Wednesday, August 18, 2004

Builders drive new era for county

Construction dollars rival tourism; industry?s impacts range far and wide

Express Staff Writer

Construction of a new luxury day lodge at the base of Dollar Mountain in Sun Valley has been proceeding at a fast and furious pace. The 26,000-square-foot project, headed by Intermountain Construction of Idaho Falls, was started in May and is on schedule to be completed before the end of the year. Sun Valley Resort plans to have the new lodge open by Christmas.

Mountain resorts throughout the West have undergone vast transformations in the last decade, as legions of investors took their eyes off Wall Street and focused instead on the ever-attractive realms of ski trails, rushing rivers and cowboy bars.

The Wood River Valley—fueled for much of the 20th century by a growing influx of tourism dollars inspired by Sun Valley Resort as an outdoor recreation Mecca—was not overlooked. Opulent new residential and commercial buildings appeared in and around Ketchum and Sun Valley, while new housing subdivisions took over vacant land in Hailey and points south.

Throughout the middle and late

1990s, con-struction employment and investment soared to new heights in Blaine County, ultimately rivaling tourism as the region’s foremost economic engine.

The trend has continued in recent years, and today Blaine County’s construction industry generates gainful jobs for thousands of workers, pumps tens of millions of dollars into the local economy and supports a multitude of cottage industries.

On any given summer weekday, throngs of carpenters, brick masons, electricians, steel workers and painters wake up at the crack of dawn and head out to hundreds of construction sites up and down the verdant—but ever more developed—Wood River Valley.

“If it wasn’t for construction, I think this valley would be pretty quiet,” said Hailey-based general contractor John Bulotti. “It’s certainly one of the driving forces, right behind tourism.”

Indeed, Bulotti is correct. Tourism locally does generate more jobs than construction. However, in the day-to-day culture and evolu-tion of the region, the construction industry is every bit as prevalent.

2003 was banner year

In 2003, the Building Contractors Association of the Wood River Valley reported, contractors in the valley built 250 new houses—collectively valued at more than $118 million—and completed another $34 million worth of residential additions, alterations and repairs.

At the same time, industry workers accounted for nearly $9 million in new commercial construction and nearly $10 million in commercial additions and remodeling projects. (Spending on new commercial projects has fluctuated widely in recent years, after reaching a height of more than $40 million in 1999.)

All told, Wood River Valley contractors in 2003 finished 874 construction projects valued at $171 million, the Contractors Association reported.

The 2003 dollar figure was up from 2002—when nearly $166 million was spent on new construction—and was nearly on par with the boom years of 1999 and 2001, when total con-struction was valued at $174 million and $175 million respectively.

In 2003, the value of all new construction in all of Idaho was estimated at $2.36 billion.

So far this year, indicators suggest the con-struction industry is still going strong. As of Aug. 10, the value of construction projects in the Wood River Valley was estimated at more than $67 million, with several large, costly projects still on the horizon.

New developments keep planners busy

In Ketchum, work has just commenced on three major residential projects, called Pineridge, Frenchman’s Place and Trail Creek Crossings. Construction of two additional large-scale housing projects, luxury developments called The Waters and The Timbers, is expected to start in the near future.

In Sun Valley, a total redevelopment of central Elkhorn Village, called Elkhorn Springs, was approved this summer, just weeks after Sun Valley Resort proposed several hundred million dollars worth of new tourist and residential development on 2,800 acres it owns in and around the city.

The first element of the Sun Valley Resort long-term development plan, a new multi-million-dollar 26,000-square-foot day lodge at the base of Dollar Mountain, is being erected at a blistering pace by scores of local and out-of-town contractors.

In Hailey, city planners are gearing up for a series of major land-annexation requests that could result in a grand-scale expansion of the city boundaries. If annexed, the lands could accommodate the construction of hundreds of new single-family houses.

“We’re busier than ever,” said Kathy Grotto, Hailey planning director. “I think this year our Planning Department is more swamped than ever before.”

One of the largest ongoing projects in the Wood River Valley this year is at Copper Ranch, a phased project in southeast Hailey that will ultimately include 135 condominium units.

In Carey, the city is considering a 62-lot housing subdivision, the largest single land-development proposal the small here-to-fore rural town has ever seen.

Economic impacts far ranging

The impact of some $170 million worth of construction taking place in the Wood River Valley year after year is tremendous, to say the least.

