During a prison work group meeting on April 2, 2025, Ryan Brunner, an adviser to South Dakota Gov. Larry Rhoden, points toward the property line of land in rural Lincoln County that had been surveyed for the purpose of constructing a men’s prison. (John Hult/South Dakoa Searchlight. (John Hult/South Dakota Searchlight)
South Dakota taxpayers lost $21 million when their leaders abandoned plans for a men’s prison in southern Lincoln County.
Republican Gov. Larry Rhoden’s office released the figure to lawmakers on Wednesday and to the public on Thursday. It came as part of what he described as a funding plan for a prison in Sioux Falls, the merits of which will be debated during a special session of the Legislature on Tuesday in Pierre.
Lawmakers in February rejected Rhoden’s plea — which he inherited from his predecessor, Kristi Noem — for support of a 1,500-bed, $825 million prison on the controversial Lincoln County site. That land’s neighbors, who unsuccessfully sued the state over zoning on the property, helped sour the deal by persuading local lawmakers to oppose it.
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By the time the Legislature rejected the Lincoln County plan, the state had already spent or obligated more than $50 million in preparatory funding.
The sunk costs came up during meetings of the Project Prison Reset task force, a group convened in the wake of February’s prison vote failure. Its members ultimately voted to back a 1,500-bed men’s prison in northeastern Sioux Falls and cap its price at $650 million.
Lt. Gov. Tony Venhuizen, the task force’s leader, said some of the Lincoln County money could be clawed back by repurposing Lincoln County prison designs for a new location.
Tuesday’s funding plan spelled out how much for the first time.
The state spent a total of $52.7 million on the Lincoln County endeavor, the plan says. According to the Rhoden administration, $31.9 million of those costs should not be considered lost, because they funded local water wastewater improvements, were spent on prison designs that are being repurposed, and were recovered in the swap of the Lincoln County land for the Sioux Falls land.
Of the total amount spent, $10 million was federal funding, given to Lennox to pay for the wastewater upgrades needed to service a prison. The Rhoden administration does not consider that wasted money, reasoning that the federal funding would’ve gone to a local infrastructure project one way or another.
The remaining $42.7 million came from state coffers. About $17.4 million of the design work paid for out of that pool of funds has since been folded into a layout for the prison on Benson Road in Sioux Falls.
Also counted in that $42.7 million was an $8 million transfer from one state office to another: the Department of Corrections to the Office of School and Public Lands. The transfer gave Corrections the title to the 320 Lincoln County acres upon which it had hoped to build its prison. The state took ownership of the land years ago, when the owners died without heirs or a will, and had been leasing it for farming.
As industrial land, an official assessment determined in 2023, those farm acres would be worth $8 million.
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According to a purchase agreement signed for the Benson Road property last month, however, those Lincoln County acres are worth $4.5 million if they keep growing crops.
Thursday’s funding plan says the state “recovered” $4.5 million in “land value” through its purchase agreement, which would swap the Lincoln County land and $12.5 million in cash for 148 acres along Benson Road, located in an industrial area between Sioux Falls and Brandon. That land is valued at $17 million, the state said when it announced the land swap deal.
The land deal would only go through with legislative approval.
Earlier this week, Rhoden’s office released a document outlining how it was able to revamp its prison plans and reduce square footage to hit the $650 million construction target set by the prison task force.
After factoring in the $21 million lost in Lincoln County, Rhoden’s funding plan says, the state can still deliver a 1,500-bed prison complex for $154.2 million less than it asked for — and didn’t get — for the same number of beds back in February. Rhoden expects to be able to fund the project with money from the budget legislators adopted last winter and from a prison construction savings account filled by lawmakers during the last several years.
Tuesday’s special session is scheduled to begin at 9 a.m. before a speech by Rhoden to a joint session of the state Senate and House of Representatives at 9:30 a.m.
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