City building totals down a bit from year ago; outgoing commissioner gets appointed to powerful city board
I figure it is a natural time to talk about building in Lawrence, given an army of men are still putting together the “some assembly required” Christmas presents, all the while refusing to look at the directions and muttering the famous phrase “they must have sent a half-dozen extra bolts with this.” Lawrence home and commercial contractors aren’t quite having those types of problems, but building totals in 2017 are down a bit, according to the city’s latest report.
The city has issued permits for $160 million worth of new construction through November. That’s down from $210 million at this point in 2016 and $216 million at this stage in 2015. But really, unless it is my December credit card statement, $160 million is not a bad number. It still ranks as one of the better years in Lawrence construction history. However, it just doesn’t stack up to 2015 and 2016, which were the two best years Lawrence has seen on the construction front.
For further perspective, since 2008, the average number of new permits issued has been $133 million through November. So, while this year is below our historic highs, construction activity is still about 20 percent above our recent averages.
If you were to label this year, perhaps it would be the year of the hotel. Lawrence thus far has had seven projects check in at $3 million or more. Of those, three of them have been hotels. The largest project started this year is a $10.7 million Best Western Plus near Rock Chalk Park in northwest Lawrence. A $4 million Tru by Hilton hotel in the Bauer Farm development near Sixth and Wakarusa is the second largest project. The third hotel is a $3.9 million Country Inn & Suites that is being built on the eastern edge of town next to VenturePark.
The Best Western hotel should be a sight to see. It is about $7 million more expensive than the other two hotels, despite not being that much larger. The Best Western is planned to have about 120 rooms, while the other two hotels each will have a little more than 80 rooms. The Rock Chalk Park property is a Best Western Plus brand, which claims to have larger-than-normal rooms and other such amenities. But my understanding is the hotel isn’t the type that has its own bar and restaurant, which certainly does make for a larger project. So, it will be interesting to see what other bells and whistles the project is offering.
Actually, the entire Rock Chalk Park area will be interesting to watch next year. The hotel development will be completed, and I would expect construction on LMH’s new $65 million medical office building — which will be just a bit west of the hotel — to be underway. The key thing to watch is whether those two developments will spur other development near the sports complex.
I would think it certainly would cause some restaurants to locate near the center. I’ve been told restaurants want to be next to the recreation center, which attracts large weekend crowds as part of its youth basketball and volleyball tournaments. Those restaurants, though, have been waiting for a larger project to come into the development to help shoulder many of the water, sewer and other infrastructure costs that are required to develop in the area.
The LMH medical building qualifies as a large project, so this should be the year that theory is put to the test.
Here’s a look at some other facts and figures from the November building permit report for Lawrence:
— 2017 has been the year that apartment builders have taken a break. The city has issued permits for only eight apartment living units thus far. Last year, the city had issued permits for 1,205 apartment units, and in 2015, the city issued permits for 467. Don’t expect the break to last, though. As I’ve reported, plans have been filed for two apartment projects — one behind the south Lawrence Walmart and another near Clinton Parkway and Crestline that would total about 475 units with almost 1,350 bedrooms.
— Single-family and duplex construction is on last year’s pace. The city has issued permits for 167 single-family and duplex projects, compared with 166 at this time last year. While those numbers aren’t big compared with the time period before the housing bust in 2008, this year’s total is above more recent averages. Since 2009, the average through November has been 142 units.
In other news and notes from around town:
• As we have noted a few times recently, Mike Amyx is ending his 22-year career as an elected official soon. His last City Commission meeting is Jan. 8. But it appears he is going to be headed to another set of meetings.
City commissioners at their year-end meeting Wednesday morning appointed Amyx to serve as a member of the Lawrence Memorial Hospital board of trustees. The hospital board is appointed by the city — the city technically owns the hospital — but the board is far more than your run-of-the-mill advisory board. The hospital board serves as the governing body for the hospital, meaning it oversees the hospital’s approximately $270 million budget.
With the appointment of Amyx, the LMH board is beginning to look a bit like Lawrence City Hall from the 1990s. In addition to Amyx, former Lawrence mayor Bob Moody is on the LMH board, and so too is former Lawrence city manager Mike Wildgen.
Watching LMH may be one of the more important tasks of 2018. In addition to the major west Lawrence expansion mentioned above, we’ll need to keep our eyes peeled for any news of potential partnerships LMH may undertake. As health care companies combine forces in both Kansas City and Topeka, I think LMH leaders are giving much thought to the long-term strategy needed to be successful in the future.
Kansas ranked one of the least fun states in America; Lawrence housing construction off to best start in years; KC eatery coming to downtown
Now that I’ve made a weight loss breakthrough (the battery finally went dead in my digital scale), I thought it was safe to offer up a smorgasbord of news and notes from around town:
• When it comes to fun, Kansas evidently isn’t, according to a new ranking. The folks at the financial website WalletHub have looked at a variety of data related to restaurants, bars, national parks, beaches, theaters and other such attractions that suck dollars out of our bank account in the name of entertainment. (Personally, I think dollar bill origami is the best type of entertainment. You get to keep the dollar, and origami just sounds fun.)
Kansas ranked No. 43 out of 50 states in the Most Fun States in America report. The report looked at two broad categories. The Entertainment and Recreation category used data such as per capita rates for restaurants, theaters, beaches, golf courses, marinas, national parks, art venues and also looked at the per capita dollars spent by consumers on recreation and also the per capita funding levels by government for parks and recreation. Kansas ranked No. 44 in that category. The second category was Nightlife, which measured average beer and wine prices, movie costs, nightlife options per capita and something called “access to bars.” I know you are curious: it is combination of bars per capita and bars per square mile. Kansas ranked No. 42 in the Nightlife category.
