Lawrence tops $200 million in building projects for first time in city’s history; longtime construction company to close Lawrence operations
The number that has caught my eye this morning is $200 million, and thankfully it didn’t come from my friends at Visa. It is from the city’s latest building permit report. The city has topped the $200 million mark in construction projects for the first time in history. (The true total is actually a lot higher because the city's figures don't include the bulk of the school projects underway or the work happening on the KU campus. Plus, building permit totals don't capture other types of construction, like the more than $190 million worth of road work as part of the South Lawrence Trafficway project.)
The latest report shows building permits issued in October, and the fall season was a good one on the construction front. The city issued permits for $12 million worth of projects in the month. That brought the year-to-date total to $206.9 million.
We previously have reported that the city had set a new building total record. Back in August the city broke the previous record of $171.9 million that was set in 2013. So, now the city is just adding to the record.
Perhaps the most noteworthy number in the report is that single-family home construction experienced its best month of the year in October. Builders pulled permits for 28 single-family homes, topping the previous high mark of 21 set in June. When you add duplex construction to the mix, the city has issued 211 permits for single-family and duplex construction in the city thus far in 2015. That’s the highest total in at least the last six years, according to figures from the city. Not only is the number higher; it is a lot higher. At this time in 2014, the city had issued only 88 permits for single-family and duplex construction. The five-year average has been 112 units.
The numbers seem to be a sign that the construction industry is betting that the housing market in Lawrence is in for a pretty good run.
The city report also noted a couple of projects worth keeping an eye on. Permits have been issued for a new industrial building in front of the Comfort Inn and Suites near McDonald Drive and Princeton Boulevard. As we previously have reported, a group led by Lawrence businessman Thomas Fritzel is building a storage unit facility there. Based on the plans I’ve seen, it won’t be mini-storage units; rather, the plans show three climate-controlled buildings that will be constructed on the site. My understanding is Fritzel plans to relocate some of his construction firms that are using some downtown space into those buildings. I suspect some of the buildings also may be for lease to other firms that have storage or warehouse needs, but I don’t have any definitive word on that. That project pulled permits for about $775,000 worth of work, which made it the largest project of October.
The city’s report also notes a building permit has been issued for remodeling work at Sports Pavilion Lawrence, the city-owned recreation center at Rock Chalk Park. The work is part of Lawrence Memorial Hospital’s plan to renovate vacant space in the center into a sports therapy location for the hospital. The city issued permits for about $150,000 worth of remodeling work at the center.
In other news and notes from around town:
During this season of holiday buffets, I pretty much always carry the equivalent of a concrete block in my stomach. But if you want the real deal, there’s soon going to be one less option in Lawrence. A concrete block company that has had ties to Lawrence for more than 50 years is leaving the city at the end of the month.
Capitol Concrete Products has confirmed it is closing its North Lawrence facility at the end of the month and transferring workers to the company’s Topeka plant. Capitol Concrete sells concrete blocks, bricks, pavers and other types of materials to contractors and the general public. It has been in the Lawrence market since 1998, but its Lawrence lineage dates back much further. The company bought the Lawrence-based Morton’s Building Materials in 1998. Morton’s had been in operation in Lawrence — primarily on East 15th Street — since at least the 1940s.
Capitol Concrete had closed the production part of the Lawrence operation years ago and had just four employees at the Lawrence location, which served as a distribution and retail center. Jon Forsberg, manager at the Lawrence center, told me three of the four employees are transferring to other positions with Capitol Concrete, which has a production plant in Topeka.
Forsberg said the concrete block business did see a decline during the recession, but said business had picked back up. He directed questions about why the company is leaving the Lawrence market to Capitol’s parent company, which is The Monarch Cement Company in Humboldt. I put a call into an executive down there, but haven’t heard back yet.
UPDATE: I did hear back from Kent Webber, executive vice president of Monarch. He said the fact that the Lawrence office no longer produced any products but rather was only a sales office led to the decision. He said the company will keep its sales representative stationed in Lawrence, and the representative will continue to call on commercial accounts. The North Lawrence business was open to the public, but Webber said the big box home improvement retailers had cut down on the amount of retail business the location did.
