builders outlook 2014 issue 9

8/11/2019 Builders Outlook 2014 Issue 9

1/16

Builders utlookwww.elpasobuilders.com 2014: issue 9

For the better part of this year,

investors have been slowly trickling out

of the home buying market, but in

August they apparently cut off the cash

flow in a big way.

Sales of existing homes fell an

unexpected 1.8 percent from July,

according to the National Association of

Realtors (NAR), but more dramatic was

the drop in investor sales. Investor

activity in 2012 and 2013 was the main

driver behind double-digit price gains.

Just 12 percent of August purchases

were by individual investors, down from16 percent in August; investors had

been making up nearly one-third of

home purchases during the worst of the

housing crash nationally, and in some

markets they accounted for well more

than half.

"Investors are concerned with a

potential rise in interest rates," said

Lawrence Yun, chief economist for

NAR. "It makes it less attractive in a

rising interest rate environment."

The drop has been long expected.

Home prices jumped dramatically last

year and are still higher by nearly 5

percent from a year ago, while the

supply of cheap, distressed properties

fell. When calculating for potentialreturns, the math simply doesn't work

as well anymore for investors.

"The reduction in appetite from

investors has put a temporary lid on

home sales that has yet to be offset by

the first-time home buyer, which is more

interested in renting than buying," wrote

Peter Boockvar, chief market analyst

with the Lindsey Group. "Faster income

growth, slower home price gains and

more of an easing in credit standards is

what is needed to bring them back."

First-time home buyers made up just

29 percent of August buyers and do not

appear to be picking up any of the slack

of investors. The first-time buyer share

is historically around 35 to 40 percent of

the market, and it usually increases in

the fall, when large families move out of

the market. First-time home buyers tend

not to have children yet.Realtors are hoping the decreased

competition from investors will bring

first-time buyers back to the market, but

this younger cohort is still facing high

levels of student debt, weak

employment and income growth and

soaring rents, which keep them from

saving for a down payment on a home.

Some of those who are more fiscally

sound are still choosing to rent,

especially as the single-family rental

market has become more popular.

This is why investors, while not

buying many more homes, are not

rushing to sell the ones they already

have, either. Rents are up over 3

percent from a year ago nationwide."We are really happy with our portfolio

of homes," said Aaron Edelheit, CEO of

Atlanta-based The American Home, in a

July 2014 interview with CNBC. "Our

demand for rental properties is strong.

We have 95 percent rented." American

Home invested in distressed properties.

Edelheit, who operates mainly in the

Atlanta and Charlotte, N.C., markets,

said he is not buying any more homes.

The company currently owns about

2,400 single-family rental homes, which

it manages through an in-house

network of property managers, rental

agents and technicians."This is maturing into every other type

of industry," noted Edelheit. "You will

have consolidation. Business is going to

be about execution and operations. It

will be all about operations. We have an

attractive company with attractive

assets. Like anything else, it's about

operating and running this business."

Others, however, are still buying,

albeit shifting their strategies. Justin

Chang, CEO of Colony American

Homes, which was a huge player early

on in the Phoenix and Southern

California housing markets, said his

company continues to buy, although ata reduced rate.

"The contours of the buying and the

geographies are shifting, as one might

expect," said Chang.

By Diana Olick CNBC.com

Construction of single family homes

and multifamily apartments fell by over

14 percent in August from July, a far

more striking plunge than analysts

expected. Single family housing starts

are running at about half the normal,

prebubble pace, and single family

building permits, an indicator of future

construction, are flat. So how is it that

some claim we are building too many

houses?

"We're still building single family

homes faster than we can fill them,"

argues Trulia's chief economist Jed

Kolko.

Using new numbers released this

week from the U.S. Census, Kolko

makes the following points:

The vacancy rate for single-family

homes was 10.7 percent in 2013, up

from 10.6 percent in 2012 and near its

2011 peak of 11 percent. That's farabove the vacancy rate during the

bubble (8.6 percent in 2005) and

before (7.4 percent in 2000).

In 2013, household formation was just

321,000, much lower than the 1.2

million baseline implied by current

population growth. The number of

owner-occupied single-family homes

actually fell by 184,000.

At the same time, the multi-unit

vacancy rate continues to normalize,

dropping for the third straight year to

below its 2006 level. Despite all the

new multi-unit construction,

apartments are filling up.

To put it simply, there are plenty of

vacant homes, no new owner

households are being formed, and

there's not enough demand to

necessitate building more new homes.

Why then do real estate agents claim

there is not enough supply to meet

demand, and why are home prices

continuing to rise? The answer is that

certain segments of the market are

thriving while others are stalled and

certain locations are thriving while

others are stalled.

