builders outlook 2013 issue 5

7/28/2019 Builders Outlook 2013 Issue 5

1/16

Builders utlook

www.elpasobuilders.com www.epbuilders.org

2013

issue 5

Budget settled

after tumultuousnegotiationsBy Kate Alexander

American-Statesman Staff

The Legislatures tumultuous statebudget negotiations came to close Fridaywhen all sides agreed to a deal includingmore money for public schools inexchange for $1 billion in tax cuts and feerebates.

This is a very good budget, and I dontknow how any member of the House orSenate could vote against this budget,said Senate Finance Committee ChairmanTommy Williams, R-The Woodlands.

The budget bill, which is the only piece oflegislation that legislators must approve,will come up for a final vote in bothchambers in about a week. Then it willhead to governors desk where Gov. RickPerry can strike particular items, veto thewhole thing or allow it to become law.

Lt. Gov. David Dewhurst had declaredlate Thursday that a deal had beenreached between the House and Senate.

But House Democrats, who wieldeddisproportionate influence in the waningdays of negotiations, had not agreed to the

Senate package and spent much of Fridaydiscussing whether they would join in.

In the end, the Democrats assented to a$3.9 billion education package thatincludes $3.4 billion for basic public schoolaid and additional money for teacherpensions and other education programs. In2011, legislators eliminated $4 billion inbasic aid as well as $1.4 billion ineducation grants.

While it doesnt restore the $5.4 billionin education cuts, it puts back $3.93 billionthat was taken away, and you cannot letthe perfect be the enemy of the good, saidstate Rep. Trey Martinez Fischer, D-SanAntonio. Weve negotiated a resolutionthat is at best a fair resolution and a

resolution that Texas can be proud of.But in exchange for the education

money, Democrats had to swallow $631million in utility fee rebates from a fund thatwas intended to help low-income Texanspay their electric bills. Those rebates,together with a few million dollars inbusiness tax cuts, are aimed at satisfyingPerrys demand for significant tax relief.The $1 billion total falls short of the $1.8billion that Perry called for.

GOP leaders needed Democratic buy-inbecause they will need at least someDemocrats to reach the 100-vote thresholdneeded to create a new water fund that willhelp communities across the state buildreservoirs, pipelines and other waterinfrastructure. Perry has said the waterfund is a must-pass issue.

Senate Bill 1, the 2014-15 budget thatwill spend $94 billion in state money overthe next two years, is one piece of acomplicated puzzle that still must cometogether before the legislative sessionends May 27. Another measure, House Bill1025, provides $200 million of thepromised education money, as well as $2billion for the new water fund and perhapsmore.

The two budget leaders werenoncommittal about how much would bedrawn from the states $12 billion rainy dayfund beyond the money for water andwildfire recovery.

The bill is still being discussed, andthere may be other items that are taken outof it, said House Appropriations ChairmanJim Pitts, R-Waxahachie.

Legislators still have room under theconstitutional spending limit to the tuneof $600 million to $800 million and coulddraw that much from the rainy day fundwithout asking GOP lawmakers to take apolitically treacherous vote to bust the limit.

Budget-writers freed up $400 million forhighway construction in the budget bill andwill include an additional $500 million forroads in the oil patch in House Bill 1025.Williams said he would continue to fight for$2.9 billion that he wants to pull from the

rainy day fund to pay off some highwaydebt.

I havent given up, Williams said.Texas is the fastest-growing state in thecountry, and we clearly have a shortfall inour highway funding. Its undisputed that

thats the case.Williams said it doesnt make sense to

pay more to borrow money for highwayswhile billions sit in the rainy day fundcollecting very little interest.

At your house, if you have the money topay off your car or to pay off your mortgageand still have plenty of money in the bank,you would choose to do that, Williamssaid.

In the final budget, general stateemployees will get a 1 percent raise in thefirst year of budget and an additional 2percent the next year. A piece of that payraise, however, would be eaten up by anincrease in the employees pension

contribution. In the first year, thatcontribution goes up from 6.5 percent to6.6 percent and then it jumps to 6.9percent for the next year.

By the NumbersKey points in the budget agreement:

$94 billion 2014-15 general revenuefund, up 7.7 percent

$3.4 billion additional basic state aidfor public schools

$1 billion tax relief and fee refunds

$400 million highway construction

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2/16

2 Builders Outlook 2013 issue 5

NATURAL GAS IS YOUR KEY TO HOME SALES.

By installing natural gas in your new homes and developments, youre opening the door to

added value for potential buyers.

Natural gas kitchens sell themselves, and natural gas furnaces, water heaters and clothes

dryers offer greater efficiency and lower operating costs than their electric counterparts.

For more information on how to use natural gas to turn prospects into buyers, contact

Eduardo Lucero at [email protected] or (915) 680-7216.

