Coronavirus delivers a big hit to Sioux Falls downtown development as the Lloyd Companies delays breaking ground on its $200-million project to convert the old Sioux Steel grounds into a hotel and office complex:
The project received approval earlier this year from the Sioux Falls City Council and had been moving toward an August groundbreaking.
“We’re anticipating this is a short-term delay, but we also can’t put a specific time line to it yet. We’re constantly re-evaluating what the landscape looks like and where we believe conditions are heading,” said Jake Quasney, Lloyd’s executive vice president.
…The project will be driven by the hotel and adjacent office tenants – both markets that have been significantly affected by the COVID-19 pandemic and subsequent economic shutdown, he said.
…“We’re not putting the project on a shelf and forgetting about it,” Quasney said. “The team is balancing the significant value that can be created by contracting for the materials and services involved in the project during the pandemic against the timing of when banks will have confidence in the various components of the project” [Jodi Schwan, “Lloyd Cos. Postpoones Start on Sioux Steel Redevelopment,” Sioux Falls Business, 2020.07.15].
Lloyd could start building now—the project is supposed to take at least two years to complete, and one would think we’d all be vaccinated and back to traveling and shopping by then. But evidently the financial planners are saying the economy will take longer than that to recover to whatever magic point their financial wizards foresee bringing back the level of business they’ll need to make the project pay off.
The key consideration here is that many employers are finding employee costs are lower and work to be done more cost effectively with working from home. There are bean counters crunching all these data points and deciding whether it pays to lease office space or not. Lloyd will not invest in a building that will predictably never be occupied.
The trump recession is making what workers there are unemployed in South Dakota. We have no leadership from the republicans in Pierre to do anything about it so Lloyd’s, you’re on your own bud. My advise is to let that land stay in fallow, put some goats on it to keep the weeds down or grow weed.
“The Department of Labor and Regulation reported Thursday that 1,160 people made new claims for unemployment benefits during the week ending July 11. That’s 325 more than the previous week, an increase of 40%.
“A total of 18,687 people were receiving unemployment benefits statewide on July 4, according to the U.S. Employment and Training Administration. The number of continued claims has decreased by 6,500 from a historic high in May as the coronavirus pandemic caused mass layoffs. 4.5% of all eligible employees in the state are still unemployed, according to the latest report.” Rapid City Journal 7.16.20
Of course these numbers don’t reflect the entire state or job status, if that were to be considered, South Dakota would be around 30%-40% unemployed.