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Building values up in Park Rapids

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By Anna Erickson

Construction values have increased by a fair amount in Park Rapids, according to numbers provided by Ronald E. Dick, city building official

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In his 2013 year-end report, Dick said the economic situation at a national, state and local level will have varying effects on the amount of building construction for the upcoming year.

“On the national level, the activities of Congress involving the budget, the budget deficit and the debt ceiling will all have an effect. On the state level, budget issues may have an effect on public spending, a portion of which is typically dedicated to state owned buildings. At the local level, the trickle-down effect from the national and state political and economic decisions may have an effect on the decision making process of local citizens and businesses on whether to remodel, add on, build a new structure or do nothing,” he said.

Private financing through banks, savings and loans and credit unions generally appears available for mortgage lending, Dick said. Federal regulations appear to be easing somewhat for financial institutions.

Public funding from the state level appears to be more readily available although additional standards may need to be met for release of these funds.

“I have talked to building officials representing Barnesville, Dilworth, Moorhead, Detroit Lakes, Perham, Frazee and Pelican Rapids since Jan. 1. The permit valuations had remained static in two cities, increased slightly in three cities and significantly increased in Moorhead (70 percent) and Perham (400 percent),” according to the report.

In 2012, 172 permits were issued in Park Rapids with a total permit valuation of $4,637,763. In 2013, 134 permits were issued with a total permit valuation of $11,283,293, which is about 144 percent above the 2012 valuation.

Although there were 38 fewer permits issued in 2013, the average project valuation increased by 212 percent from $26,204 to $84,204. The Park Avenue Plaza shell, Pleasant Court Apartments and the Hubbard County Courthouse addition/remodel accounted for about $7,500,000 of the construction valuation.

Highlights during 2013

Major projects permitted in 2013 included the following:

Commercial projects:

n Park Avenue Plaza ­– A three story office shell and DaVita fit-up on first floor (2 permits).

n Thielen Motors – A remodeling and addition project.

n Hubbard County Courthouse – A four level addition totaling 7,000 square feet and major remodeling on most of the existing 28,000 square feet four level building (approximately $500,000 of interior fit-up will be completed under a separate permit to be issued in 2014).

Residential projects:

n Pleasant Court Apartments – Twenty-nine unit apartment building.

These five permits accounted for about 77 percent of all permit valuation for permits issued in 2013. The other 129 permits total about 23 percent of permit valuation with an average of $19,765. These projects involved five new homes, three new small commercial buildings, small residential and commercial remodeling and some garages, decks and other detached construction.

What will 2014 bring?

Projections always are estimates at best, Dick said. However, there are some occurrences which are certain or almost certain as follows:

The state of Minnesota did not adopt the 2013 state building code, which had been in the preparation mode since the 2007 state building code was adopted.

“When a new code is adopted, I assume that the 2012 International Building Code and the other miscellaneous mechanical, electrical codes will be incorporated as modified by the state code,” Dick said.

Further fit-up of the Park Avenue Plaza is being considered. The Davita Clinic for dialysis services is currently located on the first floor with the upper floors being available for medical or business offices or other health related occupancy.

Lamb Weston has indicated that they will remodel a portion of the existing building and complete an addition to provide additional office/administration space, Dick said. It is expected that construction will begin this spring and be completed this fall.

Hubbard County has authorized a major remodeling and addition to the courthouse building to provide offices for judges and county attorneys, increase security and increase accessibility. This project started late last fall and should be almost completed by the end of this year. The project value is expected to be about $4.6 million.

Heritage Living Center announced early in the summer of 2012 that they were considering a major remodeling/replacement project to update their facility. This project will be in the $10-$11 million range. The Department of Labor and Industry will be responsible for plan review and inspection services, Dick said.

“If the interest rate remains low, single family construction may become stronger this year although five homes were permitted in 2013,” he added.

Dick’s final observations are that construction activity in Park Rapids in 2014 will obviously be affected by conditions at the national and state level with respect to how the politicians address the financial situation.

“There are at least two projects with significant construction costs in the planning stage and it is my opinion that the total project costs in 2014 will exceed that of 2013,” he said.

“However, at least $10 million in construction valuation will be issued permits by the state of Minnesota, so this volume will not be included in the 2014 permit volume. I would expect the total number of permits to be similar to last year.”

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Anna Erickson
Anna Erickson is editor of the Park Rapids Enterprise.
(218) 732-3364
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