State government plans to give a $3.2 million building to a Black Hills businessman for conversion to a novel kind of manufacturing plant, in exchange for his agreement to demolish 125 mobile homes he owns near the Ellsworth Air Force Base runway.
The plant will produce steel-constructed “volumetric modular” units, such as individual hotel rooms, that will be shipped to building sites and stacked together to make completed structures. The plant is projected to employ 100 or more people at starting wages of $14 per hour, plus benefits.
Proponents of the multifaceted deal say it will help protect Ellsworth Air Force Base from closure while growing the local economy. But the deal will also displace the residents of the mobile homes.
Legislation covering part of the deal was recently approved by the state House and Senate and is awaiting the governor’s consideration as soon as Monday.
The legislation, Senate Bill 40, directs the state’s commissioner of school and public lands, Ryan Brunner, to transfer a state-owned former Western Dakota Technical Institute property at 1600 Sedivy Lane in Rapid City to the Ellsworth Development Authority.
The property includes a main building, which is 100,000 square feet, plus 10 acres of land and some smaller structures.
Brunner said the property was originally appraised at $4.1 million, but the appraisal was adjusted lower after it was discovered that the property — which Brunner said was annexed into the city after originally being built outside of city limits during the 1970s — did not meet some city codes and will need an estimated $900,000 worth of upgrades.
Scott Landguth, executive director of the Ellsworth Development Authority, said the property will be given to Branden Bestgen, who plans to locate his new Best GEN Modular company there.
Another Bestgen company, Capital Holdings LLC, owns 125 mobile homes in Box Elder. Most of the homes are in a mobile-home park that is bounded on its north side by Interstate 90, South Ellsworth Road to the east, Box Elder Road to the south and a set of railroad tracks to the west. A small number of the mobile homes are located in another area about a half-mile to the west.
As part of the deal, which will take additional time to close even if the governor approves it, Bestgen will have five years to demolish and clear away the mobile homes. Meanwhile, residents of the homes will have to find other places to live. Bestgen said Friday in email correspondence with the Journal that the tenants will receive a one-year relocation notice in 2023.
Several residents of the mobile homes declined to speak at length Friday with the Journal, but some said they have long been aware that they could be required to move because of their proximity to Ellsworth Air Force Base.
The Ellsworth Development Authority is a state entity tasked with maintaining and improving conditions around the base near Box Elder to ensure the base's viability.
Bestgen has agreed to grant the development authority an easement on the land where the mobile homes are currently located. As part of the easement agreement, future uses of the land will be limited to non-residential, low-density commercial development.
The mobile homes are about a mile as the crow flies from the southeast end of the Ellsworth runway and are also nearly in line with the runway. Landguth said the mobile homes are in one of the Accident Potential Zones that the authority has been working to make safer since the authority was created in 2009. The authority hopes that clearing the zones of high-density residential developments will please the U.S. Department of Defense and make the base less vulnerable to future rounds of base-closings like the one that nearly shuttered Ellsworth in 2005.
Landguth told a legislative committee that the Ellsworth Development Authority has purchased or acquired rights to 58 properties totaling 2,800 acres since 2009, all as part of an effort to make surrounding land more compatible with the base. The funding has come from a program that mixes a 75 percent federal contribution with a 25 percent state contribution.
“A few years ago, we thought it was something that would maybe take decades,” Landguth said Friday in a Journal interview. “But in the last five years, we’ve gone from about 65 percent compatible with our land around the base to about 99 percent.”
Besides displacing the mobile-home dwellers near Ellsworth, the deal will also affect some tenants at the former Western Dakota Tech property. Brunner, the state’s commissioner of school and public lands, said the Pennington County Sheriff’s Office is using some of the space for a shop, and the state Department of Corrections has some office space in the building. Brunner said both will have to move out, but a daycare in a smaller building on the property might be able to obtain a lease and stay.
Bestgen said Best GEN Modular will focus on the hospitality market but may also manufacture modular units for apartment complexes, senior housing and student housing.
The units will be built and furnished in the factory, to include artwork, beds, fixtures and furniture. Construction of the units will occur simultaneously with the preparation of the building sites, thereby shrinking typical construction schedules.
“As a lifelong resident of South Dakota, I am excited this venture will be located in Rapid City,” Bestgen said.