Downtown proposal would transform Wells Fargo block

An estimated $130 million development on Phillip Avenue between Eighth and Ninth streets is one of three proposals being considered by the city for a public-private partnership that would involve a new parking ramp.

But parking is just the start of the plan.

A concept released by the propery's representative shows the block transformed with what might be the most densely developed area in the city.

It combines two new office towers, the existing office building anchored by Wells Fargo, a 20-story hotel, an urban market and multiple residential areas.

"Every building is going to be iconic," said David Shelton, a broker with Century21 Advantage, who represents property owner Roland Johnson. "We came to the city saying this site is under-utilized."

Johnson bought the building in 2013 from an out-of-state investor.

It was built in 1973, and its adjacent parking lot and ramp have been discussed as parking expansion options for years.

The new proposal goes much farther.

Its first phase – which Shelton says could start late fall – would renovate the existing office building and add a 12-story attached tower, doubling the overall square footage to about 200,000 square feet.

"It hasn't been updated in a number of years, so that's one thing we will do is re-establish that building to its 'class A' urban office building status. When it was built in 1973, it was the talk. And it stayed that way for a while, but over time I can't say it was neglected but it didn't keep its grandeur."

The new plans, designed by North Dakota-based architect EAPC, show extensive glass and a prominent Wells Fargo sign. The attached new tower would be called R.H. Johnson Plaza I.

The building would include a level of underground parking, multiple levels of above-ground parking and have a green roof. The plan would be to market the space to a restaurant, Shelton said.

South of the current Wells Fargo office building along Phillips Avenue, Shelton plans to build and sell 22 townhouse-style houses.

"We built those in Vancouver (Canada). They are a loft style but they will be two-story," Shelton said. "It's got a whole different feel. It's very contemporary and urban."

Shelton's experience includes helping develop mixed use projects in Canada in the mid-1990s.

"We hope to have a positive impact," he said. "The scope, the magnitude of our development depends on the city participating in a significant manner and the parking."

Even if the city doesn't choose the proposal, Shelton said the existing office building will be renovated. Wells Fargo occupies the main floor, second floor and portions of fourth and fifth.

There are some issues between owner and tenant, however.

Wells Fargo representatives wouldn't comment on Shelton's plan, citing concerns about potential litigation.

Shelton said he also can't discuss the issue but that Wells Fargo representatives have seen his plan.

Other building tenants include Murphy, Goldammer & Prendergast and Hughes Law Office.

Future phases

The master plan for the site also includes a 20-story loft-style hotel on the northwest corner of the block.

Shelton said he is working with an international brand that offers a modern style with between 135 and 150 rooms. It might also include loft units for sale or lease.

"It will have all the amenities of a top international hotel," he said. "The hotel is absolute. That's got to happen. It's needed. It's timely. It's perfect."

He says the same thing about an urban market, which is the third proposed phase of development and would be located in the middle of the site facing Eighth Street.

A announcement event Saturday included food from Trader Joe's, and Shelton is clear about his enthusiasm for the brand. But even if the chain doesn't sign on for the site, he is adamant about securing a grocery store there.

"We see that as essential infrastructure for downtown going forward. It's what's missing."

Much of the center of the block is envisioned as green space.

Another office tower is shown facing Ninth Street. Shelton pitched it to city officials as a government building.

"We think it's best served if it's public. In this whole thing, I think we can make a deal that's going to lessen the burden on taxpayers and I think that's important," he said.

The balance of the plan calls for addition residential development similar to the townhouses in the first phase.

"The demographic we're after residentially is a demographic that we don't have much of downtown," Shelton said. "It's a higher income. It's retired. So far we've missed that opportunity in what we're doing here. We're getting young people paying high rents and squeezing their disposable income, but we need to bring in a demographic where this may be their third or fourth home."

Next steps

The city's other two proposals also involve mixed use projects that could include hotels.

All interviewed with the city last week.

"I would say that each is unique and significant," community development director Darrin Smith said.

The First National Bank of Sioux Falls partnered with Bender Midwest and the Ramkota Companies on a proposal.

Few details have been released on it, but Ramkota representatives have said they would like to build a unique, niche hotel downtown.

"We want to think outside the box," president and CEO Tom Biegler said last month. "We've got a location we think is perfect for something, and we want it to be spectacular."

Architects Dave Sellers and Robin Miller, who have formed development company JDI, also presented to the city.

"Ours spread across four sites," Miller said. "We're shooting for something we will be proud of 150 years from now, and my great-grandkids will go, 'That was a good idea.' Every time we look at a lot we're looking at what is the best use for that lot. What does the town need?"

The city has said it might choose to work with more than one proposal. One proposal also might be chosen through the formal request for proposal process while others might work with the city independent of the formal structure and process, according to Smith.

The city plans to make an announcement this month.

The request for proposals called for a parking ramp to be done by the end of 2017.

Shelton said his entire $130 million development is planned to be done by then.

"We're not messing around," he said. "It's an aggressive schedule for everything."