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Scores are in:

2014: issue 4

So which states soared and which tanked?

Top improving states and metros Freddie Mac: Over half of metros continue to improve Brena Swanson @ HousingWire.com The housing market is recovering, and although it is at a slower pace than last month, more than half of the top 50 metro areas continue to record improving trends. According to Freddie Mac’s newest housing metric, the national February Multi-Indicator Market Index value stands at -3.11 points, down from -3.08 in January, indicating a weak housing market overall. However, on a year-over-year basis, the U.S. housing market has improved by 0.67 points, and the 3-month trend shows an improving housing market. This is compared to the nation’s alltime MiMi low of -4.49 in November 2010 when the housing market was at its weakest.

MiMi merges four economic indicators - purchase applications, payment-toincome, current on mortgage and employment -- with data from multiple sources, including Freddie’s daily business with more than 2,000 mortgage lenders across the country. “Despite a slowdown over the winter months, the housing market continues to show improvement in most states, although at a somewhat slower pace," Freddie Mac Chief Economist Frank Nothaft said." And while not all the MiMi indicators are trending in a better direction–in particular, home-purchase applications have weakened in many areas-- gains in local employment and loan performance have really helped many markets across the country, especially those that were hardest hit."

5 most improving states month-overmonth: South Carolina (+0.14) Louisiana (+0.7) Ohio (+0.07) Tennessee (+0.05) Nevada (+0.07) 5 most improving states year-overyear remain unchanged: Florida (+1.87) Nevada (+1.65) California (+1.08) South Carolina (+0.96) Texas (+0.93).

On the metro level, the five most improving metro areas month-overmonth: Charlotte, N.C. (+0.10) Columbus, Ohio (+0.09) Nashville, Tenn. (+0.07) New Orleans, La. (+0.07) Las Vegas, Nev. (+0.05) (tied) Memphis, Tenn. (+0.05) Miami, Fla. (+0.05). From one year ago, the most improving metros remained unchanged: Miami (+2.33) Orlando, Fla. (+1.91) Las Vegas (+1.64) Riverside, Calif. (+1.60) Tampa, Fla. (+1.49). For first place, the top ranking state and metro are: State: North Dakota at -0.48 Metro: San Antonio at -1.27

GSEs lower expectations on housing market Fannie, Freddie revise sales, construction forecasts downward The government-sponsored enterprises are lowering their housing expectations for 2014, citing shrinking inventory and tightened credit standards among other reasons. Freddie Mac lowered its forecast for home sales to 5.5 million, down about 100,000 sales from the prediction at the start of 2014. “Tight inventory may pose a significant challenge for home buyers in many markets across the country, which may result in higher home prices and sales being lower than expected,” said Freddie Mac chief economist Frank Nothaft. Doug Duncan, chief economist for Fannie Mae, says he now believes that new-home construction will hit 1.5 million housing units this year, which is 50,000 fewer than the original forecast from the start of 2014. “We have downgraded our housing forecast slightly due to a lackluster sales picture,” Duncan said. Digital Risk's CAO Tom Showalter says that the market is currently experiencing

Local inspection app now available The Android version of the Build El Paso Inspection app is now available in the play store. The City Development Department unveiled its first iPhone compatible mobile app for inspection requests – the Build El Paso Inspection app. “Between our efforts and the City [of El Paso’s] IT team and our partners at CityGovApp, we are extremely pleased to offer the public an easier and faster way to request much needed inspections on their building projects,” states Mathew McElroy, director of City Development. For the past few months, City Development along with the Department of Information Technology Services has been working with CityGovApp, Inc to develop a mobile application for inspection requests. The Build El Paso Inspection app will

friction as a result of economic factors like rising home prices, stagnant income levels, and investor participation in the marketplace, and that this friction will keep the housing market from revving up in 2014.

"You know what happens in an engine when you get too much friction and the car just doesn't rev as fast? It’s one of those friction-based arguments rather than a 'catastrophic change' based argument. What I’m saying is that there is so much friction here; the friction from the

regulators, the friction from the lenders, friction from the borrowers (median incomes aren't going up, coming up with down payments are tough, they aren't sure the house is priced correctly) every one of those reasonable propositions is a source of friction," Showalter said. This friction in the market is shrinking retail appetite, as investor demand slows. "What I’m seeing is that the investor is exiting and now you have to start seeing the influx of the retail buyer. The investors are gradually leaving the market as prices rise, and the retail buyer is waiting in the wings. There are some markets, like Miami and San Francisco that are driven by outside factors, but markets like St. Louis and Omaha and parts of California and Nevada that aren't driven by structural factors that are unique and powerful, they are going to suffer the friction as the retail buyer struggles to get back into the marketplace," Showalter said. Showalter notes that "as they get into this excessive friction situation, where in a normal environment for every 10 people

allow users to view their issued permit and request inspections on these permits. Build El Paso Inspection will dramatically increase the turnaround process from assigned permits to inspections. “Right now most inspections are scheduled manually which is time consuming for contractors and staff,” describes Victor MorrisonVega, deputy director of Building & Development Permitting (formally Building Permits & Inspections) – a division of City Development. “This mobile app will eliminate the middle-man and immediately take the request for an inspection and upload it directly into our system.” Build El Paso Inspection is available for download for all iPhone users.

