A Better Economy Ushers in a Wave of New Projects
TELLURIDE – As the national and local economies continue to improve, construction permits in Telluride are up substantially from 2013 with corresponding project valuations up almost three times what they were last year. The boom in new renovations, expansions and additions presents some challenges, according to town officials, but also the potential to revitalize the town without compromising Telluride’s integrity as a small mountain community and a National Historical Landmark District.
According to Helen Schumack, Building Permit Tech for the Town of Telluride, 86 new construction permits in Telluride were granted year-to-date as of Aug. 4, 2014, up from 67 during the same period in 2013. But the total valuation for projects has jumped from $13, 270, 266 to $30, 376, 490, indicating that the scale of construction is far more than last year.
In a recent interview, Telluride’s Building and Planning Director, Michelle Haynes says that while many of the new permits are for single-family residences, the uptick in the number of permits is not due predominantly to one type of building, but is a combination of remodels, rehabilitations, additions, and demolitions of non-contributing properties, in addition to new residences.
“Construction is very apparent,” she said, “because we’ve got one or two new projects on every street, including the construction on Clark’s Market.”
Haynes attributes the flood of new construction projects in part to the fact that many people who obtained development approval around 2009 – 2010 chose to wait out a three -year vesting period and put off their projects due to the recession. “We also received an increased number of requests for extensions during period,” she adds, “and now that the economy is better people are exercising their development approvals from years ago, which helps account for the numbers being so high.”
Town Manager Greg Clifton agrees that the end of the recession and an improvement of the overall economy has notably contributed to the increase in construction activity.
“What is really telling here is the increased valuation,” he said in a recent interview. “Perhaps it can be attributed to our emergence from the recession; people are spending big dollars on their projects this year. It is evident all over town. The construction activity is no longer defined by ancillary projects and occasional residential starts (as has been the case in recent years), but rather commercial projects, scrapes and large residential structures.”
Haynes believes that, for the most part, the new construction projects cropping up all over town have mostly been beneficial for the town and the community.
“A lot of structures are being rehabilitated, which is valuable to the town,” she explains. “And because a lot of the properties involved in new construction projects are rated by the Park Service as contributing historical value to the area, the historical elements and qualities need to be maintained.”
Haynes also notes that the new construction is bringing substantially more revenue to the town from building permit fees.
Clifton agrees that in the near term there are be benefits from increased building activity, including increased employment and fees, and in the long term there is the benefit of revitalization.
However, he is careful to stress that with the good comes some bad, and there are some negative impacts to the town.
“Some of the benefits are countered by the negative impact construction and development have upon the community and overall quality of life (noise, dust and traffic),” he explains, and “there is indeed some debate to be had regarding the benefit of very large residential structures and second homes. The community here strives to see its bedbase filled and its structures built in scale with this small box canyon town.”
Haynes also recognizes that there are adverse impacts on the town, including a loss of rental housing.
“Financing is available for deed restricted properties, so all of a sudden owners who used to have to rent their homes are now able to sell their properties,” she explained.
In addition, Haynes says that temporary encumbrances to town property, such as roads, represent adverse impacts. As the town is increasingly built out, there are fewer vacant lots to stage projects on, which causes construction to spill onto roads, causing closures. Another downside of new development can be a change of use, as occurred with the Aspen Street Inn, which was demolished to make way for single-family duplexes.
“The loss of short-term accommodations units is of concern to some,” Haynes says. “But with the level of development up, we can’t necessarily control that.”
Despite their separate acknowledgments of the difficulties that have come along with the construction boom, Haynes and Clifton do not see any as insurmountable, and both seem confident that the town has enough procedures and safeguards in place with respect to building to ensure the negative impacts can be mitigated.
“We have very good regulations that support the fabric of the community,” Haynes said, and “design reviews are occurring, but in a consistent way with the interests of the town. It says a lot that people who have been coming here to visit for forty-plus years say it still looks the same.”
Clifton points out that “over time this community has done some pretty remarkable things to mitigate the impacts of high-end residential development that typically defines resort communities.
“Although second-home ownership is an inescapable reality in resort towns, the Telluride community has done much to balance the demographics and maintain some diversity in its makeup,” he explained. “The affordable housing policies have enabled people of varied incomes and ethnicity to stay in Telluride and be a part of the community fabric. Telluride’s designation as a National Historic Landmark District a half-century ago has accomplished so much in terms of preservation of our historic structures.”
For Ron Kurucz, the owner of KDC Development Inc., which is building the Clark’s Market expansion, the construction boom has been largely positive.
“There is no question the real estate market is on fire,” Kurucz said in an interview, “so the construction market for renovations has really taken off as well.” Kurucz explained that the projects he has been seeing the most are renovations, and that while they are mostly in Telluride, there has been construction activity in Mountain Village as well and he anticipates that there will be more of an increase in Mountain Village and outlying areas as real estate prices in Telluride continue to rise
Kurucz doesn’t see much downside to the construction boom, saying simply, “Last year, and for the past three years, we had very little work, and this year we are on the Clark’s project. Everybody seems to be busy … with such a small workforce and so much more activity in the market it seems like everyone doing the work is swamped.”
Everyone doing the work has indeed been swamped.
According to American Institute of Architects Associate, Courtney Kizer, local architects have seen a surge in work since construction has been up.
Kizer worked for a local architecture firm from Jan. 2013 until relatively recently, and she cites the construction boom as one of the reasons she was able to go out on her own.
“Since construction has taken off, there hasn’t been a shortage of work for consultants or architecture firms,” she said. “There are so many more projects this year that the smaller ones are getting passed up by bigger firms, or they need help picking up the slack.”
Kizer notes that when she did work for a firm, the work volume was steady until roughly six months ago, when it rose so much her firm was considering turning work away.
One downside Kizer experiences is that it takes longer to get through the approvals process for design and construction. Another is rising costs for construction.
Haynes also noted the increased work load town employees are experiencing, and explained that there have been new hires, including a planner and a part-time building inspector, to enable the construction and building processes to run more efficiently from start to finish, and to ensure that new projects have the necessary approvals.
“It is good for the building community to know we’re paying attention to these issues,” she said.
“The biggest question on my mind,” Kizer sums up, “is whether this is going to last through the winter and be a prolonged boom, or if it is just a bubble.”