Joplin reports worst building year in at least a decade

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November 14, 2009

Anonymous The Joplin Globe Sat Nov 14, 2009, 10:37 PM CST

By Andy Ostmeyer

aostmeyer@joplinglobe.com

Despite a strong showing in October, Joplin reported its worst year for construction in at least a decade, according to building permits filed with the city.

The permits indicate that the value of new business and new home construction was down by half, compared with the previous year.

In October, $9.5 million in permits was filed, compared with $2.3 million for the same month one year earlier. That comes on the heels of a September in which less than $300,000 in new construction was permitted in Joplin.

Despite the boost, construction for the city’s fiscal year that ended on Oct. 31 came to $46 million, compared with $87 million last year and $128.1 million a year before that. That $128.1 million was a record for Joplin.

Construction has been sluggish in Joplin since the recession began, with few seven-figure projects filed by the private sector, but October included three permits valued at more than $1 million. One of those was at Joplin Regional Airport for a new electrical vault building for lighting controls for the airfield, as well as signage and striping. The largest was $5.1 million for work on the Gryphon Building at 1027 S. Main St. It was filed by Neal Group Construction.

“It is going very well,” Jeff Neal said.

Remediation of lead, asbestos and pigeon waste is nearly complete and work on the exterior of the building is about 90 percent complete, he said. Crews have restored, cleaned and tuckpointed the original brick and replaced window lentils. The building has about 120,000 square feet.

“We anticipate being complete with vanilla box construction — that is all the systems awaiting tenant infill — in March of next year,” Neal said.

He praised the Joplin City Council and City Manager Mark Rohr for their role in the project, having contributed $175,000 in grant money.

“We’re very gratified for the opportunity to be working on a great project,” Neal said.

Staying optimistic

While some experts see reason to believe the economy is improving, there’s always some lag time before contractors pick up work. They have to wait for projects to be approved, financing to be arranged and drawings to be completed by architects before the bidding process begins.

“Things are pretty bleak right now,” Chuck Killinger, president of Dalton-Killinger Construction, said Thursday. “There is a little trickle going on.”

His company plans to finish in the next few weeks work on the $12.5 Health Sciences building at Missouri Southern State University, and recently picked up bids for $10.9 million for work on Seneca’s intermediate and high school additions, and $1.3 million in work from the Webb City School District.

“I think things in Joplin are going to be improving in the third and fourth quarters,” Killinger said. “We do, hopefully, have enough work to stay the course.”

He said he has been in the business for four decades — long enough to know that the economy picks up after slumps like last year’s.

“I’ve been in it for a while, and they usually do,” said Killinger.

There may be other reasons to remain optimistic.

Nationwide, construction spending in September posted a better-than-expected performance, powered by the largest jump in housing construction in more than six years. October figures have not been released.

The advance spurred hope that the battered housing sector is starting to turn around and will provide support for the overall economy as it struggles to emerge from the worst recession since the 1930s.

The U.S. Commerce Department said recently that total construction spending was up 0.8 percent in September, much better than the 0.3 percent drop that analysts had forecast.

The overall increase reflected a 3.9 percent rise in spending on residential construction, the biggest jump in housing activity since July 2003.

There is a worry, however, that a big part of the activity in recent months may have reflected a rush by builders to start projects that could qualify for a tax credit of up to $8,000 offered by the government to first-time homebuyers.

‘Aggressive’

Dennis Burns, director of business development for Crossland Construction Co., said of the local market: “The past year has been tough. It has been more aggressive and more competitive than in who knows how long.”

Just a few years ago, he said, construction “was on fire. We couldn’t get out of the way of the work.”

Now builders are seeing more contractors from larger markets with whom they never had to contend on bids before.

Although based in Columbus, Kan., Crossland has offices in Rogers, Ark., near Dallas, Texas, and Tulsa, Okla., as well as a new office in Wichita, Kan. That’s helped cushion the blow from the economy some.

“Texas and Oklahoma seem to be holding their own,” Burns said.

And Wichita voters just approved $300 million in new school construction that will start going out for bids in the next few months.

Burns said his company is also are finishing up work on Joplin North Middle School, which is on track for completion next summer, and earlier this year completed Joplin East Middle School. It also has several multimillion-dollar projects in the Joplin area, including the Freeman Health System surgery center, new offices for EBV east of Joplin and the new Joplin Humane Society building.

Joplin’s fiscal year runs from Nov. 1 to Oct. 31, and the permits reflect only that construction taking place inside the city limits, but none of the work going on outside Joplin.

Only 14 new business permits have been filed in the past fiscal year, valued at $15 million, compared with 18 permits valued at $29.8 million for the comparable period one year earlier.

In the past 12 months, only 52 permits have been filed for new single-family homes in Joplin, with a combined value of nearly $6.8 million. That compares with 88 homes valued at $14.8 million for the same period one year ago.

But Charlie Kuehn, president of Four-State Homes and the Home Builders Association of Southwest Missouri, sees reason to be optimistic. He called the market slow, and said that while he hasn’t done any new homes inside the city limits, he’s kept busy with some homes being built outside the city limits as well as light commercial work in Joplin.

Recently, Congress not only extended that first-time homebuyers tax credit, but created a $6,500 tax credit for second-time homebuyers that Kuehn believes will stimulate the market.

The Associated Press contributed to this article.

Year by year

Construction totals for Joplin over the past decade are as follows:

2009: $46.2 million

2008: $87.1 million

2007: $128.1 million

2006: $97.8 million

2005: $124.5 million

2004: $75.4 million

2003: $64.2 million

2002: $86.6 million

2001: $71 million

2000: $60.7 million