builders outlook 2014 issue 9
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8/11/2019 Builders Outlook 2014 Issue 9
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Builders utlookwww.elpasobuilders.com 2014: issue 9
For the better part of this year,
investors have been slowly trickling out
of the home buying market, but in
August they apparently cut off the cash
flow in a big way.
Sales of existing homes fell an
unexpected 1.8 percent from July,
according to the National Association of
Realtors (NAR), but more dramatic was
the drop in investor sales. Investor
activity in 2012 and 2013 was the main
driver behind double-digit price gains.
Just 12 percent of August purchases
were by individual investors, down from16 percent in August; investors had
been making up nearly one-third of
home purchases during the worst of the
housing crash nationally, and in some
markets they accounted for well more
than half.
"Investors are concerned with a
potential rise in interest rates," said
Lawrence Yun, chief economist for
NAR. "It makes it less attractive in a
rising interest rate environment."
The drop has been long expected.
Home prices jumped dramatically last
year and are still higher by nearly 5
percent from a year ago, while the
supply of cheap, distressed properties
fell. When calculating for potentialreturns, the math simply doesn't work
as well anymore for investors.
"The reduction in appetite from
investors has put a temporary lid on
home sales that has yet to be offset by
the first-time home buyer, which is more
interested in renting than buying," wrote
Peter Boockvar, chief market analyst
with the Lindsey Group. "Faster income
growth, slower home price gains and
more of an easing in credit standards is
what is needed to bring them back."
First-time home buyers made up just
29 percent of August buyers and do not
appear to be picking up any of the slack
of investors. The first-time buyer share
is historically around 35 to 40 percent of
the market, and it usually increases in
the fall, when large families move out of
the market. First-time home buyers tend
not to have children yet.Realtors are hoping the decreased
competition from investors will bring
first-time buyers back to the market, but
this younger cohort is still facing high
levels of student debt, weak
employment and income growth and
soaring rents, which keep them from
saving for a down payment on a home.
Some of those who are more fiscally
sound are still choosing to rent,
especially as the single-family rental
market has become more popular.
This is why investors, while not
buying many more homes, are not
rushing to sell the ones they already
have, either. Rents are up over 3
percent from a year ago nationwide."We are really happy with our portfolio
of homes," said Aaron Edelheit, CEO of
Atlanta-based The American Home, in a
July 2014 interview with CNBC. "Our
demand for rental properties is strong.
We have 95 percent rented." American
Home invested in distressed properties.
Edelheit, who operates mainly in the
Atlanta and Charlotte, N.C., markets,
said he is not buying any more homes.
The company currently owns about
2,400 single-family rental homes, which
it manages through an in-house
network of property managers, rental
agents and technicians."This is maturing into every other type
of industry," noted Edelheit. "You will
have consolidation. Business is going to
be about execution and operations. It
will be all about operations. We have an
attractive company with attractive
assets. Like anything else, it's about
operating and running this business."
Others, however, are still buying,
albeit shifting their strategies. Justin
Chang, CEO of Colony American
Homes, which was a huge player early
on in the Phoenix and Southern
California housing markets, said his
company continues to buy, although ata reduced rate.
"The contours of the buying and the
geographies are shifting, as one might
expect," said Chang.
By Diana Olick CNBC.com
Construction of single family homes
and multifamily apartments fell by over
14 percent in August from July, a far
more striking plunge than analysts
expected. Single family housing starts
are running at about half the normal,
prebubble pace, and single family
building permits, an indicator of future
construction, are flat. So how is it that
some claim we are building too many
houses?
"We're still building single family
homes faster than we can fill them,"
argues Trulia's chief economist Jed
Kolko.
Using new numbers released this
week from the U.S. Census, Kolko
makes the following points:
The vacancy rate for single-family
homes was 10.7 percent in 2013, up
from 10.6 percent in 2012 and near its
2011 peak of 11 percent. That's farabove the vacancy rate during the
bubble (8.6 percent in 2005) and
before (7.4 percent in 2000).
In 2013, household formation was just
321,000, much lower than the 1.2
million baseline implied by current
population growth. The number of
owner-occupied single-family homes
actually fell by 184,000.
At the same time, the multi-unit
vacancy rate continues to normalize,
dropping for the third straight year to
below its 2006 level. Despite all the
new multi-unit construction,
apartments are filling up.
To put it simply, there are plenty of
vacant homes, no new owner
households are being formed, and
there's not enough demand to
necessitate building more new homes.
Why then do real estate agents claim
there is not enough supply to meet
demand, and why are home prices
continuing to rise? The answer is that
certain segments of the market are
thriving while others are stalled and
certain locations are thriving while
others are stalled.
"There are always people who want
new. Also, income growth at the high
end helps boost demand for the larger
new homes now being built," Kolko
acknowledged. "But if new construction
weren't keeping up with demand, andhousehold formation were strong, more
of the vacant homes out there would
get occupiedbut they're not."