About a month ago, the City Development Department unveiled its first mobile phone app, compatible only with iOS, for inspection requests – the Build El Paso Inspection app. Now Build El Paso Inspection app is available for all smartphones via Apple and Google Play store. “Between our efforts and the City [of El Paso’s] IT team and our partners at CityGovApp, we are extremely pleased to offer the public an easier and faster way to request much needed inspections on their building projects,” states Mathew McElroy, director of City Development. The Build El Paso Inspection app was developed with commercial and residential

that are thinking about doing a deal, where the normal turn rate is 6 in 10, the turn rate becomes 3 or 4 in 10. This is what’s happening in the country, we are making the average home seller nervous, the average home buyer nervous." While this stress on the market will likely slow growth in the coming quarters ahead, Showalter notes that there will be no major collapse. "I don't see things dropping off a cliff like it did when the meltdown occurred because this is a different kind of problem. It will be so hard to get it to climb at a high rate because there is just too much drag," he said. There is some upside, however. "One thing I do see happening as the prices start to drop and as median incomes don't necessarily drop is that you are going to see the affordability index start to go up. So more people will be able to buy a home, the question is how many fish will bite on that bait," Showalter said.

developers in mind; however, anyone can take advantage of its convenience. The app will allow users to view their issued permit and request inspections on these permits. Build El Paso Inspection will dramatically increase the turnaround process from assigned permits to inspections. “These mobile apps will eliminate the middle-man and immediately take the request for an inspection and upload it directly into our system,” shares Victor Morrison-Vega, deputy director of Building & Development Permitting under City Development. For more information about El Paso’s City Development Department, visit elpasotexas.gov/citydevelopment. Like them on Facebook at facebook.com/ElPasoCityDevelopment or follow them on Twitter @EPCityDev. For more information about El Paso’s City Development Department, visit elpasotexas.gov/city-development


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Builders Outlook

Stay safe. Call before you dig. If you have digging or excavation work to do, remember to call 811 at least 48 hours in advance. Natural gas and other utility lines may be buried a few feet deep. By calling 811, utility crews can mark locations of underground lines at no charge. The markings are done in paint and will eventually wash away. Marking line locations can help prevent you from accidentally damaging a natural gas line or another utility line. Always call before you dig. It can help keep you and your construction crew safe, and failing to do so can result in a $1,000 fine.* * Texas Utilities Code 251.201 Civil Penalties

2014 issue 4


2014 issue 4

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Builders Outlook

President’s Message | Frank Torres

El Paso Disposal

President, El Paso Association of Builders

Thank you for a great golf outing! The association held its annual spring golf tournament, something Ray and Sam call a “pachanga”, a party and not so much real tournament. I think this year we had a real tournament because some of our players turned in super scores. That’s great because we were worried that the weather wouldn’t cooperate, but as all of you who went the weather was great. Horizon Golf Course is in pretty good shape considering it only reopened about a year ago. Jeff Gates is the general manager and head pro at the course and he and his guys have done a really good job getting the course in shape. My regular golf partners have played Horizon for some months now and we’ve seen some pretty good improvement. Our tournament couldn’t happen without the help of our friends and fellow members, who take out sponsorships and advertising on the course. This year our lead sponsor was StrucSure Home Warranty. Scott Whisenant has really brought us a great relationship and I want to thank him for doing so. He not only brought his company to us but he’s also going to be involved down the road in at least two other events this year. Thanks StrucSure and thanks Scott. To our entire group of tee box advertisers, thanks. Joe Bernal thank you for your hole in one sponsorship. I didn’t win it and neither did anyone else. Someday we’ll give the $10,000 away so keep coming. Our general meeting was great with the general manager of the new El Paso Chihuahuas Brad Taylor as the speaker. Brad was so optimistic about El Paso and so optimistic about the team that he really brought that excitement to the group. If the Chihuahuas can capture that excitement from the boss then it will be a good season for the team. I hope that all of you who attended agree that Brad is a welcome addition to our city. I hope we have him back at some time this year. Finally we have had a generous offer from our builder member Don Rassette for a potential parade site. Things being as they are in our business we hope that the association can hold a Parade this year, but we need to know if it will work for all of those interested. If you were involved in the meeting on this please let Ray know if you are in or out, so that we can get going either way. Thank you Don and Cheryl for your generous offer.

772-7495

Showroom: 2131 Missouri 915 • 533 • 6045

fax • 533• 6096

Thomas R. Brown, Owner


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Builders Outlook

2014 issue 4

Perspective

Ray Adauto, Executive Vice President EPAB

The International Conference of Shopping Centers has been busy in other parts of the country over the last few decades. El Paso meanwhile wasn’t on the radar. That all changed as the local association took the bull by the horns and brought a conference to El Paso that has been the talk ever since. Bob Ayoub from MIMCO and Tina Wolfe from HUNT Companies were the two persons who headed up a great team to bring attention to the El Paso market. Rather than continue with a “pobrecito” (poor me) attitude these two told industry leaders that El Paso is on a renaissance and that NOW is the time to make the move here. The event was supported heavily by local real estate developers anxious to showcase their properties and ideas. Deal making was at the center of the talks, while a few big announcements were made at the event. An informal meet and greet was held at the Fountains at Farah and the reception was well attended. Host Paul Foster, developer of the center welcomed guests. The following day the

