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Crowded Sioux Falls City Hall offices will be staying that way a little longer.

Negotiations between the city and a local developer seem to have fizzled out after an agreement could not be reached.

The city was thinking of buying the old Midland National Insurance building downtown to expand.

"We started looking, and made an offer and from their standpoint, what they needed for money wasn't quite what we had in mind for what we could do, so it just didn't work out," said Sioux Falls Mayor Dave Munson.
"I was actually kind of glad they rejected our counter because i figured at least this way, my partners won't chase me out of town.  I mean we thought our counter to them might be a little bit on the weak side," said developer Don Donhum.
Building Services workers at City Hall are cramped and working in close quarters.  A study completed in 2008 says the city is operating in 20% less space than it needs. "We're just to the point where there's simply no more room left," said city employee Ron Bell.  The department is scattered across three floors.   "It would be much more efficient if our department could be in one location, but that's just not practical with the building that we have here."
The building that houses City Hall has been in Sioux Falls for more than 70 years but they have been looking for a new place to call home.  The city says they had high hopes for the Midland Building, but developers could not accept the offer.

"We really didn't want to expend any cash, we wanted to make some trades with properties that we had that would be equivalent to the price was down there at the time," said Mayor Munson.

Since a deal was not made, employees will be staying in City Hall; but there is one consolation to working in a crowded office.

"I guess I look at it, I kind a get my exercise in this place by going from floor to floor dealing with different staff, you know, in one department," said Bell.

The developer, Dunham Company, said the city's offer was a couple million dollars short of what they were asking.   

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