Spokane Journal of Business

Spokane-area construction activity nears record

Total value tops $1 billion for first time since 2013

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Building permit values last year for unincorporated Spokane County and the cities of Spokane and Spokane Valley—at a total of $1.02 billion—were up 38 percent over the 2015 total and nearly reached the 2013 record of $1.03 billion.

Six of the 10 largest construction projects permitted throughout the county were school projects, and the other four were apartment projects.

Of the three jurisdictions, Spokane Valley tallied the largest year-over-year increase in permit volume, with 2016 permit values totaling $262.4 million, a whopping 167 percent increase compared with the year-earlier permit total of $98.2 million.

The largest projects permitted in Spokane Valley were the $21 million Evergreen Middle School renovation and addition, at 12441 E. 16th; the $17.9 million Granite Pointe III apartments, at 12930 E. Mansfield; and the $17.5 million Bella Tess Apartments, at 17016 E. Indiana Parkway.

John Hohman, community development director for the city of Spokane Valley, says the growth in permit values includes a mix of public sector, commercial, and private sector projects in addition to big school and apartment projects.

One major project that’s highly anticipated by the city of Spokane Valley is the $14.1 million new City Hall under way at 10210 E. Sprague.

Hohman says the city hopes to move into the 65,000-square-foot, three-story building by late summer.

Besides growth in total permit values for new construction, Spokane Valley saw permits for remodels and renovations also grow in volume in 2016, he says.

“Quite a few permits were associated with reroofing resulting from the windstorm of 2015,” Hohman says.

He says he’s optimistic the city will see another increase in permit volume this year.

“We’ve got a few more school projects coming,” he says, referring to projects remaining in the $121.9 million Central Valley School District bond, which voters approved in 2015.

“We’re also hoping some changes we did to the comprehensive plan will result in additional development within the city,” he says.

Hohman also predicts residential construction will continue to grow in Spokane Valley.

“I think there will be growth in residential lots,” he adds.

The city of Spokane issued permits valued at $412.8 million last year, an increase of nearly 26 percent compared with the 2015 permit total.

The largest project permitted in the city of Spokane was the $26 million Salk Middle School replacement project. The project is part of the $145 million school bond measure that district voters passed in 2015.

Other high-dollar projects include the $13.3 million Hampton Inn & Suites hotel project, at 675 S. McClellan, and a $12 million phase of the Riverside Park Water Reclamation Facility upgrades.

Suzanne Schmidt, president and CEO of the Spokane-based Inland Pacific Chapter of Associated Builders & Contractors, says most members of the trade organization have as much business as they can handle.

“Our members are constructing private- and public-works projects like commercial buildings and schools,” Schmidt says. “Nothing has slowed down.”

She says the biggest challenge members will have this year will be to maintain a full workforce.

“I’m hearing members have work on the books, and their biggest issue is having the manpower to complete those jobs,” she says.

The city of Spokane’s 2016 construction values was second only to the record year of 2013 when Spokane issued permits totaling $534.6 million.

The 2013 total was skewed by three big projects: the $136 million Davenport Grand Hotel, the $45 million Gonzaga University COG Center, and the $37 million Spokane Convention Center expansion downtown.

Those three projects added up to more than a fifth of the total dollar volume for Spokane, Spokane Valley, and Spokane County combined that year.

For 2016, unincorporated Spokane County saw the smallest year-over-year increase in permits issued in 2016 with a total value of $349.2 million, up 10.5 percent compared with the year-earlier total of $315.9 million.

The largest projects permitted in Spokane County in 2016 included the $16.8 million Northwood Middle School addition and gym modernization, at 12908 N. Pittsburg; the $16.3 million second phase of Pine Valley Apartments, at 13808 E. 32nd; and the $15.5 million Greenacres Elementary School addition, at 17915 E. Fourth.

Single-family home permits in the three jurisdictions were up 16 percent in unit numbers and 13 percent in dollar volume last year compared with 2015 totals.

In 2016, 1,276 single-family homes with a total construction value of $317.6 million were permitted in Spokane County and the cities of Spokane and Spokane Valley, up from 1,100 permitted with a total construction value of $281.9 million a year earlier.

The rate of increase in new-home starts last year outpaced the growth in overall home sales, which includes existing home sales, through the Spokane Multiple Listing Service. The MLS 2016 growth rate in unit sales was 9.9 percent.

Craig Roberts, general manager of Spokane custom homebuilder Condron Homes LLC, described 2016 as a “great year” for homebuilders, and he expects continued growth in 2017.

Roberts says Condron Homes sold 32 custom homes last year and expects to sell 45 this year.

Condron Homes is primarily building homes in the $350,000-plus range in the Wandermere Heights and Pine Ridge developments on the North Side.

Roberts says average prices for Condron Homes in 2016 were up about $10,000 compared with a year earlier.

The average 2016 permit value for new homes in Spokane County, Spokane, and Spokane Valley, however, was $249,300, down nearly $7,000 compared with a year earlier.

Looking forward, Roberts says there’s some concern that demand for new-home construction could outpace new-lot development in coming years.

“We’re going to be in need of (lots) two to three years down the road if sales continue the way they are,” he says.

Mike McLean
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Reporter Mike McLean covers real estate and construction at the Journal of Business. A multipurpose fisherman and vintage record album aficionado, Mike has worked for the Journal since 2006.

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