Commercial group stages El Paso conference; El Paso shines with opportunities conference began at the Double Tree Hotel. The top floor conference center provided the best view of the new Southwest University Park from high on top. The home of the new AAA El Paso Chihuahuas sparkled with the newly planted grass and was a show stopper. In addition the work being done at San Jacinto Plaza (Basic IDQ) and other downtown work was clearly visible. Inside the meetings were broken up into several topics beginning with an overview of public projects. Speakers included Fort Bliss, the City of El Paso and TXDOT representatives. TXDOT talked about the multibillion dollar work being done on I-10 and Loop 375 along with other work connecting the new rail yard at Santa Teresa. The second group discussion was on an overview of Regional Projects like the Union Pacific yard; the Medical Center of the Americas (Emma Schwartz); and what’s new in the Mesilla Valley region of Las Cruces to the state line. The keynote speech was given by the Director of Employer Initiatives from the Texas Governor’s

office, Mr. Arron Demerson. He spoke of the commitment from the his office to El Paso adding that for too long the state dismissed El Paso for other communities along I-35. The third group round table involved El Paso Development Update from a panel including W. Claiborne Gallagher, Rick Amstater, Bill Caparis, Doug Schwartz, Justin Chapman and me. We discussed the local real estate/development market and in my set I was asked to provide information on residential growth, problems, and challenges. The final discussion group brought in outside interests including representatives from Jimmy Johns Gourmet Sandwiches; Le Duff America (Le Madeline restaurants); AT&T Mobility; TopGolf entertainment; and the senior director for real estate for Walmart. I told the April general meeting about some of the big things coming to El Paso in the very near future that I was able to discern from the conference. There is significant interest in El Paso as more barriers are taken down. In

particular restaurants are finding El Paso as underserved and that’s why they’re interested in coming. Chipotle found out what can happen as did Sprouts when it expanded. The new Le Madeline set all-time records for a grand opening week. I pointed out that retailers including H&M could lead us to get an HEB grocery store or even a Trader Jacks or Whole Foods. El Paso has an underground economy that is visible on Friday and Saturdays as restaurants and bars fill up. The Medical Center of the Americas is the economic driver for the next 50 years, in my humble opinion. Our reliance on Fort Bliss will remain strong but El Paso will diversify and provide untold opportunities to those willing to challenge the main stream. Proof lies in the work done by Bob Ayoub and Tina Wolfe. They are visionaries who love El Paso and are willing to share her with outsiders. I am proud to have represented the residential market at the conference and hope that I will have a chance to do so again.


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Industry News Housing Starts Rise 2.8 Percent in March

Builder Confidence Holds Steady in April

credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor.”

Led by a 6 percent rise in single-family starts, nationwide housing production rose 2.8 percent above an upwardly revised February rate of 920,000 to a seasonally adjusted annual rate of 946,000 units in March, according to newly released figures from HUD and the U.S. Census Bureau. “We see improving signs of new-home construction as we move into the spring buying season,” said Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, Del. “The strongest recovery is in the Northeast and Midwest, where builders were hampered by severe winter weather earlier in the year.” “Today’s report is in line with our forecast of a gradual strengthening in the housing sector in 2014,” said NAHB Chief Economist David Crowe. “However, several uncertainties including tight credit conditions for home buyers and erratic job growth are making builders cautious about

Builder confidence in the market for newly built, single-family homes rose one point to 47 in April from a downwardly revised March reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. “Builder confidence has been in a holding pattern the past three months,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.” “Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable,” said NAHB Chief Economist David Crowe. “While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight

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. The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32. The component measuring expectations for future sales rose four points to 57. The HMI three-month moving average was down in all four regions. The West fell nine points to 51 and the Midwest posted a four-point decline to 49 while the Northeast and South each dropped two points to 33 and 47, respectively. Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.

getting ahead of demand.” Single-family housing starts rose 6 percent to a seasonally adjusted annual rate of 635,000 units in March, while multifamily starts fell 6.1 percent to 292,000 units. Regionally in March, combined single- and multifamily housing production rose strongly in the Northeast and Midwest with gains of 30.7 percent and 65.5 percent, respectively, but fell 9.1 percent and 4.5 percent in the South and West, respectively. Overall permit issuance fell 2.4 percent to 990,000 units in March. The Northeast and Midwest posted gains of 33.3 percent and 26 percent, respectively, while the West was unchanged and the South posted a 17.1 percent decline.

A W A R D E D

TEXAS BUILD E R O F THE Y E AR

NAHB Supports Senate Bill that Addresses ‘Patent Trolls’ The National Association of Home

2013

We build so you can GROW

Builders (NAHB) is calling on the Senate to advance the Patent Transparency and Improvements Act of 2013 (S. 1720), legislation that would significantly improve the U.S. patent process and stop patent abuse. Small business owners in home building and scores of other industries across the nation are increasingly being attacked by patent trolls who are indiscriminately issuing threatening letters to companies alleging patent infringement. “This is little more than a coercion tactic intended to force companies to enter into a licensing agreement or risk litigation,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “S. 1720 would improve the patent process and protect businesses and individuals who are the target of dubious claims.” Fighting to stop patent trolls and fix patent laws, NAHB is a member of the Main Street Patent Coalition, a national, nonpartisan coalition of organizations that are dedicated to stopping patent abuse from trolls by encouraging Congress to pass comprehensive, common sense patent reform legislation. Senate bill S. 1720 would help put an end to bad-faith demand letters that are hurting jobs, stifling innovation and threatening small business owners with protracted, expensive patent infringement lawsuits. The legislation makes clear that sending fraudulent or materially misleading demand letters in connection with the assertion of a patent is an unfair and deceptive trade practice that may be targeted by the Federal Trade Commission. The Senate Judiciary Committee is expected to consider the bill in the near future.