While this report uses data from the Census Bureau and other federal agencies, it is still pretty subjective because everybody’s idea of fun is a bit different. However, it is interesting to look at Kansas compared with other states in the region. The rankings may help add some perspective to how Kansas’ tourism industry stacks up. No surprise here, Colorado is the runaway leader in the region. With mountains, ski resorts and a huge tourism industry, it ranks No. 3 in the report. Missouri is next at No. 22, and that isn’t exactly a surprise. The Ozark tourism industry, with corn cob pipes and Deliverance soundtracks, is pretty significant. (Actually, I love the Ozarks.) But then the rankings get more interesting. Nebraska is No. 23 and Oklahoma is No. 25. Both states were helped by top 20 rankings in the nightlife category, which I think means the number of bars per capita is pretty high and/or liquor prices are pretty cheap.
Again, I wouldn’t put too much stock in the ranking, but it did make me wonder if Gov. Brownback has a point. Kansas really may be in need of more attractions if it hopes to draw more outside dollars to its economy. I’m not saying that the whitewater rafting park that the administration is pushing for at Clinton Lake — the proposed North Carolina developer of that park is still meeting with folks around town — is the answer, but the administration may be seeing something that others are too.
In case you are wondering, the top five ranked states for fun are:
— No. 1: Nevada
— No. 2: South Dakota
— No. 3: Colorado
— No. 4: North Dakota
— No. 5: New York.
In case you are wondering how North Dakota made the list, all 25 people who live there have vouched for its fun factor.
• If Kansas isn’t any fun, why is it that more people are building homes to live in Lawrence? The city has released a report showing building permit activity through the first quarter of 2017. It shows that the homebuilding industry is off to its best start since the Great Recession.
Through March, the city has issued 63 permits for single-family or duplex construction. That’s well above the first quarter average of recent years. Since 2008, the average has been 32 such permits, so builders are operating at a pace almost double the recent norm. As we have been reporting for awhile now, real estate agents say the number of buyers on the market are outnumbering the supply of homes for sale in the Lawrence market. Builders seem to be responding. It will be worth watching the rest of the year.
However, the total amount of building going on in the community is down from past years. That’s primarily because there haven’t been any large apartment projects in Lawrence yet in 2017. Plus, the number of large commercial projects have been a bit light thus far.
March, however, did produce the two largest commercial construction projects of the year so far. They are both projects we previously have reported on: a $3.9 million project to build a Country Inn and Suites at the old Don’s Steakhouse site near 23rd and O’Connell, and a $3 million office and gym addition at the St. John Catholic school, 1208 Kentucky.
Despite those projects, though, the total dollar value of construction projects receiving permits through March totaled $38.7 million, down from $68.7 million and $81.2 million during the same time periods in 2016 and 2015. However, 2016 and 2015 went on to be two of the top construction years in Lawrence history. The $38 million underway this year is still the third highest total since 2008, and is slightly above the average since 2008, which is about $34 million.
• I told you quite some time ago that the speculation on the street was that a Kansas City sandwich/bar type of shop was going into the old La Familia location on New Hampshire street. Indeed that appears to be correct.
Kansas City restaurant folks being what they are decided to confirm that to The Kansas City Star. The newspaper reported that Grinders hopes to open in July in the former La Familia spot and the buildings next door to it. Pizzas, cheesesteaks, burgers, wings, that sort of stuff and more. It will be hip and funky. The proprietor, Jeff “Stretch” Rumaner, has gotten quite a bit of attention over the years from Food Network Host Guy Fieri for his Kansas City version of Grinders. I’ll let you know if I hear more.
Report shows Lawrence sets new record for apartment construction; more than 1,000 apartment units set to open in city
The boom you heard in September was Lawrence exploding with new apartments. We have been reporting all year about new apartment construction in Lawrence, but a new report from City Hall delivers a nice, easy to understand number: For the first time in its history, Lawrence has built more than 1,000 new apartments in a single year.
September is the month that pushed Lawrence over the top. The city recently released its building permit report for September and it included $40 million worth of new apartment construction. Permits were pulled for two projects that we have been reporting on for quite some time: The Links at Lawrence apartment development just east of the Rock Chalk Park sports complex and a new set of apartments being constructed along the Alvamar golf course.
Through September, the city has issued building permits for 1,191 apartment units. Never has that number been so high. The new total beats the record of 972 apartment units built in 1996. And don’t forget, this year’s number is just through September, so it's a lot like a credit card bill in November — subject to grow.
The Links project was the big one. In case you have forgotten, it is an apartment development that will be constructed around a private nine-hole golf course that is just east of the Rock Chalk Park sports complex. Arkansas-based Lindsey Management has these types of developments around the country where the selling point is your monthly rent includes unlimited greens fees on the golf course. The company in September pulled building permits for 30 apartment buildings, plus a clubhouse. All 30 apartment buildings are three stories tall and have 18 to 24 living units apiece. The city issued permits for construction totaling $26.4 million.
The other big project was an upscale residential development along the Alvamar golf course, which has been bought and is being redeveloped by a group led by Lawrence businessman Thomas Fritzel. A project labeled Alvamar Apartments pulled permits for three apartment buildings, each four stories tall with 56 living units apiece. Each apartment building also has underground parking. The city has issued permits for $14.4 million worth of construction for that complex. And, remember, that won’t be the last of the building that occurs around Alvamar.
