Officials blame inflation for state building projects that are millions over budget
Officials break ground in September 2022 on the Nucor Mineral Industries Building at South Dakota Mines in Rapid City. (Photo courtesy SD Mines)
Eight building projects already approved by the Legislature need about $30 million in additional funding due to rising costs, state lawmakers were told Monday at the Capitol in Pierre.
State officials told the Joint Committee on Appropriations about the challenges of trying to keep project costs under control amid high inflation.
One of the projects that has seen its cost estimates rise significantly is the new Dakota Events Complex, or DEX, at the state fairgrounds in Huron. It’s already under construction and slated to be open in time for this summer’s state fair.
The Legislature initially appropriated $20 million for the project, but recent estimates have the secretary of the Department of Agriculture and Natural Resources, Hunter Roberts, asking for $9 million more.
“We actually reduced the footprint 50,000 square feet,” Roberts said, “And we’re still way off.”
The DEX was initially aiming to open for the 2022 fair, but supply chain disruptions delayed completion.
An addition to the Kinsman Building in Pierre rose from $1.45 million to $3 million. The cost to improve and repair Hiddenwood Lake near Selby will be another $1 million, on top of the originally appropriated $3.5 million.
A slate of state university projects has also been affected by inflation.
The construction of a new bioproducts facility at a research park in Brookings, home of South Dakota State University, was estimated to cost around $20 million but has seen its cost estimates rise by over $3 million.
“Inflation grew at a rate that could not be envisioned,” said Brian Maher, executive director of the state Board of Regents. “All of these bills are impacted by inflation.”
SDSU is asking for an additional $1 million for a dairy research facility on top of the originally appropriated $7.5 million. And South Dakota Mines in Rapid City is asking for another $4.4 million to complete its Mineral Industries Building on campus, which originally received $19 million.
Similarly, Black Hills State University in Spearfish is asking for another $5 million to complete a health services center that initially received $15.1 million. And the new Lincoln Hall planned for Northern State University in Aberdeen is expected to need another $5 million, now totaling $34.5 million.
Despite these challenges, lawmakers and project officials said they remain committed to completing the projects. The Appropriations Committee will make its decision on the funding requests in the coming days.
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
SUPPORT NEWS YOU TRUST.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics. Please see our republishing guidelines for use of photos and graphics.