Willmar sees construction decline in 2009 in return to a typical year

WILLMAR -- Construction activity was down substantially in 2009, with a total valuation of $30,992,475. That figure was down from the record of $70 million in 2008, but was more in line with a typical year, according to the annual report from Bruce Peterson, director of planning and development services for the City of Willmar.

Permits were issued for 17 single-family homes and permits were issued for the 28 twin-home units in the Westwind low-income housing project. Westwind construction was delayed until 2010.

Permits for commercial and industrial construction were down 36 percent from 128 in 2008 to 82 in 2009. Mechanical and plumbing permits were up slightly from 226 in 2008 to 230 in 2009.

Major projects (valuation over $250,000) for 2009 included the Bethesda Wellness Center, Willmar Municipal Utilities wind turbines, Ridgewater College improvements, Rice Hospital oncology project, Kandiyohi County Rescue Squad building, Roosevelt School addition, Willmar Municipal Utilities substation, National Guard Armory addition, O'Reilly Auto Parts, Humane Society building, and continued improvements at the Minn-West Technology Campus.

Peterson said his staff provided code research, site planning, plan reviews, and inspections for all major projects that required a considerable amount of technical assistance.

Housing

Peterson said 2009 was a down year for residential development. The local housing market was feeling the effects of the burst housing bubble and the credit crisis. Fortunately, Willmar escaped the brunt of the foreclosure problem.

Area lenders have tightened their credit underwriting standards, making mortgages available to a smaller pool of buyers. The supply of residential lots continues to be ample, although good single-family lots are at a premium.

Although the number of residential units permitted in 2009 exceeded that of 2008, it should be noted that the Westwind project, which was permitted in 2009, did not begin construction until 2010, Peterson said. Development of the twin homes was delayed a year due to economic issues that affected project financing.

Peterson said his staff continues to enforce exterior storage and maintenance violations in residential neighborhoods. The number of zoning and nuisance violations increased from 511 in 2008 to 667 in 2009. Due to continuing complaints, staff last year paid particular attention to the mobile home parks, which accounted for 216 violations.

"These efforts are critical if the city is to maintain the aesthetics and property values of residential neighborhoods,'' he said.

Business activity

The local economy mirrored state and federal trends, although to a lesser degree. Major layoffs were avoided and the local economy is performing better than that of most regional centers. The unemployment rate in Kandiyohi County remains the lowest of any county in the 18-county central region.

Commercial and industrial development projects were down. Notable private projects included the Bethesda Wellness Center ($3.9 million), O'Reilly Auto ($534,819), Willmar Electric addition ($445,000), Print Masters addition ($390,000), improvements at the MinnWest Technology Campus ($300,000), and Marshfield Foods laboratory renovation ($270,000).

Willmar and the surrounding area continue to have strong retail sales, despite the recession. The most recent figures available show county-wide retail sales of over $600 million. Sales in Willmar account for 75 percent of that total.

Wholesale trade has not been as strong because some local wholesalers depend on the construction and manufacturing industries for their sales and those sectors were hurt by the economic downturn. Manufacturing and agricultural sales remain fairly strong.

"Looking at the big picture, it would have to be said that the local economy is fairing pretty well in the current economy,'' Peterson said. "Business activity and employment remain strong, even with the drop in construction activity.''

MinnWest Technology Campus

The campus remains a bright spot in the area economy. The 19 campus businesses employ more than 240 people. Efforts continued to establish the Mid Central Research and Outreach Center, which is a joint effort of MinnWest, the University of Minnesota, the Minnesota State Colleges and Universities system and the city.

A $10 million grant from the Minnesota Department of Employment and Economic Development to the city will be used to improve a campus building for the center. Biotech development should be an increasingly important piece of the local economy.

Airport development

Last year ended without the city obtaining the land release for the former airport. The Federal Aviation Administration had issues with development occurring on the property before the land was released to the city and the city had to redraft the environmental review documents to reflect any environmental issues that may have been associated with those development projects. No significant environmental impacts have been identified, Peterson said.

The final plat for the expanded industrial park was approved and will provide additional sites for industrial development. All former airport land east of County Road 5 has been platted as phase 1 of the redevelopment effort. Property west of County Road 5 will be platted in future phases as demand dictates.

Population and employment

A state demographer's estimate of Willmar's population at 19,130 may be low, said Peterson. Based on inaccurate findings in the 2000 Census and knowledge of local housing and population trends, staff places the estimate closer to 19,700.

"Hopefully, the results of the 2010 Census will provide an accurate population count and portrait of the community,'' he said.

Willmar remains the eighth-largest city outside the metro area. The state demographer projects population to grow 3.5 percent from 2010 to 2020. The age groups expected to show the most growth in the near future are the "baby-boomers'' (age 55 and older) and those persons who are 5-14 and 35-44.

Employment remains fairly steady, even during the recession. Willmar will continue to be the employment hub of the county and region, owing to its growing population and diverse economy. The county's largest employment sectors are health care and social assistance, manufacturing, and retail trade. Most employment sectors grew over the past decade, and are likewise projected to grow over the next decade.

Comprehensive plan

The Willmar City Council adopted a new comprehensive land use plan in June 2009. That action culminated a three-year process of public participation, staff research and writing, Planning Commission comment and review, and packaging by the Mid-Minnesota Development Commission.