"There are always people who want

new. Also, income growth at the high

end helps boost demand for the larger

new homes now being built," Kolko

acknowledged. "But if new construction

weren't keeping up with demand, andhousehold formation were strong, more

of the vacant homes out there would

get occupiedbut they're not."

On the flip side, multifamily rental

construction, while down for the month,

is running at quarter-century highs, and

the units are filling up fast. At the same

time, there are 14 million single-family

homes currently occupied as rentals,

and those renters appear to be staying.

There were just 11 million single-family

rental homes as recently as 2007.

"It's proving that households are

finding renting to be much more

appealing than they ever thought it

might be, and they're sticking with those

rental homes longer than we expected,"

said Buck Horne, an equities analyst at

Raymond James. Horne added that

Kolko "makes a fair point."

Horne, however, focuses on particular

markets, particular builders and price

points.

"If you look at the big job producing

markets like California, Texas and

Florida, [housing] demand there is very

strong," he said. "If you're looking for

first-time buyers, you'll find them in

Texas."

First-time buyers nationally, however,

are the weakest segment of the market,

as younger millennials were hardest hit

during the recession. That is why some

builders, like Lennar and Pulte, arefocusing on move-up models rather

than cheaper, entry-level homes.

Lennar reported strong third quarter

earnings this week, but the Miami-

based builder has been focusing on

prime locations, higher-priced homes,

and did not overestimate demand. DR

Horton, however, announced it would

have to use incentives to sell its homes.

It last reported it had 10,000 unsold

homes, 3,100 of those already finished.

"Other builders are sitting on more

than that," Horne noted. "That's a lot to

be speculating with, especially after the

spring selling season."

Pulte, meanwhile, is also steering

away from entry-level product and,

according to Horne, is willing to give up

market share as long as it means

optimizing cash returns on a per-house

basis. As of last quarter, Pulte had less

than 1,000 spec homes in all of its

combined communities.

"That's one the industry's lowest

ratios of spec homes," Horne said.

Home builders large and small are

having to re-evaluate today's tricky

market. Some, like Lennar are

diversifying, getting into the multifamily

market, while other smaller builders are

turning to townhomes in more urban

settings.

"We're constantly having our

expectations pulled out from under usbecause we think that the market might

finally be in a more permanent recovery,

and now we go into a slowdown again,"

Stephen Paul, executive vice president

of Maryland-based Mid-Atlantic Home

Builders, said on CNBC's "Squawk

Box." "It's hard to figure out and plan."

By Diana Olick, CNBC

Investors leaving housing high and dry

The question is: are we building too many houses?


2/16

2 Builders Outlook 2014 issue 9

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3/16

Housing recovery continues at slow pace, housing permits are down 15 to 20 % fromlast year and about 60% below 2005 big boom. Home builder confidence has return toits highest level since 2005, near the peak of the housing market, ( this is an article fromThe National Association Of Builders reported on Wednesday September 17, 2014) buthousing starts arent even half of the the way back to the late 2005 level. Why arehousing starts so Low? Whats the Deal? Are Builders hopelessly optimistic? Here aresome of the answers: Typically new home orders decline from July to August as homebuyers focus on the start of school year and late summer vacations. Tight mortgagefinancing, new mortgage regulations are making it more difficult for buyers to qualify, ithas reduced the potential buyers by about 20% also higher sales prices and lowemployment puts purchasing out of reach for more potential buyers. So are wehopelessly optimistic? No! We have to believe in our industry and hope for the best forthe rest of the year and 2015. Do we have to change the way we do business? Do wehave to offer new products?, Do we have to advertise our companies differently? Hereis something to think about, most of the baby boomers are already settle on a house,yes some will upgrade to a newer or bigger home but not a big percentage of them

compared to previous years, we have to cater to a new generation, the Milennials (thosegraduating from college roughly 2003 to 2018 or a person reaching adulthood aroundthe year 2000 also called Generation Y. Millennials arent in a rush to buy their ownhomes. Many of them arent in a rush to to move out of their parents houses. Thatdoesnt mean, however, that theyll remain renters or freeloaders in mom and dadsbasements forever. And the housing and mortgage industries cant wait. A recent surveyfound that 92% of people in this age group who dont have a home want to buy one inthe future, and there are some clear preferences in what they want in a home. Millenialbuyers like to be close to everything they need, including transportation, work, coffeeshops and bars and of course all the modern technology inside the home. Make plansto build for the new generation. Things are changing rapidly at local and state level, ifyou are not a member of our association now is the time to join we will keep you informof this new changes, dont be the last one to be informed. Keep you hopes high and dobusiness with a member.