Between them, the two projects add 762 new apartment units to the city. To put that in perspective, the city has only had one year in it history where it ever issued permits for more than 762 apartment units That was in 1996 when 972 were issued. But, remember, that was over the course of an entire year. This happened in one month.
The Links project and the Alvamar project rank No. 1 and No. 2 on the city’s list of largest building permits for 2016. It is worth remembering that the city’s list doesn’t include any building projects on the KU campus, since those projects are permitted by the state rather than the city. It is worth noting that all of the top 5 projects on the city’s list are apartment projects, although one is more a retirement complex than a traditional apartment. Here’s a look at the top 10:
— The Links at Lawrence Apartments, 5400-5401 Rock Chalk Drive: $26.48 million
— Alvamar Apartments, 1575-1675-1775 Birdie Way: $14.4 million
— West End Apartments, 5400 Overland Drive: $14.22 million
— Village Cooperative retirement complex, 5325 W. Sixth Street: $8.35 million
— Bauer Farms Residential, 4541 Bauer Farm Drive: $6 million
— Maple Street Pump Station, 547 Maple St.: $5.93 million
— Pinckney Elementary School additions and renovation, 810 W. Sixth St.: $5.7 million
— Bethel Estates of Lawrence, 2140 E. 25th Terrace: $5.51 million
— 800 New Hampshire multifamily addition, 800 New Hampshire: $4 million
— KU Tennis Facility, 6100 Rock Chalk Drive: $3.965 million.
There are a few other numbers of note in the report:
— Perhaps Lawrence now is routinely going to be a $200 million city. Last year was the first time in the city’s history that more than $200 million worth of building permits were issued by City Hall.But it looks like it won’t be the last time. The September report shows the city has issued permits for $190.6 million worth of construction. That puts the city on pace to top the $200 million mark in 2016.
— Lawrence is posting record numbers without a lot of activity in what used to be the city’s bread-and-butter industry: Single family home construction. Through September the city has issued 128 permits for single family or duplex construction. That is actually a slowdown from the 181 permits the city had issued at this point in 2015. Still, this year’s showing is a little above average. The five-year average at this point in the year is about 111 units. The city’s single-family housing industry, though, has not bounced back from the housing bubble of the 2000s. As we have been reporting, real estate agents report the number of homes for sale is getting tight, so we’ll see if 2017 is the year that single-family builders start to pick up the pace.
Or, maybe we all will just live in apartments. Apartment builders tell me the majority of these units aren’t being built for students anymore. The tenants are people who traditionally would be buying a starter home, or perhaps downsizing to a smaller retirement home. There are many people who are choosing to pass on home ownership for whatever reason. Whether that is a trend that continues is uncertain. What is certain is that the look of Lawrence is being changed dramatically. In the 1990s and early 2000s it used to be that single-family home construction routinely outpaced apartment construction. But that is no longer the case. Now, it is not even a contest. From 2016 to 2012, Lawrence has built 2,279 apartments compared with 665 single-family homes.
I’m not saying that is a good or a bad change. But it certainly is a change, and one that will leave its mark for a long time.
I’m still waiting for the boom to come. Yes, those were the last words I remember saying before waking up on July 5 with a head bandage and a patriotic ringing of the ears. But what I’m talking about this morning is a Lawrence boom in single-family housing construction.
New numbers are out for home construction in Lawrence, and they show that the Lawrence home-building scene is quite a bit different from what is happening in the Kansas City market. Through July, Lawrence builders have received permits to build 105 single-family or duplex homes in 2016. That’s a good number compared with the post-recession doldrums of 2009-2012. But the number is not so good compared with last year. Thus far in 2016, single-family and duplex construction is off 30 percent compared with the same period a year ago.
What’s more interesting is what is going on in Kansas City. Single-family home construction in Kansas City actually is booming. The Home Builders Association of Greater Kansas City hasn’t yet released its July report, but through June the numbers are impressive. Single-family construction in the KC metro is up 29 percent compared with the same period a year ago. (If you are wanting to compare apples to apples, Lawrence single-family home construction at the June mark was down about 34 percent.)
Home building is an important economic activity in Lawrence, but for whatever reason it has had a hard time sustaining any momentum recently. Compare that with the Kansas City market, which is in its fifth straight year of increases for single-family home construction.
Perhaps the most interesting difference between the Lawrence and Kansas City markets has to do with apartments. The construction of apartments in Lawrence has been much more robust than single-family construction. In fact, it has become almost routine for the number of apartment units built in Lawrence to exceed the number of single-family and duplex units built in the city. That didn’t used to be the case, but now the numbers most years aren’t even close.
It is not hard to find national stories about how more Americans are choosing to live in apartments rather than single-family homes. There is a generation of Americans who don’t like the idea of owning and maintaining a property as much as their parents did. Plus, as the number of retirees rise, more of them are seeking to get away from some of the responsibilities of home ownership. But the trend is particularly pronounced in Lawrence.
Since 2009, Lawrence every single year has built more apartment units than single-family or duplex units. Contrast that to Kansas City: In the eight-county area that comprises the KC metro market, single-family home construction has exceeded apartment construction every single year.
Here are some numbers to put in perspective just how different the Lawrence market has become: From 2009 through June of 2016, about 33 percent of all new residential construction in Lawrence was single-family or duplex homes, while 67 percent was apartments or other multifamily units. During the same time period in the KC metro, 61 percent of all residential construction was single-family, while 39 percent was apartments.
