Part Two: Residential and commercial construction picking up following economic downturn
There are signs that the Michigan economy is rebounding — slowly, but surely. The following is the second in a series of stories that point to a more positive outlook in areas that affect Tecumseh and the surrounding communities.
The construction industry was hard hit by the recession of the past several years, but there are small signs indicating that things might be getting better — both for residential home and commercial construction.
“We saw a significant downturn, particularly in new construction, when the economy started to falter and many of our local builders struggled,” said Judy Carlisle, Executive Officer of the Lenawee County Association of Home Builders (LCAHB). “Remodeling projects became more popular during that time as we’ve been waiting for a rebound. The good news is I think we’re beginning to come out of that.”
Steve Shobe, President of the LCAHB and owner of Victory Builders in Britton agreed.
“One of the more positive things we’ve seen is that property values are finally starting to come back a little bit,” Shobe said. “I think that’s beneficial for all of us. So many people were underwater with their loans and a lot of times people couldn’t get a bank appraisal because their homes didn’t have market value. But a lot of the foreclosures have been bought up now.”
Shobe said the fact that there are few homes on the market currently could actually bode well for builders as some are looking to have new homes built again.
“Over the past couple of years I think people are gaining a little bit of confidence,” Shobe said. “We were in such a fragile place, and still are in some respects, but I think people are moving toward larger remodeling projects, room additions and some new home construction.”
The LCAHB recently held its annual Home and Better Living Show in Tecumseh at the AJ Smith Recreation Center, and Shobe said the talk among participants was more upbeat.
“The outlook is a little more hopeful,” he said. “And it’s not just for people in home building, but those in associated industries — people in floor covering, plumbing and heating and other related services.”
Tecumseh’s Building Services Director and Building Inspector, Brad Raymond remembers how the development boom in the area started its decline around 2006, and work in proposed area subdivisions literally stopped, and some homeowners turned to remodeling projects if they were able to keep the homes they couldn’t sell.
“Some were making improvements to increase the value when things came back, like remodeling the kitchen and bathroom, or adding exterior things like windows, siding and roofs, things that would help sell when they could put it back on the market.”
While Raymond hasn’t seen a big up-tick in new home construction yet, he believes with the slow-down on foreclosures and banks offering low-interest loans again, it might be on the horizon. He has colleagues in the downriver area of the state that are showing increased activity.
Locally, Raymond sees some signs as well, with developers at Bonner Hills poised to resume construction, only with an offer of something a little different. Bonner Hills plans to construct 32 detached units, proposed to sell for between $135,000-$150,000 per unit, but offer maintenance that typically is not found in a regular subdivision.
“I think that will be real appealing to seniors who aren’t able to do their own maintenance anymore or to young working families who are busy and would welcome that,” said Raymond.
There are other signs of people taking tentative steps on the housing market front: the purchase of Buttermilk condominiums by developer Al Roberts who plans to continue the building project there; and plans by downtown building owners to take advantage of Michigan State Housing Development Authority grant funds to build residential units on second and third floor levels.
“The city recently waived tap fees to encourage development, too,” Raymond said. “That certainly helps developers be able to afford to construct new projects and make a profit from it.”
But it’s not just home construction that is providing some hope for the area that a rebound might be mounting.
“The other thing I see as a good sign is commercial development,” said Raymond.
Progress continues on the new Tim Horton Café and Bake Shop on W. Chicago Blvd. General contractor Leonard C. Carnaghi said that his firm, which subcontracts some of the work, has experienced no setbacks since construction started in March.
“We’ve done enough of these now that we know what we’re doing,” he said, adding that his company has constructed six other Tim Horton facilities. This week, electricians were setting panels and carpenters were working on the interior. Carnaghi said the tiles and finish work were yet to be completed. He was not sure when the restaurant would be open for business.
Raymond said McDonald’s will soon be ready to begin their rebuild as well.
“It’s kind of an indication in a positive way when you see corporations decide now is the time to go ahead and do commercial development,” Raymond said.
Other commercial ventures that have taken place or are in progress in the area include the completion of the new Fieldstone unit at Tecumseh Place; Cambrian Assisted Living’s Memory Unit; and 3-D PT’s addition of an indoor soccer facility at the back of its building in Tecumseh Plaza.
“The addition of the Spotted Cow and Foundation Realty in the former Chocolate Vault was also a good sign,” said Raymond. He said there is also potential interest in the community from others pursuing business locally, including a renewed Pizza Hut inquiry in the strip mall next to Movie Gallery. “It’s picking up,” he said.
Business has picked up for the Tecumseh Planning Commission as well, which had time periods it did not meet during the downturn.
“We’re getting pretty busy again now,” said Raymond, adding that things are looking a little brighter these days. “We’ve already got some items to be adding to the agenda, and I’m sure there will be more to come.”