Riverline District report: Sioux Falls convention center holding economy back
Riverline District report: Sioux Falls convention center holding economy back
Consultant says existing facility costing city millions; proposed costs of 2050 vision still unknown
A newly released market analysis has confirmed what tourism industry leaders have been saying for years: South Dakota’s largest city could capitalize on more convention and hotel space.
That’s the message delivered to Sioux Falls City Councilors Tuesday when they got their first look at a 75-page “Convention Center Review and Market Analysis” that coincides with plans to redevelop eight acres east of downtown Sioux Falls.
“Downtown Sioux Falls is growing toward Tenth Street and Cliff Avenue, so it’s important we are strategic in the steps we take now to maximize the potential of the Riverline District,” Mayor Paul TenHaken said Tuesday. “This market analysis is part of our due diligence with the Riverline District to ensure this visionary plan emphasizes the well-being of our community and economic vitality for Sioux Falls.”
Compiled by Chicago-based Johnson Consulting, the report analyzed economic and market conditions in Sioux Falls and the surrounding area, existing demand and capacity for convention and hotel space, and assessed similar indicators in comparable markets. The consultant also vetted to what degree the existing convention center in north central Sioux Falls is stopping industry groups and trade shows from booking their conventions here.
While Johnson Consulting’s report shows strong event demand at the Sioux Falls Convention Center, a significant weakness is the current conference center’s proximity to tourism, leisure, entertainment, or recreational opportunities. The existing facility is also to blame for some lost business in recent years due to the space being too small and the schedule of the convention center being full, according to the report.
More specifically, the facility lost 139 events that would have totaled $2.99 million in direct revenue in 2023, the consultant found. Of those lost bookings, a majority were due to a lack of available dates while space and size was second-most impactful on lost business — 13 percent of revenue lost is due to it being too small, according to the report.
That comes as no surprise to Teri Schmidt, the longtime CEO of Experience Sioux Falls, who is often heard calling for more convention space.
“Johnson Consulting is validating what Experience Sioux Falls hears over and over again from current and prospective clients — our convention center is too small, it’s not walkable to dining and retail experiences, and another full-service hotel is needed to support the convention center,” she said.
Part of what’s touted as the city’s 2050 plan, the proposed Riverline District was first unveiled in early 2023 when a coalition of community leaders and business groups led by the Sioux Falls Development Foundation formed Friends of the Riverline District, with the intention of acquiring two tracts of land between downtown and Tenth Street and Cliff Avenue where the state of South Dakota maintains offices. The land also includes the ground formerly known as Stadium Court beneath the viaduct.
The vision calls for a complete overhaul of the eight acres, redeveloping the area into a commercial and hospitality hub. The plan also includes repurposing the existing convention center into recreational space for youth programming.
An analysis of ways to repurpose the existing convention center is still ongoing but will be released following its completion, according to City Hall.
How much bringing the vision to fruition will cost is not yet known, though the mayor has speculated it could be as much as $200 million or more.
With the market analysis complete, cost projections and strategizing financing options are being assessed. Sioux Falls Finance Director Shawn Pritchett said he anticipates those findings will be presented to the City Council in late 2024.
The mayor is also proposing an $8 million line item in his 2025 budget for the purchase of the eight acres.
Given this would be such a large investment ($200 million+) we should seriously evaluate how big a benefit this would actually be. It's claimed:
"the facility lost 139 events that would have totaled $2.99 million in direct revenue in 2023, the consultant found. Of those lost bookings, a majority were due to a lack of available dates while space and size was second-most impactful on lost business — 13 percent of revenue lost is due to it being too small, according to the report."
A new events center would not solve the problem of lack of available dates (the old convention center is planned to be used for indoor recreation) so the vast majority of that money would not have been gotten with the proposed events center. I think they need to make a much stronger case to justify this investment. The city has big needs like affordable housing that get nowhere near this amount of investment.