Presidents Message |

El Paso Disposal

772-7495

32014 issue 9 Builders Outlook

Frank

Torres

President,El Paso Associationof Builders

Showroom:2131 Missouri

915 533 6045 fax 533 6096

Thomas R. Brown, Owner

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4/16

The truth of the matter is that permits

are down in the City of El Paso. Down

some 18% from 2013, a large

percentage given that 2013 was also a

down year for permits. So why then is it

that the City of El Paso has raised its

fees for permits and incorporated a

new technology fee as a regular

charge? It baffles most of us until we

return to what the last city

administration under John Cook and

the Progressives did. Spend like

drunken sailors to bring a quality of lifeto downtown El Paso regardless of

what it costs. Implode City hall and

scatter departments over all parts of

downtown; renovate dilapidated

buildings into new city offices and all

the while removing all these buildings

off the tax rolls. That council also

decided to introduce a quality of life

bond issue without telling people

someone had to pay for it. The bond

passed and so the city began its

renovation of downtown, spending

money left and right on fixing this, fixing

that, leasing this and leasing that.

Meanwhile buildings downtown who

owe taxes still own taxes and no one is

going after the owners since many of

them are owned by powerfully rich

people. Certificates of obligation,

known to us as money borrowed

without voter approval is in the

hundreds of thousands of dollars

putting the City of El Paso in debt

without voter approval. Yeah all these

things have caught up to us and each

business and each builder or developer

are now paying for the sins done by the

progressives. Irritatingly giddy aboutall the changes theyve brought to El

Paso they fail to take the blame for the

high dollar amounts we owe

collectively. Thats why builders and

contractors now have to pay higher

fees when taking out a permit. Itll be

the reason our members will have to

pass along the fee to customers.

Remember this: whenever the cost of a

home goes up by $1000 you push at

least 647 El Pasoans from qualifying

for a home according to NAHB. Let

that sink in. 647 families can no longer

qualify for a home. Nationally NAHB

says well lose some 200,000 people

from qualifying when homes go up by

$1000. So theres really a disconnect

in El Paso when the cost of the homes

go up for no apparent reason other

than the city is deep in debt and theyre

looking for a way out.

Conversations with new City

Manager Tommy Gonzalez are

addressing issues like this one.

Problem is that hes inherited the mess

and has to find a way to pay for what

the voters approved. Whats most

bothersome is that there are way toomany El Pasoans who still think the

city owes them something. As far as

this writer is concerned the city is

responsible to provide public safety,

public health and a safe environment.

Everything else is something the city

can do if it can afford it. That includes

parks, libraries, art and other wants.

The city would be wise to let people

know if they cant afford things. This

communities mind set is costly to the

few who actually pay taxes. If the city

cant afford to employ someone, then

they shouldnt. If the city cant afford a

park then they should say so. So many

things are wants, not necessities and it

would be good if the citizens would

understand that. It would be better if

politicians understood that as well. El

Paso is on the cusp of dire

consequences if it keeps going down

the path of higher taxes and fees.

News flash: builders will move out to

the county or New Mexico if the

customer decides to buy there. Keep

increasing fees and taxes and guess

what? Welcome to Santa Teresa my

friend. Just like the railroad did bymoving dont think the public wont if

theres a less costly alternative.

By the way, look at your water bill if

you own a business. Theres a new

franchise fee that is nothing more

than a way for you to help pay the debt.

You get nothing new for the fee, just the

privilege of paying on the debt. Thank

you city council. This is a really friendly

way to treat businesses. Lets see how

many decide this is the straw that

sends them packing.

Perspective

Ray Adauto,

ExecutiveVice PresidentEPAB


City increases fees while permits down;

non friendly franchise fee


5/16


Builder Confidence

Hits Highest Level

Since November 05

Builder confidence in the market for

newly built, single-family homes rose for a

fourth consecutive month in September to

a level of 59 on the National Association of

Home Builders/Wells Fargo Housing

Market Index (HMI), released today. This

latest four-point gain brings the index to its

highest reading since November of 2005.

Since early summer, builders in many

markets across the nation have been

reporting that buyer interest and traffic

have picked up, which is a positive sign

that the housing market is moving in the

right direction, said NAHB Chairman

Kevin Kelly, a home builder and developer

from Wilmington, Del.

While a firming job market is helping to

unleash pent-up demand for new homes

and contributing to a gradual, upward

trend in builder confidence, we are still not

seeing much activity from first-time home

buyers, said NAHB Chief Economist

David Crowe. Other factors impeding the

pace of the housing recovery include

persistently tight credit conditions for

consumers and rising costs for materials,

lots and labor.

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.

All three HMI components posted gains

in September. The indices gauging current

sales conditions and traffic of prospectivebuyers each rose five points to 63 and 47,

respectively. The index gauging

expectations for future sales increased two

points to 67.

Builder confidence also rose across

every region of the country in September.

