SIOUX FALLS, S.D. — South Dakota lawmakers have approved a $650 million plan to retire the 144-year-old state penitentiary, known as “the Hill,” and construct a modern, 1,500-bed men’s prison in Sioux Falls. The approval marks the largest taxpayer-funded construction project in state history.
Governor Larry Rhoden signed SB 2 on September 23, 2025, officially greenlighting the facility, which will be located on industrial land near Benson Road, roughly three miles from the existing penitentiary. While the governor’s office did not provide a precise construction start date, the facility is expected to be completed by 2029.
The new prison will feature a combination of cell-style and barracks-style accommodations to balance cost efficiency and operational needs. Officials estimate the design will save $175 million compared to earlier proposals, while prioritizing rehabilitation, vocational training, and enhanced safety for staff and inmates.
To further control costs, a joint venture between Henry Carlson Construction and JE Dunn Construction has committed to a guaranteed maximum price of $650 million, as stated in a letter to Governor Rhoden and state legislators.
“The design ensures we provide safe, modern, and functional facilities while remaining fiscally responsible,” said a spokesperson for the Governor’s office.
The South Dakota State Penitentiary, located on a 30-acre site in northern Sioux Falls, has been operational since 1881, first as a territorial prison and then as the state penitentiary after South Dakota gained statehood in 1889. While the complex has undergone several structural modifications over the decades, the facility has been widely criticized as inadequate for modern correctional requirements.
Earlier in 2025, a proposed $825 million replacement plan failed amid legislative and public concerns. The new $650 million plan is seen as a compromise, addressing cost, location, size, and programming needs, while ensuring that two newer units of the current penitentiary remain in use after the new facility opens.
“This project reflects a balance between cost efficiency and our commitment to rehabilitation programming. We’re building a facility that will meet today’s standards and serve the community for decades to come,” said a Department of Corrections representative.
The construction of the new prison is expected to create hundreds of jobs in construction, engineering, and related trades throughout the project lifecycle. Local officials also note that modernizing the facility will improve safety for correctional staff and enhance rehabilitation opportunities for inmates, aligning with broader criminal justice reforms in the state.
As South Dakota embarks on this historic construction project, stakeholders remain focused on timely completion, budget management, and operational readiness, ensuring that the state’s prison infrastructure meets long-term needs.
Originally reported by Marshall Benveniste in Construct Connect. News.
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