Park City construction industry, ‘hectic,’ nails the $100 million mark
September 29, 2015
The Park City construction industry reached the $100 million mark in August, the second consecutive nine-digit year for the bellwether sector and more evidence of the post-recession strength of the local economy.
The Park City Building Department reported the year-to-date dollar figure hit nearly $106 million in August. The industry reached $100 million one month earlier than it did in 2014. It seemed almost certain by midyear that builders would reach $100 million in 2015, but it was not clear when it would occur. The milestone was expected in August after the department’s monthly report covering July left the industry just short of nine digits. Through the same period in 2014, the industry had posted approximately $99.5 million.
"We expected it to be another big year, for sure," Chad Root, the building official at City Hall, said.
The Building Department this year has issued a series of high-dollar permits as well as numerous permits for smaller projects. Root said larger-value permits that pushed the numbers toward the $100 million mark this year included an expansion of the Park City Medical Center, the Stein Eriksen Residences lodging project in Deer Valley, improvements at Park City Mountain Resort and a development at 205 Main St.
"A lot of the projects are bigger projects than we’ve been seeing in the past," Root said.
The Building Department in 2015 had also issued permits for 27 houses through the end of August, down from the 32 permits issued through the same period in 2014. Five permits had been issued for multifamily projects in 2015, which was up from the one permit issued by the end of August in 2014. Permits for alterations and additions, which have played a larger role in the overall numbers since the recession, had dropped to 720 through the end of August from the 750 logged through the same period the year before.
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The numbers were especially strong during the first half of the year, when builders typically obtain permits for construction projects starting when winter breaks. The numbers in March and May broke $20 million. The little more than $25 million posted in May was the top month as measured in dollar value in at least four years.
"You can look on the hillside, see cranes, see plywood on homes," Root said.
He acknowledged the Building Department has fielded complaints about noise from construction sites and parking issues associated with sites. He said the complaints are similar to those the department has received in the past.
The Park City construction industry is amid one of its strongest-ever two-year runs. The industry in 2014 posted nearly $144.9 million worth of permits. It seems unlikely the industry will reach that figure this year even as Root predicts there could be valuable permits issued in the fall for work at Park City Heights and, later in the year, for temporary setups for the Sundance Film Festival in January. Root declined to project the end-of-year number.
The last time the industry reached $100 million in consecutive years was during an especially strong streak of four straight nine-digit years between 2005 and 2008. Park City at that time enjoyed a rollicking economy between the 2002 Winter Olympics and the onset of the recession. The record — $239.7 million — was set in 2007. The Building Department estimates the market value of the construction is upward of three to four times the value of the permits.
"It’s great to finally see numbers up," said Matt Russell, the president of the Park City Area Home Builders Association and the owner of Russell & Co. Construction.
Russell noted the number of renovations in Park City, saying property owners who bought their places during the recession are now working on them. He also said Park City homeowners are pursuing environmental upgrades.
"From a business standpoint, it sure has been nice to have that commitment of work," Russell said, acknowledging, though, that it has been difficult to hire skilled laborers in trades like masonry, tile setting and carpentry as the industry became busier.
Russell said it appears the next few years will be strong for the Park City construction industry as well. He said his firm has met with clients planning construction projects in 2016 and 2017.
"It’s exciting. It’s hectic," Russell said.
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