The City of Prior Lake has seen a substantial dip in building activity during the first six months of 2025 when compared to the same period last year. The change in numbers, however, was anticipated due to several projects completed in 2024, and building activity is expected to improve in 2026 when two new neighborhoods are ready for development.
The city’s building permit summary was included in documents provided to the Prior Lake City Council this week. In the first six months of 2025, all but one building category reflected a decline when compared to the same period of 2024. The valuation for all building categories, including all new construction, additions and alterations totaled $70.75 million in the first half of 2024, while the 2025 total is $36.7 million.
Casey McCabe, Prior Lake’s Community Development Director, said much of the decline seen this year can be attributed to the city’s low inventory of undeveloped residential lots. The city typically had open lots to cover between two and three years of residential development, but open inventory has substantially declined due other new construction that has occurred in recent years. In the first half of 2024, single family dwellings accounted for $18.3 million in permit valuations, while this year, that number has dropped to $9.7 million.
McCabe said the city should see a big uptick in single family home construction starting next year with the opening of two new developments within the city limits. Aspen Ridge, located near Friendship Church on the south edge of the city, is being prepared for 45 new homes to be built. Grading will also begin this fall on property located near the intersection of County Road 42 and Crest Avenue that will allow for the construction of 68 new homes.
Construction of large apartment buildings was also a big positive for the city in 2024, and had an estimated valuation of $28.7 million. That development category dropped to $5.5 million in the first half of 2025, according to the summary report. The number, however, is expected to improve when the application is finalized for another apartment building to be constructed near Jeffers Pond and County Road 42 that will contain 140 units.
Permits pulled for new industrial and commercial development since Jan. 1 showed Prior Lake’s biggest gains to date in 2025, totaling close to $7.5 million. Last year’s total in the first half of the year stood at $3.95 million. McCabe attributed the increase to permits awarded for the development of three properties: Park Place Storage with 225,000 square feet devoted to condo storage units built along Eagle Creek Avenue; Valvoline Oil Change being constructed near the intersection of Highway 13 and Panama Avenue; and Chula’s Mexican-Latin Food & Spirits, expected to open in early 2026 in downtown Prior Lake.
McCabe is optimistic that residential development will once again be brisk within the city in the coming years. He said he’s received many inquiries about property acquired recently through annexation which lies west of Marschall Road, along with vacant land between 160th and 170th Street. McCabe said those parcels will provide the city with more development options for the next 20 years.
