Sioux Falls one‑stop opens in phases; state presents lease costs and plan for 280,000‑square‑foot facility

The Bureau of Human Resources and Administration told the Joint Appropriations Committee that the new Sioux Falls one‑stop facility is being occupied in phases and will consolidate many state services under a single, leased roof.

Commissioner Darren Seeley said the 280,000‑square‑foot building was procured through a design‑build‑lease process and that partial occupancy began in December when the Department of Social Services moved into the customer‑facing south wing. The bureau said it will move roughly 600 employees from 20 separate Sioux Falls locations into the new building between late January and late spring; full planned occupancy for the first phase is expected by June.

The building was procured through an RFP process begun in 2022 and awarded to Dream Design International (with Coop Architecture and Magoff Construction). Commissioners described the facility as finished, with the exception of internal modular partitions in an approximately 8,000‑square‑foot flex area that the state will use for future expansion or additional agencies.

Commissioner Seeley said the lease is a 30‑year contract. The bureau gave an annual cost figure of about $7.65 million across all funding sources (general, federal and other). That breaks down to an all‑in rent estimate of about $26.92 per square foot, inclusive of common area maintenance, snow removal, landscaping and other building‑level services. Officials said the rate compares favorably with local shell‑space market rates when adjusted for the difference that the state’s space is fully built and tailored for agency needs.

Committee members asked about transit access, local neighborhood impacts and phasing. The city has added a public bus stop at the site and service was in place when the hearing occurred, officials said. Commissioners said the move would not interrupt services because agencies plan duplication during the phase‑in: some employees and services will remain at existing locations while others begin serving from the new site.

Members asked whether the state considered ownership instead of leasing. Seeley said the state has historically leased most customer‑facing field offices outside Pierre to avoid large capital outlays and preserve bonding capacity. He added that leasing transfers certain maintenance and unexpected‑repair risks to the landlord and yields predictable operating expenses for budget planning. The bureau provided a slide showing agency budget and square‑foot allocations and said the cost per agency will vary with planned square footage.

Officials said the building includes specialized spaces such as a clinic for the Department of Health and shared conference, training and break rooms intended to improve efficiency and reduce duplicated leased space across the city. The bureau acknowledged staffing and occupancy questions remain and said it will work with a committee workgroup to answer additional technical and budgetary questions later in the session.