On the flip side, multifamily rental
construction, while down for the month,
is running at quarter-century highs, and
the units are filling up fast. At the same
time, there are 14 million single-family
homes currently occupied as rentals,
and those renters appear to be staying.
There were just 11 million single-family
rental homes as recently as 2007.
"It's proving that households are
finding renting to be much more
appealing than they ever thought it
might be, and they're sticking with those
rental homes longer than we expected,"
said Buck Horne, an equities analyst at
Raymond James. Horne added that
Kolko "makes a fair point."
Horne, however, focuses on particular
markets, particular builders and price
points.
"If you look at the big job producing
markets like California, Texas and
Florida, [housing] demand there is very
strong," he said. "If you're looking for
first-time buyers, you'll find them in
Texas."
First-time buyers nationally, however,
are the weakest segment of the market,
as younger millennials were hardest hit
during the recession. That is why some
builders, like Lennar and Pulte, arefocusing on move-up models rather
than cheaper, entry-level homes.
Lennar reported strong third quarter
earnings this week, but the Miami-
based builder has been focusing on
prime locations, higher-priced homes,
and did not overestimate demand. DR
Horton, however, announced it would
have to use incentives to sell its homes.
It last reported it had 10,000 unsold
homes, 3,100 of those already finished.
"Other builders are sitting on more
than that," Horne noted. "That's a lot to
be speculating with, especially after the
spring selling season."
Pulte, meanwhile, is also steering
away from entry-level product and,
according to Horne, is willing to give up
market share as long as it means
optimizing cash returns on a per-house
basis. As of last quarter, Pulte had less
than 1,000 spec homes in all of its
combined communities.
"That's one the industry's lowest
ratios of spec homes," Horne said.
Home builders large and small are
having to re-evaluate today's tricky
market. Some, like Lennar are
diversifying, getting into the multifamily
market, while other smaller builders are
turning to townhomes in more urban
settings.
"We're constantly having our
expectations pulled out from under usbecause we think that the market might
finally be in a more permanent recovery,
and now we go into a slowdown again,"
Stephen Paul, executive vice president
of Maryland-based Mid-Atlantic Home
Builders, said on CNBC's "Squawk
Box." "It's hard to figure out and plan."
By Diana Olick, CNBC
Investors leaving housing high and dry
The question is: are we building too many houses?
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2 Builders Outlook 2014 issue 9
HEAT UP YOUR HOME SALES
Football season is here. Its time to fire up the grill, mix the marinade and enjoy
an evening on the patio cheering on your favorite team with friends and family.
Natural gas can help. From grills and fire pits to lights and torches, building
outdoor living spaces equipped with clean, efficient natural gas gives your
customers a chance to enjoy the big game from the comfort of home.
For more information on building with natural gas, contact Eduardo Lucero at
ealucero@texasgasservice.com or (915) 680-7216.
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Housing recovery continues at slow pace, housing permits are down 15 to 20 % fromlast year and about 60% below 2005 big boom. Home builder confidence has return toits highest level since 2005, near the peak of the housing market, ( this is an article fromThe National Association Of Builders reported on Wednesday September 17, 2014) buthousing starts arent even half of the the way back to the late 2005 level. Why arehousing starts so Low? Whats the Deal? Are Builders hopelessly optimistic? Here aresome of the answers: Typically new home orders decline from July to August as homebuyers focus on the start of school year and late summer vacations. Tight mortgagefinancing, new mortgage regulations are making it more difficult for buyers to qualify, ithas reduced the potential buyers by about 20% also higher sales prices and lowemployment puts purchasing out of reach for more potential buyers. So are wehopelessly optimistic? No! We have to believe in our industry and hope for the best forthe rest of the year and 2015. Do we have to change the way we do business? Do wehave to offer new products?, Do we have to advertise our companies differently? Hereis something to think about, most of the baby boomers are already settle on a house,yes some will upgrade to a newer or bigger home but not a big percentage of them
compared to previous years, we have to cater to a new generation, the Milennials (thosegraduating from college roughly 2003 to 2018 or a person reaching adulthood aroundthe year 2000 also called Generation Y. Millennials arent in a rush to buy their ownhomes. Many of them arent in a rush to to move out of their parents houses. Thatdoesnt mean, however, that theyll remain renters or freeloaders in mom and dadsbasements forever. And the housing and mortgage industries cant wait. A recent surveyfound that 92% of people in this age group who dont have a home want to buy one inthe future, and there are some clear preferences in what they want in a home. Millenialbuyers like to be close to everything they need, including transportation, work, coffeeshops and bars and of course all the modern technology inside the home. Make plansto build for the new generation. Things are changing rapidly at local and state level, ifyou are not a member of our association now is the time to join we will keep you informof this new changes, dont be the last one to be informed. Keep you hopes high and dobusiness with a member.
