Wednesday, May 18, 2011

A glimmer of hope?

Building-permit numbers are mixed but optimism persists


By REBECCA MEANY
Express Staff Writer

Work continues on a new house in Sun Valley last week. Two new houses in the city are under way, but new construction up and down the valley has yet to turn the corner. Photo by David N. Seelig

As the building season gets under way, projections about the area's construction prospects range from cautiously optimistic to guarded—and there are reasons to support both theories.

Applications for summer projects often are submitted by late spring, so work can be completed by winter.

By most tallies, permit applications so far are the same as or a little bit ahead of last year.

"April has always been a fairly good starting month," said Ketchum Building Official Cedric "Suds" Knehans. "By May the snow's off the ground so they can start digging and pouring concrete. It just hasn't happened this year. They've been trickling in, but not like in the past."

Between Jan. 1 and May 9, Ketchum received 24 applications. Of those, only two are permits for new homes. None is for new commercial or mixed-use buildings.

Permits can be required for re-roofing jobs, remodels, demolitions, additions and other projects, not just for new construction.

"Things are really slow for the city of Ketchum," Knehans said.

The city is getting some remodel applications, but, he said, businesses aren't eager to move right now.

"How do you invest money in changing buildings or moving and still survive?" he said.

Knehans said that even if people obtain a building permit, that doesn't mean they're going to build right away.

"I don't see the small money moving until you see the big money moving," he said, though acknowledging that "maybe economists wouldn't agree with that."

Knehans said he doesn't anticipate a building rebound for a couple of years.

"I don't see our economy warranting an expansion," he said. "I think it boils down to more confidence."

Waiting on that rebound are the valley's building professionals. Many have had to refocus their efforts on smaller projects.

"Business is way down," said Steve Kearns, with Ketchum-based Kearns, McGinnis & Vandenberg. "Everybody's having to cut back and figure out a way to be more efficient."

During the boom years, he said, his company built three or four houses a year. Now, it's three or four remodel jobs, with an occasional new-construction project. He said remodeling projects bring in far less money than new construction.

Although Kearns remains cautious, he senses the worst may be over.

"It feels like we hit bottom last year," he said. "But it's going to be a long climb out."

The city of Sun Valley has received about 20 applications since Jan. 1, similar numbers to the past couple of seasons, but none for new construction.

"We were kind of immune for a little while," said Community Development Director Mark Hofman. "We would still get a handful of large homes."

However, the economy caught up to Sun Valley, creating a lull in the action. Recently, Hofman said, the city has been fielding more inquiries.

"I wouldn't characterize it as an upturn, but the buzz returned this winter," he said. "The winds have changed for the summer (building season)."

Hailey and Blaine County

Hailey issued 42 permits between Jan. 1, 2011, and May 13. As of May 13, 2010 and 2009, the city had issued 61 permits each year.

"I think that it's safe to say that we are off to a slower start this year than the past two years," said Hailey Building Official Dave Ferguson. "However, there does appear to be a recent uptick in permit activity."

Ferguson said the Blaine County School District recently applied for a building permit for a new maintenance facility in the Airport West subdivision, and that another applicant will be coming forward soon for a permit to build a 24-unit residential living facility.

By this time last year, Blaine County had accepted 36 permit applications, compared with this year's 44.

"It's starting to get a little better," said Karen Osborne, permit technician and office manager.

By late April 2010, there were no new-home permit applications. Eight came in during the summer. So far this year there are six.

One reason for the uptick, however, is that the county's BuildSmart standards took effect May 1. The amended code requires increased energy efficiency in homes. Osborne said five of the applications came in before that deadline.

"People pushed to get us (project applications) so they wouldn't be subject to that requirement," she said.

Osborne said that even though people are starting to build new homes, they are not "big-money" projects.

Jim Ruscitto, principal with architecture, engineering and planning firm Ruscitto, Latham, Blanton in Ketchum, said business is picking up, but slowly.

"Our workload is down, of course, in general compared to what it has been," he said. "We had been operating in a more frantic position."

He said his firm is starting to get calls from potential clients who are moving forward with their plans. Clients are telling him that if they wait longer, the advantages to building during an economic downturn may be gone.

Advantages come from lower labor costs and from general contractors and subcontractors who are making their prices more competitive, Ruscitto said.

"We found it is a really good time to build," he said. "A lot of people are taking advantage of this and doing remodeling. We don't know if it's bottomed out, but the construction climate is good to build."

Craig Eckles, the city of Bellevue's chief planner, said the city has received 15 permits since Oct. 1, all of which have been approved. None of those, however, are for new construction.

"We're right on target from the previous year," he said. "We'll see what the rest of the year brings. We'll hope for the best. I'm always optimistic."

Rebecca Meany: rmeany@mtexpress.com




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