Don’t get me wrong, I’m not saying what is happening in Lawrence is bad. More apartment construction theoretically means we’re becoming a denser community, which is one of the strategies to fight urban sprawl. But since apartments are generally always rentals, it also means that the ownership of our community is becoming more concentrated too. That probably has implications.
Regardless, we long have said Lawrence should be different from Kansas City. These numbers show that’s the case. Kansas City residents are the ones with yards.
Here’s a look at other numbers from Lawrence’s July building permit report:
• Thus far in 2016, the city has issued permits for 105 single-family or duplex homes. That’s down from 152 units in 2015, but is still better than the seven-year average of 86 units.
• The city year-to-date has issued permits for 377 apartment units. That’s down from 431 units in 2015. But don’t kid yourself, this is still a very good year for apartment construction. The seven-year average is 188 units.
• The city thus far has issued permits for $126.8 million worth of construction in Lawrence. That’s down from $167.6 million at this point in 2015. But remember, 2015 went on to be a record-setting year. The seven-year average is about $78 million.
Furniture store opens at Ninth and Iowa; apartment construction has Lawrence building totals off to strong start; pizza trivia
Perhaps you are like me and last week’s rain caused you to cut up the furniture to use for building the Ark. If so, you are probably wondering when you are going to get your circular saw returned to you and what your Lawrence furniture buying options are. Well, there’s news on the Lawrence furniture store front.
Over the years Lawrence has lost several large furniture stores, but there has been a pretty strong trend of smaller, secondhand furniture stores coming into the market. Add one more to the list. Phoenix Furniture and Home Goods has opened in the Hillcrest Shopping Center at Ninth and Iowa streets.
The store sells bedroom sets, couches, desks, dining room tables, rugs, lamps, wall hangings and other such items, said owner McKenzie Widner. Except for a few smaller items, all of the furniture is used.
Widner said she sold antiques as a side business for years while she worked as a Montessori school teacher in Lawrence. She said finding unique items has been something she’s long enjoyed, and she believes it is a service Lawrence shoppers are seeking.
“I tend to collect things that have a story,” Widner said. “I think shoppers these days like items with a little bit of character. The cool thing is the stuff in the store is stuff you can’t find anywhere else.”
Lawrence has a few used furniture stores that cater to the college crowd, and Widner said some of her items are at prices aimed at that audience. But she said the store also seeks to have a good inventory of items for families and others that are wanting to stock their home with quality furniture.
A big part of the store’s business is that it buys furniture as well as sells it.
“Lawrence is a town where people are always coming and going, so I think it is important that there always be a store where people can go to sell their items,” Widner said.
The store is located at 925 Iowa, Suite L. If you haven’t memorized your Hillcrest Shopping Center suite locations, the store is right next door to a shop that has caused me to expand the size of some of my furniture: Munchers Bakery. (It is funny how mini-cinnamon rolls do not make you “mini-er.”)
In other news and notes from around town:
• When it comes to building homes to put more furniture in, activity is up a bit in Lawrence, according to figures from City Hall.
I have city building permit totals through April, and they show new single-family and duplex construction is thus far off to its best start since 2013. The city has issued 53 permits for single-family and duplex construction, up from 49 the same period a year ago. The recent high-water mark was 59 in 2013. So, activity is up but not actually booming at this point.
The story in the Lawrence building world continues to be apartments. The city, through April, has issued permits for 377 apartment units. This marks the third time in the last four years that the city has issued more than 350 apartment permits during the spring building season. Last year the city issued 351 building permits through April and issued 374 during the time period in 2013.
The construction activity has Lawrence on pace to have an above-average year in construction projects. The city thus far has issued permits for $77.7 million worth of projects. That’s below last year’s pace of $89.3 million, but remember that construction activity hit an all-time high in Lawrence in 2015. Since 2009, the spring season — January through April — has produced an average of $39 million worth of projects. So, Lawrence is nearly doubling that pace.
As for large projects that got started in April, an approximately $940,000 renovation of the Delta Chi Fraternity at 1245 West Campus Road tops the list. Also, as we’ve reported, work has begun on an approximately $825,000 renovation of the Hampton Inn at 2300 W. Sixth St.
• It is now after 8 a.m., so of course pizza is on my mind. Fun fact time regarding pizza. Pizza Hut was founded on this date in 1958 in Wichita. The company was once a very important Kansas-based company, but it has long ago moved its headquarters out of state. On its birthday, the company announced it is making some changes to its menu. It is removing all artificial preservatives from its cheeses by the end of March 2017 and removing something called BHA/BHT — both food preservatives, I think — from all its meats by the end of July.
That's fine enough, but I mainly bring up Pizza Hut because of its birthday and because I've been trying to track something down about the chain for awhile. I've had someone tell me that the former Pizza Hut store on Massachusetts was the first Pizza Hut in the country to offer delivery service decades and decades ago. I've even heard that it may be the first location — or at least one of the first — of any pizza places in America to offer delivery. I haven't ever been able to confirm that, though, but it would be a neat bit of Lawrence trivia, if true. So, if you happen to have a box of Pizza Hut delivery documentation in your attic, let me know.
City sets record with $227 million of construction in 2015; apartment construction continues to lead the way in city growth
The new number to shoot for in the Lawrence construction industry is $227 million. No, contractors, the Lawhorn household has not decided to start construction on the much-discussed third wing of the shoe closet. Instead, $227 million is the record-breaking amount of new construction that took place in Lawrence in 2015.
