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Land ownership question hovers over $185 million Sioux Falls redevelopment plan

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Land ownership question hovers over $185 million Sioux Falls redevelopment plan

Questions about the ownership of a strip of land within the Sioux Steel Co. site in downtown Sioux Falls has created a new, unexpected hurdle for the proposed $185 million redevelopment of the property.

The land in question was once a channel of the Big Sioux River and has ownership origins that stretch back beyond South Dakota statehood all the way to the presidency of Abraham Lincoln.

Archived press clippings appear to indicate that the channel that separated Seney Island from the western bank of the Big Sioux River was filled in and, along with the former island, was turned into usable land in the early 1900s. Sioux Steel Co. has owned and operated on the site since 1918.

Officials in the state School and Public Lands and Attorney General’s offices are reviewing maps, historic documents and other information to determine whether the state may have a claim of ownership to the strip of land.

A team of experts with the Lloyd Cos., which was selected by Sioux Steel ownership to redevelop the site, has completed its own investigation that the firm says indicates the land is not state-owned and is available for legal sale and development.

Jake Quasney, executive vice president of development at the Sioux Falls-based Lloyd Cos., said part of the channel route is within the roughly 11-acre site that Lloyd hopes to redevelop. Lloyd wants to turn the site on Sixth Street in Sioux Falls into an urban community with riverfront hotel and convention center, residential tower, parking ramp and an office and retail complex on the north end of downtown Sioux Falls.

According to South Dakota law, the state can claim ownership of any land beneath a waterway that is now or ever has been navigable. The key question state officials are investigating is whether the former channel was navigable.

The land-ownership questions were initially raised by Steve Wegman of Pierre, a former state policy analyst who now runs the South Dakota Renewable Energy Association.

Wegman said he first heard about the mystery of the former island and channel when he was a paperboy for the Sioux Falls Argus Leader and a customer on his route told him about it.

Wegman said his research raised questions about who owned the island and also who filled in the western channel. He said his findings appeared to indicate that the ownership of the island and channel land was unclear but is probably held by the state.

“It’s an interesting story all around,” Wegman said. “But the bottom line is that somebody does not have clear ownership of that property.”

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