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Builders Outlook

2014 issue 4

Alternate materials growing in counter top popularity By Ben Keough The graybeard of high-end design is increasingly déclassé. Here's what's coming to force it into retirement. For years, granite has been the goto material for high-end countertops. Despite its expense, weight, and ubiquity, it still remains the countertop of choice. But at EuroCucina 2014, there was a huge variety of granite alternatives on display. From stainless steel to tempered glass, from ceramic to wood... we’ve seen the future of your kitchen, and it’s not granite.

courtesy of Arpa Industriale. Referred to as a “nanotech matte material,” the Fenix NTM countertop is antireflective, anti-fingerprint, self-healing, and soft to the touch without being... well, soft. It felt great under our hands, and looked great in Arrital’s modern kitchens.

Ceramics Leicht also made use of ceramic counters, which one representative described as the “closest thing you can get to indestructible.” The material is scratch-resistant, easy to clean, and cool but not cold to the touch. And the dark gray finish we saw paired beautifully with the wooden surround.

Wood We saw solid wood and woodfinished countertops everywhere at the show, often contrasting with or overlaid on a stone or synthetic material. Everything from mahogany and ebony to light pine and bamboo was used, and often paired with matching cabinetry to create a minimalist yet warm look. In some cases, wood was even paired with granite, though that was less common. At least one of Snaidero's EuroCucina kitchens featured an overlapping combo of wood and stone. Arrital also mixed wood with synthetic finishes to interesting effect. Leicht also got in on the wood-andstone game... and even mixed in a little granite. Cheeky! Rossana eschewed granite and paired its dark wood countertop with luxurious marble. Something went wrong when fetching the photos. Please try again.

Nanotech Materials The most unusual alternative countertop we saw at EuroCucina came from Italian designer Arrital,

Stainless Steel Look, stainless is nearly as played out as granite. In fact, we just ran a whole story about why

Tempered Glass German design house Leicht showed off a lovely tempered glass countertop in a number of its model kitchens. The thick, translucent material is tough and has a pleasant tactility, while still remaining easy to clean. According to company reps, it’s also available in a huge variety of colors.

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it’s probably a terrible idea to overdose on gleaming silver in your kitchen. But plenty of designers at EuroCucina made a virtue out of this particular vice and made stainless countertops look fresh and new again. In addition to its nanotech finish, Arrital showed off plenty of stainless Italian designer Rastelli showed off a huge stainless countertop at EuroCucina. Tile When it comes to countertop finishes, tile is pretty old school. It’s a style that’s generally beholden to a certain era or area—both of the places

I lived in Santa Fe had them, for instance. At least one designer at EuroCucina is aiming to bring them back. Minacciolo’s Minà multi-function island employs a beautiful mosaic tile top with subtle hues of red and orange. Ben is an experienced industry journalist, now managing news and features for Reviewed.com. Most recently hailing from the vast wilds of the American southwest, he is an avid photographer who is deeply disturbed by the lack of wide open landscapes in Boston.


2014 ISSUE 4

Builders

Builders Outlook

utlook on the scene |

Spring Golf Tourney The 2014 Spring Golf Tournament, sponsored by StrucSure Home Warranty, was played at Horizon Golf and Conference Center on April 16. Despite dire predictions of very gusty winds and blowing dust the day turned out to be picture perfect in more ways than just the skies. Twenty five teams showed up for the golf and fun that this tournament is known for. Guests were signed in by Margaret and her cast of volunteers from the Professional Women’s Council. The women sold mulligans to help support their scholarship program and a good amount was collected for that effort. Each team member was handed a goodie bag that was described by our sponsor Scott Whisenant as “better than the bags handed out by other associations”. Numerous items in the bag ranged from towels to lip balm, cookies, crackers or candy bars, fig newton’s, and more. The golfer was then given a sleeve of Callaway HEX golf balls courtesy of the EPAB. The golf course hadn’t seen an association event in over 10 years. It brought back some very good memories for some of our players. Rudy Guel told the Outlook that the day turned out well. “I am so impressed with the way this fun tournament turns out, and it’s because of the hard work you guys put into it,” Guel said. “My team and I had a terrific time. The course was good, the beer was very cold, the meal was great and the service terrific,” he continued. Sam Shallenberger, the tournament chair was equally impressed. “The service we got from Moonlight Bar and Grill, and the Horizon Golf guys was awesome,” Sam said. “I can tell you that back in January when we started to look at the course for the tournament we weren’t all that sure, but the results speak for themselves. It was great!” Our thanks go to Jeff Gates, the General Manager and pro for Horizon Golf and Conference Center. He and his staff made everyone feel comfortable and welcomed. Jeff told the Outlook that he was grateful for the associations business. “I really want to thank Ray and Sam for choosing us and allowing us to host the tournament,” Gates said. “While we’re still some months away from being at our best this year the course has really come a long way,” he said. The course fairways were in decent shape and the greens a little rougher than a course that has been in constant supervision. Horizon was abandoned for a long time and up to a year ago the course greens didn’t exist. “We have put a great deal of work into this course, getting the pro shop stocked, finding ways to return the club to its original greatness,” Gates said. “It will be a real gem soon, and we invite your members and guests to come out and try us,” he told us. The team of Chris Montiel, Henry Tinajero, Chris Elguea and Lane Harris took first place with a sizzling 54. They won Taylor Made RBZ drivers for their efforts. The second place went to the team from Texas Gas headed up by Mica Short and included the Mayor of Horizon City Walter Miller. Third place went to WestStar Bank team headed up by Armando Avila. Andy Arroyos won the closest to the target on the fairway, sponsored by Stewart Title, while long drives were won by Shane Duncan, sponsored by Sierra Title and Vincent Quintana, sponsored by Southwest Land Development. The drink carts were staffed and sponsored by HUNT and Pioneer Bank; the dinner sponsor was HUNT Communities. A $10,000 hole in one contest was sponsored by Employee Benefits of El Paso while the beverage Tinas (washtubs) were compliments of AT&T Mobility.

