Riverline District committee to pause work, seek community buy-in

A volunteer group working on next steps for the proposed Riverline District has paused its work while looking for community buy-in and partner organizations to help move a conversation forward involving a new convention center.

The proposed convention center would offer more than twice as much space as the Sioux Falls Convention Center, with 135,000 net usable square feet versus 60,510 square feet. The largest contiguous space would be 75,000 square feet versus 50,400 square feet.

An initial site study shows room for convention space and hotels at the Riverline site.

The Friends of the Riverline Group was formed in 2022 to explore the possibilities for available land on the eastern edge of downtown.

With funding from community partners, the group secured options on two parcels of land totaling more than 8 acres.

A smaller committee then was formed to evaluate the opportunity and form next steps. The larger parcel, 7.2 acres, was purchased by the city this year.

The committee also was tasked with establishing a timeline for how a project would move forward with design, construction and an advisory election.

“Those three things are greatly dependent upon … the community support for a convention center vision,” said Rich Merkouris, City Council member and chair of the committee.

“My perspective is that our work as a committee has really come to a pause point. It doesn’t really make a lot of sense to work on those three things until we know we have strong community support for a convention center vision.”

The committee voted unanimously to pause its work for an undetermined amount of time.

“It is a pause. It’s not a termination or end of this committee,” committee member Alex Halbach said.

Merkouris said he and Mayor Paul TenHaken would then engage with formal conversations involving which organizations might be willing to lead a convention center process going forward.

“We need to find an entity that can build a case for this,” said Bob Mundt, CEO of the Sioux Falls Development Foundation and a member of the committee.

“If a convention center is what we need, then we need to build a case for that whether it’s on the Riverline site or somewhere else. We need to build a case for a convention center, period. Is it something we need? Have we lost enough business? Is it the next step in our tourism journey? I think we have to answer all those questions first and get out to the public and make a case.”

If a project hasn’t moved forward by March 2028, there would be an option for the former landowners to repurchase the site. The city also at one point committed to an advisory vote on the project, so any approach could change with a new mayor and City Council.

A report earlier this year, prepared by Williams Architects, commissioned by Johnson Consulting, concluded that repurposing the Convention Center and Arena buildings would support the recommendations and goals established by the city’s 2020 Parks & Recreation System Plan, “which indicated a significant amount of indoor recreation space is needed within the Sioux Falls Parks & Recreation System to meet national standards.”

The report offered four options for repurposing both facilities, including cost estimates. The Convention Center was built in 1995, while the Arena was built in 1960.

Those options are detailed here.

Subsequently, the consultants determined a new downtown convention center would demand between 300 and 400 new hotel rooms to support growth in event business.

The initial projections show an operating shortfall every year ranging from $215,000 to more than $1 million. That would be offset by taxes the city would generate through the facility, leaving the gap at $134,000 to $513,000 the first two years as operations ramp up and ending at more than $1 million in positive territory by year five.

A downtown facility is projected to generate $55.8 million in annual economic impact — everything from direct spending at businesses to dollars that then get multiplied through employee earnings and business spending. Direct fiscal impact on the community is expected to be $2.7 million annually, with 278 full-time equivalent jobs created.

An overall construction cost hasn’t been finalized yet but has been estimated at up to $250 million in current dollars, which includes 1,000 underground parking spots. Funding sources could include:

• Existing city capital funds.
• Private participation/philanthropy.
• State and federal grants.
• Private economic development grants.
• Naming rights.

Sources used to fund debt could include general obligation bonds; limited or special obligation bonds tied to hotel revenue, business improvement districts or sales tax; and tax capture zone bonds such as a TIF, or tax increment financing, district.

The planning committee looked at several other communities and their convention facilities, including Fort Wayne, Indiana, and Grand Rapids, Michigan.

As in Fort Wayne, a downtown site in Sioux Falls could host conferences, meetings and trade shows while the existing facility could focus on larger consumer shows and other large public events.

Sioux Falls continues to be “stretched … for space and location, dates and hotel rooms for big events,” committee member Jessie Schmidt said. “We have hosted Pheasant Fest twice. I don’t think we’re large enough to host them again … and I think there are significant other events that we are losing an opportunity to host in a city that I think really hosts events better than most.”

A timeline for reconvening the committee likely could stretch into the next mayoral administration.

“I know how long projects like this take to work through the system, and under five years is a pretty tight timeline,” Halbach said. “There is a level of urgency in advancing these conversations. The day that this data came out, it starts to age. This doesn’t sit on a shelf for five years.”