We already had reported that Lawrence had set a new record for building activity in 2015, but we didn’t know the final number until the city closed the books on the year. Well, that’s now been done, and the latest report from City Hall shows the city issued building permits for $227.89 million worth of construction.
That’s more than double the $99.7 million worth of projects that were started in 2014. The 2015 totals broke the previous building permit record that was set in 2013 when permits for $171.9 million worth of construction were issued. Here’s a look at building totals since the 2008-2009 recession:
— 2015: $227.8 million
— 2014: $99.7 million
— 2013: $171.9 million
— 2012: $100.6 million
— 2011: $115.7 million
— 2010: $101.8 million
— 2009: $75.3 million
The actual amount of construction occurring in the city in 2015 was quite a bit higher than what was recorded by the city. The bulk of the public school construction projects were exempted from the city’s building permit process, so they don’t show up in these totals. As has long been the case, construction projects on the KU campus also don’t show up in the totals.
The city had a mix of projects that led to the record total. In all, there were 19 projects valued at $1 million or more. Here’s a look:
— $45 million: Here @ Kansas apartment and retail building near KU’s campus
— $18.75 million: Apartment/office building at Ninth and New Hampshire
— $13.3 million: Wakarusa River sewage treatment plant
— $12.5 million: Americare assisted living complex at Peterson and Monterey Way
— $12 million: Pioneer Ridge independent living near Wakarusa and Harvard
— $7.5 million: Pump station near 31st and Louisiana for Wakarusa sewage treatment plant
— $6.2 million: Hutton Farms West residential development near Kasold and Peterson
— $3.8 million: Fourth-floor renovation of Lawrence Memorial Hospital
— $3.5 million: Deerfield Elementary School renovation and addition
— $2.7 million: single-family home at 116 N. Wilderness Way
— $2.6 million: Phi Delta Theta renovation
— $2.3 million: Schwegler Elementary School renovation and addition
— $2 million: Phi Gamma Delta addition
— $1.9 million: Kansas River sewage treatment plant addition
— $1.5 million: renovation work for Iowa EPS Foam industrial building near 31st and Haskell
— $1.5 million: Raising Cane’s restaurant near 25th and Iowa streets
— $1.4 million: renovation of the former Holiday Inn, which is becoming a Double Tree hotel.
— $1 million: Dwayne Peaslee Technical Training center renovation near 31st and Haskell
— $1 million: single-family home at 3642 Brush Court
The list is kind of interesting in that it provides a snapshot of what is driving the construction industry. It shows that Lawrence, at the moment, is heavy on residential projects and light on industrial, retail or office projects. A quick total of those 19 big-dollar projects shows about $103 million were projects related to residential projects — everything from fraternity houses to retirement communities.
The numbers also show that a dramatic change in how Lawrence lives continues unabated. Once again, Lawrence builders constructed more apartments than than they did single-family homes or duplexes. In 2015, it wasn’t even a close contest. The city issued permits for 467 new apartment units, while issuing permits for 239 single-family or duplex homes.
The last time the city built more single-family/duplexes than it did apartments was in 2006. Since that year, the city has seen apartment construction outpace single-family home construction by nearly a 2 to 1 pace. Since 2006, the city has added 2,703 apartment units and 1,377 single-family/duplex units.
Lawrence is not alone in experiencing this trend. A move toward apartment living is being seen in many communities. It is not clear when the trend may reverse. For what it is worth, 2015 was the best year for single-family home construction in a number of years in Lawrence. The 239 single-family and duplex permits were the most issued by the city since 2006.
As I’ve noted before, the apartment boom that is occurring today likely will have long-lasting implications for the community. Most prominently, what is going to happen to all the old apartment complexes that clearly are losing tenants to the new apartment complexes? How will those old apartment complexes redevelop?
I ask that question because population numbers raise questions about whether Lawrence is building apartments and single-family homes at a rate faster than the city’s population is growing. From 2006 to 2014, Lawrence’s population increased by only about 0.5 percent per year. According to the Census Bureau’s annual estimates, Lawrence added a total of 4,158 people from 2006 to 2014.
During that same time period, the city added 4,080 new single-family, duplex and multifamily living units. The city added almost one unit for every new man, woman and child who moved to the city. (Yes, some living units got demolished in that time period, but I’m not sure the number is enough to be very significant to the totals. It also is worth noting that the Census and the city sometimes disagree on how many people live here.) The average household size in Lawrence, according to Census data, is 2.28 people per household. Those numbers would suggest that Lawrence needed to add fewer than 1,900 housing units since 2006 to keep up with population demand, rather than the approximately 4,000 living units that were built.
You might be asking yourself why apartment builders would construct new units at a rate higher than population growth. The simple answer is that new apartment complexes don’t need new population growth to be successful. They just need residents who are willing to move from an old apartment unit into a new one.
Whether the city is building the “right amount” of apartment units is beyond me. What I find interesting about it, though, is how differently City Hall treats apartment construction than it does retail construction.
Market forces are in play in both instances. As we recently saw with the denial of a proposed shopping center at the SLT and Iowa Street interchange, the city spends much time worrying about whether the Lawrence market can absorb new retail space. Has the city spent much time worrying about whether the Lawrence market can absorb new apartments?
One of the primary reasons government cares about not allowing a market to become overbuilt is because it can create blight in existing areas of town: A new shopping center takes business away from an existing shopping center, and the existing shopping center becomes rundown. Is that an issue the city should be worried about with new versus old apartment complexes? Drive around town and note what you see more of: blighted shopping centers or blighted apartments.
