Lawrence construction totals on pace for record year; more details on costs of large apartment project; eco devo leaders confirm details of new manufacturer
It is time to keep our eyes open for a possible Lawrence record in 2015, and it involves the use of hammers and saws, which is usually the type of record that causes my insurance agent to lose his job. But no worries here because the record in question is whether Lawrence will have its best building year in history.
The latest figures from Lawrence City Hall show that city building inspectors have issued permits for $89.3 million worth of projects through the end of April. That puts Lawrence within striking distance of the all-time record of $175.03 million worth of projects built in 2000. (Granted, the 2000 numbers aren’t adjusted for inflation, but for those of you hung up on that, I suggest you spend the rest of this column playing with your pocket protectors.)
It is probably a bit of a long shot that the record will fall in 2015 because two of the larger projects expected this year are already included in the $89 million total — a $45 million permit for the HERE at Kansas apartment project across the street from KU’s Memorial Stadium, and an $18.7 million permit for the new multistory apartment and office building under construction at the northeast corner of Ninth and New Hampshire streets.
We’ll have to see whether there are another $86 million worth of construction projects that materialize in the final eight months of the year. Regardless, it looks like Lawrence is poised to have a building year that is well-above average. To put the numbers in perspective, Lawrence in the first four months of the year had almost as many projects underway as it had for the entire 12 months of 2014. The city issued permits for $99.7 million worth of projects in 2014. For further perspective, look at the downturn Lawrence was in during the depths of the recession. For all of 2009, the city issued permits for only $75 million worth of projects.
Here’s a look at some other facts and figures from the latest building permit report from City Hall:
• The number of single family and duplex units under construction is up slightly in 2015. The city has issued permits for 49 single-family or duplex units thus far in 2014. That’s up from 42 at the same time period last year.
• Apartment construction is back with a bang. The city has issued permits for 351 new units of apartments. The HERE project and the Ninth and New Hampshire project have been major drivers of those numbers.
• April was a busy month for new construction. During the month, city inspectors issued permits for $8 million worth of work. Among the larger projects were $1 million for renovations at the new Peaslee Technical Training Center at 2920 Haskell; $700,000 for the new Chick-fil-A building near 27th and Iowa; $600,000 for a new Ulta Beauty at 27th and Iowa; $540,000 for a new grain storage bin at the Ottawa Co-op at 2001 Moodie Road; and $500,000 for renovations for Port Fonda restaurant, which will be on the ground floor of the new Marriott hotel at Ninth and New Hampshire.
In other news and notes from around town:
• Perhaps some of you remember that during the debate over whether the City Commission should approve financial incentives for the HERE at Kansas project, the development was frequently described as a $75 million project. So, perhaps you are confused why the building permit for the project has come in about $30 million less than that.
It did catch my eye, but city officials have provided me an explanation. They said that the $45 million is the estimated cost of building the actual structure. The rest of the costs are for other items related to the development. Britt Crum-Cano, the city’s economic development coordinator, said the developer of the project provided these estimates on the other project costs: $420,000 in utility connection fees; $1,000,000 in public improvements that are being paid for by the developer; $7.9 million to acquire the land; $2.7 million in architectural, engineering and legal fees; $2.1 million for fixtures, furnishings and equipment; $4.4 million for equipment to run the automated parking garage; $1.6 million in interest costs; $2.4 million for contingencies; and $6.7 million in other soft costs.
Those soft costs include items such as demolition, asbestos abatement, specialty engineering; renderings, insurance, marketing, travel, developer overhead, loan fees and a host of other items.
I’m not saying any of this was done wrong here. I’ve never given much thought to how the city determines the value of a project for building permit purposes. But I do watch permits fairly closely, and many times the value listed on a building permit is pretty close to the dollar value that is presented to city commissioners when they are considering issues such as incentives and such. The most recent project I’m thinking of is the hotel development at Ninth and New Hampshire. That was frequently discussed as being about a $12 million to $14 million project. In the end, the city issued a building permit for $13.8 million. The county appraiser lists the fair market value of the project in 2015 at about $13 million.
The only real consequence of the value listed on the permit is the value is used to determine the building permit fee due to the city. If another $30 million were added to the permit value, the developer’s building permit fee would have increased by about $30,000.
The bigger question probably relates to what the project ultimately will be valued at by the county appraiser. The City Commission approved an 85 percent, 10-year tax rebate for the project, in part, based on the idea that the project was going to go on the tax rolls somewhere near $75 million. Once the tax rebate period expires, a $75 million building produces a lot of property tax. I’m assuming that the expectation is that the building will go on the tax rolls at $75 million or so, but I’m double checking on that.
• Last week we reported that an Iowa-based company has filed plans to open a foam manufacturing plant along Haskell Avenue. Well, I’ve gotten a few more details about that project.
As we previously reported, EPS Products plans to locate in 60,000 square feet of space in the former E&E Display building at 910 E. 29th St. I had been told that the project likely would include about 20 jobs. Now, an official with the Lawrence chamber of commerce is confirming that information. Brady Pollington, economic development project manager for The Chamber, said at a chamber event this morning that he expects 15 to 20 jobs with an average wage of about $15 per hour.
Pollington also confirmed another piece of information I had heard. The company is coming to Lawrence to be closer to Amarr Garage Door’s Lawrence manufacturing facility. The new EPS facility will manufacture foam that is used as interior insulation for garage doors.
Look for the project to take shape in the next few months.