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el paso development news Retail Buzz: Grimaldi’s Pizzeria to Open at ‘Fountains’ A new eatery has been added to the lineup of the Fountains at Farah shopping center in East El Paso. Grimaldi’s Pizzeria, an Arizona-based pizza and calzone chain, will be located in the Promenade lifestyle section of the center. It will be the 11th Texas location for the restaurant chain, which has a total of 32 locations throughout the United States. “Our team searches the country for the best restaurant sites, and we’re excited about opening our eleventh location in Texas,” said Joey Ciolli, president and chief executive officer of Grimaldi's Pizzeria, in a press release. “We see a lot of opportunity in El Paso and we are excited to be a part of The Fountains at Farah property. Guests will feel comfortable, enjoying our coal-fired brick oven pizza, all at a great price.” Grimaldi’s credits its coal-fired ovens at its restaurants for its success. The ovens are designed and built by hand and weigh in at 25 tons each, using 100

pounds of coal per day. This creates heat of up to 1,200-degrees within the oven, allowing for a “crispy and smoky thin crust.” In recent years, Grimaldi’s has been named “best pizzeria” by the Zagat Survey. In addition, a chemist will be hired to ensure the water used in making the dough at the Fountains at Farah location will “re-create” the water used at the chain’s Brooklyn location, to ensure the dough tastes exactly the same, according to the press release. Aside from pizzas and calzones, the restaurant will offer fresh salads and desserts. The Fountains at Farah opened last fall, and the Promenade shops area is slowly filling in. Two other restaurants, Kona Grill and La Madeleine Country French Café, are currently under construction and should open soon. No opening date has been announced for Grimaldi’s Pizzeria (www.grimaldispizzeria. com).

The interior of a Grimaldi’s Pizzeria, from the restaurant chain’s website. A new location will open at the Fountains at Farah this year. (www.grimaldispizzeria.com)

Improvements Continue at El Paso Public Parks Fiesta-Balboa, Radford, and Armijo Parks See Progress The City of El Paso has provided updates on three public park projects currently underway around town. The parks are just three in a myriad that will see improvement projects in the coming years, many of which are funded by the 2012 Quality of Life bond initiative approved by voters. Fiesta-Balboa Park on the West Side is the closest to completion. This project has transformed vacant properties near Mesa Street into a pocket park that includes amenities such as a basketball court, play equipment, benches, and landscaping. Homes that once occupied the properties were severely damaged in the infamous storm that caused severe flooding in El Paso in 2006. For years, only concrete slabs showed a hint of the homes that once sat there. Black Stallion LB Construction of El Paso was awarded the park project last year. Fiesta-Balboa Park should open in the coming weeks. Further east, in Central El Paso, the brand new Radford Park is also showing concrete signs of progress as sidewalks have been added along Radford Street and park paths are being set. The nearly three-acre park is located just south of

the Pershing Gate to Fort Bliss. New amenities for the planned park include two playground areas, one for toddlers and one for school-age children, bike racks, sidewalks, and lighting. According to the site plan, paths will meander through the park, which is located on a somewhat-sloped property. Two sports courts will be located in the southwest quadrant of the park, including one that can be used for hard-court soccer or basketball. Medlock Commercial Contractors of El Paso was awarded the contract by the City in December, with completion tentatively set for August 2014. And a project to improve Armijo Park in South El Paso should start next month, according to a public meeting held last week. About half of the park should be affected. Construction crews will replace a playground area with new equipment, make improvements to sidewalks and paths, install new trees, and make lighting improvements. The project was awarded to Kaizen Construction Service of El Paso last month. Work on the Armijo Park project should be completed by August 2014.

Sun Metro Brings 22 New Buses to Its Fleet

Before the upcoming Brio RTS begins to steal Sun Metro headlines, El Paso’s mass transit system has just added 22 buses to its regular fleet. The new buses will replace other units currently being retired. The new units are 2014 New Flyer Xcelsior models, 40-foot buses which will be powered by compressed natural gas. The Xcelsiors offer better fuel economy, low floors, LED interior lighting, and a more aerodynamic design. A new feature may help passengers using mobility devices, such as wheelchairs, board and exit the bus units more

Recently installed playground and athletic equipment at the new Fiesta-Balboa park. (City of El Paso)

quickly. The “rear-facing wheelchairsecurement” option will not compromise passenger safety, according to a Sun Metro press release. The current “forward facing” option will still be available. The units that will be retired, which date from 1991, have driven over one million miles. Most units will be stripped of usable material that can be sold for scrap, though some units will be retained for training purposes. The new buses are paid in part by Federal Transit Administration grants. They will be rolled out over the next few months.