Presidents Message |
El Paso Disposal
772-7495
32014 issue 9 Builders Outlook
Frank
Torres
President,El Paso Associationof Builders
Showroom:2131 Missouri
915 533 6045 fax 533 6096
Thomas R. Brown, Owner
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8/11/2019 Builders Outlook 2014 Issue 9
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The truth of the matter is that permits
are down in the City of El Paso. Down
some 18% from 2013, a large
percentage given that 2013 was also a
down year for permits. So why then is it
that the City of El Paso has raised its
fees for permits and incorporated a
new technology fee as a regular
charge? It baffles most of us until we
return to what the last city
administration under John Cook and
the Progressives did. Spend like
drunken sailors to bring a quality of lifeto downtown El Paso regardless of
what it costs. Implode City hall and
scatter departments over all parts of
downtown; renovate dilapidated
buildings into new city offices and all
the while removing all these buildings
off the tax rolls. That council also
decided to introduce a quality of life
bond issue without telling people
someone had to pay for it. The bond
passed and so the city began its
renovation of downtown, spending
money left and right on fixing this, fixing
that, leasing this and leasing that.
Meanwhile buildings downtown who
owe taxes still own taxes and no one is
going after the owners since many of
them are owned by powerfully rich
people. Certificates of obligation,
known to us as money borrowed
without voter approval is in the
hundreds of thousands of dollars
putting the City of El Paso in debt
without voter approval. Yeah all these
things have caught up to us and each
business and each builder or developer
are now paying for the sins done by the
progressives. Irritatingly giddy aboutall the changes theyve brought to El
Paso they fail to take the blame for the
high dollar amounts we owe
collectively. Thats why builders and
contractors now have to pay higher
fees when taking out a permit. Itll be
the reason our members will have to
pass along the fee to customers.
Remember this: whenever the cost of a
home goes up by $1000 you push at
least 647 El Pasoans from qualifying
for a home according to NAHB. Let
that sink in. 647 families can no longer
qualify for a home. Nationally NAHB
says well lose some 200,000 people
from qualifying when homes go up by
$1000. So theres really a disconnect
in El Paso when the cost of the homes
go up for no apparent reason other
than the city is deep in debt and theyre
looking for a way out.
Conversations with new City
Manager Tommy Gonzalez are
addressing issues like this one.
Problem is that hes inherited the mess
and has to find a way to pay for what
the voters approved. Whats most
bothersome is that there are way toomany El Pasoans who still think the
city owes them something. As far as
this writer is concerned the city is
responsible to provide public safety,
public health and a safe environment.
Everything else is something the city
can do if it can afford it. That includes
parks, libraries, art and other wants.
The city would be wise to let people
know if they cant afford things. This
communities mind set is costly to the
few who actually pay taxes. If the city
cant afford to employ someone, then
they shouldnt. If the city cant afford a
park then they should say so. So many
things are wants, not necessities and it
would be good if the citizens would
understand that. It would be better if
politicians understood that as well. El
Paso is on the cusp of dire
consequences if it keeps going down
the path of higher taxes and fees.
News flash: builders will move out to
the county or New Mexico if the
customer decides to buy there. Keep
increasing fees and taxes and guess
what? Welcome to Santa Teresa my
friend. Just like the railroad did bymoving dont think the public wont if
theres a less costly alternative.
By the way, look at your water bill if
you own a business. Theres a new
franchise fee that is nothing more
than a way for you to help pay the debt.
You get nothing new for the fee, just the
privilege of paying on the debt. Thank
you city council. This is a really friendly
way to treat businesses. Lets see how
many decide this is the straw that
sends them packing.
Perspective
Ray Adauto,
ExecutiveVice PresidentEPAB
4 Builders Outlook 2014 issue 9
City increases fees while permits down;
non friendly franchise fee
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52014 issue 9 Builders Outlook
Builder Confidence
Hits Highest Level
Since November 05
Builder confidence in the market for
newly built, single-family homes rose for a
fourth consecutive month in September to
a level of 59 on the National Association of
Home Builders/Wells Fargo Housing
Market Index (HMI), released today. This
latest four-point gain brings the index to its
highest reading since November of 2005.
Since early summer, builders in many
markets across the nation have been
reporting that buyer interest and traffic
have picked up, which is a positive sign
that the housing market is moving in the
right direction, said NAHB Chairman
Kevin Kelly, a home builder and developer
from Wilmington, Del.
While a firming job market is helping to
unleash pent-up demand for new homes
and contributing to a gradual, upward
trend in builder confidence, we are still not
seeing much activity from first-time home
buyers, said NAHB Chief Economist
David Crowe. Other factors impeding the
pace of the housing recovery include
persistently tight credit conditions for
consumers and rising costs for materials,
lots and labor.
Derived from a monthly survey that
NAHB has been conducting for 30 years,the NAHB/Wells Fargo Housing Market
Index gauges builder perceptions of
current single-family home sales and sales
expectations for the next six months as
good, fair or poor. The survey also
asks builders to rate traffic of prospective
buyers as high to very high, average or
low to very low. Scores from each
component are then used to calculate a
seasonally adjusted index where any
number over 50 indicates that more
builders view conditions as good than
poor.
