Park City’s construction industry tanks
February 9, 2010
Park City’s construction industry, accustomed to the $100 million-plus years it has enjoyed in the last decade, tanked in 2009, with the value of permit-authorized construction falling to one of its lowest levels since the middle of the 1990s.
The Park City Building Department reported that the industry posted $68.5 million in construction last year. The dollar amount was less than half of what was recorded the previous year. It was the lowest year-end figure since 2003, when $59.2 million was posted, and the third-lowest total since 1997, according to the Building Department.
It had long been expected that the 2009 figures would fall from the busy construction years of earlier in the decade, but it was not clear until the end of the year how dramatic the decline would be. Park City officials had anticipated a drop early in 2009.
The dollar value the department assigns to construction is generally one-third of the market value of the buildings that received permits.
"I’m surprised at the slowness, the lack of the recovery," said Ron Ivie, the chief building official at City Hall.
Ivie said had expected a recovery in the lending market by the later months of 2009, but the construction numbers did not show that happening. He said the Building Department ha signed off on some construction blueprints, but the developers were unable to secure financing.
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Some highlights of the Building Department’s year-end report for 2009 include:
The number of building permits issued in 2009 — 765 — was down from 996 in 2008 and 1,074 in 2007.
The amount of fees brought in by the department in 2009 — $4.6 million — beat the previous year’s $2.9 million but was down from the $6 million collected in 2007.
The number of houses that received permits in 2009 — 27 — trailed the 30 in the previous year and the 62 in 2007. Ivie said the 27 houses were scattered throughout Park City, meaning that a single development did not account for the total figure.
The Building Department did not issue a permit for a duplex in 2009. Two such permits were issued in 2008 and nine were issued in 2007.
"2009 was a tough year," said Jared Rakisits, who served as the president of the Park City Area Home Builders Association in 2009.
Rakisits said business at his firm, Mountain Country Homes, fell 60 in 2009 percent from busy years like 2006 and 2007. He said the drop in construction was felt throughout the crucial sector.
"There wasn’t a lot of new starts," he said. "It’s pretty industry-wide."
The year-end figure of $68.5 million relied heavily on a permit issued early in the year for work at the Montage in Empire Pass. That permit was valued at nearly $26.9 million. The Montage permit accounted for 39 percent of the year-end total. It is rare for one permit to prop up the numbers in a similar fashion.
Ivie said the 2010 totals could drop even further if banks do not loosen their lending this year. He said, though, Park City’s construction industry is weathering the recession.
"As far as Park City’s concerned, we’re good. We’re so much better than other communities in the region," Ivie said.