Builders Outlook Issue 4.2014

Content provided by El Paso Development News visit: elpasodevnews.com

2nd Charrette to be Held for Upper Valley Property Findings from First Community Design Meeting Released‘ ALong before ground is broken on the newest neighborhood in El Paso’s Upper Valley, developers and City officials held their second public meeting discussing and drawing ideas for the 120 acre development on Wednesday, April 2, 2014. UV120, a local land development partnership, is holding the meetings in coordination with the City of El Paso’s Planning Division to get the public’s feedback on how the future neighborhood should be designed, what amenities it should include, and how the land plan should be laid out. During the first meeting, which was held January 30, 2014, officials showed participants different general images in the categories of housing, thoroughfares, commercial, parks & open space, civic buildings, amenities, and canal-scapes. Attendees used stickers to indicate which version of each category they preferred. Generally, participants chose images that resemble current themes throughout the Upper Valley, including elements such as trees, open space, and agricul-

ture, especially in the categories of parks & open space, amenities, and thoroughfares. In the category of amenities, the top image was one depicting an outdoor café along a waterway dotted by waterfowl. The second-ranked choice was an image showing an outdoor open space shaded by many trees and suggesting an agricultural market setting. For housing uses, participants showed a desire to include various housing types, tending toward lower density homes. Some attendees did show a preference for an uptick in density along a main thor-

oughfare. Participants really liked the idea of a main street lined with shops and eateries for the property. The top four choices in the commercial category all showed this similar theme. The options showing lots of pavement, a parking lot and a wide surface street, received the fewest votes. Officials also gave meeting attendees a chance to choose which was their favorite among the layouts of existing neighborhood plans in other cities. A conceptual master plan for a neighborhood in Humboldt County, California, was the top choice, with a plan from Gilbert, Arizona, just behind in close second. Both plans showed a mix of uses with a focus on open space. City and UV120 officials will use the

next meeting to get clarification on residential and commercial densities and styles, and the preferred design of thoroughfares throughout the property. No timeline has been provided for the eventual development of the 120 acre property, which is currently used for agriculture. It is located on the southeast corner of Artcraft Image1: These were the most and least liked images for commercial spaces during the charrette in January. (City of El Paso) Image 2: The 120-acre property sits among neighborhoods transitioning from agricultural uses to residential uses.

Two New Eateries Open at ‘Fountains’ Craze, La Madeleine Latest to Open Doors Two new eateries are the latest to open in the Promenade lifestyle section of the Fountains at Farah shopping center in East El Paso. La Madeleine Country French Café and Craze Yogurt Lounge have opened their doors at the center. La Madeleine, a franchise venture of local businesspersons Paul Foster and Alejandra de la Vega Foster, specializes in fresh-baked baguettes, bold espressos, and delicate pastries. The restaurant offers breakfast, lunch, and dinner and is open daily from 6:30 a.m. to 10:00 p.m. The eatery opened its 4,500 square foot location on April 3, 2014. It includes

Tilted Kilt to Open in West El Paso’ Chain Brings Sports Pub Experience with Scottish Twist

A national sports pub chain will open a new location in West El Paso this summer. The Tilted Kilt, a Celtic-themed restaurant and bar whose servers wear Scottish kilts, will open its sixth Texas location in the Sun City. "Tilted Kilt is ecstatic to be opening this new location in El Paso and continue to expand across the market," states Teo Regalado, the Tilted Kilt franchise owner in El Paso, in a press release. "The Tilted Kilt concept continues to flourish and grow as people seek more convenient, casual dining options with a unique ambiance, innovative menu options and unbeatable hospitality." According to the press release, the sports pub’s theme will combine “Celtic décor,

features such as wood floors, hearth fireplaces, rustic beams, custom-built seating areas, and a wine room. The wine room includes a 100-year-old reclaimed fireplace. The La Madeleine spot at the Fountains is at the western end of the Promenade area, to the southwest of Nordstrom Rack. La Madeleine (lamadeleine.com) has 63 locations throughout the United States, mostly in Texas. On the opposite end of the Promenade, Craze Yogurt Lounge is now serving frozen yogurt after opening on March 29, 2014. The shop is located in

humorous and slightly bawdy limericks and sexy cast members with great food, drinks and a fun entertaining atmosphere.” Diners can expect traditional pub food such as fish and chips as well as “cre-

one of the conservatory-like mini-structures in the middle of the Promenade, near a Verizon store. This is the third location for Craze (crazeyogurt.com) which also has locations on the West Side and in Far East El Paso. Craze opens daily at 11:00 a.m. Restaurants still to come include Kona Grill, a “modern American grill and sushi bar,” and recently-announced Grimaldi’s Pizzeria, specializing in pizzas and calzones baked using a coal-fired oven. Kona Grill is scheduled to open this spring with Grimadli’s opening up later this year.

ations” like a Pub Fried Egg Burger and Gaelic Chicken. The eatery will also specialize in “beers from around the world.” The chain currently has 94 locations in North America, with 20 more in development. The concept was developed in 2003 at the Rio Hotel in Las Vegas. The first El Paso location will open up at 955 Sunland Park Drive, west of Interstate 10, near the Holiday Inn Sunland Park and Bob-O’s Family Fun Center. There are plans for an additional two El Paso locations in the works. No opening date has been revealed, though it should be sometime this summer, according to the press release.


