Commercial construction biggest in 7 years

The Kenai Peninsula Borough is experiencing its largest commercial building growth in seven years, officials said.

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According to second quarter borough figures, there were 32 permitted commercial alteration projects for a total assessed value of $2.4 million. Seventeen new commercial permits on the peninsula were valued at $8.37 million.

"That's the highest new commercial (value) that I have seen since 1995," said Jeanne Camp, the borough economic analyst who compiles records of business and economic development.

In 1995's second quarter, new commercial permits valued at $5.5 million, were $2.8 million less than the current quarter reported. Camp said the new 64-bed dormitory at Alaska Vocational Technical Center in Seward, which will begin construction next spring, pushed the quarterly total above the seven-year high mark with its $2.5 million projected price tag.

"Even without that, they are still up about $700,000 over last year," she said of Seward's rise in new commercial construction valuation from just $155,000 in 2001's second quarter to $3.2 million in this year's second quarter.

The construction industry generated $2.7 million in sales tax that goes directly to the Kenai Peninsula Borough School District.

Seward saw a decrease in commercial additions, however, from $438,239 between April and June of 2001 to $25,000 in this second quarter.

Soldotna reported $2.6 million in new commercial projects and $1.9 million in alterations, a jump from $717,150 in commercial add-ons last year at this time and no new construction permitted in the same period.

Homer had $1 million in projected new building costs as opposed to $1.4 in 2001, and reflected a drop in alteration assessments from $200,000 last year to $14,000 this year. Kenai recorded $1.4 million in new commercial building permits as compared to $3.7 million in assessed in 2001, and $404,300 in additions after showing $739,600 in the 2001 second quarter.

Kenai city building official Bob Springer said the significant numbers of projects taking place is not unusual for this time of year.

"A lot of the contractors start in the latter part of year so they can get their groundwork done first," he said. "We always see a late surge usually about the middle of this month to about the middle of next month."

Springer said government projects have historically created notable jumps in the quarterly and annual assessment figures. Construction on the new wing of the Challenger Learning Center, which broke ground in July and is scheduled for completion next March, has been valued at $2.2 million.

"That'll be the biggest number we've ever had for a commercial addition," Springer said.

He said government building in general can spike annual and quarterly values , referring to projects costing $6 million and $3 million respectively over the past two years.

"Any time you have a government building, it really kind of skews the numbers for valuation because those things are so expensive," he said. "In '97 when we had the PRISM fire training building, it went from $1 million to $7 million. Last year was the same, when we had the new fire station at the airport."

Terry Berger, superintendent for G&S Construction, the contractor working on the Challenger Center, said many of the government jobs end up waiting for bidding and financing processes that don't always fit nature's schedule. He said although construction work is easier when the days are longer and the weather is warmer, many non-government jobs still don't get started until late in the summer.

"The earlier you start, the better off you are," Berger said. "But with a lot of private sector jobs, people get fired up at the end of summer to get done before it gets cold."