Construction lull could come to Steamboat
Several companies say work is steady; some projects delayed
October 12, 2008
Steamboat Springs — Steamboat Springs’ construction boom isn’t busting, but industry insiders and observers said the field might be headed for a slowdown amid the U.S. economic slide.
“I don’t think there’s any project that isn’t impacted, whether it hasn’t started yet or it has started, because the credit requirements and pre-sale requirements and pre-leasing requirements have changed significantly,” said developer Jim Cook, of Colorado Group Realty. “Banks are very nervous.”
Cook is developing downtown projects, including Alpen Glow, Howelsen Place and River Walk. River Walk isn’t scheduled to go vertical until at least 2010. One of his mixed residential/commercial projects, Sundance North, lost its financing commitment, Cook said.
“We have secured another one,” he said. “But it’s too late in the year. We probably won’t begin construction on that until after the 1st of the year.”
Most of the Sundance units are leased, Cook said. But the credit crisis has made banks wary.
At Fox Construction, business is steady, Vice President Sarah Fox said.
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“We’ve seen some projects that maybe have been postponed till spring, but we have other projects coming,” Fox said.
The company has encountered businesses that are affected by the drying up or delay of projects, she said.
“We’ve had a lot of people who have small construction companies coming to us to see if they can run a project to get them through the slow time,” Fox said.
On the bright side for Fox Construction, subcontractors’
prices are decreasing, she said. Those costs usually aren’t low just before the holidays, Fox said. But pricing is getting competitive, “so that tells us they’re looking for work.”
Rob Van Deren, a partner at Mountain Valley Communities, reported a similar trend.
“I think there’s more availability of subs,” Van Deren said. “I think you get better work because people aren’t slammed, and I think you might get a competitive price.”
He said he was starting to see a slight slowdown. Banks used to require builders to put down 25 percent for a new project. They’ve started requiring 35, 40 or even 50 percent up front, Van Deren said.
The economy really isn’t so bad, he said, and this is a good time to build if you have the cash. Van Deren also said out-of-town construction companies might leave if projects taper off.
“I think we’ll get back to having quality builders in the market,” he said. “There will be a slowdown. We’re all going to have to ride this out. Now is the time to start projects, because you’ll get more quality and bang for your buck than if things do start going again.”
Firm trends in the valley’s construction are difficult to identify, however, because observers are seeing different things. Fox said her company’s residential construction was up and commercial was down. Cook said commercial leasing was solid but residential was slow.
Randy Booco, owner and president of Booco Contracting in Hayden, said he has seen the housing sector take a hit.
“I don’t see that getting a whole lot better,” Booco said.
He said his company, which does projects mostly in western Routt County, Moffat County and Rio Blanco County, is keeping busy.
“We haven’t had any layoffs or slowdown yet, but I think it’s probably coming,” Booco said. “I could be wrong. I don’t have a crystal ball.”
Many construction companies didn’t seem to want to discuss the issue, opting not to return calls seeking comments. Statewide, construction employment in August was down 3.4 percent compared with the same month in 2007.
Despite the grim news, Cook said he wasn’t worried.
“It’ll change,” the developer said. “All these things change. I’ve been through about six or seven of these downturns. Some are larger and more painful than others, but by and large, they pass.”
He said real estate still is cheaper in Steamboat than other resort towns such as Vail and Aspen. Now is a good time to buy, Cook said, adding that financing does exist.
Regardless, he said, he’s ready for good news.
“The next trend I want to see is an upward one,” Cook said.
– To reach Blythe Terrell, call 871-4234
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