Looking at the three-month moving

average for each region, the Midwest

registered a five-point gain to 59, the

South posted a four-point increase to 56,the Northeast recorded a three-point gain

to 41 and the West posted a two-point

increase to 58.

New-Home Sales Top

500,000 in August

Sales of newly built, single-family

homes increased 18 percent in August to a

seasonally adjusted annual rate of

504,000 units in August, the highest level

in six years, according to newly released

data by the U.S. Department of Housing

and Urban Development and the U.S.Census Bureau.

This jump in sales activity is in line with

our latest surveys, which indicate builders

are seeing increased traffic and more

serious buyers in the market for single-

family homes, said Kevin Kelly, chairman

of the National Association of Home

Builders (NAHB) and a home builder and

developer from Wilmington, Del.

This robust level of new-home sales

activity is a good sign that the housing

recovery is moving towards higher

ground, said NAHB Chief Economist

David Crowe. Historically low mortgagerates, attractive home prices and firming

job and economic growth should keep the

housing market moving forward in 2014.

Regionally, new home sales rose 50

percent in the West, 29.2 percent in the

Northeast and 7.8 percent in the South.

Sales were unchanged in the Midwest.

The inventory of new homes for sale

edged up to 203,000 in August, which is a

slim 4.8-month supply at the current sales

pace.

NAHB Chairman

Kevin Kelly on House

Passage of H.R. 5078

Kevin Kelly, chairman of the National

Association of Home Builders (NAHB) and

a home builder and developer from

Wilmington, Del., today issued the

following statement on House passage of

H.R. 5078, the Waters of the United States

Regulatory Overreach Protection Act:

NAHB commends the House for

passing bipartisan legislation championed

by Rep. Steve Southerland (R-Fla.) that

would prevent federal overreach by EPA

and the U.S. Army Corps of Engineers that

would harm individual landowners and

home buyers and impact economicgrowth.

H.R. 5078 prohibits the EPA and Corps

from finalizing a proposed rule that would

dramatically increase their authority over

waters of the U.S. to include almost any

body of water, such as ditches, mudflats,

prairie potholes and other water features.

Allowing these agencies to radically

increase their jurisdiction under the Clean

Water Act would impede the fledgling

housing recovery by greatly increasing the

number of construction sites required to

obtain permits, which would also delay and

raise the cost of home building projects.

Moreover, many American families would

be priced out of the housing market if thisrule is finalized in its current form.

Todays House vote sends a strong

message to the EPA to go back to the

drawing board to find a common-sense

middle ground plan that will maintain

environmental safeguards and protect

landowners from unnecessary regulation.

TEXAS BUILDER OF THE YEAR

A W A R D E D

We build so you can

GROW

Industry News


6/16


The Economy

The National Debt: Growing but More SlowlyThe federal debt routinely captures

headlines and continually grows but isthere a crisis? Should congress fix thedebt immediately, or have we madeenough progress? Turns out, in the

short-run we are fine,but there is heavylifting that must yet bedone if we are to get toa sustainable path.

While the debt ishuge, its the ratio ofdebt to GDP thatmatters. Ignoring debtheld by governmentagencies (such as the

$5 trillion in IOUs held by the SocialSecuritv Administration), and focusing ondebt held by households, firms andforeigners and upon which the treasurypays interest, the total amount of money

the government has borrowed equals,$12.6 trillion, close to 75% of GDP.

To give some perspective, before theGreat Recession the debt was 35% ofGDP and it was projected to graduallyrise to 50% of GDP by 2018 as moreBaby Boomers became eligible for SocialSecurity and Medicare and as healthcarecost rose. Then came the GreatRecession which resulted in moreborrowing as tax receipts fell and morehad to be spent on countercyclical socialprograms including unemploymentbenefits and food stamps. As a result,debt rapidly rose to 50% of GDP and wasprojected to rise to 70% within a decade.

Then to fight the Great Recession,President Obama persuaded Congressto pass the American Recovery andReinvestment Act (aka The Stimulus)an $800 billion package of tax cuts and

spending increases. That along with theweak recovery pushed the debt to 70% ofGDP by 2011 and it was projected to risetoward 100% of GDP by 2021 as theeconomy returned to health and interestrates rose towards normal levels.

At that point things looked grim. Thencame some big changes that dramaticallyimproved things. Congress raised taxeson upper income families, cutdiscretionary spending, and the rate ofincrease in government spending onhealthcare, particularly on Medicare,unexpectedly slowed by 2.25%/year.That improved the projected trajectory ofthe debt. Now, it is forecast to climb from

75% of GDP today to 80% of GDP by2024 and its projected to climb higherafter that. While the debt is high byhistorical standards, at least its gettingworse more slowly, at least in the short-run.