Texas Gas Service provides natural gas to more than 600,000 customers in the state of Texas, including customers in Austin, El Paso, the Gulf Coast and the Rio Grande Valley. Texas Gas Service is a division of ONEOK, Inc. (NYSE: OKE), a diversified energy company. ONEOK is the general partner

and owns 43.4 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded limited partnerships, which is a leader in the gathering, processing, storage and transportation of natural gas in th e U.S. and owns one of the nations premier natural gas liquids (NGL) systems, connecting

much of the NGL supply in the Mid-Continent wi th key market centers. ONEOK is among the largest natural gas distributors in the United States, serving more than 2 million customers in Oklahoma, Kansas and Texas. Its energy services operation focuses primarily on marketing natural gas and related

services throughout the U.S. ONEOK is a Fortune 500 company. For more information, visit www.texasgasservice.com. 2013

ONEOK, Inc. Oklahoma Natural Gas Kansas Gas Service ONEOK Partners, L.P. ONEOK Energy Services


3/16

Late spring is such a nice time of year. The weather is pretty good and thedays arent as dusty as they were in April. It is also a time when we get someaction in the building trades as people prepare for summer visitors or get theyard ready for grilling. Some get the kids ready to move into a new home inthe summer. Our sales are really good right now and thats always good forthe association members. Its also a time for renewing your membership asMay is the single largest month for this. We can blame one guy for that andits Mike Santamaria, our membership guru who brought together so many ofus to bring in members during our drive in May. Just a tip of the hat to Mikefor doing that, but a reminder to those of you getting your renewal invoice thatnow is the time to do so.

I want to congratulate the candidates that ran for city representatives andmayor. It was clear from the mayoral vote that Oscar Leeser did a great jobcoming out for the office and working hard to get such a big vote. Steve Ortegacame in second and because neither candidate got the required 50% plus onethe runoff now will take place June 15. Runoffs also will happen in races forDistrict 2, 4 and 7. I urge you to vote in the runoff and to make sure thecandidate you vote for respects what you do. The association websitehomepage says that and I think its important. You dont want someone whodoes not respect our industry and who will not listen to us. The vote is apowerful tool you and your employees, friends and family should use to ensurethis.

We are nearing the Parade of Homes and Im asking you to volunteer for theticket booth when Margaret sends out the request. Its a great big deal to havethe opportunity to have a Parade and we will have a great one at the Falls atCimarron, a HUNT community. Thanks to all who have made this a reality,especially Kathy Parry and Frank Torres and all the builders in the Parade.

Presidents Message |

El Paso Disposal

772-7495

32013 issue 5 Builders Outlook

Edmundo

Dena

President,El Paso Associationof Builders

Showroom:2131 Missouri

915 533 6045 fax 533 6096

Thomas R. Brown, Owner


4/16

The election of 2013 could be

pivotal if you are to believe that this

election is really any different than

past elections. There were eight

candidates running for mayor, over a

dozen running in four city district races

and a handful of judges wanting to

stay on the bench or earn that right.

Of the eight who ran for mayor I mustadmit that they have more guts than I

do to put up with the endless rhetorical

questions about this or that. Its got to

be hard to hear people talk about you

in less than flattering terms or to betold a bold face lie that I am voting for

you when you see them pal around

with other candidates. Yes Im glad

that there are men and women willing

to put themselves through this

adventure. No matter what affiliation

or office there is still that hope that a

republic like ours attracts people toopen their lives to such scrutiny and

abuse. I congratulate all of them and

wish some of them well win or lose.

The election also shows us who is

paying attention to the issues of

housing in El Paso and who seems to

forget about those issues. In our

world that means the cause is homeconstruction. An endorsement can

validate the actions of the past and

doesnt hold the candidate

responsible if you endorse an

incumbent. In my opinion and those of

politically active members its simply

irresponsible to endorse a candidate if

they discredit your industry by ignoring

you or your industry. An endorsement

reinforces that you dont understand

how important it is to support thosewho support the industry and to do

everything you can to remove those

who dont.

Time and time again we see smartpeople do exactly this, and its

happening again this year. While it is

the right of citizens to vote their

conscious the question is why dont

they vote with their wallet as well? Its

a fair question since politicians can by

the very nature of the position impose

restrictive codes and ordinances that

stifle construction or increase costs.Its also hard to believe that anyone

who is remotely making money in

construction would support any

candidate who has stated that our

industry is corrupt, incompetent or

worse yet full of thieves. Instead you

should ask why such a commentwould be made on a business that

creates homes for the people; who

creates the biggest taxable revenue

for the city; and who employs

thousands in a community begging for

jobs.

If you sincerely believe that a

candidate for public office who shows

that they are anti-builder, anti-

developer is the right choice then

perhaps you deserve what you get. Ifon the other hand you are more

interested in the future of our industry

in El Paso then you should reconsider

your choice and vote for someone

who supports and respects what you

do. The choice you make says a lot

about you and what you think about

your profession and those who

support you. Remember this as well:

those who fight to keep homebuilding

in El Paso will remember who was in

and those who werent. When we

make our bed we have to sleep in it.Respect. Nothing more, nothing less.