Capitol Concrete’s North Lawrence facility is in the small industrial park that is just north of the Tee Pee Junction, which also is known as the intersection of U.S. Highway 24/40 and U.S. Highway 59. Forsberg said Capitol Concrete owns the facility and would be seeking a buyer for the several-acre site. Webber said the company has had conversations with a couple of potential buyers, but has not made any decision about what to do with the property. The company several years ago sold its East 15th Street facility. It is owned by the city of Lawrence.
Builders on pace to obliterate Lawrence’s construction record; city pondering whether to allow digital signs along roadsides
It is frequent that I break something when I get out my hammer and saw for a building project, and it appears that is the case for Lawrence builders this year too. With half of 2015 in the books, it sure appears Lawrence is going to have a record-breaking construction year.
The latest report from City Hall shows that through June, the city has issued building permits for $155.9 million worth of construction projects in Lawrence. Based on the records I have, that’s the highest mid-year mark in the city’s history, and it is not even close. In recent years the previous high was in 2013, when city officials had issued permits for $75.1 million worth of projects through June.
To put it in further perspective, there have only been four years in the history of the city where there have been at least $155 million worth of projects for the entire year. Those were in 2013, 2006, 2000, and 1996.
The record year was 2000 with $175 million worth of projects. That means Lawrence builders need to start $20 million worth of new projects in the second half of the year to equal or break the record. That’s a little more than $3 million a month. When it comes to building, anything can still go wrong. I’ve got a closet without a door that proves that point. (I’m just thankful I was standing on the correct side of the wall when I built it.) But it sure looks like Lawrence is primed for a record.
In terms of the projects that are boosting the totals, there were two decent-sized ones in June. The city issued a permit for $7.5 million worth of construction work on a new sewage pump station for the city’s new sewage treatment plant that is being constructed south of the Wakarusa River. The second-largest project of the month was $6.2 million worth of work that began on the expansion of the Hutton Farms residential complex in northwest Lawrence. As we reported in January, plans were filed to expand the complex, which is just north and west of Peterson Road and Kasold Drive. Plans called the pending development an “exclusive residential community” with a clubhouse and other amenities. The city in June issued permits for 42 duplexes — or 84 living units — and three single-family homes that will be part of the development.
Both those projects are large, but they are still middle of the pack when it comes to other projects in 2015. Here’s a look at the 10 largest:
— HERE @ Kansas apartment and retail building across the street from Memorial Stadium: $45 million.
— Multistory apartment and office building at northeast corner of Ninth and New Hampshire: $18.7 million
— Wakarusa river sewage treatment plant buildings: $13.3 million
— Expansion of Pioneer Ridge retirement community near Harvard and Wakarusa: $12 million
— Pump station for Wakarusa sewage treatment plant: $7.5 million
— Hutton Farms expansion: $6.2 million
— Single-family home at 116 N. Wilderness Way: $2.7 million
— Renovation of the Phi Delta fraternity house near the KU campus: $2.6 million
— An addition onto the Phi Gamma Delta fraternity house near the KU campus: $2 million
— Addition to the Kansas River sewage treatment plant: $1.9 million.
One number that could get lost in all of this is that single-family home construction has picked up as well. The city has issued 138 permits for single-family and duplex construction in Lawrence through June. That’s the best six-month total in at least the last five years. In recent years, the highest total was 87 in 2013. As I reported above, duplexes accounted for a large number of the units in June, but the city still issued 21 permits for single-family homes. That’s the largest single-family showing thus far in 2015. The single-family home market has been an area that has struggled to regain its momentum following the downturn earlier this decade. Watchers of the local economy have been keeping their eyes open for signs of a sustained turnaround in the single-family market. We’ll see what the second half of the year brings in that category.
In other news and notes from around town:
• If there is one project that may be even more dangerous for me than building closets, it would probably be changing the messages on the marquee signs that businesses have around town. You know, those message signs on the tall poles along major streets where they advertise their specials or come up with a funny saying. Think about how dangerous it is: It involves both ladders and spelling.
