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So far in 2013, Willmar, Minn., construction valuation up 350 percent over 2012

A crew is pictured Thursday at the site of a 2,000-square-foot clubhouse under construction at Somerset Apartments on 19th Avenue Southeast in Willmar. The $800,000 project is one of numerous projects driving up construction valuation in Willmar to more than 300 percent over last year. Tribune photo by Ron Adams

WILLMAR -- An $800,000 construction and remodeling project at Sommerset Apartments on 19th Avenue Southeast and other major projects are contributing to a healthy increase in this year's construction valuation in Willmar.

Total construction valuation at the end of July this year is up nearly 350 percent, or just shy of $33 million worth of new construction compared with about $9.5 million to date in 2012.

Commercial additions and alterations are down from 2012 to 2013, but the real change is seen this year in new commercial and industrial construction, said Bruce Peterson, city planning and development director.

"Last year there was very little new commercial and industrial construction,'' he said. "The commercial and industrial additions and alterations are down from last year. That's really where the bulk of the construction occurred last year and now we're seeing more new investment.''

The Sommerset project includes construction of a 2,000-square-foot clubhouse and apartment remodeling.

Among other notable projects so far this year are $575,000 remodel at Waters Edge Apartments; $8 million Torgerson Properties hotel expansion and remodel; $5 million Mills Auto Center and $800,000 car wash; $606,928 for two two-family dwellings in Emerald Pond Addition; $2.3 million Rice Hospital radiology department remodel; $770,000 R & J Tours office building; and a $575,000 project at Eagle Ridge Apartments.

Other projects include Rice Home Medical, Willmar Overhead Door Company; Walmart upgrade; Willmar Forklift expansion; and projects at Willmar High School, Middle School and Kennedy Elementary School.

On the residential side, the city has seen a pretty good uptick in construction of single-family housing in the Woodbury Addition south of Nelson International on the eastern edge of the city, some in Oslo Meadows near Ridgewater College, on the far west end of the Valleybrooke addition, and other sites scattered around town.

"We haven't seen any new residential plats. It's just been construction on existing lots in existing plats that are being developed,'' said Peterson.

"If you look around the neighborhoods, we've got a lot more garages and sheds and that type of buildings being built. People are investing in their residential properties not just in new construction but in rehab and building new outbuildings,'' he said.

Also, construction of two-unit to four-unit homes is rebounding as more investors look at rental properties as a good investment, said Peterson.

He said interest rates are still very favorable.

"On the residential side, they're up slightly from what they've been but still way lower than historic levels, very attractive, plus people that had some housing difficulties in the recession have been able to get their credit straightened out and are now back into the housing market, buying homes. That allows people that want to build homes to pull some equity out of their old home and invest it into a new home,'' he said.

Peterson would like to see the city finish 2013 with a construction valuation of between $40 million and $50 million. His optimism is based on preliminary plans that he has seen for a mix of public and private projects valued at $12 million to $14 million.

"That would be a good sign that things have turned around and we're headed in the right direction,'' he said. "Whether or not they'll come to fruition and be constructed remains to be seen.''

Peterson said those plans will not be made public until the city has completed plan review and has the permits ready for issuance.

Peterson said construction activity is still below the 2004-06 the peak years, "but we're far exceeding what we've seen the last two or three years, due to the Great Recession.''

What this means to the average citizen is the city is continuing to see development that reduces the need for tax increases, he said.

"We're able to continually fund the city's budgets without putting it on the backs of the taxpayers and we've got alternative revenue sources that provide a significant amount of money for the city's budget,'' he said.

David Little
David Little covers the Willmar City Council, Willmar Municipal Utilities and other city news.
(320) 235-1150