Perspective |

Ray Adauto,

ExecutiveVice PresidentEPAB


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6/16


The Economy

Interest Rates Yield No Recession

Millions Remain Trapped by Effective Negative Equity

While Q1 GDP growth was 2.5%, itwill probably be the best performingquarter of the year. Add to thatcontinued contractionary fiscal policy in

the form of both the sequester and theFiscal Cliff deal,continued weakemployment growth,declining exports anda lacklustermanufacturing sectorand suddenlyrecessionary fearsare palpable. Afterall, a recession willinevitably come and it

has been almost six years since thestart of the last one. Arent we kind ofdue? Turns out, the answer is no, no

and no! If history is any guide - and itsa very good one in this case - there is norecession in sight.

Since 1970 there have been sevenrecessions, and interestingly enough,each one has been preceded by an

inversion in the yield curve, a situationwhere short term interest rates arehigher than long term interest rates.Rarely is there an indicator that is seven

for seven over a period of 44 verydissimilar years. The last time the yieldcurve inverted and a recession did notfollow was in 1966-67, and though therewasnt a recession, the economy slowedsubstantially with GDP growth of lessthan 1% for 21 straight months.

Normally, interest rates are higher thelonger the period of time money is lent.For example, today a one-year Treasurybill yields 0.15%/year, a 10-yearTreasury note pays 2%/year and a 30-year Treasury bond pays 3.125%/year.After all, the longer you lend someonemoney, in this case the government, the

more interest rate risk, inflation risk andcredit risk you incur, and investors mustbe compensated for these risks.

However, from time to time thisnormal relationship breaks down. Oneexplanation for this phenomenon is that

by raising short-term rates (to slowdownan overheating economy with risinginflation), the Federal Reservediscourages bank lending, as banks

generally borrow short and lend long.And when the yield curve is inverted,banks have much-reduced profitmargins, and this reduction in lendingcauses a recession. A secondexplanation for an inverted yield curve isthat investors expect future short-terminterest rates to decline because theyexpect a recession. As a result,investors expect the central bank tolower interest rates to counteract theexpected recession. And when thishappens, investors plow into low-yielding long-bonds to lock in yields theyexpect will be still lower in the future.

Regardless of the reason, from time-to-time the yield curve inverts. Today,the difference between ten-yearTreasury notes and one-year Treasurybills is 1.85%. Assuming the FederalReserve felt compelled to start raising

short-term interest rates soon (and letsbe clear, it does not), it would take,based on history, about two years beforeyields on one-year Treasury bills were

higher than yields on 10-year Treasurynotes. And again using history as ourguide, it generally takes another 12months after the yield curve invertsbefore a recession begins. Thissuggests that we have at minimum threeyears before the next recession. Ofcourse, given the expansionary state ofmonetary policy and the laser-like focusof the Fed in preventing a recession, mybet is we have quite some time beforethe recession of 2018!

Elliot Eisenberg, Ph.D. is President ofGraphsandLaughs, LLC and can bereached at [email protected].

His daily 70 word economics and policyblog can be seen at www.econ70.com.

By: Svenja Gudell,Senior Economist, Zillow

According to the first quarter ZillowNegative Equity Report, the national

negative equity rate continued to fall inthe first quarter of 2013, dropping to25.4% of all homeowners with amortgage from 27.5% in the fourthquarter of 2012. The negative equityrate has been continually falling for thepast four quarters, with the first quarterof 2013 being down significantly fromthe first quarter of 2012 at 31.4% adecrease of 6 percentage points. In thefirst quarter of 2013, more than 730,000American homeowners were freed fromnegative equity. However, 13 millionhomeowners with a mortgage remainunderwater (Figure 1). Moreover, the

effective negative equity rate nationallywhere the loan-to-value ratio is morethan 80%, making it difficult for ahomeowner to afford the down payment

on another home is 43.6% ofhomeowners with a mortgage. While notall of these homeowners areunderwater, they have relatively littleequity in their homes, and thereforeselling and buying a new home whilecovering all of the associated costs (realestate agent fees, closing costs and anew down payment) would be difficult(Figure 2). Of all homeowners roughlyone-third of homeowners do not have amortgage and own their homes free andclear 17.9% are underwater.

As homes values nationally bottomedin late 2011, home value appreciation

across the nation has been the mainfactor reducing negative equity levels.Some markets, such as Phoenix(25.5%), Las Vegas (23%) and several

California markets, such as SanFrancisco (24.8%), Los Angeles (17.9%)and Sacramento (25.4%), areexperiencing very strong appreciation.Furthermore, continued foreclosureliquidations are also driving down thenegative equity rate. Despite these highrates of appreciation, negative equity isstill very high and will remain high asdeeply underwater homeowners areslowly being lifted toward positive equity.Figure 3 shows the loan-to-value (LTV)distribution for homeowners with amortgage in the nation in 2013 Q1 vs.2012 Q1. Even though many

homeowners are still underwater andhavent crossed the 100% LTV thresholdto enter into positive equity, they aremoving in the right direction. However,

the effective negative equity rateremains very high at 43.6%. In a move-up market, homeowners with less than20% equity will effectively still belocked into negative equity. Onaverage, a U.S. homeowner in negativeequity owes $73,059 more than whattheir house is worth, or 42% more thanthe homes value (Table 1). Whileroughly a quarter of homeowners with amortgage are underwater, 91% of thesehomeowners are current on theirmortgage and continue to makepayments.

