buildersoutlook2013issue5

Builders utlookwww.elpasobuilders.com www.epbuilders.org

2013issue 5

Budget settledafter tumultuousnegotiationsBy Kate Alexander

American-Statesman Staff

The Legislature’s 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 don’tknow 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 governor’s 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 theSenate 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 doesn’t 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. “We’ve negotiated a resolutionthat is at best a fair resolution and aresolution that Texas can be proud of.”

But in exchange for the educationmoney, 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 satisfyingPerry’s 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 state’s $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 therainy day fund to pay off some highwaydebt.

“I haven’t given up,” Williams said.“Texas is the fastest-growing state in thecountry, and we clearly have a shortfall inour highway funding. It’s undisputed that

that’s the case.”Williams said it doesn’t 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’ pensioncontribution. 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

2 Builders Outlook 2013 issue 5

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Late spring is such a nice time of year. The weather is pretty good and the

days aren’t as dusty as they were in April. It is also a time when we get some

action in the building trades as people prepare for summer visitors or get the

yard ready for grilling. Some get the kids ready to move into a new home in

the summer. Our sales are really good right now and that’s always good for

the association members. It’s also a time for renewing your membership as

May is the single largest month for this. We can blame one guy for that and

it’s Mike Santamaria, our membership guru who brought together so many of

us to bring in members during our drive in May. Just a tip of the hat to Mike

for doing that, but a reminder to those of you getting your renewal invoice that

now is the time to do so.

I want to congratulate the candidates that ran for city representatives and

mayor. It was clear from the mayoral vote that Oscar Leeser did a great job

coming out for the office and working hard to get such a big vote. Steve Ortega

came in second and because neither candidate got the required 50% plus one

the runoff now will take place June 15. Runoffs also will happen in races for

District 2, 4 and 7. I urge you to vote in the runoff and to make sure the

candidate you vote for respects what you do. The association website

homepage says that and I think it’s important. You don’t want someone who

does not respect our industry and who will not listen to us. The vote is a

powerful tool you and your employees, friends and family should use to ensure

this.

We are nearing the Parade of Homes and I’m asking you to volunteer for the

ticket booth when Margaret sends out the request. It’s a great big deal to have

the opportunity to have a Parade and we will have a great one at the Falls at

Cimarron, 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.

President’s Message |

El Paso Disposal

772-7495

32013 issue 5 Builders Outlook

Edmundo

Dena

President,

El Paso Association

of Builders

Showroom: 2131 Missouri

915 • 533 • 6045 fax • 533• 6096

Thomas R. Brown, Owner

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 must

admit that they have more guts than I

do to put up with the endless rhetorical

questions about this or that. It’s got to

be hard to hear people talk about you

in less than flattering terms or to be

told a bold face lie that “I am voting for

you” when you see them pal around

with other candidates. Yes I’m 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 to

open 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 home

construction. An endorsement can

validate the actions of the past and

doesn’t hold the candidate

responsible if you endorse an

incumbent. In my opinion and those of

politically active members it’s simply

irresponsible to endorse a candidate if

they discredit your industry by ignoring

you or your industry. An endorsement

reinforces that you don’t understand

how important it is to support those

who support the industry and to do

everything you can to remove those

who don’t.

Time and time again we see smart

people do exactly this, and it’s

happening again this year. While it is

the right of citizens to vote their

conscious the question is why don’t

they vote with their wallet as well? It’s

a fair question since politicians can by

the very nature of the position impose

restrictive codes and ordinances that

stifle construction or increase costs.

It’s 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 comment

would 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. If

on 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 weren’t. When we

make our bed we have to sleep in it.

Respect. Nothing more, nothing less.

Perspective |

Ray Adauto,

Executive

Vice President

EPAB


NOW is the best time

to buy your new

home in El Paso!

Ahora es el

tiempo para

comprar una casa nueva

en El Paso!

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Su Casa Nueva Reserve your advertising space inthe next edition of Your New Home/Su Casa Nueva

The most complete home buying guide

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• Unmatched distribution and circulation• Unique dual language layout• Great advertising opportunity

Call Margaret today at 778-5387

Politics makes strange bedfellows, consider your endorsements


New-Home Sales

Rise 2.3 PercentSales of newly built, single-family

homes rose 2.3 percent to a

seasonally adjusted annual rate of

454,000 units in April, according to

newly released figures from HUD and

the U.S. Census Bureau. The gain

builds on a strong upward revision to

sales numbers reported for the

previous month.

“Builders are reporting an active

spring buying season as consumers

become more confident about going

forward with a new-home purchase

along with steadily firming prices in

local markets,” said Rick Judson,

chairman of the National Association

of Home Builders (NAHB) and a home

builder from Charlotte, N.C. “While the

cost of constructing homes is rising

due to tightened supplies of materials,

lots and labor, to some extent, this may

be creating greater urgency among

potential buyers.”