Well, there’s a pending discussion at City Hall that could remove the ladders from the equation. The city’s planning and development services department is starting a review of Lawrence’s sign code, and one item up for discussion is whether digital message board signs should be allowed. Currently, the only type of business allowed to use digital signs in Lawrence are gas stations, and they can only use them to display the price of fuel. That was a fairly recent change to the city’s sign code.
Leaders in the planning department have said it likely will take six to 12 months for an entire review of the sign code to be completed. There are several other topics officials plan to review when it comes to signs. Those include:
— Changes to how temporary sign permits are issued, which may give businesses greater flexibility in using temporary signs to advertise certain events.
— The use of signs that move, such as pennants, flags, signs on trailers, and something called a “feather sign.” I don’t know what that is, but I’ll keep an eye out for a bird towing a banner.
— Automobile dealership signs. The industry creates some special situations because of their size and desire for high visibility, the department said.
— Better definitions and standards for signs of community interest, which usually are temporary signs that aren’t related to a specific business but usually some type of event such as a home show or the variety of events that happen at the Douglas County Fairgrounds.
— Issues related to the size, number, location and duration of real estate signs that are used to advertise a property is for sale.
— The use of residential commercial service signs, such as the advertising signs roofers and painters use when they are performing a job at someone’s home.
— A review of how the city can address “nuisance signs” that are left vacant and cause blight.
The city expects to conduct the sign code review incrementally, so expect to see some proposed changes for some of these items in the next couple of months.
• It is a beautiful day for a sidewalk sale, and I'll be at one for hours on end. I've packed my jackhammer so I can take the sidewalk home with me today. (Oh wait, I'm told that is not what they mean by a sidewalk sale.) Regardless, I'll still be at the Downtown Lawrence sidewalk sale from 10 a.m. to 2 p.m. today at the Journal-World's booth. Stop by, say hi, tell me what's on your mind. Look for the booth at the corner of Eighth and Massachusetts streets.
Lawrence home construction hits second lowest total on record; Rock Chalk Park recreation center posting big attendance numbers
It appears I wasn’t the only one cursing in the workshop in 2014. (I can promise you the best piece of advice you’ll ever receive in life is not to wear a necktie next to a lathe.) New numbers are out, and 2014 wasn’t a very good year for the local building industry.
City Hall has released year-end building permit totals, and 2014 ended up being the second worst year on record in terms of new single-family housing starts. City records go back to 1956. Builders pulled permits for just 101 single-family homes in Lawrence. That’s a nearly 35 percent decrease from the 155 permits issued in 2013.
The slowdown ended a two-year streak of rising single-family home numbers in Lawrence. The city hit its all-time low in 2011, when just 95 single-family homes were started. But the single-family building market posted double-digit percentage gains in both 2012 and 2013.
There may be some reason for optimism in 2015. (Case in point: I have one less tie.) The last quarter of 2014 showed signs of the single-family market picking up. December was the busiest month of the year, with 14 permits issued. November was the second busiest with 13.
There also may be reason to be concerned. (Case in point: I own other ties.) Preliminary numbers from the Kansas City metro area aren’t yet indicating a slowdown in the housing market there. The Kansas City Home Builders Association hasn’t yet released its year-end report for 2014, but through November the association was reporting single-family home starts had risen by 2 percent in the KC metro area. To give you an idea of how many houses are being added in some of our neighboring communities, Olathe issued 485 single-family building permits through November. Overland Park checked in at 369, Shawnee at 189 and Lenexa at 180.
Lawrence used to put up comparable numbers. For 14 consecutive years — from 1991 to 2004 — Lawrence issued more than 300 single-family building permits per year. In more recent years, apartment construction has become more prevalent in Lawrence. Those numbers also took a dip in 2014. Lawrence issued permits for 143 apartment units, which was the lowest total since 2006. But I wouldn’t worry much about the apartment numbers. Apartment construction comes in batches, and it mainly was just dumb luck that the numbers weren’t higher this year. The city has approved two large apartment projects — the one across street from KU’s Memorial Stadium and the one on the northeast corner of Ninth and New Hampshire — that will start construction in a matter of weeks, but just didn’t pull a permit prior to the end of the year. Those two projects alone will produce more apartment units than all apartment projects combined in 2014. You should expect significant apartment development to occur in northwest Lawrence as well.
