The Pierre City Commission has approved a plan to redevelop the old city hall.
The building is being converted into an 81-unit hotel, 60-unit apartment complex, an office building and retail space.
Mayor Steve Harding said the community of Pierre has had outstanding support for the project.
“I think with more people living downtown in that areab that will revitalize the downtown area and create additional, you know, little shops and retail type things for people because of the increased activity of people living there," Harding said.
Chapelle Investments is financing the project.
The city is setting aside $5.45 million from a new property tax to help pay for it. They’re also setting up a program where up to $200,000 of sales tax collected at the hotel will be rebated back to Chappelle to help with financing.
The new project is expected to increase tax revenue without losing existing tax dollars, property or sales, Hardin said.
Construction is expected to begin this year and complete by next year.