The Zillow Negative Equity Reportincorporates mortgage data from

TransUnion, a global leader in credit andinformation management, to calculatevarious statistics. The report includes,but is not limited to, negative equity,loan-to-value ratios and delinquencyrates. To calculate negative equity, theestimated value of a home is matched toall outstanding mortgage debt and linesof credit associated with the home,including home equity lines of credit andhome equity loans. All personallyidentifying information (PII) is removedfrom the data by TransUnion beforedelivery to Zillow. Overall, this reportcovers more than 870 metros, 2,500

counties and 24,200 ZIP codes acrossthe nation.Regional TrendsAs mentioned earlier, the main factor

driving down negative equity rates hasbeen very strong home valueappreciation, specifically in very hard-hitstates, such as California, Florida,Nevada, Arizona and Georgia. Therehas been a negative equity feedbackloop, as regions with high negativeequity have experienced acute inventoryshortages brought on in part by locked-in underwater homeowners, and theseshortages in turn have produced home

Elliot Eisenberg


7/16

72013 ISSUE 5 Builders Outlook

CONTINUED FROM PAGE 6

value appreciation spikes, which havebeen reducing negative equity at a fastpace. The metros that have seen thelargest drop in negative equity amongthe largest 30 metros are Las Vegas(down 4.9 percentage points), Phoenix(4.4 percentage points), Minneapolis

(down 4.3 percentage points) andSacramento (down 4.3 percentagepoints). Despite these large drops innegative equity, the rates remain high,especially when considering theeffective negative equity rate. Table 1shows the effective negative equityrates for the top 30 metros, where LasVegas has the highest rate of 71.5%,followed by Atlanta at 64.1% andRiverside at 59.7%.

In some cases high home valueappreciation rates have produced onlyrelatively small decreases in negativeequity rates. However, the depth ofnegative equity has been significantly

impacted. In the Phoenix metro, thepercentage of homeowners with amortgage who owed more than doublewhat their houses were worth wasreduced from 14.8 to 5.7% from the

first quarter of 2012 to the first quarterof 2013, which can be seen in Figure4. In the Las Vegas metro, 15.9% ofhomeowners with a mortgage owemore than twice the amount of theirhomes value. This number comparesfavorably to how deeply underwaterLas Vegas homeowners were a year

ago. In 2012 Q1, 26.8% ofhomeowners with a mortgage owedmore than double (see Figure 5). Onthe metro level there is wide variationin negative equity with the percentageof underwater borrowers ranging from1.5 to 61.5%. Furthermore, there iswide variation in how deephomeowners are underwater. Figure 6provides an overview of the distributionof the loan-to-value ratio for the largestmetropolitan areas (a loan-to-valueratio greater than 100 % means thatthe homeowner is underwater).

While negative equity makes ahousehold more vulnerable to

foreclosure, most homeowners innegative equity will not end up indefault. The majority of underwaterhomeowners continue to make regularpayments on their mortgage, with only

9% (down from 10% a year ago) ofunderwater homeowners beingdelinquent. This implies that 2.3% of allhomeowners with a mortgage are athigh risk for foreclosure near-term.Figure 7 shows a breakdown of thesenumbers for the top 30 metros.

Forecast

The Zillow Negative Equity Forecastpredicts the negative equity rateamong all homeowners with amortgage will fall to at least 23.5% bythe first quarter of 2014, freeing more

than 1.4 million additional underwaterhomeowners nationwide. Of the 30largest metro areas, the majority ofthese newly freed homeowners areanticipated to come from: Los Angeles

(94,642 homeowners); Riverside(74,693 homeowners); and Phoenix(51,580 homeowners). The ZillowHome Value Forecast is aconservative estimate of what negativeequity rates will be a year from now. Toforecast negative equity, we take thecurrent home value of a house andappreciate it by the Zillow Home ValueForecast (ZHVF) for the MSA in whichthe home is located. In cases wherethere is no ZHVF available, we use thehistorical rate of home appreciation,

and for metros that dont have ahistorical rate of appreciation we usethe historical rate of inflation at thenational level. For homes that are notlocated in a metropolitan area, we usethe forecasted national rate ofappreciation. To calculate the level ofhome equity a year from now, we usethe forecasted home value and thecurrent outstanding debt balance,where we make no assumptions abouta homeowners debt level a year fromnow. We also make no assumptionsabout foreclosure activity in the comingyear. Therefore, this forecast is a veryconservative one, as homeowners willlikely continue to pay down their debtthroughout the year and homes willlikely continue to be foreclosed on, andboth of these factors will contribute to alower negative equity rate. The ZillowNegative Equity Forecast cantherefore be considered a higherbound estimate of negative equity.

Outlook

Negative equity will continue toimpact the real estate market, eventhough the negative equity rate iscontinuing to drop relatively quickly,and the depth of negative equity isfalling significantly. However, as home

values continue to appreciate andmortgage rates increase homes willbecome increasingly more expensive,leading to slowing demand which, insome markets, will lead to stagnanthome values or even home valuedepreciation. Once that occurs,negative equity will be reduced at amuch slower pace and might evenincrease again. We expect thesedynamics to unfold in two to threeyears from now once mortgage ratesbegin to return to normal levels. In theshort term, home values are up 5.2 %on a year-over-year basis in April2013, and given our forecast of an

additional 4% home value appreciationover the next year (April 2013 to April2014), we expect that negative equityrates will continue to decrease in thenext year to a rate of, at most, 23.5%by the first quarter of 2014.