As for total construction in Lawrence, the city issued permits for projects valued at $99.7 million. About $87 million of it came from private-sector projects, while the rest came from government or other publicly funded projects.
The $99 million total was down significantly from the 2013 total of $171 million, but that was an all-time year with Rock Chalk Park, the library expansion and several other large projects. The $99 million total was in the ballpark of the 2010 to 2012 activity levels, which averaged about $105 million worth of projects per year.
Finally, we get to the list you’ve all been waiting on. (The last one.) Below is a list of the largest building projects in 2014. But before you look, see if you can guess the largest building project of the year. If you guess correctly, maybe I’ll make you something from my workshop as a prize. I’ve done some really interesting things “combining” fabrics and woods. In reverse order, because you are apt to cheat:
— 10. Petsmart renovation, 2727 Iowa St., $1 million.
— 10. Genesis health club renovation, 3201 Mesa Way, $1 million.
— 9. Medical clinic building, 4930 Overland Drive, $1.3 million.
— 8. Sigma Kappa sorority addition, 1325 West Campus Road.
— 7. Buffalo Wild Wings/multitenant commercial center, 2626 Iowa St., $1.8 million.
— 6. Corpus Christi Catholic School addition, 6001 Bob Billings Parkway, $2.3 million
— 5. Sprouts Farmers Market, 4740 Bauer Farm Drive, $3.7 million
— 4. 9 Del Lofts Apartments, 900 Delaware St., $4.4 million.
— 3. Menard’s, 1470 W. 31st St., $5.5 million.
— 2. Apartments at Frontier, 523 Frontier Road, $5.8 million.
— 1. Douglas County Public Works Complex, 3755 E. 25th Street, $11 million.
In other news and notes from around town:
• It hasn’t been a great week for the Rock Chalk Park project, as a new round of questions about some accounting issues between the public-private partnership have emerged. But there are good numbers associated with the project too. The city-owned recreation center — Sports Pavilion Lawrence — is posting some large attendance numbers.
A new report from the city shows attendance at the recreation center from October through December totaled 178,931. October was at about 53,000, while November was about 63,800 and December about 62,000. The drop in December is probably no reason for concern, since it is a well-known fact that the best exercise during the holidays is to repeatedly lift a 25-pound ham one fork-full at a time.
The city report provides some demographic information about who is using the facility as well. The average age of a key card holder is 40 years old. Now, this doesn’t count lots of the youth who play in the sports leagues at the center. They don’t have to have key cards to participate in leagues, so the city doesn’t have their demographics. (The youth sports teams, however, are counted in the attendance totals.) About 57 percent of the key card holders are female, and the rest are male, although hopefully you had already figured that out.
But perhaps the most surprising statistic is where key card holders live. About 41 percent live in the 66049 zip code, which is the far west Lawrence zip code. So, that’s not surprising given that Rock Chalk Park is in the far northwest corner of the city. But the second highest zip code area is 66044, which is primarily a central and East Lawrence zip code. That zip code accounts for about 27 percent of the users. Parks and recreation officials were pleased to see that because one of the concerns with the location of the center was that it would be too difficult for East Lawrence residents to use. The 66047 zip code accounted for 17 percent, the 66046 was at about 9 percent, and zip codes accounted for the rest, including about 1.6 percent from the Baldwin zip code and 1 percent from Eudora’s.
• One other thing to remember about Sports Pavilion Lawrence is that about 7,000 square feet of the 181,000 square-foot center is still empty. That was the spot designated for a wellness center that did not come to be. At least it hasn’t quite yet. I wouldn’t totally count out a wellness center at the site.
Parks and recreation leaders recently told the city’s Parks and Recreation Advisory Board that they hope to have that space filled either with classes or some other functions in the next six months. But first, they are trying to wrap up a sponsorship/naming rights deal for Sports Pavilion Lawrence. Mark Hecker, assistant director of parks and recreation, said use of that 7,000 square-foot space may play into a potential sponsorship/naming rights package.