The good news, outside of SocialSecurity and Medicare, projectedrevenues and spending are balanced.The key to balancing the budget isclosing the gap between promised futureMedicare and Social Security benefitsthat are actuarially higher than futuretaxes earmarked for those programs.This can be done by cutting benefits,raising taxes or ideally some of both.

Moreover, the earlier these changes aremade, the less painful they will be. Asecond way to fix the budget; pass pro-growth legislation. This would includereducing tariff and non-tariff barriers via

trade reform, reducing marginalcorporate and personal income tax ratesvia tax reform, and enabling illegalimmigrants to fully participate in theeconomy via immigration reform.Collectively these policies would raiseannual GDP growth by $80 billion, or0.5%, which when compounded overtime is a huge amount.

Our budget problems now lie largely inthe future. That, however, must notdistract us from grappling with them soonas time passes all too fast. Moreover,assuring markets that we are solving

future budget problems should helppromote the current economic recovery.

Elliot Eisenberg, Ph.D. is President of

GraphsandLaughs, LLC and can be

reached at [email protected] daily 70 word economics and policy

blog can be seen at www.econ70.com.

Elliot Eisenberg

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7/16


8/16

el paso development news

Construction will soon begin on thetransformation of a vacant Downtown ElPaso building into a mixed-use structurewith retail and apartment elements. Thebuilding, located at 513 West SanAntonio Avenue, can be found in the his-toric Union Plaza district on the westernedge of Downtown.

The long, narrow building will containretail on the first and basement levels,with apartments on the second and thirdfloors. A sunken courtyard will be createdalong the back of the building with land-scaping and a water feature.

According to the architect on the proj-ect, Carlos Lievanos of Liev Arch of El

Paso, the structure dates to the early1900s. The renovation design maintainsthe historic character of the facade, withplans to restore the brickwork and addonly a Texas canopy along the retailspaces on the street level. The canopywill help to showcase the retail spacesalong San Antonio Avenue, he indicates,helping draw customers to the shops.Lievanos was also the architect on TheMix at Union Plaza project nearby.

The only other major change to thefront facade will be the addition of retailwindows and doors, and the upgradingof windows on the second and thirdfloors. According to Lievanos, the build-ing has historically been used this way,with retail on the ground floor and apart-

ments on the floors above.The idea behind creating a sunken

courtyard in the back is to provide

access to future retail spaces on thebasement level. Stairs on either end willtake pedestrians to and from the court-yard, with a lift included for those need-ing ambulatory assistance. Tenants ofthe basement level retail may be able tolease part of the courtyard for additionalseating, if needed.

Renderings for the courtyard spaceshow a variety of landscaping andpaving elements, seating areas, and awater feature at one end. And, in addi-tion to providing access to the basementlevel retail, the courtyard will connect toanother building owned by the samedeveloper. That building, known as the

Coffee Bean Building, will be developedas phase two of the project.

The upper floors will have a total of 13apartment units, according to Lievanos,ranging in size from 400 to 500 squarefeet. Rates for the small apartments,though not set, should be in the samerange as those found at The Mix acrossthe street.

Two rear catwalk balconies will beaccessible by residents and will hoverover the sunken courtyard below.Materials used will include exposed steelcolumns, beams, and railings that reflecta modern twist to the historic UnionPlaza train district.

Parking availability for tenants has notyet been finalized. A nearby lot may be

utilized for this purpose.Adding more housing options to the

area is key to making Downtown revital-

ization successful, according toLievanos, and this project will help to dothat.

We have all this entertainment, buthardly anybody lives nearby, saysLievanos. This was an opportunity totake a historic building and revitalize itfor that purpose. Residents will be ableto go down and get a bite to eat, grab

some coffee, and like having that nearbywithout having to leave the area.

Indeed, the new project is just steps

away from multiple restaurants, bars,and shops that have opened up in recentyears as part of Union Plazas renais-sance. Also nearby: the brand newTriple-A baseball stadium that openedthis year, just two and a half blocks tothe north.

The developer hopes to have the proj-ect completed in the first half of 2015,

perhaps by March or April. The contrac-tor on the project is Devo Design &Construction of El Paso.

Mied-Use Project Set For Union Pla!a

Development Includes Apartments & Retail with a Sunken Courtyard

A new mixed-use project for Union Plaza in El Paso is getting underway. This

rendering shows the building after completion. (Courtesy Liev Arch)

Ground was broken last week on anew multi-million dollar Sierra ProvidenceHealth Network (SPHN) hospital inNorthwest El Paso that will take shape atthe corner of Transmountain Road andResler Drive. Officials touted their part-nership with Texas Tech UniversityHealth Sciences Center in making thefacility a teaching hospital.

The hospital will eventually have 140beds for patients and will eventually hostapproximately 75 medical residents in amulti-year program.

Once completed, it is expected to gen-erate about 300 jobs. Look for comple-tion in 2016.