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Builders Outlook

2014 issue 4

The Economy

House-Hold Spending By Elliot Eisenberg, Ph.D., GraphsandLaughs, LLC

Before the Great Recession, household wealth peaked at $68.8 trillion or $254,600 per person. If that seems like more money than you have, it’s because wealth isn’t evenly distributed. The rich have much more of it than the poor. As a result, back in 2007 the median family had wealth of just $126,000 while the average family had $584,000. Then the recession hit, house prices plunged, stock markets cratered and household wealth hit a low of $56.6 trillion in 2009. Since then stock markets around the world have staged a remarkable recovery and house prices have been steadily recovering. As a result, household wealth now stands at $80.7 trillion, almost $12 trillion more than before the recession. So things have more than recovered, right? Not quite. Since 2007 there has been inflation and the US population has grown by 20 million people. As a result, inflationadjusted per capita wealth is now $254,000, just a shade less than it was before the Great Recession. So we are at least back where we were before the recession hit, right? Not so fast. The problem is that the asset price recovery has been profoundly unequal and that has caused the distribution of wealth to change dramatically. And that has huge implications for the economy. Homeowner equity hit $10 trillion last quarter, and while way up from a low of $6.3 trillion in 2011, it’s nowhere near the pre-recession high of $13.4 trillion. By contrast, equities have soared and are now worth almost $23 billion, way more than their pre-recession high of $18.3 trillion. The economic kicker is that equities are primarily owned by upper-income households, while home equity is the major source of wealth for everybody else. This means that while the rich are roughly $5 trillion wealthier than they were before the recession, all other households are about $3.5 trillion poorer. And while the upper classes spend more when their wealth increases, it’s nothing like the increase in spending that occurs when the rest of the population feels better off. A huge chunk of middle class spending is the result of tapping into home equity via cash-out refinancing. Regrettably, despite rising home prices many households are still under water, credit remains harder to get than ever before, and many households now have mortgages with extremely low interest rates and are simply unwilling to tap into their home equity. As a result, mortgage equity withdrawal has nearly stopped. After peaking at $320 billion in 2006, it was just $32 billion last year, a decline of almost $300 billion, and that is the highest it’s been since 2010! In addition to the rich, another group that has done well is older Americans.

Families headed by someone under 40 have on average recovered only onethird of their lost wealth, but families headed by someone middle-aged or older have recouped all their losses as more of their wealth is in stock and less in housing. And regrettably the middleaged and the elderly, like the wealthy, are less likely to spend their capital gains than younger middle class families. As a result of the profoundly uneven wealth recovery, spending on luxury goods has done very well but firms that rely on middle class spending are not enjoying nearly as much of a renaissance. For that to change wages will have to start rising.

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Builders Outlook

Kansas Builder Testifies at OSHA Silica Hearing: Rule Just Doesn’t Work for Residential Construction Tony Zimbelman, a small home builder and general contractor from Wichita, Kan., testified at a recent Occupational Safety and Health Administration (OSHA) public hearing against a proposed rule to regulate workers’ exposure to crystalline silica. In February, NAHB asked OSHA to withdraw the proposed rule, and instead treat it as an advance notice of a proposed rule. Doing so would allow the agency time to collect more data and determine how best to align the rule with current construction industry practices.  As written, the proposed rule drastically lowers the permissible exposure limit (PEL) of  silica  dust workers can be exposed to; requires impractical medical surveillance of construction industry workers; mandates extensive and costly recordkeeping processes; and places restrictions on certain construction site work practices, which do not align with existing safety procedures. Zimbelman said that he and many other small builders and trade contractors find the

rule difficult to understand, and don’t feel the compliance requirements make sense for the residential construction industry. “After reading through the proposed language and Table 1 a number of times, I am still not sure what to do to comply,” he told OSHA officials. As an example, Zimbelman pointed out that the procedures and engineering controls listed in Table 1 do not specifically address all construction tasks, especially in home building. Table 1 in OSHA’s proposed rule contains the required silica control methods for construction operations. “Our deck builders hand mix concrete for setting deck posts, which takes about an hour. Because Table 1 does not address this specific task, will these contractors be required to conduct exposure assessment and monitoring to determine if their workers are exposed to silica above the permissible exposure limit,” he queried. “This monitoring is complex, time consuming and costly,” he continued. “In my experience, trade contractors are currently

not conducting exposure testing and these small employers would definitely have to hire an outside industrial hygiene firm to do this.” Zimbelman also noted that silica controls requiring a continuous water source might not always be feasible in home building. Most new construction sites are not hooked up to a water source for two to three months after construction begins. “The local municipality controls when water service is provided, and it is often delayed well into the construction process,” he said. One of the largest issues with the

proposed rule, Zimbelman added, was simply convincing workers that the regulations and compliance measures are necessary. Zimbelman said he could easily point to facts and data related to falls and the need for fall protection requirements, but because OSHA has yet to provide information showing a direct correlation between silicosis deaths resulting from residential construction work, workers may not believe there’s a real threat.