Hecker didn’t provide any clues about who the city is talking with, but it is no secret that city officials have wanted Lawrence Memorial Hospital to operate a wellness center at the site. LMH didn’t jump at that opportunity earlier, but I think it may be a situation to keep an eye on. One of my many fascinating hobbies is to read the minutes of various meetings that happen around town. One of them was the minutes of a December meeting of LMH’s Marketing and Community Relations Committee. Those minutes talked about how the board discussed and ultimately recommended a “sponsorship that would require a significant long-term investment” from the hospital. The minutes noted the sponsorship would have to go through some other approvals at the hospital. I have no insight into whether that sponsorship would be for Sports Pavilion Lawrence, but it seems like something to keep an ear out for.
Perhaps my wife has infiltrated the Lawrence construction industry and convinced the builders of her motto: Summer is for shopping (And in case you are wondering, the calendars that show summer beginning on June 21 are sneered at in my house.)
As we told you yesterday, current retail sales numbers are painting a positive picture of the Lawrence economy. Recent building permit numbers, however, aren't quite as rosy.
The latest report from City Hall shows that the total value of construction projects underway in Lawrence is at its lowest level since at least 2009. Through May, the city has issued permits for $31.5 million worth of building projects, which is more than a 55 percent drop from the same period a year ago.
That's not too surprising. Last year was a monster year for the local building industry, at least when it came to big projects. There was the downtown hotel, Rock Chalk Park and the library, which all contributed mightily to construction totals. But what is surprising is that this year's construction totals are lagging behind more ordinary years. From 2009 to 2012, the average number of projects underway through May was about $39 million. We're 20 percent below that average, so it seems safe to say that we're off to a slow start in 2014.
Home builders, apparently, are among those out shopping with my wife. (That explains the pink hammers and the "bedazzled" tool belts.) Builders in May started only nine new homes in the city. That's the lowest May total since at least 2009, although the average since 2009 has been only 13. For the year, builders through May have started 51 homes, down from 74 started at this time last year.
The five year average number of home starts is 55. So, the numbers aren't that bad for home builders, but the 2013 totals had created some optimism that 2014 would be the year the industry really started to sustain some momentum. That doesn't seem to be happening in Lawrence, although early totals suggest it is occurring in the Kansas City metro area. May numbers haven't been released yet, but through April the eight-county KC metro area was off to its best start since 2007. In case you are wondering, builders in KC have started 1,304 homes through the first four months of the year. More specifically, Olathe has issued 174 permits, Overland Park 142, Lenexa 63 and Shawnee 55. Again, all of those numbers are through April.
Lawrence's numbers also have one other oddity to them thus far: No permits have been issued for apartment units. This is the first time since 2010 that the city has started the first five months of the year without new apartment construction.
But things change quickly in the construction industry. Plans have been approved for at least two large apartment projects that could begin construction later this year: a multistory loft-style development near Ninth and Delaware streets in East Lawrence, and a huge seven-story apartment/retail project across the street from Memorial Stadium. Developers with that project recently announced that it is expected to be a $75 million project. That single project would be more than double all the construction that has taken place thus far in the city.
So, the picture may look a bit different in a few months. Maybe the motto should be wait until fall. Maybe fall will provide some relief for the construction industry, but not for me. Where I reside, the motto is Fall is for Fashion. Winter? No. Winter is for Waterford. Spring? Surely you jest. Everyone knows Spring is for Second Mortgages.
In other news and notes from around town:
• We've also been reporting lately on the potential for a property tax increase at Lawrence City Hall. Commissioners had their latest budget study session yesterday, and while no decisions were made, I didn't hear anything to make me believe a tax increase isn't likely. It appears the discussion will start around a 1.5 mill increase and grow from there.
Part of the numbers provided by City Hall on Tuesday was a history of the local property tax rates. You can look at the chart here . The quick takeaway from the numbers is that during good economic times, the city was fairly successful at holding the property tax rate stable or even allowing it to decline. From 2003 to 2008, the city's property tax mlll levy dropped by 1.44 mills. During tougher economic times, the city's mill levy has increased. From 2009 to today, the mill levy has increased by 3.36 mills. During that time period, the city also added three sales taxes that increase the sales tax rate by 0.55 percent.