All three HMI components posted gains
in September. The indices gauging current
sales conditions and traffic of prospectivebuyers each rose five points to 63 and 47,
respectively. The index gauging
expectations for future sales increased two
points to 67.
Builder confidence also rose across
every region of the country in September.
Looking at the three-month moving
average for each region, the Midwest
registered a five-point gain to 59, the
South posted a four-point increase to 56,the Northeast recorded a three-point gain
to 41 and the West posted a two-point
increase to 58.
New-Home Sales Top
500,000 in August
Sales of newly built, single-family
homes increased 18 percent in August to a
seasonally adjusted annual rate of
504,000 units in August, the highest level
in six years, according to newly released
data by the U.S. Department of Housing
and Urban Development and the U.S.Census Bureau.
This jump in sales activity is in line with
our latest surveys, which indicate builders
are seeing increased traffic and more
serious buyers in the market for single-
family homes, said Kevin Kelly, chairman
of the National Association of Home
Builders (NAHB) and a home builder and
developer from Wilmington, Del.
This robust level of new-home sales
activity is a good sign that the housing
recovery is moving towards higher
ground, said NAHB Chief Economist
David Crowe. Historically low mortgagerates, attractive home prices and firming
job and economic growth should keep the
housing market moving forward in 2014.
Regionally, new home sales rose 50
percent in the West, 29.2 percent in the
Northeast and 7.8 percent in the South.
Sales were unchanged in the Midwest.
The inventory of new homes for sale
edged up to 203,000 in August, which is a
slim 4.8-month supply at the current sales
pace.
NAHB Chairman
Kevin Kelly on House
Passage of H.R. 5078
Kevin Kelly, chairman of the National
Association of Home Builders (NAHB) and
a home builder and developer from
Wilmington, Del., today issued the
following statement on House passage of
H.R. 5078, the Waters of the United States
Regulatory Overreach Protection Act:
NAHB commends the House for
passing bipartisan legislation championed
by Rep. Steve Southerland (R-Fla.) that
would prevent federal overreach by EPA
and the U.S. Army Corps of Engineers that
would harm individual landowners and
home buyers and impact economicgrowth.
H.R. 5078 prohibits the EPA and Corps
from finalizing a proposed rule that would
dramatically increase their authority over
waters of the U.S. to include almost any
body of water, such as ditches, mudflats,
prairie potholes and other water features.
Allowing these agencies to radically
increase their jurisdiction under the Clean
Water Act would impede the fledgling
housing recovery by greatly increasing the
number of construction sites required to
obtain permits, which would also delay and
raise the cost of home building projects.
Moreover, many American families would
be priced out of the housing market if thisrule is finalized in its current form.
Todays House vote sends a strong
message to the EPA to go back to the
drawing board to find a common-sense
middle ground plan that will maintain
environmental safeguards and protect
landowners from unnecessary regulation.
TEXAS BUILDER OF THE YEAR
A W A R D E D
We build so you can
GROW
Industry News
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6 Builders Outlook 2014 issue 9
The Economy
The National Debt: Growing but More SlowlyThe federal debt routinely captures
headlines and continually grows but isthere a crisis? Should congress fix thedebt immediately, or have we madeenough progress? Turns out, in the
short-run we are fine,but there is heavylifting that must yet bedone if we are to get toa sustainable path.
While the debt ishuge, its the ratio ofdebt to GDP thatmatters. Ignoring debtheld by governmentagencies (such as the
$5 trillion in IOUs held by the SocialSecuritv Administration), and focusing ondebt held by households, firms andforeigners and upon which the treasurypays interest, the total amount of money
the government has borrowed equals,$12.6 trillion, close to 75% of GDP.
To give some perspective, before theGreat Recession the debt was 35% ofGDP and it was projected to graduallyrise to 50% of GDP by 2018 as moreBaby Boomers became eligible for SocialSecurity and Medicare and as healthcarecost rose. Then came the GreatRecession which resulted in moreborrowing as tax receipts fell and morehad to be spent on countercyclical socialprograms including unemploymentbenefits and food stamps. As a result,debt rapidly rose to 50% of GDP and wasprojected to rise to 70% within a decade.
Then to fight the Great Recession,President Obama persuaded Congressto pass the American Recovery andReinvestment Act (aka The Stimulus)an $800 billion package of tax cuts and
spending increases. That along with theweak recovery pushed the debt to 70% ofGDP by 2011 and it was projected to risetoward 100% of GDP by 2021 as theeconomy returned to health and interestrates rose towards normal levels.
At that point things looked grim. Thencame some big changes that dramaticallyimproved things. Congress raised taxeson upper income families, cutdiscretionary spending, and the rate ofincrease in government spending onhealthcare, particularly on Medicare,unexpectedly slowed by 2.25%/year.That improved the projected trajectory ofthe debt. Now, it is forecast to climb from
75% of GDP today to 80% of GDP by2024 and its projected to climb higherafter that. While the debt is high byhistorical standards, at least its gettingworse more slowly, at least in the short-run.