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Builders Outlook

2014 issue 4

Latest NAHB Index Reading Shows Recovery Continues to Spread Of the approximately 350 metro markets nationwide, 59 returned to or exceeded their last normal levels of economic and housing activity, according to the National Association of Home Builders/First American Leading Markets Index (LMI), released today. This represents a net gain of 11 metros year over year. The index’s nationwide score ticked up to .88 from a March reading of .87. This means that based on current permit, price and employment data, the nationwide average is running at 88 percent of normal economic and housing activity. Meanwhile, 28 percent of metro areas saw their score rise this month and 83 percent have shown an improvement over the past year. “I think the big news here is that regions outside of the energy states continue to gain ground,� said NAHB Chief Economist David Crowe. “It’s a promising sign to see areas like Los

Angeles and San Jose joining the top ten largest MSAs showing a recovery. We still expect 2014 to be a strong year for housing and to aid in the overall economic recovery. The job market continues to mend and with that we will see a steady release of pent up demand of buyers.� Baton Rouge, La., continues to top the list of major metros on the LMI, with a score of 1.42—or 42 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as San Jose, Calif. and Harrisburg, Pa.— all of whose LMI scores indicate that their market activity now exceeds previous norms. “Things are getting slowly better overall,� said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “And with the housing market now entering the spring buying season, the fact that the

nation’s economy is headed in the right direction is a very promising sign.� “Stronger employment numbers seemed to be the driving force this month—an important factor to the recovery of our economy,� said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which co-sponsors the LMI report. Smaller metros showing recovery continue to be dominated by the middle of the country experiencing an energy boom. Odessa and Midland, Texas, boast LMI scores of 2.0 or better, with their markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Bismarck, N.D.; Casper, Wyo.; and Grand Forks, N.D., respectively. The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the

Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of economic and housing activity. More than 350 metro areas are scored by taking their average permit, price and employment levels for the past 12 months and dividing each by their annual average over the last period of normal growth. For single-family permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity.

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Builders Outlook

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14

Builders Outlook

2014 issue 4

Associates Council

Sam Shallenberger

A big hello to all !!!! I hope everyone had a HAPPY EASTER. I would have to say the golf tournament was a huge success based on all the comments we have received. The food and service in and outside the club house was first rate. The golf course for only being open for around five or six months was as good as to be expected. The

fairways were in great shape but the greens have a ways to go. The course was closed for over two years and I think Jeff Gates and his staffs have done a good job getting it to where it is. Give it a few more months and it will be top notch. I would like to thank everyone who participated and especially those of you

that volunteered their time and effort to make this tournament a big success. Everything was sold out so our membership again proves why we are among the most successful associations in El Paso. See you soon, remember we have Bowling coming this summer.

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Builders

utlook

www.elpasobuilders.com www.epbuilders.org 6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038 ■ execuTive oFFicerS Frank Torres – President GMF Custom Homes edgar montiel – vice President Palo Verde Homes carlos villalobos – Secretary Treasurer Palo Verde Homes Sam Shallenberger – Associates chair Western Wholesale edmundo Dena - immediate Past President Accent Homes ray Adauto – executive vice President El Paso Association of Builders Jay Kerr -Attorney of record

■ couNciL/commiTTee cHAirS Associates council Sam Shallenberger Build PAc Randy Bowling Desert Green Building council Javier Ruiz Land use council Sal Masoud Young Designer Award John Chaney remodelers council Rudy Guel membership retention Mike Santamaria, Greg Bowling Finance committee Carlos Villalobos Women’s council Lorraine Huit ■ ADviSorY To THe BoArD J. Crawford Kerr, Attorney, Firth, Johnston & Martinez ■ BoArD oF DirecTorS Beverly Clevenger, Automated Division 6 Builders, Inc. Leti Navarette, Custom Dream Homes Kathy Parry, Hunt Communities Edgar Garcia, Bella Vista Custom Homes, Inc.. Bud Foster, Southwest Land Development Services Juanita Garcia, ICON Custom Home Builder, LLC Walter Lujan, DAWCO Home Builders Joey Najera, Joseph Custom Homes Rigo Mendez, Mission Homes Nick Bombach, Casas de Leon, LLC Lydia Mhouli, Crown Heritage Homes JJ Vasquez, Pacifica Homes Dan Ruth, Millenium Homes Ken Wade, El Paso Building Materials Ruben Orquiz, MTI Ready Mix Kathy Carrillo, Pioneer Bank El Paso Henry Tinajero, WestStar Bank Chuck Gabriel, Carpets West Ted Escobedo, Snappy Publishing John Chaney, Passage Supply Joe Bernal, Employee Benefits of El Paso Linda Troncoso, TRE & Associates Orlando Rodriguez, Mass Media Advertising, Inc. Bret Thompson, Foxworth Galbraith Lumber Chris Worm, City Bank Texas Sal Masoud, Del Rio Engineering

■ TAB STATe DirecTorS Randy Bowling Greg Bowling

■ NATioNAL DirecTorS Bobby Bowling IV. Demetrio Jimenez NATioNAL ASSociATioN oF Home BuiLDerS (800) 368-5242

TexAS ASSociATioN oF BuiLDerS (800)252-3625

2013 Builder member of The Year Edmundo Dena Accent Homes 2013 Pat cox Award Sam Shallenberger Western Wholesale Supply 2013 Associate of The Year WestStar Bank Larry Patton, Burt Blacksher and Henry Tinajero

Honorary Life members Wayne Grinnell Don Henderson Chester Lovelady Cliff C. Anthes Anna Gill Brad Roe Rudy Guel E H Baeza Past Presidents committed to Serve Greg Bowling Kelly Sorenson Mark Dyer Mike Santamaria John Cullers Randy Bowling Doug Schwartz Robert Baeza

Bobby Bowling, IV Rudy Guel Anna Gil Bradley Roe Bob Bowling, III E. H. Baeza Hershel Stringfield Pat Woods

ePAB mission Statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization. © 2014 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Ted Escobedo, Snappy Publishing ted@snappypublishing.com El Paso • Texas • 79912 915-820-2800


Buildersoutlook2014issue4  

The official publication of the El Paso Association of Builders

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