. Why Use Zillow? Zillow is a freeonline real estate site where you cansearch for homes for sale, find homeprices, see home values, view recentlysold homes, and check mortgagerates. Get started by finding real estatein top states and real estate in topcities. www.zillow.com

While negative equity makes a household more

vulnerable to foreclosure, most homeowners innegative equity will not end up in default. Themajority of underwater homeowners continue to

make regular payments on their mortgage..


8/16

Builders utlook on the scene |

The 2013 Young Designer competitionsaw twenty four entries submitted for consid-eration of scholarship awards from the El

Paso Association of Builders. The program,in its 12th year, is designed for students in

the 11th and 12th grade. Participatingschools included the Career Center forTechnical Education (CCTE), Socorro High

School and Montwood High School. Thestudents were required to work a problem

submitted by the National Association ofWomen in Construction (NAWIC). This year

the problem was a single story home withthree children, an office, and special displaycases for the projects owner. The simulated

construction problem required a completeset of blueprints, landscaping, foundation,

Mechanical and electrical plans along withdrawings of the cabinets and their measure-

ments. A model then needed to be made ofthe design and those two items submitted forjudging. This year our judges were headed

up by Past President Kelly Sorenson andincluded Ryan Harding, Carlos Sarinana,

Juan Estala, Edgar Montiel, Margaret Adautoand Ray Adauto.

The judges scores were tabulated and thetop three submittals were awarded scholar-

ships. In first place, and a returning winnerfrom last year was Adalberto Coronel, a sen-ior studying at CCTE. In second place was

Eric Nunez, while third place went to AlixHerrera, both with CCTE. John Chaney,

longtime chairman of the event representedthe EPAB at the award ceremony and pre-sented the scholarship letters to the sur-

prised teens. I want to thank the buildersassociation for this award and want

to assure you that the money fromlast year and this year will really help me,

said Adalberto. The effort that our kids do inthis shows up pretty well in the completedproject, said Ceci Orozco, CCTE instructor.

Thank you to every member at theAssociation for their support and encourage-

ment, she continued. A special thanks goesto Tropicana Homes and Gus Loy who have

hosted the students early in the year at anactual construction site. This hands onlearning experience is invaluable to the stu-

dents. Our appreciation to Aurea Herrerateacher from Montwood High and to Lynn

Cordova from Socorro High School. Look forinformation on the 2014 YD contest coming

when the school year starts again.

EPAB honors 2013 Young Designers


9/16

2013 issue 5


10/16


CITY BEAT |

Store, Contractor Websites

Reveal Possible RetailersThe developer behind the fastapproaching Fountains at Farahshopping center has remained tightlipped with regard to retailers andrestaurants that will occupy the site,but some possible names have beenrevealed by both store and contractorwebsites on the internet. Noannouncements have been made forthe tenants mentioned below.

Plans for a Carters apparel store havebeen disclosed at the website(www.carters.com) for the seller of

baby and childrens clothing. A searchfor stores in the El Paso area reveals afuture location at the Fountains atFarah that is Opening October 2013.Carters history dates back to 1865,and the retailer now sells bothCarters and OshKosh Bgosh brandclothing. This will be the secondlocation in the city; the first is locatedat the Outlet Shoppes at El Paso onthe west side.

A proposed Fountains location forJared, The Galleria of Jewelry hasbeen revealed through anemployment listing for the company.

Job openings are for salesassociates at the coming store.Jared is a division of SterlingJewelers, Inc., which also operatesKay Jewelers stores nationwide.Rumor Mill

Other retailers do not currently havecoming locations listed on theirwebsites, but contractor andsubcontractor sites give hints as towhich projects are available at theFountains. Some of these possibletenants have been previouslyrumored to have locations plannedfor the center, but none have been

confirmed.

Ulta The largest retailer of beautyproducts, the typical size of a store is10,000 square feet. Salons areusually incorporated into the design.There are currently two Ultalocations in El Paso. (www.ulta.com)

Stein Mart Stores focus onoffering apparel, accessories, andhome fashions at 60% offdepartment store prices. The typicallocation is 35,000 square feet insize. There is one Stein Mart location

on the west side of the city.(www.steinmart.com)

Rack Room Shoes/Off BroadwayShoe Warehouse The familyfootwear retailer was founded in1920 and has 450 locationsnationwide. Rack Room currentlyhas three stores in El Paso andanother in Las Cruces.(www.rackroomshoes.com)

Pier 1 Imports Pier 1 has over1,000 stores and specializes inimported decorative home

furnishings and gifts. There are twocurrent Pier 1 stores in El Paso and

one in Las Cruces. (www.pier1.com)

T.J. Maxx The closeout retaileroperates under the TJX, Inc. umbrellawhich has over 2,900 stores in sixcountries. The Fountains locationcould include a combination T.J. Maxxand HomeGoods store. TJX alsooperates Marshalls stores, of whichthere are three in the city and one inLas Cruces. (www.tjmaxx.com)

Two retailers have officially announcedlocations at the Fountains at Farah:Nordstrom Rack and DicksSporting Goods. Another, Best Buy,

has reportedly signed a lease but hasnot made an announcement.Posted byEPDNews

Retail Buzz:Potential Fountains Tenant Names Emerge


11/16

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Downtown UpgradesSeveral Public andPrivate Projects Plannedfor Downtown El Paso

For years, El Paso officials and business

owners alike have made all sorts of movesto get the citys largely dormant downtownback on the upswing.

