Longtime business leader Al Schoeneman to celebrate retirement

May 21, 2025

After more than 55 years, Al Schoeneman is celebrating a career that helped shape Sioux Falls’ growth and became a homegrown success story.

The CEO of Schoeneman’s Building Materials Center for much of his career, he helped solidify the company into a local powerhouse with multiple locations that eventually evolved its longtime downtown property into a thriving redevelopment.

Schoeneman will celebrate his retirement with an open house Thursday. It will run from 3 to 7 p.m. with a program at 6 p.m. at the company’s Harrisburg location, 600 N. Cliff Ave.

Schoeneman knew this day was coming a year ago when the company became part of industry leader Texas-based Builders FirstSource after 136 years of local ownership.

“It’s a good time to transition,” he said, adding that the people side of the business was his favorite part, “working with the contractors and customers.”

Schoeneman’s dates back to 1888 when it was founded in Iowa before moving the headquarters to Sioux Falls a century later.

Schoeneman, who was the fourth generation to lead the family business and has no children, took over for his father, Cecil, and uncle, Herb, who worked in the business into their 90s.

At the time, “there were 10 lumberyards in Sioux Falls,” he said, calling them out by name.

Today, it’s one of few in the area, though the industry has moved into manufactured trusses and Schoeneman’s also added such an operation at its Harrisburg location.

In the early 1980s, Schoeneman’s opened a second location in Sioux Falls at 4000 S. Western Ave., which remains today.

“We didn’t really have much lumber here, but a lot of the contractors wanted to work out here because it’s more convenient,” he said.

The business supplied lumber as Sioux Falls grew from a community of about 70,000 when he started to more than 200,000, supporting largely single-family and multifamily developments.

In 2009, Schoeneman’s relocated its longtime downtown store to Harrisburg, which paved the way for the development that now includes the Lumber Exchange Building and the Hilton Garden Inn Downtown.

In 2016, with no heirs to the business, Schoeneman decided to transition it to an ESOP, or employee stock ownership plan. The terms were so generous to employees that the advisory team working on the deal needed to be told twice before fully comprehending what Schoeneman wanted to do.

“I think every day when people came to work at Schoeneman’s they knew Al had their best interest at heart and that he was running the company not only to be successful and profitable but to take care of them and their families,” said Pat Costello, who joined the team almost a decade ago and now serves as market manager over the stores in Sioux Falls and Harrisburg as well as a warehouse location in Tea.

The two shared an office at one point, and “a lot of people would come in to look for support from Al,” he added. “Customers, vendors, employees, and he was more than generous. He didn’t need to do the things he was doing.”

Costello jokes that almost every Eagle Scout probably came through Schoeneman’s when it was time for a project.

“If they needed lumber or screws, they’d come here,” and Schoeneman would support it, he said.

The acquisition by Builders FirstSource came at an opportune time, Costello said.

“Builders FirstSource is the largest building material supplier in the country, by far over twice as big as our next competitor,” he said. “They’ve spent almost $1 billion on their digital platform, how the back office runs but also the customer-facing side.”

Younger contractors want digital access to everything from estimating projects to ordering material and scheduling deliveries, and “that kind of investment isn’t something Schoeneman’s could get close to doing,” he said.

Because it was the ESOP that was acquired, about a year ago, longtime team members “woke up millionaires and had no idea,” Costello said. “It went from $0 on day one in 2016 and tens and tens and tens of millions of dollars when we sold it, and essentially about 50 employees got that.”

Today, many of those employees are still part of the approximately 75-person team.

“The team we have here are very deep in the building material and lumber industry with experience and very qualified,” Costello said. “Vendors would come from a corporate office and say that you don’t see that tenure. And that goes back to the way Al treated people for years.”

For Schoeneman, at 77, retirement life will bring a split of his time between Sioux Falls and Arizona, more time to golf and the need to probably find some hobbies because he has been used to working a lot, he said.

“Our community is a great community. And I’m fortunate,” Schoeneman said of being part of its growth.

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