Construction values in Willmar-area triple
WILLMAR — The year 2014 is shaping up to be an excellent year for construction values in Willmar.
Peterson said plans for a couple of projects were submitted to the city. If developers pick up the permits for those projects, the valuation total would top $60 million.
But if they don’t pick up the permits for 2014, “that gives us a good start for ’15,’’ Peterson said.
One of those projects is a large government office and conference area expansion. Another one is a $1.5 million remodel and reconfiguration at Rice Institute for Counseling and Mental Health.
“Rice definitely continues to make investments to keep their facilities current and to meet the needs of the marketplace,’’ Peterson said.
Another major project in 2014 is the $7 million Jennie-O Turkey Store corporate office expansion.
Additional projects include the $19.5 million Bethesda expansion of senior care facilities, the $11 million Rice Care Center renovation,
$2.3 million expansion by dairy and food processing manufacturer Relco, and $1.4 million Aldi Food Market.
Also, the city had many new construction, remodeling and renovation projects in the range of $200,000 to $500,000.
This year’s construction values are up considerably from two to three years ago.
“In 2011 and 2012, our construction values were in the $16 million to $17 million range,’’ said Peterson. “You can see they’ve tripled since then and we’re pretty much back to normal.’’
The big difference is in construction for commercial and industrial buildings and renovations and remodels, which account for an estimated
80 to 85 percent — possibly a little bit more — of total permit value.
However, residential construction continues to be very soft in the city. Part of that is due to demand and part of it is due to the fact that there’s a shortage of desirable single-family lots right now.
“We’ve got some nice lots available for twin-homes and patio homes. But for the person that’s looking to get into a nice neighborhood and construct a single-family home in that, say, $300,000-plus range, their options are limited,’’ Peterson said.
Local lenders seem to be optimistic.
“The ones I have contact with are primarily those that bring projects to the finance board of the (Kandiyohi County and City of Willmar) Economic Development Commission for review and approval where there would either be a matching loan from EDC funds or where the EDC might offer a loan guarantee, and we’ve seen good activity there,’’ Peterson said.
“The lenders seem to be upbeat and I don’t think that access to capital is an issue right now at all. The mortgage crisis has passed. It’s now easier once again to get a mortgage. There’s options available to borrowers so they don’t all need to come in with 20 percent down. It’s just because of the enhanced confidence in the economy, I think lenders have adjusted their lending standards to be more inclusive and to make additional capital available.’’
There’s also optimism among the commercial and industrial sector now that the Great Recession has passed, he said.
“I don’t think there’s any question about that. You look at the jobs that are available out in the community and in the region right now, and it’s been a long time since I’ve seen this many ads for jobs and have been aware of this much availability of positions,’’ he said. “Finding the right people to fit into that workforce is a real challenge right now for these major employers.’’
The Tribune asked if companies are either withholding projects because they can’t find people to fill those jobs or if they’re going ahead with projects anyway.
“I think that you’re seeing a combination of the two,’’ Peterson said. “Businesses that have the demands for their product have to produce the product, so they’re going to either bring in the people with the skills or they’re going to bring the people in and train them and try to get them up to speed as quickly as they can.’’
Peterson said people need to know that good manufacturing jobs are available.
“Manufacturing was always thought of for the most part as just a job. Manufacturing can be a good career. It pays well, and you definitely need skills. There are definite skill sets that need to be brought to that,’’ Peterson said.
“That kind of plays along with the idea that we’re seeing more talk about not everybody needs a four-year degree to be successful. There’s a lot of opportunity in manufacturing for people with technical experience, technical education and technical degrees.’’