Areas around and south of PaisanoDrive have been abuzz with shoppers fordecades, but the business sectors ofdowntown have seen somewhat measuredinvestment.

Relatively recent revitalization highlightsinclude the Mills-Plaza area, which is stillunder development, and the dynamicUnion Plaza area, where anentrepreneurial element sparked severalyears back leading to trendy restaurants,clubs, and more recently, shops andapartments.

Now, a combination of big moves areculminating in several construction projects

planned for the next two years and beyond.Here are some of those projects :

1. Luther Building The historic structureis undergoing rehabilitation to makeroom for City departments. Constructionshould be done by the fall of this year.

2. San Jacinto Plaza Completereconstruction of the citys downtownplaza. Construction should start in Julyand be completed in January 2015.

3. Mills Avenue Promenade Apedestrian-only portion of Mills Avenuebetween the Plaza Hotel and theMills/Centre Buildings. No concrete startdates, but should be nearing.

4. Baseball Stadium The former CityHall was demolished last month to makeroom for a Triple-A baseball stadium.Construction has begun and isscheduled for completion in April 2014.

5. Convention Center Walkway Thisnew pedestrian route would make it

easier to get from the museum district tothe Union Plaza area. No concretedates, but design may be complete.

6. Texas Tech School of Architecture Adeal has been struck that will bring thecollege to the historic Union Depotbuilding on the western edge ofdowntown.

7. Streetcar Project - $90 million projectto bring a streetcar route that will travelfrom downtown to the UTEP area. Couldbegin construction in 2014.

8. Bataan Memorial Trainway Therehabilitation of six street bridges over arailway trench which includes aestheticimprovements and public art.Construction on some bridge structuresmay begin this year.

9. San Antonio Avenue City project toconvert the surface street from one-wayto two-way traffic. Currently underconstruction.

10. Mesa Bus RTS Route A rapid transitline that will begin at the DowntownTransfer Center and travel to the westside of the city. Scheduled to start inJune and open in July 2014.

A. Artspace El Paso The project to bringaffordable housing and studio space forEl Paso artists is still in the designphase. If financing is approved,construction could begin soon.

B. United Bank of El Paso del Norte

This former parking structure is being

transformed into a bank and officebuilding. The external construction isnearly complete.

C. Martin Building This historic building,owned by the Lane Gaddy group ofinvestors, could see a revitalization

effort soon in the form of mixed use thatcould include housing options.D. The Savoy The vacant upper levels of

this building at the corner of EastOverland Avenue and Stanton Streetcould be converted into 27 apartmentunits. Bearing Development has postedthe project at its website.

E. Mercado/Walgreens Two propertiesacross Paisano Drive from each otherare seeing new life, both formerly fleamarkets. On the southern side, a newMercado building has sprung up, whileon the northern side, a brand newWalgreens store is being built.

All projects are subject to change,especially concerning expectedtimeframes with regard to construction.Check our website for updates on theseand future projects.

The Downtown Management District

(DMD) has developed a page at its websitethat contains updates on street andsidewalk closures due to downtownconstruction. This includes a color codedmap of downtown El Paso complete with aproject timeline.

The page can be found athttp://downtownelpaso.com/dwntwn-construction/.

Posted byEPDNews


12/16


Expert Advice

In most surveys, employees rank healthinsurance as the most important benefit.Thats a good thing, because healthinsurance represents a sizeableinvestment for employers. Premiums forthe average employer-sponsoredindividual-only policy reached an averageof $5,615 in 2012, with employers payingan average of 83 percent of the cost,

reported the Kaiser Family Foundation.Interestingly, the least expensive age

group to insure was the only group thatdidnt put employer-provided healthinsurance at the top of their wish list. Newcollege graduates ranked employer-paidhealth insurance fourth in order ofpreference, after annual salary increases,401(k) company matches and tuitionreimbursement. This is a change fromearlier surveys, where new collegegraduates placed employer-paid medicalinsurance at the top of their list. MarilynMackes, executive director of the NationalAssociation of Colleges and Employers,which conducted the survey of collegegrads, attributes the change to theAffordable Care Act. Graduates know that

they can now stay on their parentscoverage until they are 26 years old,making medical benefits somewhat lesscritical in their list of priorities, she said.

Employers Not Giving Up MedicalBenefits

As more details of health insuranceexchanges under the Affordable Care Act

come to light, many employers aredeciding to stick with the status quo, atleast for the near future. After the SupremeCourt decided in July 2012 to uphold theAffordable Care Act, the National BusinessGroup on Health (NBGH) and TowersWatson found 88 percent of employersplanned to continue offering healthinsurance for employees working 30 ormore hours per week. That represents anincrease of 17 percent over 2011 surveyresults.

