It would be the most expensive state-led, taxpayer-funded capital project in South Dakota history.
PIERRE, S.D. – A new men’s prison in Lincoln County will cost state taxpayers $825 million, lawmakers learned last week.
That figure is $256 million more than the $569 million state lawmakers have appropriated for the project over the past few years. It also does not include the cost of paving and widening the two-lane gravel roads that surround the project site, about 15 miles south of Sioux Falls at the intersection of 477th Avenue and 277th Street.
Even without those road costs, the $825 million “guaranteed maximum price” now locked in for the multi-building complex is higher than any previous estimate publicly offered for the prison’s construction.
Department of Corrections Secretary Kellie Wasko, her finance director and the project’s construction manager faced pointed questioning from members of the Joint Appropriations Committee and the public on Thursday about the price tag, plans for flooding mitigation and about the possibility of building somewhere else.
Throughout the questioning, Wasko returned several times to a common theme: That the state studied its options for a new men’s prison, and that the $825 million project was the most fiscally responsible option to address overcrowding and security issues within the state’s correctional system.
“The decision to construct a men’s prison was not made hastily,” Wasko said.
Finance Director Brittni Skipper said that the DOC’s next prison project budget request will be less than $200 million because the money lawmakers have already allocated has been placed in an interest-bearing incarceration construction fund. The interest from the $505 million currently in the fund is anticipated to return $61 million, Skipper said. The prison is set to open in 2029. Skipper did not say how long it would take for the project to generate that much interest, and the DOC did not immediately return a request for clarification.
Some lawmakers on the committee and several members of the public, however, urged caution on the project. It would be the most expensive state-led, taxpayer-funded capital project in South Dakota history, and lawmakers are headed into a budget year with fewer dollars to spare than they’ve had in recent years.
“The Legislature is going to be challenged to find the additional funding you may need for this facility,” said Rep. John Mills, R-Volga.
The facility is intended to largely replace the existing penitentiary in Sioux Falls, parts of which date to 1881.
Price scrutinized
JE Dunn Construction and Henry Carlson Construction were selected to build the project. Vance McMillan of JE Dunn was on hand for Thursday’s meeting, and told lawmakers that there’s a “gluttony” of prison and jail projects in the works across the U.S.
Dunn talked about a handful of what he called “comparable” projects in Georgia, Alabama and Utah. Comparing price per square foot, McMillan said, South Dakota’s prison project is in line with those correctional facilities.
Mills noted that a 2022 study from a consultant company called DLR suggested a price tag of less than $350 million for a 1,200-bed facility. Mills wanted to know how the price tag for a 1,500-bed facility could be so different, given that the 2022 report adjusted for inflation.
“What are the differences between what’s anticipated to be built today that makes up your guaranteed maximum price, and what the DLR study envisioned?” Mills said.
McMillan said he doesn’t know how those consultants came up with their numbers, but said his company returned a fair price based on South Dakota’s design.
Every bed in the new facility could be used for maximum- or medium-security inmates, with each cell designed to house two inmates. The price for the new prison is tied in large part to the needs of inmates at those security levels.
“I will tell you that since we’ve been working with Kellie Wasko’s team, we’ve been very diligent about trying to roll up our sleeves and save you guys money,” McMillan said.
Rep. Chris Karr, R-Sioux Falls, said South Dakota was set to spend twice the price that Utah did per bed, and asked McMillan why that might be.
McMillan said the other projects mix maximum, medium and lower-security inmates, which can lower the price. Some of the facilities planned to house four inmates per cell, as well. That skews the per-bed comparison, McMillan said, again urging lawmakers to consider the price per square foot.
Mills and Karr asked Wasko why the state couldn’t save money by designing with four-bed cells in mind.
Wasko said four beds per unit is more like a minimum security setup, and that South Dakota has plenty of minimum security beds. What the state needs, she said, are beds for about 800 medium security inmates at the state penitentiary and about 250 inmates at Mike Durfee State Prison in Springfield.
“Can we go to a multi-bed, four-bed setup? We talked about it,” Wasko said. “When we discussed it, considering some of the management issues that we’re having right now, the population issues and our ability to separate people, it was decided that we were going to get the best use out of our beds if we went with double occupancy.”
McMillan also addressed the possibility of paring down the design. He told Mills and Karr that adjusting the design in hopes of saving money might not save much if the cost of construction continues to rise. There are only so many subcontractors with security expertise, he said, and they might be committed to other projects and more costly to hire if the state waits to start construction.
“I’m not trying to scare people,” McMillan said. “I’m just trying to be a realist for you.”
Questions about drainage, roads
Rep. Jim Bolin, R-Canton, asked Wasko if the $825 million price included road upgrades. They’ll be needed, he said, with about 400 employees coming and going from work throughout the day and the prison’s need to transfer prisoners in and out of the facility.
The price did not include the cost of roads, Wasko said. The DOC has worked with the state Department of Transportation to identify needed upgrades, and she said the details and cost of that work would be part of the governor’s proposed annual budget, which will be released next month.
The transportation department did not return a request for further information on the cost of road upgrades, how many miles would need to be built or when work might begin. The agency’s 2025-28 Statewide Transportation Improvement Plan map shows a four-mile stretch of County Highway 278 set for “corridor modifications” in 2027 at a price of $541,000. That road runs east to west adjacent to the project land. There are no projects listed on the map for the north-to-south road that runs by the new prison site, 477th Avenue, which runs through Harrisburg and into Sioux Falls.
Dan Paulson of Harrisburg testified against the project on Thursday. He lives near the area, and said he’d expect the state would need two lanes of highway in either direction on the cross streets around the prison site to make transportation feasible.
The cost of roads should be considered part of the price, he said.
“If they are not in the budget request, then it does not reflect the true cost of the facility,” Paulson said.
Another neighbor to the facility, Sam Eiesland, also talked about the road situation. Eiesland owns the land across 477th Avenue from the prison site.
“Where is the ground coming from to widen those roads?” Eiesland said. “I own that ground, and it’s not for sale.”
Michelle Jensen, another neighbor to the project, asked lawmakers on the committee why they wouldn’t push the DOC to consider alternative sites, perhaps on other land it owns, in light of the opposition and practical concerns about building a prison in an undeveloped area.
She compared the prison to a walled city plopped onto a field.
“It is fiscally irresponsible to build a new 2,000-person town in an area with no infrastructure, with volunteer emergency services, that is not zoned for such a project and is not wanted in the area,” said Jensen, who is among the landowners suing the DOC in hopes of forcing the agency to ask Lincoln County’s permission to build. A county judge dismissed the lawsuit, but the plaintiffs announced their intent to appeal on Tuesday morning.
Rep. Karr noted the catastrophic flooding that hit McCook Lake earlier this year, saying development around the area was among the factors that exacerbated the problems.
“I just want to make sure we’re thinking about the impact of this build on those other individuals around us in the community,” Karr said.
Wasko promised to get lawmakers a drainage plan to show how the agency planned to mitigate potential damage during major rain events. She also urged lawmakers to put faith in her agency and the prison it has designed.
“We are indeed building a small city within a city, and it is going to be a secure city,” Wasko said. “And I promise you that the dollars that we’re using to build this are what make it safe, because at the end of the day, I don’t think that you can put a price on public safety if one inmate gets out.”
