Willmar construction activity in 2010 down
WILLMAR -- Despite tough economic times, the city of Willmar had new construction projects valued at over $22 million in 2010.
"Even though that's nowhere near the construction we have seen or would like to see, it still exceeds for communities our size state and national construction averages,'' said Bruce Peterson, director of city planning and development services.
"From a construction economy standpoint, we're ahead of the nation but I think that says more about the nation than it does about Willmar,'' Peterson said. "We're still lagging behind the good times of 2006 to 2008 and we've got a lot of lost ground to make up.''
During the past 10 years, construction valuation peaked at $70 million in 2008. Construction starts for new residential, multi-family and commercial projects in 2010 are still far behind those of three to five years ago, he said.
But the number of permits has remained steady, reflecting a large increase in permits for property maintenance.
"People are still making investments,'' said Peterson. "They're just not doing it in a lot of new construction.''
Housing construction declined to approximately $5 million, but commercial and industrial construction valuation totaled a surprising $14.3 million.
Peterson made the comments during his annual report to the Willmar City Council last week.
His department issued 10 permits in 2010 for new commercial and industrial projects, up 42 percent from 2009. Commercial and industrial additions and alterations totaled 95 permits.
Some of the major projects were United FCS headquarters -- $2.9 million, Rice Care Center -- $2.28 million, Willmar Poultry addition -- $600,000 and Jennie-O Turkey Store pretreatment facility -- $510,800.
Peterson said 12 single-family homes were built in 2010, down 41 percent from 2009. He said 3 twin-home buildings and 4 four-unit apartment buildings were constructed, resulting in 30 new housing units in 2010.
"For cities our size, that's above average, but it's still not what we want to see. It's going to take a few more years before the residential construction market recovers,'' Peterson said.
He said the national economy was improving in 2010 but it was doing so without a whole lot of job growth.
"Our local economic gains were even better because locally there was a significant number of new jobs created and this was able to reverse the recession-caused job losses,'' said Peterson. "The strongest sectors of our local economy in 2010 were once again agriculture and manufacturing, which posted the largest job gains.''
Peterson said the 2010 census shows Willmar's population was up nearly 7 percent over the past 10 years with 19,610 persons. Kandiyohi County was up roughly 3 percent to just over 42,000.
"If you look at Willmar and Kandiyohi County, you'll notice that things drop off very rapidly when you get west of here,'' Peterson said. "We are the last bastion of population gain in southwest or west central Minnesota and that's really solidified the city's position as a regional center. Likewise it has strengthened the responsibility that the city has to a much larger region to provide goods and services and jobs to the inhabitants of that large geographic area.''
The city and county unemployment rate has been decreasing "as we grow our way out of the recession.'' The local unemployment rate continues to be 2-3 points better than state averages.
Housing construction remained slow in 2010 with the fewest number of new units permitted during the past 10 years. Foreclosures continue to hinder any housing market turnaround by artificially reducing prices and causing lenders to be more cautious in approving credit.
"Interest rates are great if you've got the credit right now to take advantage of it. The foreclosures are keeping a lot of people out of that market,'' said Peterson. "The side effect of the foreclosure issue is exhibited by housing maintenance problems. There are some declines in certain neighborhoods. We've been working with mortgage holders to make sure that the needed maintenance is performed on the structures they are getting back in foreclosures.''
The campus remains a local economic bright spot. With more than 20 businesses and nearly 300 employees, the campus is officially a biotechnology hub, said Peterson. The Planning Commission recently approved a number of new businesses. Some have potential to grow jobs and be very successful, he said.
The Mid-Central Research and Outreach Center is scheduled to open in 2011. Peterson said significant staff time was spent with MinnWest and the University of Minnesota on planning, drafting and reviewing lease and management documents. Up to 40 professors and graduate students will occupy the center and assist businesses with research and development, bringing intellectual property to the marketplace.
Efforts to redevelop the former airport did not go very far in 2010. "We do know that hundreds of acres of land continue to be held hostage by the Federal Aviation Administration over the claimed historical significance of the former terminal area and we hope to make some progress on that in the near future,'' he said.
In 2010, staff spent more time than usual working on maintenance issues with property owners to eliminate blight and preserve property values. Most efforts involved exterior storage or maintenance violations, and then dealing with owners or tenants to abate the conditions.
A greater emphasis was placed on education versus punishment, said Peterson. His department and the Police Department updated and distributed the 'handbook' of citizen expectations in multiple languages.
"We've taken a little different approach and tried to work more with people. We've had a little more time to give people to help them work through the process rather than moving straight to citations,'' Peterson said.
Clean-up efforts extended into the Regency East and West Mobile Home Parks. Some homes were removed and only one new home was moved in. East park occupancy is down to 50 percent and west park is down to 70 percent. Several homes are slated for removal.
Peterson said his staff has joined forces with Kandiyohi County on mobile home hazard and nuisance abatement. "We've been getting a little bit better results from the owners. They know that the county's involved and the county holds the license for the parks,'' he said.
Because construction and economic development activities were down in 2010, the department had more time to look for innovative ways to provide services citizens require and to focus on core department functions and continuous process improvement.
"To remain relevant and address current trends and workplace demands, the department has reviewed and fine-tuned development review and inspection procedures,'' said Peterson.
In 2010, airport management responsibilities were transferred from the Public Works Department to a staff person in Peterson's department, which required workload shifts to the inspectors.
Peterson said the Kandiyohi County and City of Willmar Economic Development Commission, Kandiyohi County, adjacent townships, Willmar School District and the Mid-Minnesota Development Commission provided opportunities for cross-jurisdictional cooperation on development issues.
"The city takes seriously its leadership position in this process and we acknowledge our responsibility as the economic engine of the region,'' he said.