It appears the city is allowing the market to have a much greater say in apartment development in Lawrence than it is allowing the market to have in retail development. I really don’t know what the right approach is for either retail or apartment development. But it is interesting how the two are treated differently.
It creates a couple of questions: What will happen to all these old apartment complexes in Lawrence? And, will this new City Commission start clamping down on new apartment construction?
Home sales up; housing construction hits recent high; sales tax numbers strong but create some budget worries at City Hall
As a quick homework conversation with my seventh-grade son confirmed, junior high math has surpassed me. But that doesn’t mean I can’t still do some calculations to determine the state of the Lawrence economy. So, here’s a look at the latest batch of numbers.
• The housing market in Lawrence remains strong. Homes sales through July are up 18 percent, according to a new report from the Lawrence Board of Realtors. Lawrence home builders are even getting in on the good news. Sales of newly constructed homes are up 21 percent for the year. The newly constructed home market has been one that has been slow to bounce back in Lawrence.
The statistic that shows how hot the Lawrence market is right now has to do with the number of homes on the market. Real estate agents measure how many homes are on the market versus how quickly they are selling. A balanced market between buyers and sellers normally has about four to five months worth of homes on the market at any given time. Currently, there are 1.9 months worth of homes on the Lawrence market. It is a seller’s market right now. Negotiating for a house in Lawrence right now probably would remind me of my efforts to get a date for prom. You have to be prepared to sweeten the offer. (I had to promise we would super size the meal.)
Thus far for the year, the median number of days a home is sitting on the market before it sells is 24. That’s down from 34 at this point in 2014 and 42 in 2013. One other statistic of note: Real estate agents have sold $160 million worth of residential real estate in Lawrence thus far in 2015. That’s up from about $129 million during the same time period a year ago. That’s a nice boost for the Lawrence economy.
• The uptick in the home construction market is becoming very clear when you look at the city’s building permit totals. Through July, the city has issued 152 building permits for either single-family or duplex homes. That’s up from 60 such permits at this time last year. It also is well above the recent averages. From 2009 to 2014, the average number of permits at this time of year was 75. My seventh-grade son tells me 152 is more than double the average.
With projects both near campus and in downtown, the apartment construction market also has been strong. The city has issued permits for 431 new living units. Since 2009, the average for this time of year has been around 150 living units. So, there had better be a lot more people wanting to live in Lawrence.
The other big trend is in the building sector is that there have been a lot of big-dollar projects. The city has issued permits for $167 million worth of projects thus far. There have been four projects in 2015 that have checked in at more than $10 million each: the $45 million Here apartment/retail building near the KU campus; an $18 million apartment/office building at Ninth and New Hampshire; $13.3 million in work for the city’s new sewer plant south of the Wakarusa River; and $12 million for a new independent living unit at Pioneer Ridge in west Lawrence.
As we have reported before, we’re on pace to set a new building record in the city. Since 2009, the average amount of construction for this time of year has been $63.5 million. I would tell you how much more $167 million is than the average, but I’m afraid it would require my son to take off his shoes and, trust me, you don’t want a seventh-grade boy doing that.
• Lawrence’s retail sales numbers are a bit like a rib dinner: There’s plenty to like, but the barbecue sauce in your ear can cause a problem.
The sales tax report from the state shows that Lawrence’s sales tax collections are up about 5 percent thus far. That’s good, and actually is better than the showing of several other large retail centers in the state.
But the issue is City Hall budget makers are counting on sales tax collections to grow by 5 percent in 2015 to make the budget work as planned. The last few reports from the state have shown that sales tax collections are growing at a rate slower than what was happening in the beginning of the year. If that trend continues, it could put pressure on both the 2015 and 2016 budgets.
Bryan Kidney, the city’s finance director, told me that it now seems likely the city won’t hit its 5 percent growth estimate for 2015. He said it is still too early to predict how short the city may come up on that projection. It has the potential to cause city officials to reduce expenses in the general fund both for the 2015 and 2016 budgets. The reason it would affect both the 2015 and 2016 budgets is because the recently approved 2016 budget was built with an assumption that there would be a surplus of revenue in the sales tax fund at the end of 2015 that would carry into 2016. In order for the 2016 budget to work properly, the surplus needs to be there. So, that could result in some expenditure cuts in the last part of 2015.
Cuts could be necessary in 2016, if the sales tax growth doesn’t hit projections during that year. The city is banking on sales tax collections growing by at least 3 percent in 2015. We’ll see. That could be close.
So, there are some budgeting challenges, but from a big picture standpoint, recent sales tax numbers have been a strong sign for the Lawrence economy. At the moment, we're at 5 percent growth, and that is better than really any other major retail area in the state. How much that growth rate slows is the key question for budget-makers.
The state should be releasing new sales tax numbers very soon, and I’ll work to get those reported in a more timely manner. (We’ve had other things going on to report at City Hall this month.) But here’s a look how Lawrence’s sales tax collections are stacking up with other major communities.
— Johnson County: up 1.3 percent
— Kansas City: up 4.1 percent
— Lenexa: up 4.9 percent
— Manhattan: up 2.5 percent
— Overland Park: down 2.4 percent
— Salina: up 3.2 percent
— Sedgwick County: up 2.3 percent
— Topeka: up 0.8 percent
KC’s Port Fonda is looking for Lawrence location; home building numbers down; report shows size of local apartment boom
I haven't dusted off my special sombrero yet — just my ordinary one — but I have gotten word that one of Kansas City's hipper Mexican restaurants is seriously considering a Lawrence expansion.
