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City Council passes second reading of lease with Startup Sioux Falls

Published: Jan. 11, 2022 at 10:55 PM CST
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SIOUX FALLS, S.D. (Dakota News Now) - The Sioux Falls City Council is moving ahead with a lease that would rent the historic Parks and Recreation building at 6th Street and Phillips Avenue for one dollar a year.

The second reading passed unanimously Tuesday night, following public input and discussion between council members. Startup Sioux Falls staff have already said that they’re in the early planning stages of renovations, and plan on spending around one million dollars. The City Council passed the reading noting that with the lease, the city retains ownership of the building while offering it a new lease on life.

“We’ve thought about selling it. But concerns we have with that is it’s right next door to the Levitt Shell, which is one of our city parks. And losing control of a building in such a sensitive area would be a problem. So we don’t want to sell it, but we also aren’t really actively using it.” said NW Council Member Greg Neitzert.

There was discussion on if the city should have opened up the opportunity for outside groups to buy or lease the building, on the same grounds as the non-profit Startup Sioux Falls. The council agreed though that having Startup Sioux Falls in the building was the right fit.

“They have a proven track record, they get things done. They’ve created jobs, they’ve helped businesses get off of the ground. And so it’s just a natural fit. This isn’t a big risk.” said Neitzert.

While this lease will take effect, it’s something that At-Large Council Member Janet Brekke said the city should avoid.

“For the future, I think we have to be a little bit careful about just doing the deal and bringing it forward. Because most of the time in the city, we need to do things competitively.” said Brekke.

While she agreed that the lease with Startup Sioux Falls is a great proposal and voted for it, she stated that they need to be more careful with future leases.

“This one would’ve probably held up in a competitive setting. It would’ve probably been one of the top opportunities. But if we’d have did it that way, then other people could’ve brought us proposals, and we could’ve selected the best proposal.” said Brekke.

The lease on the building runs for ten years. The city has the options of buying out the lease beginning in 2028, with a percentage of what Startup Sioux Falls has already invested into the building.

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