Vacant FranklinLaundromatTransformingInto "Cantina#

Blackbird Cantina

transforms a

Downtown

laundromat.

(facebook.com/Blac

kbirdcantina)

"Mandala Sunrise# Installation Added to UTEP CampusPublic Art Piece Highlights Relationship Between the University and Bhutan

The drive along Sun Bowl Drive on theUniversity of Texas at El Paso (UTEP)campus just got a lot more artistic thanksto a new public art installation along thestreet. Mandala Sunrise will greet driversat the new roundabout at the intersectionof Sun Bowl Drive and Glory Road.

The public art piece, designed by

Koryn Rolstad of Seattle(www.krstudios.com), consists of dozensof upright pipes towering over the round-about decorated with hundreds of colorfulresin wings. At night, the piece includesspecial nighttime lighting.

According to Rolstads Facebookpage, the piece celebrates the uniqueand remarkable blending of culturesembodied by University of Texas at ElPasos special relationship and partner-ship with the Kingdom of Bhutan. Shecalls the installation highly engineered,

yet lyrical, taking inspiration from theenvironment of the Southwest.

Mandalas are spiritual and religioussymbols often represented in different cul-tures, including Buddhism. The Kingdomof Bhutan is largely Buddhist, and thesculpture continues the tradition of tyingUTEP to the Asian country. The relation-

ship began in the 1910s when theschools newest buildings were designedusing influences from Bhutanese monas-teries.

The roundabout was constructed ear-lier this year as part of the Sun Bowl Drivewidening project. Another roundabout atUTEP, this one at the Schuster Avenueextension, will also get a piece of publicart in the future from New York-basedDonald Lipski. The Schuster extensionproject is scheduled for completion in latespring of 2015.

The Mandala Sunrise public art piece adds color to Sun Bowl Dr.

(www.facebook.com/KorynRolstadStudios)


9/16

The location for a new Corner Bakeryrestaurant in East El Paso has beenselected, according to an item on the CityPlan Commissions (CPC) agenda. Thenew eatery will be built at 1311 AirwayBoulevard, at the intersection withEdgemere Boulevard.

The restaurant will be built at the site

of a former golf shop in front of a relative-ly new TownePlace Suites by Marriott.The GECU headquarters building islocated across Edgemere. It will be thefourth Corner Bakery location in El Paso,with two also located on the East Sideand another located on the West Side.

In the Northeast part of town, a CVScould be coming to a property near thecorner of Dyer Street and Diana Drive.An item also set for consideration by theCPC has a label titled CVS Subdivision,

though the site plan does not show theactual store.The application includes two commer-

cial lots totalling 1.97 acres, across DianaStreet from the future Northgate TransitOriented Development being advancedby the City of El Paso. Officials haveremained mum on that project since thebidding period closed last year.

CVS has been steadily expanding inthe city after opening its first store inDowntown El Paso in early 2013. Since

then, it has opened a store on ZaragozaRoad in the Lower Valley and has plansfor a store on Mesa Street near UTEPand another on the East Side at McRae

Boulevard and Wedgewood Drive.No word on the timeline for either proj-

ect. The CPC will consider both items atits July 31, 2014 meeting.

Builders Outlook Issue 9.2014

Content provided by

El Paso Development News

visit: elpasodevnews.com

C"!%&$'c&i"!U#da&e:Sa! Jaci!&" Pla+a

Re!"(a&i"! P$"jec&Work Begins on CentralShade Structure that will

Protect 'Lagartos'Sculpture

A detailed site development plan is offAA prime corner in Far East El Paso will behome to a 500,000 square foot shoppingcenter in the coming years, and detailsare emerging regarding its layout andpossible retail tenants. Montana

Commons will begin construction in 2016at Montana Avenue and Joe BattleBoulevard on land that was previouslyslated for the El Cruzero smart growthdevelopment.

The shopping center will be laid outin a traditional power center fashion, asindicated by the site plan, with large box

stores along the back of the developmentand smaller shop and restaurant buildingscloser to the street. Large parking lots willbe located in front of the stores.

The site plan shows that the largesttenant may be a 140,000+ square footSams Club location, which includes a fuelisland near Montana Avenue. Two otherpossible stores include an AcademySports & Outdoors location and aBurlington discount store. Like other ten-tative retail centers, the list of possibletenants is dynamic and may changebefore ground is even broken.

The 60-acre site was formerly part ofthe El Cruzero smart growth communitythat was canceled last year when the landwas sold to River Oaks Properties of ElPaso, the company that is now developingthe Montana Commons project.

El Cruzero envisioned a hotel block,mixed-use buildings, residential homes,

and a town center for the area now beingdeveloped as Montana Commons. WhenRiver Oaks purchased the property lastyear, the developer told El Paso Inc. itmight develop a portion as Town Centeron the Loop, though there were no officialplans on the drawing board.

