Building boom

2021 shattered building permit sales in Spearfish with more than $98 million in valuation issued. This broke the previous record, set in 2020, of nearly $55 million. Pioneer photo by Mark Watson

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SPEARFISH — The city of Spearfish saw another record shattering year of building permit sales in 2021, $98,005,007.71, which is nearly 2020’s record number of $54,968,747.32.

“Just a lot of big projects, really. A lot of expensive, high-dollar projects that came in this year,” said Spearfish Building Official Tom Paisley.

The annual valuation report shows that the total number of permits sold in 2021 was 520, which is slightly lower than the 568 sold in 2020. The reason for the valuation being so high when permit sales have actually lowered is due to the number of large-scale building projects being done in Spearfish. Paisley said several apartment buildings as well as some bigger builds downtown contributed to the high number, including the major remodel of the Pioneer Bank building.

“They just don’t have any room, they have more employees than they do offices right now so they needed some extra room,” he said.

Paisley explained that the permit valuation comes from the contractor’s estimate of how much the project will cost.

“The building permit fee increases as the cost of the building increases,” he said. “It’s more involved, we have more plan review time in it, we have more inspection time in it. It’s a little more expensive to build a $10 million building than it is a $100,000 house.”

Inspectors also have the International Code Council Valuation Data Chart, which Paisley said he could use to make sure contractors are staying on point with building costs.

“They have an average cost of construction depending on the type of construction and use of the building,” he said. “We very rarely have to look at that because the contractors have been pretty honest and their numbers have been above that chart anyway.”

According to the report, there were only nine new commercial building permits sold in 2021, but 50 commercial alteration permits. 215 new residential units began construction in 2021, including 130 single-family dwellings, many of which were purchased by people from out of state looking to move to South Dakota.

“We had a lot of them that were in between $500,000 and $1 million per house, so lots of nice big houses. Expensive houses,” Paisley said.

Three new apartment buildings also got underway in 2021, which will bring 76 more living spaces for folks moving into the area.

“It’s good, we probably needed more apartments, and the Pennbrook Apartment is actually a subsidized housing, Costello Companies out of Sioux Falls owns that so that will be for some subsidized housing, which is good,” Paisley said.

Much of the residential growth in Spearfish can be attributed to the city’s strong business infrastructure and attractive outdoor recreation culture.

Melissa Barth, executive director of the Spearfish Area Chamber of Commerce said they work closely with folks looking to relocate to Spearfish.

“They’re just so happy to be coming to an area that has such a great quality of life and a great school system, and the fact that South Dakota and Spearfish continue to be a vibrant business environment throughout the pandemic,” Barth said.

Misti Caldwell, executive director for Visit Spearfish described the relationship between the city and economic builders such as Visit Spearfish, Spearfish Economic Development Corporation, and the Spearfish Area Chamber of Commerce as a continuum, with all four entities interdependent on one another to build Spearfish into the best community it can be.

“Everyone starts as a visitor, and if people want to visit here, a lot of times they want to live here, if they want to live here they have to work here, and if you need work, then businesses like to come here because they like to build business to get people here, and if you build a place that has business, then people want to visit,” she explained.

Caldwell said that the unique combination of outdoor recreation opportunities and shopping and dining options also adds to the allure of living in Spearfish.

“They’re not out in the middle of nowhere, they can still get some of those city-like amenities at a high quality, which Spearfish offers and still spend time outside,” she said.

“I don’t think it’s going to slow down anytime soon,” Barth added. “Our inquiries are still coming in multiple a week.”

The taxes collected from people shopping and playing to Spearfish all contribute to the community’s financial well-being, but the valuation from building permit sales shows just how much the city is growing through the amount of new residents and businesses that see Spearfish as a place to call home. But it’s not just Spearfish that’s amassing newcomers. Paisley said the Sioux Falls building permit valuation just topped $1 billion in 2021.

“I think Rapid City’s about $350 million, so it’s not just Spearfish, a lot of community’s in South Dakota are seeing high numbers for building permit valuations this year,” he said.

Caldwell captured the sentiment of the state’s growth very well.

“A rising tide raises all ships,” she said.

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