Legacy Developments giving new look to properties

A former employee introduced him to Les Kinstad, who founded Legacy in 2001 as a development, real estate and property management company.

Drake became an investor in the company and ended up buying it in 2008 from Kinstad, who now works for the city’s community development department.

Dr. Paul Cink became a partner the following year, followed by Larry Canfield and Aaron Hultgren.

The developers work with between 50 and 75 investors, Drake said.

“We see a lot more projects than we take on,” he said. “You’ve got to say no a lot more than you get to say yes.”

The portfolio is dominated by Sioux Falls projects.

“I like the Sioux Falls market real well right now. It’s a great community,” Drake said. “What I like about the cycles in Sioux Falls is we don’t get the highs and we don’t get the lows. It doesn’t create quite the same opportunities, but we tend to be low-risk and medium to better-than-medium returns.”

Tom Walsh Sr., who has partnered with Drake in several projects, said the developer has focused on creating win-win situations.

“I think in his business if you burn an investor or you burn a partner in a small community like this, it gets out,” Walsh said. “Your reputation is so important. Norm’s been around the block. He’s a smart guy, and more importantly his word is good. And he’s good at relationships and putting things together, and I respect and trust him. He’s a good man.”

Downtown momentum

Legacy joined with Endeavor Properties led by Dr. Rich Brue, to buy the long-vacant former DM&E building downtown from Canadian Pacific Railway.

The four-story space of Riverview Square at Eighth Street and Phillips Avenue is being renovated and has a first lease secured.

Ohio-based Equity Trust Co. has leased the second floor. The business, which is one of the largest players in the self-directed IRA industry, offers retirement plans, custodial and administrative services. It has 18 people working in an office in the Zeal Center for Entrepreneurship.

“We’re continuing to look for opportunities to expand our presence in South Dakota, so the place we’re taking will afford us that opportunity. Immediately, we’re looking to add about a dozen people,” president Mike Dea said.

The staff members in South Dakota handle call center work, but Equity is adding audit and compliance staff and looking to expand in other areas, he said. The new space will be almost quadruple the size of its space in Zeal, the former South Dakota Technology Business Center.

The hope is to move in early next year, Dea said.

“Equity wanted to be downtown and has enjoyed its experience in South Dakota,” he said. “It looks forward to further deepening its commitment to the state and the community through growth and volunteer opportunities.”

The office tenant is ideal for the building, Drake said.

“It’s a wonderful fit to be able to lease out to a tenant of that quality that really believes in Sioux Falls and is going to create a long-term presence here,” he said.

He also is working with a potential office tenant for the fourth floor.

There are several restaurant operators looking at the first floor and a coffee shop that is finalizing a lease for 2,000 square feet in the northwest corner of the building, Drake said.

Legacy also owns the nearby buildings along Phillips north of 10th Street. Copper Lounge leases one of them, and the newly named PAve is renovating the Skelly’s space next door.

“Everything is coming along really nice,” PAve general manager John Geiken said. “Every single day you walk by it’s a completely different look. We’d had customers coming in the last couple weeks, and they couldn’t believe how fast things are going up.”

The two-story bar and restaurant is expected to open by summer. It will serve lunch and dinner daily.

“One thing I think people will be trying to dissect is, is it a restaurant or is it a bar,” Geiken said. “We will 100 percent be a bar. But I think our food is going to be extremely different and unique from what a lot of people are expecting. We’re going to be exploring some concepts we’ve discovered outside Sioux Falls. We took pieces from Minneapolis, Chicago, Kansas City, just bits and pieces we really enjoyed.”

PAve plans to offer affordable lunch prices, he added.

“It won’t be steaks or anything like that, but we kind of know our market. We are definitely honing in on the happy-hour crowd for drinks, the after-work crowd for drinks and the late-night crowd. We hope we offer an amazing space where everyone has a specific area that appeals to them.”

Legacy Developments is hoping to rebuild the historic facade of the building, Hultgren said.

“It will look very similar to that historical theater look,” he said.