Last week, in an El Paso Times story

revealing the Montana Commons shop-ping center, there was no mention ofTown Center on the Loop, though RiverOaks did indicate it plans to sell off theremainder of the former El Cruzeroacreage to other developers and home-

builders.Construction of Montana Commons will

begin in 2016.

De&ail% Ee$ge

"! Ea%& El Pa%"-%,M"!&a!a

C""!%-Shopping Center PlanReplaces Former ElCruzero Smart GrowthLayout

Official% B$eak G$"'!d "! Ne) N"$&h)e%& El Pa%" H"%#i&alGround was broken last week on a new

multi-million dollar Sierra ProvidenceHealth Network (SPHN) hospital inNorthwest El Paso that will take shape at

the corner of Transmountain Road andResler Drive. Officials touted their partner-ship with Texas Tech University Health

Sciences Center in making the facility ateaching hospital.

The hospital will eventually have 140beds for patients and will eventually host

approximately 75 medical residents in amulti-year program.

Once completed, it is expected to gen-

erate about 300 jobs. Look for completionin 2016.

At left: Rendering of the new Sierra-

Providence Hospital building in NorthwestEl Paso. (SPHN)

O!i* A#a$&e!&% Take Sha#e "! We%& SideA unique, new condominium apartment

building is going up in West El Paso. The

Onix Apartments will bring a 58,000square foot, four story structure to avacant property off of Onix Drive nearSunland Park Mall.

Renderings of what the finished projectwill look like show a single building thatsurrounds a central courtyard which willinclude a swimming pool and water fea-ture. Balconies will overlook the courtyardarea, located at different levels throughoutthe building.

According to the projects architect,

Carlos Lievanos of Liev Arch of El Paso(www.lievarch.com), the courtyard is

strategically located based on buildingorientation, site exposure and views tointegrate light and privacy in response tothe desert environment.

Initial plans included a Phase II thatwould construct three more condominiumbuildings, a clubhouse, and a small retailspace. However, only the current buildingunder construction will be realized, as ofthis point.

No word yet on rental rates or availabili-ty for the apartment units.

The Montana Commons site plan has been modified to show possibleretailer locations within the center. (Original site plan: LoopNet)


10/16

Author Keith R. McMurdy recently

presented this information to the

professional retirement planners across

the country. I thought it would be a good

opportunity for our members to read the

article and give some consideration on

your own plan. If you dont currently have

some sort of retirement plan then by all

means check out the members only planthe association offers. I think the article

might just awaken some discussion on

the topic, but more importantly give you

concern on ensuring your plan or new

plan meets the important aspects of a

well-managed retirement plan for you or

your company.

-Joe Bernal

As we approach the end of the plan

year for most plans, now is a good timefor plan administrators and plansponsors to give their 401(k) plans aquick once over to see if everything isproperly in place. The IRS even providesa 401(k) plan checklist with some

suggested corrective mechanisms thatcan be taken to bring plans intocompliance.

A good starting place for a compliancetune up is to see if you can answer some

basic questions about your plan: Who are the trustees? Who is the plan administrator? Who are the outside service providers

and how often are they contacted? What are the plan's eligibility rules and

who is responsible for verifying them? How are participants notified of

eligibility? How is plan documentation distributed? Where are the plan records kept? Who is responsible for preparing and

filing the form 5500?

After you get past these, some basicquestions about plan administrationcome into play: Who keeps track of contributions and

limits? How does the plan define"compensation"? What is the vesting schedule? Are there required contributions from

the employer? Who is responsible for the

discrimination testing? Does the plan permit loans and how

are they tracked? Who is responsible for reporting to

participants? How are distributions made and who is

the contact person?

The reason I bring this topic up is that Iwas recently working with a client who

had one person who was solelyresponsible for benefitadministration. Unfortunately that personpassed away suddenly and no otherperson in the organization could answer

any questions about the 401(k)plan. Although it seems like the aboveinformation is simple to collect, the

company still spent hours and hours

recreating the plan history because theyneglected to keep a record of how theanswers to these questions had changedover the years.

Think of your 401(k) plan as a wellmaintained car. It needs a check up on a

regular basis to keep runningsmoothly. You have to keep records ofwhat was done and you have to knowwhere the important information is if youneed it. Just like your car, you hope your

401(k) plan never breaks down. But inanticipation of a future problem, it isworthwhile to stop and make a record ofthe responsibility for plan administrationand the current status of the plan. Thatway it will be easier to make repairs if

they ever become needed.

For more information contact

Joe Bernal

[email protected]

915-542-0900

(c) Copyright 2014 Employee BenefitNews. All rights Resrved.


