12/30/2009 6:00:00 AM 2010 construction can't be as bad as 2009, planner says
JC AMBERLYN/Miner
The SpringHill Suites Marriott Hotel at 3101 E. Andy Devine Ave. is one of the many commercial construction projects finished this year that got its start due to Kingman's housing boom earlier in the decade. Despite the boom's collapse in 2006, many of the projects started then have since been completed or are still underway, such as Hualapai Mountain Medical Center, the new White Cliffs Middle School and the city's first CVS Pharmacy.
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JC AMBERLYN/Miner
While new commercial construction is expected to stay slow in 2010, this patch of land in the 3400 block of Stockton Hill Road is currently being considered as a possible location for a second Carl's Jr. restaurant.
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KINGMAN - While any builder can tell you that the economic downturn has been bad for business, the sheer extent of the drop in new construction has been truly staggering, according to year-end numbers compiled by Kingman's Development Services department.
With just two days left in the year, Kingman is on course to finish 2009 with just 56 building permits issued for new single-family houses, one of the city's key benchmarks of economic wellbeing. That's the lowest number of new housing permits in more than 30 years, falling below even that of 1982, when the closure of the Duvall Mine slowed the local economy to a crawl, producing just 66 new homes that year.
The total valuation of new houses built this year has also fallen to about $9.7 million versus $16.6 million last year, though the per-house valuation appears to have risen year-over-year from $161,585 to $172,529.
Since 1980, the city has averaged about 230 new home permits a year, though that average is skewed slightly due to a disproportionately high number of new housing permits issued during the boom years of 2003 to 2005. At the boom's peak in 2005, the city issued more than 900 new home permits and nearly 30 commercial permits.
Now, both those numbers have been decimated in the wake of the worst economy in more than 70 years. And while some large new commercial construction projects are continuing into next year, city Planning Administrator Tom Duranceau says most of those projects were precipitated by the boom, and are not likely to last much beyond 2010.
"This is a new world, in my view," Duranceau said. "A lot of what drove recent commercial construction began during the boom and was based on the future implications of the boom - Hualapai Mountian Medical Center, for instance."
The largest single commercial project in the city's history, HMMC came about in part due to a number of private doctors wishing to start a privately-owned, for-profit hospital. But without the boom in place to draw the interest of the MedCath Corporation, Duranceau said the hospital might well not have progressed the way it did. He said the same went for the new Mohave County Jail and the various school construction projects that were either recently completed or currently underway throughout the city. "They were all begun during the boom, when the voters were asked to approve all this stuff," he said.
Now, however, Duranceau said many of the businesses that had been looking at Kingman have either scaled back their expansion efforts or have gone bankrupt entirely. Others may still be looking at the Kingman area but have decided not to make themselves known until they've actually settled on a piece of property - if they even do, that is.
"A lot of them that are looking often won't tell us (until they've thoroughly researched the area,)" Duranceau said.
Duranceau said the biggest roadblock to new construction, aside from the economy, is the fact that there are currently a large number of vacant homes and commercial properties still on the market, many in prime locations. Until someone moves into all those empty buildings, he said, investors and retailers will have much less motivation to build anew.
"The problem is, you've got a lot of space to fill up first," he said. "You've got Office Depot, you've got the Blockbuster building that's vacant, you've got Whataburger."
That said, Duranceau still believes 2010 will fare better for new construction than 2009, at least based on the historical trends that followed past recessions. But it could take a while before Kingman reaches its pre-boom housing construction levels - after all, it took six years to bounce back from the Duvall Mine closure, and that required the city to diversify its commercial and industrial base in order to draw new jobseekers to the area.
"There's a slow improvement that will occur," Duranceau said. "I can pretty much guarantee we won't issue 56 (new housing) permits next year - it'll be over 100."
However, commercial will likely take longer to rebound than housing, even if all the empty property is refilled. Duranceau noted that commercial growth typically lags behind residential by about 18 months, given that retailers usually won't consider moving to an area until after it has shown a pattern of growth.
But that doesn't mean 2010 won't see its share of commercial building, much of which is either already underway or well into the development stages. Such projects include the Allied Health Training Center on Detroit Avenue, new medical offices for Kingman Regional Medical Center on Western Avenue and the La Quinta Inns & Suites on Plaza Drive behind the IHOP and Golden Corral restaurants off Stockton Hill.
