$ 1 billion in Sioux Falls delays building permits, business growth

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Sioux Falls City Hall is experiencing significant delays in processing paperwork for new construction in the city, as new building permits are expected to reach $ 1 billion this fall.

According to the Sioux Falls Planning and Development Department, processing of building permits takes up to eight weeks in some cases in Sioux Falls as City Hall processes a growing backlog of building applications.

And that’s about twice as long as it took the city two years ago, Sioux Falls planning director Jeff Eckhoff said this week. And that means longer waits for new homes, stores, restaurants and whatever is being built in the city.

“Rapid City…, Watertown, Brookings, Madison, Mitchell and Yankton. I think if you took all of their building permits, put them together, we were twice as many as they put together, ”Eckhoff told Rotarians in Sioux Falls at their November 15 meeting.

Although the city has added additional staff to review permits, it has not been enough to keep pace. And while that’s understandable given the current shortage of workers and a vibrant construction climate, the developers say it’s hampering Sioux Falls’ economy.

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“We understand that they have duplicate permits – this is a major impact on the city. It’s a struggle, ”Van Buskirk Companies president Chad Van Buskirk told the Sioux Falls Business Journal.

Significant delays in 2022 for new stores, restaurants, offices

The building permit for construction at the Dave & Buster site is stapled to the door on November 19, 2021. Building permits have been delayed in 2021 due to an influx of activity.

It is not only the backlog of the town hall that is slowing down the progress of projects either.

Since the start of the pandemic, it is not uncommon for projects to be postponed. It started with construction stoppages and has since been exacerbated by supply chain shortages and intermittent shutdowns across the country.

And that’s more important to project timelines than a city hall that’s slow to deal with paperwork, the developers say.

“You have shipping delays, you have problems with the supply chain, you are looking for qualified employees, you are really trying to keep up with the massive activity. In Sioux Falls, it just seems magnified this year, ”said Alex Soundy, Commercial Sales Manager at Bender Construction.

Van Buskirk’s largest ongoing project is the planned Dave & Busters entertainment and dining complex at Lake Lorraine. It was set to open in the middle of 2020, but it likely won’t be finished until 2022.

New locations for Papa Woody’s Pizza and a planned health food restaurant near the Empire Mall are also gearing up for delayed openings.

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“It’s the same boat everyone’s in, this waiting game right now,” said Lexus Paulson, co-owner of what will eventually be the first Nautical Bowls franchise store in Sioux Falls.

Construction workers work inside the hull of the future Dave & Buster's in the Lorraine Lake development.  Van Buskirk Cos.  is the project contractor.

Paulson said she plans to open in early 2022.

Office buildings, new homes not immune to delays

Of all building types, office space and single-family home construction experience the least delays. But builders say shortages of building materials and labor continue to weigh on the market.

Tom Jarding, owner of Jarding Construction and president of the Home Builders Association of the Sioux Empire, said it was not uncommon for apartment construction to experience delays either.

“Inventories are still low (and) realtors are struggling to get signs in their backyards,” Jarding said. “But we don’t anticipate much change on the demand side; it will be more of a movement of interest in 2022.

Nautical Bowls has postponed its opening until 2022 at Empire Place due to construction and permit delays.  Photo from October 23, 2021.

Jarding said his biggest concern was rising prices for materials and supplies needed for construction, as well as household appliances and other goods typically provided in apartments. The patience of potential tenants and customers waiting for builders is also being tested, he said.

And it’s a problem that is being addressed by builders across the country. According to the US Census Bureau’s October Housing Report, home sales are down 17.6% from 2020 compared to September 2020.

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Jarding said he advises potential clients looking to build a house they should be prepared to wait up to two years or more to build. Lead times will eventually return to normal when supply chain shortages are resolved.

Construction workers work inside the hull of the future Dave & Buster's in the Lorraine Lake development.  Van Buskirk Cos.  is the project contractor.

“It’s a twelve month starting line now,” he said. “Before the supply chain issues, we saw a four to five month build. it’s not unrealistic to see a six to eight month build now. “

President Joe Biden’s “Build Back Better” infrastructure initiative, if passed by Congress, could provide some respite.

Either way, Van Buskirk said the builders and developers of Sioux Falls will continue to move forward.

“Everyone is frustrated, but the point is that the realism of South Dakota comes into play. You have to reason and face the realities that we have,” he said. “Prices are going up and things are slowing down … But (we) haven’t seen a lot of projects come to an end yet.

“It seems that consumer confidence is still there,” he added.


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