Statistics generated by the Idaho Commerce and Labor Department indicate the Blaine County construction industry in 2003 produced about 2,100 jobs yielding more than $72 million in wages. The state figures, which include all construction-related trades, tend to be more conservative than accounts by other agencies because they do not include some self-employed workers.

In a major Blaine County-area phone directory for 2004, 172 general contractors have advertised their services. In addition, scores of specialty contractors are listed, including 28 electrical contractors, 24 plumbing contractors, 57 painting contractors and 19 drywall con-tractors.

The combined wages of general contractors and specialty-trade contractors in 2001 accounted for approximately 20 percent of total earnings in Blaine County, the state reported.

In 2003, Blaine County construction workers earned an average of about $37,000 per year, with starting wages of about $13.50 per hour. The relatively high wages not only attract workers from counties all over south central Idaho and beyond, they have helped provide Blaine County with the highest per-capita income in the entire state.

Dave Wilson, owner and president of Ketchum-based Wilson Construction, said his business supports 42 employees, most of whom earn between $15 and $30 per hour.

Scott USA building brings scores of jobs

For one project completed earlier this year—a new 15,000-square-foot headquarters in Ketchum for Scott USA, a global sporting-goods manufacturer and distributor—Wilson employed nearly 100 specialty workers through local and regional sub-contractors.

“The industry is very cyclical,” Wilson said. “But still, other than the resort, we’re probably the largest single employment base.”

A single project can keep people employed for months, even years, Wilson said.

“A big house will take about 18 months,” he said. “A gigantic house will take 36 months.”

Bulotti, who works alone with the support of sub-contractors, said he will employ approxi-mately 30 contracted workers on a typical single-family house project.

Noting that almost all of his contractors are local, he said: “Wages are higher here than in Twin Falls and Boise. That’s why you have people driving up here from places like Shoshone and Burley every day.”

In 2003, as in most years, only the tourism industry surpassed construction as the largest sector of the Blaine County economy. Last year, the state reported, 2,920 workers were employed in the retail trade and 4,662 in service trades—although not all of the jobs are tourism-related.

The Sun Valley-Ketchum Chamber & Visitors Bureau has estimated that up to 5,900 jobs in Blaine County are directly related to tourism.

The state has determined that non-agricultural industries in Blaine County—which has approximately 20,000 residents—in 2003 employed approximately 12,300 people.

Study: New houses generate new jobs

Many of those jobs, a 2002 Blaine County-generated study indicates, are directly depend-ent upon construction of new houses and commercial structures.

The study, which sought to determine how many non-construction jobs are generated by new housing, indicates an average-sized house in Blaine County, 2,000 to 3,000 square feet, generates .18 full-time jobs per year. In essence, five new houses would ultimately produce the equivalent of one new full-time job.

One house exceeding 10,000 square feet, the study said, generates the equivalent of nearly one full-time job, largely through the employ-ment of maintenance workers.

Wilson said a current house-construction project he is managing in the Weyyakin subdivision, near the southern entrance to Ketchum, will temporarily employ some 20 landscapers.

In addition to jobs and wages, the construction industry and its related jobs generate substantial tax revenues for the state and local governments. The city of Ketchum this year has collected between $95,000 and $228,000 each month from a 1-percent local option tax on the sales of building materials.

Valley’s cottage industries thrive

Still, no study has effectively quantified to what level the local construction industry supports service businesses, such as wholesale-sales businesses, gas stations and restaurants. At the same time it places increased demands on municipal and county services and infrastructure, and the Blaine County School District.

Nonetheless, it is apparent that an abun-dance of successful construction-related cottage industries are maintained in the Wood River Valley. Many businesses in Ketchum’s light-industrial districts, including high-end hardware distributors, window suppliers and lighting purveyors, all depend on the strength of the construction industry.

The industry, for now, appears to be as vigorous and healthy as the scores of local general contractors could hope for.

Yet, while some sectors of the community have expressed deep concerns about the accelerated pace of growth in the valley, both Bulotti and Wilson believe the construction industry is hampered somewhat by a shortage of vacant, usable land.

Bulotti, who has been a contractor in the Wood River Valley for nearly 10 years, said he has predicted in the past that the local construction industry would slow down but has—to his surprise—repeatedly been proven wrong.

“I just don’t see how it could keep on going like this, but I have been saying that for the last five years.”

Coming Wednesday: An in-depth look at how the Wood River Valley compares to other growing mountain-resort communities. Can Blaine County finally gain some ground in the affordable-housing battle?

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