Park City builders have 100 million reasons to be happy
The Park City construction industry, long a bellwether for the city’s wider economy, has 100 million reasons to be happy.
The industry in September surpassed the $100 million mark for the year, making 2014 the first nine-digit year since 2008. With three months left in 2014, there is a chance the industry could push well past the $100 million mark, depending on whether several large projects receive permits by the end of the year, according to the Building Department.
The industry slogged through the deepest part of the recession, but it roared back as large developers broke ground and homeowners renovated their places, expanded them or both. The 2014 numbers reflect strength through the various segments of the construction industry.
It seemed likely by midyear and almost certain by the end of August the industry would hit the $100 million mark as the monthly reports showed strength throughout the year.
The Building Department reported the value of permit-authorized construction in Park City at the end of September reached a little less than $106.4 million. The figure essentially doubles the $53.3 million that had been tallied through the same time in 2013.
The industry enjoyed four consecutive $100 million-plus years between 2005 and 2008, a period of extraordinary development in the city that followed the 2002 Winter Olympics. The industry set a record in 2007 at $239.7 million. It was an era of large construction projects like high-end lodging properties and numerous residential projects.
The recession quickly hammered at the construction numbers. The industry did not approach $100 million after 2008 until this year. The industry bottomed out at $40.9 million in 2011. The numbers climbed in 2012 and then again in 2013, but it was not clear how strong 2014 would be at the start of the year.
In an interview after the September numbers were released, Chad Root, the building official at City Hall, said he did not anticipate a $100 million year at the outset of 2014.
"I think it kind of bamboozled everyone there were so many projects," Root said, recalling that the line of people seeking permits at the Building Department extended out the front door of the Marsac Building on some days.
He noted the wide range of permits that have been issued by the Building Department this year, ranging from large projects like the Park City Film Studios at Quinn’s Junction to houses in Old Town. The large projects provided a foundation for the dollar numbers this year, but the smaller ones, like houses, provided the boost toward $100 million.
"You go through Old Town, the side streets, one block would have several houses under construction," Root said.
Root credited a strong economy and Park City’s proximity to Salt Lake City for the numbers. He said Park City’s construction industry is ticking upward sooner than other mountain resorts that are more remote than Park City.
"The investment’s back in Park City, Wasatch County, Summit County," he said.
The construction industry started 2014 with a solid footing with a $15 million permit issued in January for the remodel of the building once known as the Main Street Mall. There was a pullback in February and March, but a string of eight-digit months followed between April and August.
The numbers in May were especially strong as a little more than $24.5 million worth of permits were issued, the best month of the year so far. A permit for the Park City Film Studios, pegged at a little less than $14.3 million, pushed the May numbers upward. Permits for construction at the Stein Eriksen Residences in Deer Valley and the Rio Grande development in Old Town also were valuable.
Root said the numbers this year are spread through numerous projects of various sizes. In high-dollar construction years in the past, he said, one large project could account for a large percentage of the overall dollar total. Renovations and additions have also added up in 2014.
The construction industry is pleased with the numbers this year. Joe Rametta, the president of the Park City Area Homebuilders Association, attributed the strength to "confidence in the economy."
"Now that it would appear the recovery of the economy is a real thing, people are jumping back into the market," Rametta said.
Vacation home construction, house renovations in Park Meadows and Old Town projects are especially hot in 2014, he said. His custom home firm, Rametta & Co. Inc., has a backlog of work that extends through the end of next summer.
"We haven’t been this busy in, probably, five to seven years," he said.
Rametta said employment in the construction industry is "pretty secure for the next two or three years" in Park City.
"People are happier," he said about the construction industry. "I feel a lot better about hiring people."
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The Summit County unemployment rate dropped slightly in October, the state Department of Workforce Services reported.