Joe BernalEmployees

Benefits of

El Paso

Is it time for a

checkup on your

401(k) plan?

For All Yo!r Elecrical NeedsResidenial SpecialissTrac Homes " C!som Homes

915-629-8196

800-853-3996

Total Customer

Satisfaction

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11/16


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The biggest show of the season iscoming to the El Paso ConventionCenter on October 17-19. The 2014Fall Home and Garden Showtransforms the convention center into a

showcase extravaganza. From thefront door to the backyard of yourhome this show has something foreveryone. Youll see ways to transformyour garden, ways to fix your walls,painting pros and deck specialist.This Fall Home and Garden showoffers that and much more includingshow only specials from the dozensof exhibitors that will fill the floor.

But this year El Pasos show willfeature some really cool stars fromAnimal Planets TANKED show, WaydeKing and Brett Raymer. These twobusinessmen transform customershouses and businesses with exclusive

Acrylic fish tanks designed to keep realfish enthusiast with beautiful one of akind tanks. No job is too big, too far,or too outlandish as Wayde and Bretttravel the world to make customershappy with their own little ocean.Theyve done casinos (the business isheadquartered in Las Vegas), sportheros homes, churches and evensmall mom and pop shops,transforming them into works of art.Come and meet these two stars andowners of Acrylic Tank Manufacturing(ATM) at the Fall Home and GardenShow.

The show will also offer stunninglandscapes, pergolas and outdoorliving displays. Sunset Gardens, an ElPaso favorite, will sell selections offlowers, plants and trees you can take

home.Palo Verde Homes will construct ademonstration home filled with all thelatest in kitchen appliances, lighting,fixtures, flooring and even an outdoorfeature. This Palo Verde Home willwelcome visitors to talk about theirnext dream home. Come by and visitit at the Fall Home and Garden Show.

Prices for the show have beenannounced by Show TechnologyProductions, the show producer fromSan Antonio. Were really excitedabout the show in El Paso and wedlike to remind everyone that becausethe convention center is closed from

January through July next year this willbe the only show we produce for ayear, said Tommy Mantini, co-ownerof Show Technology. With thousandsof square feet of exhibits the show willshowcase the latest in products andservices for your home, apartment ormaybe even your business, hecontinued.

Its time for you to exhibit at thisshow and with the thousands ofvisitors anxious to see you and yourproducts or service. Where else canyou get thousands of people in oneweekend? asked Ray Adauto. The

answer is nowhere else, said FrankTorres, president of the EPAB.

Regular admission is only $7.50,while active military with ID and kidsunder 12 get in free. A special seniorprice of $5.50 and children 13-16 payonly $3.00. Were affordable for thewhole family to come and enjoy the

show and we hope to fill theconvention center over this specialweekend, said Frank Torres.

For information on getting a booth orexhibit space contact ShowTechnology Productions by loggingonto www.elpasohomeandgarden.com

Thousands expected at Convention CenterFall Home & Garden Show opens October 17

Fall H"e & Ga#de! H"e (ill #! Oc%"be# 17-19 a% %he El Pa$"

C"!'e!%i"! Ce!%e#. Headli!e#$ (ill be A!ial Pla!e%*$ TANKED $h"(,

Wa)de Ki!g a!d B#e%% Ra)e#


12/16



13/16

Membership News

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14/16


Associates council hasmuch to do soon

Ive been telling you about theupcoming events for months andasking you to get involved. Im so glad

to let you know that you haveresponded pretty well. The association

is having its Fall Home and Gardenshow October 17-19 and those wackyguys from Animal Planets TANKEDshow will be here. Bret and Kevin are

the shows stars, well at least second

bananas to the real star the beautifulacrylic fish tanks these guys create. Itllbe fun and we have booth space for

you to showcase your merchandise orservice. Show Technologies is ourproducer and they always put a first

class show on. This one will be great.

We also announced the 2014Treasure Tour of Homes and Ray tells

me you are responding well to hisrequest for help with prizes and such.We need you to help with advertising

also. If you havent gotten someinformation on that make sure youcontact the builders office. We still

have a few openings for the Pro Am soif you havent gotten a team yet checkwith Ray as well. Year is almost over

and well start our 2015 campaigns

soon including a visit to Austin for RallyDay in March. Lots to do and little time

to get it all done. See you soon. SamSam Shallenberger

Western Wholesale Supply

Associates Council

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Contact your local approved agent today!

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Advertise your business to the home

building industryThe Builders Outlookis the official publication of the El Paso Association of Builders. Ouraward winning monthly newspaper is the only publication to target El Paso home builders andrelated businesses.

Widely distributed throughout the city and available to readers online, the Builders Outlook isan important advertising medium for any business that want to reach this valuable market.

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15/16

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