Posts tagged with Building Permits
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.