The good news, outside of SocialSecurity and Medicare, projectedrevenues and spending are balanced.The key to balancing the budget isclosing the gap between promised futureMedicare and Social Security benefitsthat are actuarially higher than futuretaxes earmarked for those programs.This can be done by cutting benefits,raising taxes or ideally some of both.
Moreover, the earlier these changes aremade, the less painful they will be. Asecond way to fix the budget; pass pro-growth legislation. This would includereducing tariff and non-tariff barriers via
trade reform, reducing marginalcorporate and personal income tax ratesvia tax reform, and enabling illegalimmigrants to fully participate in theeconomy via immigration reform.Collectively these policies would raiseannual GDP growth by $80 billion, or0.5%, which when compounded overtime is a huge amount.
Our budget problems now lie largely inthe future. That, however, must notdistract us from grappling with them soonas time passes all too fast. Moreover,assuring markets that we are solving
future budget problems should helppromote the current economic recovery.
Elliot Eisenberg, Ph.D. is President of
GraphsandLaughs, LLC and can be
reached at Elliot@graphsandlaughs.net.His daily 70 word economics and policy
blog can be seen at www.econ70.com.
Elliot Eisenberg
ProPerty
taxreduction Over 25 years of experience in property tax
valuations and real estate appraisals
Property tax services throughout the USA
Specializing in commercial, industrial, vacant land
Residential and personal property valuations
PTP Valuation ServicesMark Salazar
1551 Montana, suite 204,
El Paso Texas 79902
915-542-3815 fax 915-542-0612
95% success rate
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el paso development news
Construction will soon begin on thetransformation of a vacant Downtown ElPaso building into a mixed-use structurewith retail and apartment elements. Thebuilding, located at 513 West SanAntonio Avenue, can be found in the his-toric Union Plaza district on the westernedge of Downtown.
The long, narrow building will containretail on the first and basement levels,with apartments on the second and thirdfloors. A sunken courtyard will be createdalong the back of the building with land-scaping and a water feature.
According to the architect on the proj-ect, Carlos Lievanos of Liev Arch of El
Paso, the structure dates to the early1900s. The renovation design maintainsthe historic character of the facade, withplans to restore the brickwork and addonly a Texas canopy along the retailspaces on the street level. The canopywill help to showcase the retail spacesalong San Antonio Avenue, he indicates,helping draw customers to the shops.Lievanos was also the architect on TheMix at Union Plaza project nearby.
The only other major change to thefront facade will be the addition of retailwindows and doors, and the upgradingof windows on the second and thirdfloors. According to Lievanos, the build-ing has historically been used this way,with retail on the ground floor and apart-
ments on the floors above.The idea behind creating a sunken
courtyard in the back is to provide
access to future retail spaces on thebasement level. Stairs on either end willtake pedestrians to and from the court-yard, with a lift included for those need-ing ambulatory assistance. Tenants ofthe basement level retail may be able tolease part of the courtyard for additionalseating, if needed.
Renderings for the courtyard spaceshow a variety of landscaping andpaving elements, seating areas, and awater feature at one end. And, in addi-tion to providing access to the basementlevel retail, the courtyard will connect toanother building owned by the samedeveloper. That building, known as the
Coffee Bean Building, will be developedas phase two of the project.
The upper floors will have a total of 13apartment units, according to Lievanos,ranging in size from 400 to 500 squarefeet. Rates for the small apartments,though not set, should be in the samerange as those found at The Mix acrossthe street.
Two rear catwalk balconies will beaccessible by residents and will hoverover the sunken courtyard below.Materials used will include exposed steelcolumns, beams, and railings that reflecta modern twist to the historic UnionPlaza train district.
Parking availability for tenants has notyet been finalized. A nearby lot may be
utilized for this purpose.Adding more housing options to the
area is key to making Downtown revital-
ization successful, according toLievanos, and this project will help to dothat.
We have all this entertainment, buthardly anybody lives nearby, saysLievanos. This was an opportunity totake a historic building and revitalize itfor that purpose. Residents will be ableto go down and get a bite to eat, grab
some coffee, and like having that nearbywithout having to leave the area.
Indeed, the new project is just steps
away from multiple restaurants, bars,and shops that have opened up in recentyears as part of Union Plazas renais-sance. Also nearby: the brand newTriple-A baseball stadium that openedthis year, just two and a half blocks tothe north.
The developer hopes to have the proj-ect completed in the first half of 2015,
perhaps by March or April. The contrac-tor on the project is Devo Design &Construction of El Paso.