Employers also recognize the stronglink between health insurance, employeehealth and productivity. Many studies haveshown that individuals who lack healthinsurance are generally less healthy, sincethey may put off getting healthcare when

they need it.The Commonwealth Fund estimatesthat economic output lost due to health-related reasons costs U.S. employers$260 billion per year. In 2003, U.S.employers lost 407 million days of workdue to employee absences due to illness.They lost another 478 million daysbecause some 55 million workers wereunable to concentrate at work because oftheir own illness or that of a familymember, according to the CommonwealthFunds study Health and Productivityamong U.S. Workers.

Health Benefits and RecruitingAs the economy heats up and

employers look to recruit new employees,benefits could prove more important.

Some 19 million American workers plan tofind a new job in 2013, which will cost theiremployers an estimated $2 trillion inrecruiting and retraining costs. (Source:

2013 U.S. Employee Report, CornerstoneOnDemand) Employees surveyed for theCornerstone report said that the top twofactors that would influence their decision

to stay were a good manager, cited by 48percent, and feeling appreciated byemployer, cited by 46 percent.

The 10th Annual MetLife Survey ofEmployee Benefit Trends found acorrelation between employeessatisfaction with their benefits and theirfeelings of being appreciated by theiremployer. Employees who were verysatisfied with their benefits were four timesmore likely to agree with the statement,My employer has a very strong sense ofloyalty to me than those who reportedbeing very dissatisfied with their benefits.Loyalty works the other way as well: 61percent of employees who were verysatisfied with their benefits also had avery strong sense of loyalty to their

employer, compared to only 24 percent ofemployees who were very dissatisfied withtheir benefits.

Most employers would agree that healthbenefits were essential to rewarding andretaining employees. Employers surveyedby the International Foundation ofEmployee Benefit Plans opted to providehealth benefits for the following reasons: To maintain/increase employee

satisfaction and loyalty (40 percent) To retain current employees (24 percent) Part of a collective bargaining agreement

(21 percent).In fact, in the 2012 NBGH/Towers

Watson survey, 77 percent of employerscited health benefits as essential toemployee recruitment and retention. For

the near future at least, it seems thatemployer-provided benefits will remain animportant tool for employers who want toremain competitive.

Changes to ComeThats not to say you shouldnt change

your health benefits in response to theACA. Many employers regard retiree

benefits as of little value in their staffingstrategies. Health insurance exchangeswill make it easier for early retirees to findcoverage on the individual market, makingthis an easier cut for budget-consciousemployers. More than half of employerssurveyed by the National Business Groupon health plan to drop coverage forretirees (53 percent) and part-timeemployees (33 percent).

Many surveys have also foundemployers plan to fine-tune the design oftheir health plans in 2014 and beyond.Consumer-driven plans will likely increasein popularity. The NBGH reported that 61percent of employers expect to offer theseplans in 2013, versus 59 percent in 2012.Once exchanges are full in place, an

overwhelming majority (80 percent) ofemployers expect to offer these plans in2015.

Consumer-driven plans can help controlhealthcare cost inflation by givingemployees more hands-on control of theirhealthcare spending and incentives forprice-shopping. These health plansconsist of a high-deductible health plan(HDHP) paired with a healthcare spendingaccounteither a health savings account(HSA) or health reimbursementarrangement (HRA)both of which havetax advantages for employers andemployees.

We can help you review your benefitportfolio to ensure it aligns with companygoals and budgets. For more information,

please contact us.

Health benefits not disappearing despite ACA

Joe Bernal

Employee Benefitsof El Paso


13/16

AZTEC CONTRACTORS

CASAS DE LEON

CENTURY 21 APD ASSOCIATESCONSOLIDATED SOLAR TECHNOLOGIES

DAWCO HOME BUILDERS

EL PASO BLIND AND SHUTTER COMPANY

GADDY CONSTRUCTION

GREATER EL PASO CHAMBER OF COMMERCE

ORTIZ PLUMBING

POST TENSION STEEL

RANDALL SMITH, CPASOUTHWEST LAND DEVELOPMENT

VALENCIA REAL ESTATE GROUP

WINDSOR DOOR, LLC

DALTILE

CONTACT: JAIME PAPA

11185 PELLICANO

EL PASO, TEXAS 79935915-630-6699

Membership News

Thanks to our

MAY

SODA SPONSOR:

Cisco Homes

11395 James Watt, Suite A-11 79936

915-633-8002

132013 Issue 5 Builders Outlook

www.elpasobuilders.comwww.epbuilders.org

UPCOMING EVENTS |

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14/16

Welcome to the middle of theyear, or at least the month beforethat. Wow, what a great time at thePachanga Golf Tournament, inspite of the weather and all thatMother Nature threw at us. Mysincere thanks to all of the golfers,the sponsors, advertisers and to

Ray and Margaret. The WomensProfessional Council did a great joband thanks to all who boughtmulligans to help support theirscholarship. Our next big event isthe Parade of Homes and we willneed to get volunteers for the ticketbooth, so expect Margaret to sendyou a schedule request. Please,

help us out. Were working onsome incentives for those that helpout. I also want to thank the Boardof Directors for coming over toWestern Wholesale for themeeting. I hope you enjoyed yourfood and the surroundings. Weenjoyed having you. Get ready to

have an Associates meeting onJune 5 at 3:00 pm so we can workon the Parade, the house re-do,and the summer bowling event.Theres a lot to do in the next fewmonths.

