PROGRESS: Remaining Dakota Dunes Development land sells for $5.4M

A group of local investors led by Bart Connelly announced in January they had purchased most of the remaining undeveloped land owned by Dakota Dunes Development Company for nearly $5.4 million.

The purchase includes 158 acres of commercial parcels, 25 undeveloped acres in the Country Club neighborhood and 25 residential lots in Country Club. The deal also includes the 118-acre Two Rivers Golf Course. 

Dakota Dunes Development was a unit of Midwest Energy Co., a predecessor to MidAmerican Energy, which began developing the upscale planned community in the southeast tip of South Dakota in 1988. The project began with 2,000 acres.  

The tracts in this deal are located in the far northeast, southeast, northwest and southwest corners of the community, with one small section nearer to the middle of the community.

Connelly, a local contractor and developer, is the managing member of Dakota Dunes Land Holdings, LLC. The deal was finalized in early January, he said.

"It was a very complex transaction, a lot of ups and downs, but it went very, very smoothly. Much more smoothly than we thought it was going to go, and it's hard for me to contain our excitement," Connelly said at a news conference.

NAI United President Chris Bogenrief, who helped put the deal together and has been retained by DDLH to market the properties, said the decades-long development of the Dunes has entered its "final phase." Negotiations for the sale have been ongoing for the last couple of years, he said. 

Some larger commercial parcels in the transaction could be broken up for businesses in need of smaller tracts, Bogenrief said.

The investors also are planning to build one speculative commercial building and some spec houses, which are currently in the design phase. 

"You'll probably see some new streets, new construction, opening up some new areas for development," Bogenrief said.  

The group also plans to seek approval to re-zone segments of the commercial land for residential use. 

"There's more demand for residential, so we might, maybe change some of the uses," he said. 

Connelly said the Two Rivers golf course will continue with "business as usual," opening for the season April 1. But the new owners are planning some capital improvements for the golf course.

Dakota Dunes took shape in the aftermath of the 1980s Farm Crisis, which ravaged metro Sioux City's economy, Bogenrief said. Employers were leaving town, jobs were evaporating and the population was beginning to sag.

Midwest Energy CEO Russ Christiansen's vision for Dakota Dunes contributed to an economic turnaround.

"He knew the South Dakota tax climate was pretty impressive, and he knew that there was a lot of land over here, right across the bridge from Sioux City," Bogenrief said. 

Christiansen's team hired top planners and designers to design the community and quickly drew up restrictive covenants, requiring residents and businesses to keep their properties in a certain condition. In the 30-plus years that followed, the community became home to more than 2,500 people, along with scores of businesses.