City lists former Kelley home on the market for $3.5 million

Former Kelley home that sits just 2 miles west of Lake Mitchell has been listed for sale since Dec. 1.

The front of the house, formerly known as the Kelley property. The Mitchell City Council will consider rezoning the property into a urban development district. The city of Mitchell has listed the former Kelley family home along Firesteel Creek at $3.5 million. (Matt Gade / Republic)
Matt Gade

The multimillion-dollar home that the city of Mitchell purchased two years ago along Firesteel Creek is back on the market.

After going through a process to establish the value of the $3.5 million home that sits roughly 2 miles west of Lake Mitchell, the city now awaits an offer that’s in the price range of the house that was previously owned by Peggy Kelley and her late husband, Harvey. The house came with the city’s purchase of 371 acres of land that sits along Firesteel Creek, which will soon be the area where the city constructs a wetland and dam in hopes to drastically improve the water quality of Lake Mitchell.

When the Mitchell City Council approved purchasing the 371 acres of land previously owned by the Kelley family at a cost of $4.1 million in January 2019, Mitchell Mayor Bob Everson said the city’s intention was to solely buy the land. However, the Kelley family stipulated the home must be included with the land.

“We’re glad to get this home on the market. It’s 20 years old, but it is a very good, well-built house,” Everson said in an interview with the Mitchell Republic. “We are hopeful that it will sell within a reasonable timeline. We will use the money from the sale of the house to help the wetland project, which is also why we agreed to buy the house with the land.”

Considering the land is situated along Firesteel Creek, a major source of phosphorus and sediment flowing into Lake Mitchell that creates algae blooms, Everson said purchasing the land and the home was an opportunity that the city would likely never get back again. Everson noted the wetland project is expected to begin sometime in summer 2021.


With its retractable roof, heated patios and tall sliding glass windows overlooking Firesteel Creek, Everson said the house is unlike anything on the market in the Mitchell area. The 10,095-square-foot home has three bedrooms and nine bathrooms and sits on roughly 9 acres of land. In addition, a large pond and multipurpose standalone shed near the house is included in the $3.5 million sale.

While it’s been listed on the market for one month, Everson said there has already been one offer made on the home. But the offer was significantly lower than the asking price -- coming in at slightly more than $1 million -- and sought more land than the roughly 9 acres it comes with. The city declined the offer, which came in at a little over $1 million.

The home property is listed under the local real estate company Exit Realty, which has a national footprint. Stratton Havlik, of Exit Realty in Mitchell, is the real estate agent who has the home listed on the market.

Everson said the city’s decision to go with a realtor from Exit Realty was largely based on the company’s nationwide footprint and avoiding a conflict of interest with another local real estate company. That included Fischer Rounds, he said, where his mother is an active real estate agent.

“Exit Realty made the most sense because they have a nationwide listing and cover a large area, which is part of why they were selected,” Everson said. “I also have personal ties to Fischer Rounds and didn’t want to have any impropriety with it. It is a multiple listing home though, so any realtor in the state can technically sell it.”

According to Everson, a team of appraisers determined the value of the home including the land to be just shy of $3 million. However, the city set the sale price of the home and 9 acres of land at $3.5 million, largely due to the condition of the home, the amenities and the cost range of building the home.

“To build this house, it was in excess of $7 million. What we did is we looked at it and said we are at half the price to build a house like this. It is a very good house and has all kinds of amenities,” Everson said, noting the nearby wildlife and scenic beauty.

Council member Jeff Smith said the $3.5 million price tag is a “bargain."


“Hopefully there is someone out there who would be willing to purchase it, because it is quite a bargain for the costs of building the home,” Smith said.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
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