See you June 5, at 3PM at theEPAB office.


Sam ShallenbergerWestern Wholesale Supply

Associates Council

Board of Directors meet atWestern Wholesale

The monthly meeting for the Board of

Directors was held at Western Wholesale

Supply and featured lunch prepared by

Chef Adam, formerly of Red Mountain

Bistro and now executive chef at

Western Wholesale. The meeting

brought together members who were

informed of the upcoming Parade of

Homes and other association business.

The next board meeting will be held prior

to the general meeting on June 13 at theEl Paso Club.


15/16

I execuTive oFFicerSednd Dna Psdnt

Accent Homes

Fank Ts v Psdnt

GMF Custom Homes

edga mntl Stay/Tas

Palo Verde Homes

Sa Shallnbg Assats cha

Western Wholesale

Fank Ays- idat Past PsdntCisco Homes

ray Adat et v Psdnt

El Paso Association of Builders

I couNciL/commiTTeecHAirSAssats cnl

Sam Shallenberger

Bld PAc

Randy Bowling

Dst Gn Bldng cnl

Javier Ruiz

Land us cnl

Sal Masoud

Yng Dsgn Awad

John Chaneyrdls cnl

Rudy Guel

mbshp rtntn

Mike Santamaria, Greg Bowling

Fnan ctt

Edgar Montiel

Wns cnl

Lorraine Huit

I ADviSorYToTHeBoArDJ. Crawford Kerr, Attorney, Firth, Johnston

& Martinez

I BoArDoFDirecTorSJuanita Garcia, Icon Custom Builders

Samira Gonzalez, Edwards Homes

Walter Lujan, Dawco Construction

Carlos Villalobos, Pointe Homes

Don Rassette, Rassette Homes

Beverly Clevenger, Automated Division 6 Builders

Frank Spencer, Aztec Contractors

Kathy Parry, Hunt Communities

Sal Masoud, Del Rio Engineering

Robert L. Foster,

Southwest Land Development Services

Leti Navarette, Custom Dream Homes

Linda Troncoso, TR-Engineering

Lance VanDeman, Hub International

John Chaney, Passage Supply

Joe Bernal, El Paso Employee Benefits

Ken Wade, El Paso Building Materials

Ruben Orquiz, MTI Ready Mix

Kathy Carrillo, Pioneer Bank

Henry Tinajero, West Star Bank

Paul Zacour, Zacour & Associates

Chuck Gabriel, Carpets West

Ted Escobedo, Snappy Publishing

Lorraine Huit, Cardel Design

Javier Ruiz, Border Solar & Senercon

2012 Bld mb of Th Ya

Frank Arroyos

Cisco Homes

2012 Pat c Awad

Mike Santamaria

Mountain Vista Homes

2012 Assat of Th Ya

Sam Shallenberger

Western Wholesale Supply

Jhn Shatzan Awad

Hunt Companies

Hnay Lf mbs

Rudy Guel

Brad Roe

Cliff Anthes

Wayne Grinnell

Chester Lovelady

Don Henderson

Anna Gil

Past Psdnts

cttd t S

ePAB mssn Statnt:

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.

2013 Builders Outlook

is published and distributed for the

El Paso Association of Builders

by Snappy Publishing

240 Thunderbird Suite C

El Paso Texas 79912 915-820-2800

6046 Surety Dr. El Paso, TX 79905

915-778-5387 Fax: 915-772-3038

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

ITABSTATe DirecTorSDoug Borrett, Karam Co., Life Director

Randy Bowling, Tropicana Homes

INATioNAL DirecTorSBobby Bowling IV.

Demetrio Jimenez

NATioNAL ASSociATioN oF

Home BuiLDerS

(800) 368-5242

TexAS ASSociATioN oF

BuiLDerS

(800)252-3625

www.elpasobuilders.comwww.epbuilders.org

Builders utlook


16/16

Hunt is developing family focused neighborhoods

in both east and west El Paso.

Our communities feature amenities such as

neighborhood parks, walking trails, bike paths,

and landscaped roadways.

Only in a community by Hunt will you find home

options for everyone from the first-time buyer

to those searching for their ultimate dream home.

www.huntcompanies.com

DEVELOPING DREAMS.IN EAST AND WEST

EL PASO.

EAST Horizon MesaEastlake Boulevard to Horizon Mesa Boulevard

Emerald EstatesEastlake Boulevard to Emerald Park Drive

Emerald PassEastlake Boulevard to Emerald Sands Drive

Mission Ridgewww.liveatmissionridge.comI-10 and Eastlake Boulevard

WEST Cimarronwww.liveatcimarron.comHelen of Troy at Redd Road

builders outlook 2013 issue 5

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