Building permit numbers sink this season

“The phone isn’t exactly ringing off the hook….”

The Roach Coach, which for the last several summers delivered lunch to busy construction workers at sites all over the north end of the valley, will not even hit the road this summer.

 
The reason is simple, according to Andrew Gitin of the Gas Café, which owns the coach. There are far fewer building projects going on in the 2008 building season than in the past several summers.
While last year wasn’t spectacular for either new building projects or the Roach Coach, 2006 was a banner year. Take Mt. Crested Butte’s situation this summer compared to the two previous construction seasons.
“I only have two major permits so far this year, and both are houses,” said Mt. Crested Butte community development director Bill Racek. “In 2007 we had 23 permits and that wasn’t a big year. In 2006, the Wildhorse project came into play and we had 41 major permits. Even if you take out Wildhorse, there were still 20 permits and that is about what I consider to be the average. At two permits for this year, we are way, way off.”
Crested Butte is faring a little better. Town building inspector Scott LeFevre has 20 permits in the town right now compared to 35 at this same time last year. But in both 2007 and 2008, there were eight new residential permits. The difference is that in 2007, those eight residences were valued at $3,211,546 while this year the total residential value comes in at $2,400,326.
“The residential permits just kicked in within the last ten days and that was a pleasant surprise,” says LeFevre. “They came in all at once. But I think this is the early summer rush and it isn’t much of a rush.”
LeFevre explained that part of the valuation difference in the residential permits come about from Crested Butte’s second million-dollar house being constructed last summer.
As for the rest of the building permits, there is one commercial project going up this year as opposed to two last year and eight residential remodels instead of 20 at this same point in 2007.
“There is no doubt that building is off in town,” LeFevre commented. “I know of at least three or four others that are waiting to pull the pin but they haven’t. This is the season and I think the ‘rush’ has already occurred. The phone isn’t exactly ringing off the hook.”
According to LeFevre, local contractors seem to be weathering the downturn so far. “I must say that I really haven’t heard too much complaining by contractors,” he continued. “They seem to be covered this summer but are definitely afraid about next year.”
Crested Butte South Property Owners Association manager Chris Behan said his gut tells him the building slowdown is resulting in some lower bids for what little work is out there. “We only have five new starts out here for the summer at the moment,” he said. “We had 11 last year but in 2006 there was a peak when we had about 23 new house starts. We have a couple of holes in the ground at the moment and should have a few more in the next few weeks, but that is it. It is an extremely slow year. We probably built 100 new houses in Crested Butte South in the last six or seven years.”
Behan also tracks sales through title transfers and says that aspect of the market is slow as well. “In 2004, we had 130 sales of either land or residences. In ‘05 it was 150 sales; in ‘06 we had 88 title changes, while 2007 had 46 total sales. So far this year I would say it is in the high twenties. It is just a lot quieter out here with not nearly as much activity as we are used to seeing,” he said.
“I used to think there was a correlation between lot sales and new construction but I don’t think that’s the case anymore,” Behan said. “I think there was a lot of speculation for a while. I don’t think anyone thought we would keep going at the 2005-2006 pace but this is definitely a big downturn.
“In my opinion, and it’s only an opinion, I think people are sitting back and waiting. They want to see where the ski area goes and if they get an expansion. Plus you add in the fact it is harder to get a construction loan and people are taking a breath from the mayhem of a few years ago.”
Mt. Crested Butte’s Racek sees the same trend. “I think it is the state of the national economy,” said Racek. “There are bigger influences on this market than the Crested Butte council or Tim and Diane (Mueller, owners of the ski area). Like maybe the country is in a recession or there is a very expensive war going on or people are tightening up because it is harder to get good loans because of the sub-prime mortgage mess.”
Racek admits that whatever the cause, the impact will hit the local governments. “Permitting fees are a big part of Mt. Crested Butte’s revenue,” he said. “So it probably means we’ll have to forgo some projects like roads or whatever. It’s not just us. It also hits the fire district and the schools. Mt. Crested Butte always goes in cycles and we have weathered these storms before and we’ll do it again.”
Racek said other resorts such as Telluride might appear busier than Crested Butte but there is a reason. “Other resort towns have more going on than us but that could be because they have a lot of multi-year projects going on. Here in little Mt. Crested Butte, it is more feast and famine,” he said. “Once the ski area pulls a permit for Mountaineer Square North in the base area, it will boost it up again. Now, when that will happen, I have no idea.”
Gunnison County building inspector Rich Wojdakowski explained that while building permits in the county are also down, there are currently 54 paid building permits this year compared to 95 at this time last year, and his office is still busy.
“You have to remember we have between 400 and 500 active permits in our system,” he said. “People are still working on projects that started last year or before. There is a lot of work in the office and out in the field. For example last Friday I had five inspections and three of the five were from 2008 permits and the other two from projects started in previous years.”
According to the Gunnison County Building Permit Report that came out July 1, the overall construction permit valuations are also lacking with $14,437,266 totaled in the first six months of 2007 and just $8,041,907 so far this year. Wojdakowski explained that the valuation is simply an estimated number from the building department to assess permit fees
So while Wojdakowski agrees that new permits “are down pretty good this year, I still have 41 permits on my desk waiting for more information or waiting for people to pick them up,” he said. “I think some people are trying to stay ahead of the game and get a permit in the process but I’m not sure they are serious about starting the project any time soon.” He said the trend north of Round Mountain toward Crested Butte mirrors the rest of the county.
In the meantime, Andrew Gitin commented, “If you know of anyone who wants to buy a Roach Coach, we have one for sale.”