I know some of you have heard rumors that Kansas City's Port Fonda is going to open a location in Lawrence soon. Well, that information is a bit like when you get salsa all over your chin: You're a bit off, but you are in the right neighborhood.
Jamie Davila, a co-owner of Port Fonda, told me the company hasn't yet signed a deal for a Lawrence location, but has looked at about four spots so far.
"We have been flirting in Lawrence, but there is nothing to go on as of yet," said Davila. "But we are definitely flirting in a serious way about it."
Davila said he expects the company to make a decision on its Lawrence future in the next month.
For those of you not familiar with Port Fonda, it has become a favorite for some of the Westport crowd. Patrick Ryan, the other co-owner of the business, started in a food truck in Kansas City and then transitioned to a full-scale restaurant about two years ago.
"I would describe it like Mexican street food with polish," Davila said.
A quick look at Port Fonda's menu gives you an idea that involves being creative with ingredients. For example, the restaurant's beef tacos come with all the normal ingredients such as cilantro, onion and lime. But it also includes fried potatoes, green olives and raisins. Other dishes feature ingredients such as cabbage, radishes, fried avocado, and a sandwich that has a combination that allows cardiologists to dream of bigger beach homes: pork belly and bacon on a single sandwich.
At the moment, though, I would continue to file all of this under the category of a development to keep an eye on. Lots of restaurants take a look at Lawrence for an expansion, but do not ever make the move. But I wanted to pass this one along because I had heard a decent amount of discussion on the street about it.
Plus, I really do love wearing that sombrero.
In other news and notes from around town:
• The latest numbers from City Hall show that local homebuilders have slowed down just a bit in 2014. There have been 42 building permits issued for single-family and duplex projects through April. That's down from 59 during the same time period a year ago. Single-family home numbers have been on the rise for the past two years in Lawrence, but builders will have some work to do if they want to stretch that to a three-year streak. But it is worth noting that 2014 numbers, so far, are still tracking ahead of 2012 and 2011 numbers.
The total value of construction projects underway in Lawrence is way down compared to a year ago. The city thus far hasn't seen the large projects like the downtown hotel or the Rock Chalk Park facilities that pushed totals up to near highs in 2013. Through April, the city has issued permits for $25.7 million worth of projects. That's down from the $54.8 million issued at the same time a year ago. This year's total of $25.7 million ranks fifth out of the last six years.
• One noteworthy building permit trend is that the city hasn't issued any permits for new apartment construction this year. The city put out a new report that looks more deeply into building permit trends, and it shows just how rare that is. The report produced a statistic that shows just how prevalent apartment construction has become in Lawrence. It found that 2013 was the seventh consecutive year that the number of new apartment units built in the city exceeded the number of single-family and duplex units constructed.
Not to be overdramatic, but that's a contender for stat of the year. That's the type of trend that will change a city in a lot of ways. If plans for a new apartment building near Memorial Stadium move forward, that trend may well continue in 2014.
The report also compared Lawrence to 10 other area communities. In general, Lawrence fared OK in that comparison. The city's housing rebound seems to be in the middle of the pack or slightly above.
But there was one area that seemed curious. Lawrence has the fourth-largest population of the 11 communities studied. But the number of commercial building permits — permits for new business construction — ranked eighth on the list. Only Emporia, Baldwin City and Eudora ranked below Lawrence. Smaller communities such as Manhattan, Lenexa, Salina, and even unincorporated Douglas County ranked ahead of Lawrence.
You can read the full report here.
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Maybe their hammers were still thawing out from January, or maybe they were just too busy building a full-size, chocolate sculpture of Johnny Depp for Valentine's Day. (We all had to do that, right?) Whatever the reason, Lawrence home builders slowed down the pace a bit in February, according to the latest report from City Hall.
Lawrence officials issued just five new permits for single family homes in February, which is the lowest February total in at least the past five years. The five-year average has been 10 new permits. For all of 2014, the city has issued 14 permits for single family and duplex construction, which is the lowest level since 2011.
January and February aren't usually critical months for the the Lawrence construction industry. so these lagging numbers aren't any reason for concern yet. But it will be interesting to watch whether the city's home building industry can post its third straight year of increased single family home construction. In 2013, builders started 155 new single family homes. That was up from 123 in 2012 and from the low point of 2011, when only 95 new homes were started in the city.
Other construction projects in the city also have gotten off to a slower start. City officials have issued permits for $9.6 million worth of projects. That's down from $22.7 million worth of projects started by this time last year. The biggest difference has been that apartment construction in the city has taken a pause. Last year at this time, the city had 286 apartment units under construction, which added more than $10 million to the construction totals. Thus far, no new apartment projects have been started in the city in 2014.
In other news and notes from around town:
• The largest construction project started thus far in 2014 is a major addition at the Corpus Christi Catholic School, 6001 Bob Billings Parkway. City officials have issued a permit for $2.3 million worth of construction work at the West Lawrence school and church.
School principal Mary Mattern told me the project will include three additional classrooms, a multimedia library and technology area, a two-story music space and new offices for administration and teacher work areas. The space will be used both by the school and the church for religious classes and parish activities.
The school serves preschoolers through eighth-graders, and enrollment has been growing. Mattern said the school has averaged an 8 percent enrollment growth each of the past five years. Enrollment now stands at a little more than 300 students.
The construction project is expected to be completed by the beginning of the next school year.
• While we're on the subject of building permits, the city has released information from its annual audit of its building inspections division. The new report found that building inspection fees aren't quite covering the full cost of the service the city provides. In other words, general taxpayers are subsidizing the building inspection division to a degree.
