301 Patron Parkway.
MAY 25, 2022:
Hegg Companies from Sioux Falls is taking steps to build an urban infill project in the downtown Pierre area.
At last night’s (May 24, 2022) City Commission meeting, Hegg Companies owners and management laid out their plan to redevelop both sides of Chapelle Street from the former city hall building to Sioux Avenue.
President and CEO Paul Hegg says the project has been in the works for four years.
He says their proposed project involves an apartment complex, a hotel, an office building and retail space.
Hegg Companies Vice President of Development and Finance Jared Vilhauer says they’re planning an 80-room hotel and 60-unit apartment complex.
The first step toward making the necessary property available is for the city to purchase the county-owned building and parking lot located at the northeast corner of Chapelle and Dakota. The city will buy it for $175,000, then work with the Pierre Economic Development Corporation to sell it, along with the old city hall property. Hegg Companies anticipates tearing down the old city hall building this fall, with some vertical construction starting sometime next year (2023).
To allow for the necessary development space, Pierre will vacate the block of Chapelle between Sioux and Dakota Avenues. Its east and west borders will be between Highland Avenue and the alley to the east of Chapelle Street.
Pierre Mayor Steve Harding says there are some land sales and additional financial pieces that will require commission action, but this project is mature and ready to get started. He says this development is a game changer for the community, especially the downtown area.
PECDO COO Jim Protexter says housing and downtown revitalization are two challenges that are tough for many communities. He says this development addresses both those issues and is a giant shot in the arm for Pierre.
In 2018, Pierre City Hall relocated from 222 E. Dakota Avenue to 2301 Patron Parkway, leaving a large lot along Sioux Avenue available for redevelopment.
L to R: Hegg VP of Development and Finance Jared Vilhauer, Hegg Construction President Wade Behm, Hegg President and CEO Paul Hegg and Pierre Mayor Steve Harding stand with preliminary images of Hegg’s proposed urban infill project in Pierre.
Photo credit DRG Media Group.
MAY 24, 2022:
At tonight’s (May 24, 2022) City Commission meeting, Pierre Mayor Steve Harding rolled out a partnership with Hegg Companies to redevelop the former city hall property located along Sioux Avenue. It involves an apartment complex, a hotel, an office building, retail space and the closure of one block of Chapelle Street.
The first step toward making the necessary property available is for the city to purchase the county-owned building and parking lot located at the northeast corner of Chapelle and Dakota. The city will buy it for $175,000, then work with the Pierre Economic Development Corporation to sell it, along with the old city hall property.
Hegg Companies President and CEO Paul Hegg will serve as the project developer and owner of the 80-room hotel and 60-unit apartment complex to be built on the property. He says this urban infill project will enhance the Central Business District and be a catalyst for future development.
To allow for the necessary development space, Harding says the City will vacate the block of Chapelle between Sioux and Dakota Avenues. He says the development will be bordered on the north by Sioux Avenue and on the south by Dakota Avenue. Its east and west borders will be between Highland Avenue and the alley to the east of Chapelle Street.
Harding says there are some land sales and additional financial pieces that will require commission action, but this project is mature and ready to get started. He expects people will start to see work at the site by the end of the year. He says this development is a game changer for the community, especially the downtown area.
PECDO COO Jim Protexter says housing and downtown revitalization are two challenges that are tough for many communities. He says this development addresses both those issues and is a giant shot in the arm for Pierre.
In 2018, Pierre City Hall relocated from 222 E. Dakota Avenue to 2301 Patron Parkway, leaving a large lot along Sioux Avenue available for redevelopment.
Initial renderings of the downtown Pierre development project featuring a hotel, apartment complex, and an office building complete with landscaping and onsite parking.
Initial renderings of the downtown Pierre development project featuring a hotel, apartment complex, and an office building complete with landscaping and onsite parking.
Initial renderings of the downtown Pierre development project featuring a hotel, apartment complex, and an office building complete with landscaping and onsite parking.
Below are photos of the area where the proposed development will be located, as it looks May 24, 2022.
Front side, old Pierre City Hall.
Photo credit DRG Media Group.
Front side, old Pierre City Hall looking east toward Hughes County property.
Photo credit DRG Media Group.
Back side, old Pierre City Hall.
Photo credit DRG Media Group.
Green space and PryntComm building.
Photo credit DRG Media Group.
Back side of Hughes County property.
Photo credit DRG Media Group.
PryntComm building.
Photo credit DRG Media Group.
Looking south down the block of Chapelle from PryntComm to the Hughes County property. This is the block that will be vacated.
Photo credit DRG Media Group.
Looking south down the block of Chapelle from green space to former Pierre City Hall building. This is the block that will be vacated.
Photo credit DRG Media Group.
How about a favorable mention of the many user groups of the old City Auditorium, who were forced to give it up when it was condemned? Some groups were: Lewis & Clark Rifle & Pistol Club, Howkota Bowhunters, basketball players, etc.