Steel District, Sanford merger, childcare and more: Sioux Falls business stories to follow in 2023

For Sioux Falls businesses, 2022 was summed up by ongoing workforce shortages, supply-chain issues and inflation.

But as the city came out of a pandemic, it also saw major businesses like Amazon open in the northwest corner of Sioux Falls, while the skyline continued to change rapidly downtown with construction projects that smashed records.

From the Sioux Steel District to a pending Sanford Health merger to an ongoing childcare crisis, here is a look at seven stories we'll be following in the new year.

Steel District & Cherapa Place

Watch the skyline continue to change in downtown Sioux Falls as it becomes a central hub for retail, restaurants, offices and apartment living.

There will be three major building areas for the five-building Sioux Steel District project, including a hotel/convention center, a nine-story office building and a parking ramp with a retail wrap.

The nine-story office building and parking ramp are set to open by this summer, and the retail spaces and condos are expected to be completed later this fall.

Earlier:Sioux Falls' skyline has changed rapidly as Sioux Steel, Cherapa Place projects remain on track

Bee Loved Kitchen, a vegan cafe and meal-prep service, was the first retailer to announce plans to open at the Steel District.

Twin Cities-based restaurateurs Josh Thoma and Kevin Fitzgerald are also bringing Burger Dive, seafood destination Smack Shack and an unnamed taco/tequila concept to the Steel District this year, along with a high-end Italian restaurant inside the new Canopy by Hilton is set to open in 2024 when the hotel is finished.

The parking garage will be the first of the four new structures for Cherapa Place. It's on tract to open this spring and will feature 650 parking stalls with condos and apartments wrapping around the disguised garage.

The Bancorp Building at Cherapa Place, which is set to open this September, will be a 10-story office and retail building with luxury condos on the top two floors. It will be home to corporate offices for Bancorp, ISG, Eide Bailly and MarketBeat.

Other buildings will offer a number of options including apartments, condos, office buildings, retail and restaurant suites, underground parking, and indoor and outdoor entertainment with the hopes of creating a walkable destination downtown.

Amazon comes fully online with hundreds of jobs

Amazon's five-story, 640,000 square-foot fulfillment center began operations in the fall 2022, but will be in full swing this year.

The company's goal is to hit full-scale production levels by March, when it will have brought in roughly 1,500 jobs to the Sioux Falls community.

More:Sioux Falls' Amazon facility to open in few weeks despite reports of possible two-year delay

The multimillion-dollar facility in northwest Sioux falls will then have the capacity to outbound more than 8 million units per week, with 60 to 80 trucks going in and out each day.

It's stocked with nearly 92 million different items, all smaller than a microwave, and will be available for expedited shipping for Sioux Falls residents in addition to services North Dakota, part of Montana, Wyoming and Nebraska.

Amazon delayed its opening last summer, with Sioux Falls city officials saying they were targeting 2024, but the company started its initial phase of operations in October instead.

Dillard's comes to a thriving Empire Mall

Dillard's sells a variety of products such as designer clothes, shoes, cosmetics, bedding and other wedding registry items. The major fashion retailer plans to open this fall, which could mean huge things for the Empire Mall.

Construction has already begun on the new 40,000 square-foot expansion on the former Younker's space, giving the new store a total of 140,000 square feet to occupy.

At a time when a new retail landscape and online shopping has proven rough for traditional malls, the Empire Mall has continued to thrive, despite the departure of many big department stores in recent years, like Younkers and Sears.

More:How the Empire Mall is beating mass retail closures and other national threats to shopping centers

Even with closures and changes to the store offerings throughout the year, vacant storefronts are uncommon at the Empire Mall. It was also announced last summer that Macy's in the mall is bringing back the Toys R Us experience to Sioux Falls.

The arrival of Dillard's will only be another major destination for the already-popular shopping spot in town.

Sanford Health-Fairview Merger

Sanford Health and Fairview Health Services, a Minneapolis-based health system, announced an intent to merge back in November. The goal of the merger is to make care more convenient, affordable and consumer-centric while broadening access to virtual care.

The two systems hope to close the deal sometime in 2023, but watching how the agreement develops, especially after some pushback, will be important news to follow.