The division's revenue for 2013 was about 4 percent less than its expenses, which checked in at about $890,000. So, general taxpayers covered about $36,000 of the department's expenses. Builders, through fees paid for permits and licenses, covered the other 96 percent of the expenses. City officials strive to have the program paid for through fees as much as possible. And the city's building community keeps a close eye on the division's finances to ensure that the fees they pay aren't exceeding the actual expenses. City officials said the 2013 totals show there is a rough balance between the two, and are not recommending any fee increases for the department in 2014.
The report does note that there were 45 projects in the city — mainly affordable housing projects or government projects — that were not required to pay a fee. Those projects had $108,000 worth of fees waived.
The report, however, did not note the amount of fees being waived by the city as part of the Rock Chalk Park sports complex in northwest Lawrence. As part of the incentive package approved by the City Commission, the Lawrence-based private development firm Bliss Sports is getting a full rebate of all of its building permit fees.
I checked with the city about that amount. Officials tell me the city either has or is in the process of rebating about $65,000 in building permit fees as part of the Rock Chalk Park project. Those $65,000 in fees, however, are counted as revenue in the annual report because technically the city is rebating the fees through the issuing of an "economic development grant," which is separate from the building inspection division's budget.
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Real estate sales, home building off to decent start in 2014; new numbers about county’s housing values, tax base released
Perhaps you are like me, and this winter weather has you in the market for a very specific type of home: one with a heated driveway and sidewalks. (Or I would even settle for one equipped with a 10-year old son who doesn't feel faint at the sight of a snow shovel.)
I'm not sure any of those types of homes have sold recently, but the latest series of real estate and building reports indicate that 2014 got off to a decent start for home builders and real estate agents.
Here's a look at a few reports:
• Although January is one of the slower months for local real estate agents, home sales increased by a little more than 10 percent, compared with January 2013 totals, according to a new report from the Lawrence Board of Realtors. Home sales totaled 41 for the month, including five sales for newly constructed homes. The most important number of the report, however, may be the number of homes on the market. Active listings in Lawrence are down 320 homes, which is a decline from 380 in January 2013 and 460 from January 2012. That's a positive sign for the market. More homes are selling, but if the number of listings doesn't move upward, look for prices to rise.
• Lawrence home builders took out permits for nine new homes in January, compared with eight in January 2013. January obviously isn't a big month for starting new home construction, but, for what it is worth, the nine is the highest January total in at least the last five years. The five-year average for January home starts is 5.4 new homes. (Rumor has it, the guy who lived in the 0.4 of a home, spent all his money on heated sidewalks.)
• When it comes to numbers, the one homeowners usually care most about should be arriving in the mailbox at any moment. The Douglas County Appraiser's Office sent out change of value notices on Friday. The notices tell homeowners how much the appraiser's office thinks their property is worth. That number, of course, is key in determining how much a homeowner pays in property taxes. I haven't yet got an update from the appraiser on what most homeowners should expect. When I get that information, I'll pass it along. But his most recent report did include some other interesting numbers:
— The total value of real estate in Douglas County is on the rise. Total assessed valuation — that's the taxable value, not the fair market value — was $1.04 billion dollars on Jan. 1. That's up 2.2 percent from Jan. 1, 2013. Appraiser Steve Miles said most of the increase was due to new construction and an increase in the value of agricultural land in the county. If that number holds — it generally goes down a bit as people appeal their tax values — it will be good news for local governments who use the tax base to help build their budgets.
— The median value of all residential property in the county — excluding big apartment complexes — was $161,700 in 2014. That's up 2.9 percent from the $157,000 median in 2013. The median value had declined in 2013, 2012 and 2009. The report shows that median values still have a ways to climb before they reach the levels seen during the housing boom. In 2008, the median value of residential property in the county was $164,900.
— The report provides a median residential value for each of the four communities in the county, plus the rural area. Those values: Baldwin City, $140,000, up 5.5 percent; Eudora, $137,900, up 9 percent; Lecompton, up $109,860, up 30.8 percent; Lawrence, $160,200, up 0.3 percent; $199,800, up 30.2 percent.
— Housing, of course, is just one part of the county's real estate tax base. Commercial real estate, agricultural land and a few other miscellaneous categories also make up the tax base. But residential property is certainly the giant among the bunch, which has been a bit of a concern to economic development leaders for a long time. The idea is that commercial real estate produces more jobs and pays a higher tax rate. So, having more commercial, job-producing real estate in the community has been a goal.
Well, I've done some figuring. (It wasn't pretty. Those were really big numbers, so I had to call on my neighbors to take off their shoes as well.) Regardless, here's a look: In 2014, residential property made up 68.5 percent of the tax base compared with 68.1 percent in 2013. Commercial real estate made up 25.6 percent in 2014 compared with 25.7 percent in 2013. So, we didn't go in the right direction.
Just for fun, I also went back to 2004 to see how the numbers have changed. In 2004, residential made up 67 percent of the tax base and commercial made up 25.9 percent. These really are big numbers, so you shouldn't expect big swings. But it is telling that for an entire decade we lost ground on the goal of strengthening our commercial tax base.
In other news around town:
• Maybe all these numbers have made you want to be a renter. If so, you might have some questions about the city's proposed rental licensing and inspection program. Whether you are a renter, a landlord or just an interested resident, we want your questions about the program. City Commissioner Jeremy Farmer will participate in an online chat at 11 a.m. Thursday. Click here to submit some questions in advance.
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