Mied-Use Project Set For Union Pla!a
Development Includes Apartments & Retail with a Sunken Courtyard
A new mixed-use project for Union Plaza in El Paso is getting underway. This
rendering shows the building after completion. (Courtesy Liev Arch)
Ground was broken last week on anew multi-million dollar Sierra ProvidenceHealth Network (SPHN) hospital inNorthwest El Paso that will take shape atthe corner of Transmountain Road andResler Drive. Officials touted their part-nership with Texas Tech UniversityHealth Sciences Center in making thefacility a teaching hospital.
The hospital will eventually have 140beds for patients and will eventually hostapproximately 75 medical residents in amulti-year program.
Once completed, it is expected to gen-erate about 300 jobs. Look for comple-tion in 2016.
Vacant FranklinLaundromatTransformingInto "Cantina#
Blackbird Cantina
transforms a
Downtown
laundromat.
(facebook.com/Blac
kbirdcantina)
"Mandala Sunrise# Installation Added to UTEP CampusPublic Art Piece Highlights Relationship Between the University and Bhutan
The drive along Sun Bowl Drive on theUniversity of Texas at El Paso (UTEP)campus just got a lot more artistic thanksto a new public art installation along thestreet. Mandala Sunrise will greet driversat the new roundabout at the intersectionof Sun Bowl Drive and Glory Road.
The public art piece, designed by
Koryn Rolstad of Seattle(www.krstudios.com), consists of dozensof upright pipes towering over the round-about decorated with hundreds of colorfulresin wings. At night, the piece includesspecial nighttime lighting.
According to Rolstads Facebookpage, the piece celebrates the uniqueand remarkable blending of culturesembodied by University of Texas at ElPasos special relationship and partner-ship with the Kingdom of Bhutan. Shecalls the installation highly engineered,
yet lyrical, taking inspiration from theenvironment of the Southwest.
Mandalas are spiritual and religioussymbols often represented in different cul-tures, including Buddhism. The Kingdomof Bhutan is largely Buddhist, and thesculpture continues the tradition of tyingUTEP to the Asian country. The relation-
ship began in the 1910s when theschools newest buildings were designedusing influences from Bhutanese monas-teries.
The roundabout was constructed ear-lier this year as part of the Sun Bowl Drivewidening project. Another roundabout atUTEP, this one at the Schuster Avenueextension, will also get a piece of publicart in the future from New York-basedDonald Lipski. The Schuster extensionproject is scheduled for completion in latespring of 2015.
The Mandala Sunrise public art piece adds color to Sun Bowl Dr.
(www.facebook.com/KorynRolstadStudios)
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The location for a new Corner Bakeryrestaurant in East El Paso has beenselected, according to an item on the CityPlan Commissions (CPC) agenda. Thenew eatery will be built at 1311 AirwayBoulevard, at the intersection withEdgemere Boulevard.
The restaurant will be built at the site
of a former golf shop in front of a relative-ly new TownePlace Suites by Marriott.The GECU headquarters building islocated across Edgemere. It will be thefourth Corner Bakery location in El Paso,with two also located on the East Sideand another located on the West Side.
In the Northeast part of town, a CVScould be coming to a property near thecorner of Dyer Street and Diana Drive.An item also set for consideration by theCPC has a label titled CVS Subdivision,
though the site plan does not show theactual store.The application includes two commer-
cial lots totalling 1.97 acres, across DianaStreet from the future Northgate TransitOriented Development being advancedby the City of El Paso. Officials haveremained mum on that project since thebidding period closed last year.
CVS has been steadily expanding inthe city after opening its first store inDowntown El Paso in early 2013. Since
then, it has opened a store on ZaragozaRoad in the Lower Valley and has plansfor a store on Mesa Street near UTEPand another on the East Side at McRae
Boulevard and Wedgewood Drive.No word on the timeline for either proj-
ect. The CPC will consider both items atits July 31, 2014 meeting.
Builders Outlook Issue 9.2014
Content provided by
El Paso Development News
visit: elpasodevnews.com
C"!%&$'c&i"!U#da&e:Sa! Jaci!&" Pla+a
Re!"(a&i"! P$"jec&Work Begins on CentralShade Structure that will
Protect 'Lagartos'Sculpture
A detailed site development plan is offAA prime corner in Far East El Paso will behome to a 500,000 square foot shoppingcenter in the coming years, and detailsare emerging regarding its layout andpossible retail tenants. Montana
Commons will begin construction in 2016at Montana Avenue and Joe BattleBoulevard on land that was previouslyslated for the El Cruzero smart growthdevelopment.
The shopping center will be laid outin a traditional power center fashion, asindicated by the site plan, with large box
stores along the back of the developmentand smaller shop and restaurant buildingscloser to the street. Large parking lots willbe located in front of the stores.
The site plan shows that the largesttenant may be a 140,000+ square footSams Club location, which includes a fuelisland near Montana Avenue. Two otherpossible stores include an AcademySports & Outdoors location and aBurlington discount store. Like other ten-tative retail centers, the list of possibletenants is dynamic and may changebefore ground is even broken.