Earlier:Here's what we know about the potential Sanford, Fairview Health merger

Fairview is part of the M Health Fairview system, which includes the University of Minnesota and the University of Minnesota Physicians.

Sanford Health, the country's largest rural healthcare system, serves more than one million patients worldwide. Together, the new combined system would include nearly 80,000 employees across over 50 hospitals and other medical facilities.

Public opposition is already surrounding the topic, with some the loudest concerns coming from the Minnesota Nurses Association, which wonders about earlier financial misgivings from both health systems and worries the merger could lead to layoffs.

Recently, the Star-Tribune Editorial Board contended that "ceding the future of critical facilities at the U (University of Minnesota) to an organization (Sanford) with insufficient experience running a major-league academic health center is troubling."

However, while the new joint system would be headquartered in Sioux Falls, the two systems will retain their own regional presence, leadership and boards after the merger, according to Sanford health officials.

Minnesota's Attorney General is also leading an investigation into the merger to determine if it's a good idea.

Affordable Housing

The need for affordable housing is ever-growing in the state of South Dakota, especially as the city of Sioux Falls continues to grow, too.

At the beginning of December, housing affordability was the lowest it's been since 2012, because of continually rising interest rates near 6% and high levels of inflation, according to the National Association of Home Builders.

The median home sales price in the Sioux Falls metro area, which includes Lincoln and Minnehaha counties, was $265,000 in 2021 and has risen by 17% over the past year to $310,000 in 2022, according to the Realtors Association of the Sioux Empire.

Statewide, median home sales price rose by 54% from 2018 to 2022, while median household incomes rose by only 17% during that time, according to the South Dakota Realtors Association.

To combat the issue, the Sioux Falls City Council approved a TIF district that a local developer hopes will aid in creating an affordable housing development in eastern Sioux Falls. Called the East Ridge district, the development would provide 65 homes with the price goal of between $232,000 and $323,000, what the developer called "accessible workforce housing."

More:South Dakota Housing awards $13 million statewide to affordable housing projects

There are several other developments in progress that seek to provide workforce housing for the growing city, including the Marion Crossing development in Northwest Sioux Falls.

And last month, the South Dakota Housing Development Authority awarded more than $13 million to a collection of housing projects and programs throughout the state, including to the FortyOne Flats project in Sioux Falls, which will provide 41 housing units for individuals and families at or below 60% of the area’s median income.

The Glory House, which will also provide housing to individuals who have previously been incarcerated, is another Sioux Falls recipient of the funds, as is Habitat for Humanity and the South Eastern Development Foundation.

Childcare Crisis

The childcare crisis is still a topic on the minds of many, from families to business owners and city leaders and state officials alike.

An Argus Leader investigation in 2022 found the number of in-home daycares has dropped 15% in the last five years, and workforce problems have led to long waitlists at other daycare centers. Additionally, a study from Sioux Falls Thrive showed the gap in affordability in Sioux Falls was as much as $636 million per year.

But this year may see the coming of several tangible solutions, both long-term and short-term, to help ease the childcare crisis in the state for both families and employers.

In October, the Sioux Falls Childcare Collaborative named two coordinators to work full-time on a sixth-month initiative. Their goal is to create a "toolkit of possible solutions" for employers and to us to help combat the issue.

Rana DeBoer, one of the coordinators, said they have already seen businesses in the community step up and that they're on track for finding viable solutions.

More:From daycares to stipends, what South Dakota businesses are doing to help with childcare

A new statewide business collaborative led by Early Learns of South Dakota also launched in mid-November with a similar goal of finding solutions for businesses.

The South Dakota Department of Social Services held multiple listening sessions in the early fall for the community to give input on how to spend one-time funding for the states childcare system. The funding must be spent by September 2024, so it would be reasonable to expect the DSS to announced its plans for the funds in the next year.

It's also worth noting that Gov. Kristi Noem proposed extending paid family leave for state employees and establishing incentives to help private businesses offer the same, so it's worth seeing what comes from the Legislature as it relates to childcare.

This article originally appeared on Sioux Falls Argus Leader: Keep an eye on these Sioux Falls business stories in 2023