KEY POINTS
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South Dakota approved a $650 million plan to retire the 144-year-old penitentiary known as “the Hill” and build a modern 1,500-bed men’s prison in Sioux Falls.
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The new prison will be built on industrial land near Benson Road, three miles from the current site. Construction is expected to begin soon, and completion is targeted for 2029.
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The new project reflects a compromise addressing concerns about cost, location, size, and rehabilitation programming.
South Dakota lawmakers approved a $650 million plan to retire the 144-year-old state penitentiary known as “the Hill” and build a new 1,500-bed men’s prison in Sioux Falls. Officials announced last week that the project marks the largest taxpayer-funded construction project in state history.
SD Governor Larry Rhoden signed SB 2, which provided for the new prison in Sioux Falls on September 23, 2025, the office of the Governor announced.
New Sioux Falls Prison Site and Completion Target
The new prison will be built on industrial land near Benson Road in northeast Sioux Falls, approximately three miles from the existing facility. Work on the project is scheduled to begin soon, though the governor’s announcement did not state a precise construction start date. Completion is targeted for 2029.
The South Dakota State Penitentiary in Sioux Falls, shown here from a street view, will be retired and replaced with a new $650 million prison facility, approximately three miles from the existing location. Image: State of South Dakota
Design Features and Builder Commitments
The new prison facility will have 1,500 beds, including a mix of cell- and barracks-style layouts, helping to reduce construction costs by $175 million compared to earlier proposals. The design emphasizes improved programming space for rehabilitation, vocational training, and safer conditions.
Earlier this month, the SD Governor’s office announced that a joint venture between Henry Carlson Construction and JE Dunn Construction had pledged to cap construction costs for the project. In a letter to Governor Larry Rhoden and state legislators, the builders committed to a guaranteed maximum price of $650 million for the facility.
The South Dakota State Penitentiary, situated on a 30-acre site in northern Sioux Falls, has operated since 1881. Originally built as a territorial prison, it became the state penitentiary with South Dakota’s statehood in 1889.
While much of the original complex still stands, officials say the facility has undergone significant structural modifications over time. However, the aging facility has been criticized as unsafe and inadequate for modern correctional needs. The replacement effort followed the failure of a pricier $825 million construction plan earlier in 2025.
The new project reflects a compromise addressing cost, location, size, and rehabilitation programming concerns voiced throughout legislative debates. Two newer units of the existing penitentiary will remain operational after the new facility opens.
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