The 60-acre site was formerly part ofthe El Cruzero smart growth communitythat was canceled last year when the landwas sold to River Oaks Properties of ElPaso, the company that is now developingthe Montana Commons project.
El Cruzero envisioned a hotel block,mixed-use buildings, residential homes,
and a town center for the area now beingdeveloped as Montana Commons. WhenRiver Oaks purchased the property lastyear, the developer told El Paso Inc. itmight develop a portion as Town Centeron the Loop, though there were no officialplans on the drawing board.
Last week, in an El Paso Times story
revealing the Montana Commons shop-ping center, there was no mention ofTown Center on the Loop, though RiverOaks did indicate it plans to sell off theremainder of the former El Cruzeroacreage to other developers and home-
builders.Construction of Montana Commons will
begin in 2016.
De&ail% Ee$ge
"! Ea%& El Pa%"-%,M"!&a!a
C""!%-Shopping Center PlanReplaces Former ElCruzero Smart GrowthLayout
Official% B$eak G$"'!d "! Ne) N"$&h)e%& El Pa%" H"%#i&alGround was broken last week on a new
multi-million dollar Sierra ProvidenceHealth Network (SPHN) hospital inNorthwest El Paso that will take shape at
the corner of Transmountain Road andResler Drive. Officials touted their partner-ship with Texas Tech University Health
Sciences Center in making the facility ateaching hospital.
The hospital will eventually have 140beds for patients and will eventually host
approximately 75 medical residents in amulti-year program.
Once completed, it is expected to gen-
erate about 300 jobs. Look for completionin 2016.
At left: Rendering of the new Sierra-
Providence Hospital building in NorthwestEl Paso. (SPHN)
O!i* A#a$&e!&% Take Sha#e "! We%& SideA unique, new condominium apartment
building is going up in West El Paso. The
Onix Apartments will bring a 58,000square foot, four story structure to avacant property off of Onix Drive nearSunland Park Mall.
Renderings of what the finished projectwill look like show a single building thatsurrounds a central courtyard which willinclude a swimming pool and water fea-ture. Balconies will overlook the courtyardarea, located at different levels throughoutthe building.
According to the projects architect,
Carlos Lievanos of Liev Arch of El Paso(www.lievarch.com), the courtyard is
strategically located based on buildingorientation, site exposure and views tointegrate light and privacy in response tothe desert environment.
Initial plans included a Phase II thatwould construct three more condominiumbuildings, a clubhouse, and a small retailspace. However, only the current buildingunder construction will be realized, as ofthis point.
No word yet on rental rates or availabili-ty for the apartment units.
The Montana Commons site plan has been modified to show possibleretailer locations within the center. (Original site plan: LoopNet)
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Author Keith R. McMurdy recently
presented this information to the
professional retirement planners across
the country. I thought it would be a good
opportunity for our members to read the
article and give some consideration on
your own plan. If you dont currently have
some sort of retirement plan then by all
means check out the members only planthe association offers. I think the article
might just awaken some discussion on
the topic, but more importantly give you
concern on ensuring your plan or new
plan meets the important aspects of a
well-managed retirement plan for you or
your company.
-Joe Bernal
As we approach the end of the plan
year for most plans, now is a good timefor plan administrators and plansponsors to give their 401(k) plans aquick once over to see if everything isproperly in place. The IRS even providesa 401(k) plan checklist with some
suggested corrective mechanisms thatcan be taken to bring plans intocompliance.
A good starting place for a compliancetune up is to see if you can answer some
basic questions about your plan: Who are the trustees? Who is the plan administrator? Who are the outside service providers
and how often are they contacted? What are the plan's eligibility rules and
who is responsible for verifying them? How are participants notified of
eligibility? How is plan documentation distributed? Where are the plan records kept? Who is responsible for preparing and
filing the form 5500?
After you get past these, some basicquestions about plan administrationcome into play: Who keeps track of contributions and
limits? How does the plan define"compensation"? What is the vesting schedule? Are there required contributions from
the employer? Who is responsible for the
discrimination testing? Does the plan permit loans and how
are they tracked? Who is responsible for reporting to
participants? How are distributions made and who is
the contact person?
The reason I bring this topic up is that Iwas recently working with a client who
had one person who was solelyresponsible for benefitadministration. Unfortunately that personpassed away suddenly and no otherperson in the organization could answer
any questions about the 401(k)plan. Although it seems like the aboveinformation is simple to collect, the
company still spent hours and hours
recreating the plan history because theyneglected to keep a record of how theanswers to these questions had changedover the years.
Think of your 401(k) plan as a wellmaintained car. It needs a check up on a
regular basis to keep runningsmoothly. You have to keep records ofwhat was done and you have to knowwhere the important information is if youneed it. Just like your car, you hope your
401(k) plan never breaks down. But inanticipation of a future problem, it isworthwhile to stop and make a record ofthe responsibility for plan administrationand the current status of the plan. Thatway it will be easier to make repairs if
they ever become needed.