Carl's Jr. is also in talks with the city to build a second location on a patch of land between AutoZone and Brake Masters on Stockton Hill Road, right in front of the Wal-Mart parking lot.
While nothing has been set in stone, Duranceau said that, too, will likely come to fruition in the coming year.
Reader Comments
Posted: Friday, January 01, 2010
Article comment by:
Doutful
Jeff and John You each are right and wrong!
The problem with new homes is not they can't be just rented out, they can't be sold either.
The reasons include, No financing available, POOR CONSTRUCTION, the biggest one of all is buyer confidence who has any idea today what cocky scheme this Obama administration will cook up next to destroy capitalism? If I were going to leave with in the City, I would not allow my home to be built by any local contractor unless I followed each and every phase! I have seen too much shabby work in this area, how ever can't expect much with most of the local work force!
One Corporation has more people sitting around collecting pay for nothing, than Government job I have ever seen!
Posted: Friday, January 01, 2010
Article comment by:
George
In The Industry raises an interesting point. I'm not sure if it is accurate but I do think the staff should investigate if it is. If so, the city should indeed impose impact fees that are adjustable pinned to the local economic development activities.
Posted: Thursday, December 31, 2009
Article comment by:
No name provided
When voting in the next mayor, remember that the enormous impact fees and other insane ideas that the city implemented because of their greed has ruined Kingman's growth. We need a mayor who looks out for the citizens who rely on construction jobs instead of cozing up to the city employees that are overpaid.
Posted: Thursday, December 31, 2009
Article comment by:
No more empty Office space
We don't need office building, we need retail, something that will give the City revenue and the residents more of a shopping experience. There are plently of empty office space and houses in Kingman. Fill them first, then build more. WE NEED BETTER RETAIL. National Chains that don't care about paying impact fees, they are used to these fees all over the US.
Posted: Thursday, December 31, 2009
Article comment by:
Mr Mayor, Check into This
Yea, I too wonder what the city staff has done over the year of slow-to-no activity.
Now would be time to conduct various studies targeted at understanding what Kingman is, what improvements should be made, cost estimates, and in the case of retail, what segments are under-represented.
Posted: Thursday, December 31, 2009
Article comment by:
In the industry
Kingman needs to lower their impact and metering fees if they expect any future growth. A small business owner simply cannot afford to build within the city limits. I just recently priced out a small office on a lot in Kingman, and the fees were 26% of the total cost of the project. This is not the only project that is likely to be shelved because of the cost to build in Kingman, I have seen many others put on the back burner for this reason alone.
Posted: Thursday, December 31, 2009
Article comment by:
Reggie in Valle Vista
It is very fortunate we have "babble babble" to assist the City in skilled analysis of the trends for construction. Can he be signed up for the economic development commission to lend his expertise?
Posted: Wednesday, December 30, 2009
Article comment by:
Babble Babble
Duranceau said. "I can pretty much guarantee we won't issue 56 (new housing) permits next year - it'll be over 100."
What kind of idiotic statement is that? How can you "almost guarantee" something like that in a failing economy, in an area where there's minimal employment and a large percentage of the current housing stock is empty?
This guy sounds like 13 year olds that I've heard say that they can "almost guarantee" just about everything they speak of because they think by making such a statement, that they sound like they know what they're talking about!
I reality, this is just plain stupidity!
Posted: Wednesday, December 30, 2009
Article comment by:
See Yah and Raise Yah Ten
And just what are all the planners and zoners doing now that things are so slow?...What's that?...Does spades trump diamonds?
Posted: Wednesday, December 30, 2009
Article comment by:
john
well jeff u might be right just trying to get more jobs in town and help the vendors ! but the city should lower the fees !
Posted: Wednesday, December 30, 2009
Article comment by:
Jeff
John, the problem isn't new home construction. The problem is filling all the vacant homes around town. When housing vacancies are 2-3% then lower the permit fees. When they hit 8-9% raise them. What are they now - around 12%?
Posted: Wednesday, December 30, 2009
Article comment by:
john
well the city should lower the fee on new homes over $8.000.00 for a permit if they lower it more new homes would come.