Increasing taxes during tough economic times isn't uncommon. When growth slows, government still has to pay its overhead. Paying overhead costs — like salaries, health insurance and pension costs — has been a theme of this latest proposed tax increase. But the period since 2009 also has been one of significant new projects as well. They have included an $18 million expansion of the Lawrence Public Library and $22.5 million of expenditures related to the Rock Chalk Park recreation center and the adjacent privately developed sports facilities that will be leased to KU.
Voters approved the library expansion at the ballot box, and that has been the single largest increase in the city's mill levy during the time period. Voters also approved the sales tax increases, which fund public transit and infrastructure repairs. The recreation center never was put to a public vote, and it hasn't technically caused an increase in any tax rates. City officials are using sales tax money that previously was dedicated to paying off debt that has since been retired. But I mention it in this context because the option existed for those sales tax dollars to have been used to help fund the existing budget as opposed to funding a new building project.
Of course, the city is not the only tax game in town. The chart shows the tax rates for the city, the school district, the county and the state of Kansas. When you add up all the tax rates, you'll see that the total mill levy paid by Lawrence residents has increased 10 out of the last 13 years.
Since the end of 2008, which is when the economy really started to sour, the mill levy has increased by 8.11 mills. For the owner of an average $170,000 home, that means the property tax bill currently is $158 more than it was in 2008. Another way to look at it is to compare how the tax bill has increased compared with inflation. In 2008, a $170,000 home paid $2,314 in taxes. Today, it pays $2,472. If the tax bill would have grown at the rate of inflation during that time period, the bill would be $2,547. So, in that scenario, taxes have increased less than inflation.
Before you throw your shoe at me, though, let me note another scenario. Perhaps the value of your house also grew at the rate of inflation. If so, your $170,000 home in 2008 is now worth about $187,000. The tax bill on a $187,000 home is $2,719, or about 7 percent greater than the rate of inflation. Of course, the key variant there is whether your home increased at the rate of inflation or not. I'm not sure that all did, given the downturn in the real estate market. But some certainly did.
As for the sales tax, that is kind of easier to understand. For every $10,000 of taxable goods you purchase in Lawrence, you are now paying an extra $55 in taxes because of the increased sales tax rate.
Make of that what you will, but this is the season that City Hall is awash in numbers, so I thought I would let you swim around with us for a bit.
It remains to be seen how often we'll hear the Rock Chalk chant during this year's football season, but the traditional cheer is making quite a bit of noise in the Lawrence construction industry.
The latest building permit numbers are out, and the big Rock Chalk Park ship has come in. The city issued permits for a whopping $33 million worth of projects in August, led by a $25 million permit for the Rock Chalk Park sports complex near Sixth Street and the South Lawrence Trafficway.
For the year thus far, the city has issued permits for $148 million worth of projects. That's up 115 percent from the same period a year ago. What's even more impressive is that the $148 million total is more than what the city issued for all of 2012. In other words, builders have started more projects in the first eight months of 2013 than they did during the entire 12 months of 2012. In fact, it is not even that close. The city issued permits for just under $100 million worth of projects in 2012.
So, from that standpoint, the final four months of the year will look a lot like my Thanksgiving day suit — signs of gravy everywhere.
Here are some other facts and figures from the latest building permit report:
• Single-family home construction had another decent month. Builders took out 14 permits for single-family homes, up from 8 during the same period a year ago. Year-to-date, the city has issued permits for 114 single-family homes or duplexes. That's up 44 percent from the same period a year ago. One more decent month, and builders will have exceeded the total for all 2012, when 126 single family and duplex permits were issued.
• No new permits for apartment construction were issued in August, but apartment building in Lawrence is still having a booming year. Year-to-date, the city has issued permits for 374 living units, which is the highest total in at least the last five years.
• The city thus far in 2013 has issued permits for four projects that exceed $10 million in value. They are: The Rock Chalk Park sports complex at $31 million and counting; the Marriott TownPlace Hotel at Ninth and New Hampshire at $13.8 million; the apartment complex next to Walmart at 5100 W. Sixth St. at $13 million; and the city's recreation center at Rock Chalk Park at $10.5 million.