For more information contact
Joe Bernal
joe@employeebenefitsep.com
915-542-0900
(c) Copyright 2014 Employee BenefitNews. All rights Resrved.
10 Builders Outlook 2014 issue 9
Joe BernalEmployees
Benefits of
El Paso
Is it time for a
checkup on your
401(k) plan?
For All Yo!r Elecrical NeedsResidenial SpecialissTrac Homes " C!som Homes
915-629-8196
800-853-3996
Total Customer
Satisfaction
Expert Advice
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112014 issue 9 Builders Outlook
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Now more than ever
El Paso home buyers
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The biggest show of the season iscoming to the El Paso ConventionCenter on October 17-19. The 2014Fall Home and Garden Showtransforms the convention center into a
showcase extravaganza. From thefront door to the backyard of yourhome this show has something foreveryone. Youll see ways to transformyour garden, ways to fix your walls,painting pros and deck specialist.This Fall Home and Garden showoffers that and much more includingshow only specials from the dozensof exhibitors that will fill the floor.
But this year El Pasos show willfeature some really cool stars fromAnimal Planets TANKED show, WaydeKing and Brett Raymer. These twobusinessmen transform customershouses and businesses with exclusive
Acrylic fish tanks designed to keep realfish enthusiast with beautiful one of akind tanks. No job is too big, too far,or too outlandish as Wayde and Bretttravel the world to make customershappy with their own little ocean.Theyve done casinos (the business isheadquartered in Las Vegas), sportheros homes, churches and evensmall mom and pop shops,transforming them into works of art.Come and meet these two stars andowners of Acrylic Tank Manufacturing(ATM) at the Fall Home and GardenShow.
The show will also offer stunninglandscapes, pergolas and outdoorliving displays. Sunset Gardens, an ElPaso favorite, will sell selections offlowers, plants and trees you can take
home.Palo Verde Homes will construct ademonstration home filled with all thelatest in kitchen appliances, lighting,fixtures, flooring and even an outdoorfeature. This Palo Verde Home willwelcome visitors to talk about theirnext dream home. Come by and visitit at the Fall Home and Garden Show.
Prices for the show have beenannounced by Show TechnologyProductions, the show producer fromSan Antonio. Were really excitedabout the show in El Paso and wedlike to remind everyone that becausethe convention center is closed from
January through July next year this willbe the only show we produce for ayear, said Tommy Mantini, co-ownerof Show Technology. With thousandsof square feet of exhibits the show willshowcase the latest in products andservices for your home, apartment ormaybe even your business, hecontinued.
Its time for you to exhibit at thisshow and with the thousands ofvisitors anxious to see you and yourproducts or service. Where else canyou get thousands of people in oneweekend? asked Ray Adauto. The
answer is nowhere else, said FrankTorres, president of the EPAB.
Regular admission is only $7.50,while active military with ID and kidsunder 12 get in free. A special seniorprice of $5.50 and children 13-16 payonly $3.00. Were affordable for thewhole family to come and enjoy the
show and we hope to fill theconvention center over this specialweekend, said Frank Torres.
For information on getting a booth orexhibit space contact ShowTechnology Productions by loggingonto www.elpasohomeandgarden.com
Thousands expected at Convention CenterFall Home & Garden Show opens October 17
Fall H"e & Ga#de! H"e (ill #! Oc%"be# 17-19 a% %he El Pa$"
C"!'e!%i"! Ce!%e#. Headli!e#$ (ill be A!ial Pla!e%*$ TANKED $h"(,
Wa)de Ki!g a!d B#e%% Ra)e#
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12 Builders Outlook 2014 issue 9
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Membership News
Thanks to our SEPTEMBER SODA SPONSOR:
CAREFREE HOMES
132014 Issue 9 Builders Outlook
www.elpasobuilders.comwww.epbuilders.org
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14 Builders Outlook 2014 issue 9
Associates council hasmuch to do soon
Ive been telling you about theupcoming events for months andasking you to get involved. Im so glad
to let you know that you haveresponded pretty well. The association
is having its Fall Home and Gardenshow October 17-19 and those wackyguys from Animal Planets TANKEDshow will be here. Bret and Kevin are
the shows stars, well at least second
bananas to the real star the beautifulacrylic fish tanks these guys create. Itllbe fun and we have booth space for
you to showcase your merchandise orservice. Show Technologies is ourproducer and they always put a first
class show on. This one will be great.
We also announced the 2014Treasure Tour of Homes and Ray tells
me you are responding well to hisrequest for help with prizes and such.We need you to help with advertising
also. If you havent gotten someinformation on that make sure youcontact the builders office. We still
have a few openings for the Pro Am soif you havent gotten a team yet checkwith Ray as well. Year is almost over
and well start our 2015 campaigns
soon including a visit to Austin for RallyDay in March. Lots to do and little time
to get it all done. See you soon. SamSam Shallenberger
Western Wholesale Supply
Associates Council
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Contact your local approved agent today!
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