“Today’s report is further evidence of

the gradual, consistent improvement

we have been seeing in housing

market conditions over the past year,”

noted NAHB Senior Economist Robert

Denk. “We’re now about half-way back

to what could be considered a full

recovery, and we do expect to see

continual, solid gains in both starts and

sales of new homes going forward.”

On a regional basis, new-home

sales rose 3.0 percent in the South

and 10.8 percent in the West, but fell

4.8 percent in the Midwest and 16.7

percent in the Northeast in April.

The inventory of new homes for sale

edged up to a still-thin 156,000 units in

April. This is a 4.1-month supply at the

current sales pace.

Builder Confidence

Improves in May Builder confidence in the market for

newly built, single-family homes

improved three points to a 44 reading

on the National Association of Home

Builders/Wells Fargo Housing Market

Index (HMI) for May, released today.

This gain, from a downwardly revised

41 in April, reflected improvement in all

three index components – current

sales conditions, sales expectations

and traffic of prospective buyers.

“Builders are noting an increased

sense of urgency among potential

buyers as a result of thinning

inventories of homes for sale,

continuing affordable mortgage rates

and strengthening local economies,”

noted National Association of Home

Builders (NAHB) Chairman Rick

Judson, a home builder from

Charlotte, N.C. “This is definitely an

encouraging sign even amidst rising

challenges with regard to the cost and

availability of building materials, lots

and labor.”

“While industry supply chains will

take time to re-establish themselves

following recession-related cutbacks,

builders’ views of current sales

conditions have improved and

expectations for the future remain

quite strong as consumers head back

to the market in force,” said NAHB

Chief Economist David Crowe.

Derived from a monthly survey that

NAHB has been conducting for 25

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 for 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 May. The index gauging

current sales conditions increased four

points to 48, while the index gauging

expectations for future sales edged up

a single point to 53 – its highest level

since February of 2007. The index

gauging traffic of prospective buyers

gained three points to 33.

Looking at the three-month moving

averages for regional HMI scores, no

movement was recorded in the

Northeast, Midwest or South, which

held unchanged at 37, 45 and 42,

respectively. Only the West recorded a

decline, of six points to 49 in May.Editor’s Note: The NAHB/Wells Fargo

Housing Market Index is strictly the

product of NAHB Economics, and is not

seen or influenced by any outside party

prior to being released to the public. HMI

tables can be found at nahb.org/hmi.

More information on housing statistics is

also available at housingeconomics.com.

NEWS

it’s time to getserious aboutyour retirement.The El Paso Association of Builders is proud to now offer an

individualized retirement plan created for you.

ThE EPAB MEMBEr rETirEMEnT PlAn

As an EPAB member, you have the unique opportunity to take control of

your retirement investing.

We understand the challenges of retirement planning. That’s why we have

partnered with Employee Benefits of El Paso to offer you the opportunity

to create an individualized retirement plan under the umbrella of the El

Paso Association of Builders.

• investments

• irA’s

• 401K

now is the time to start planning for the next phase of your life. let your

membership with EPAB help you get there.

Call (915) 542-0900

for more information today.

Prior to selecting investment options for your plan you should consider the investment objectives, risks, fees and expenses carefully. For this and other important information, you obtain

prospectuses for mutual funds, any applicable annuity contract and the annuity's underlying funds, and/or additional disclosure documents from the appropriate retirement plan representative. Read

them carefully.There is no guarantee that participation in any retirement plan will result in a profit or that your account will outperform a self-managed portfolio. Please consult with your financial

planner, attorney and/or tax adviser as needed.

Advertise in the

Builders OutlookCall Margaret at the

El Paso Association of Builders

915-778-5387

Builders utlookwww.elpasobuilders.com www.epbuilders.org

2013issue 3

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Growing Labor Shortages

Impede Housing and

Economic Recovery


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 inthe form of both the sequester and the

Fiscal 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. Aren’t we kind ofdue? Turns out, the answer is no, noand no! If history is any guide - and it’sa 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 sevenfor 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 therewasn’t 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, themore 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 banksgenerally 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 let’sbe clear, it does not), it would take,based on history, about two years beforeyields on one-year Treasury bills werehigher 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 of

GraphsandLaughs, LLC and can be

reached at [email protected].

His daily 70 word economics and policy

blog can be seen at www.econ70.com.

By: Svenja Gudell, Senior Economist, Zillow

According to the first quarter ZillowNegative Equity Report, the nationalnegative 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 nationally—where the loan-to-value ratio is morethan 80%, making it difficult for ahomeowner to afford the down paymenton 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 severalCalifornia 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 andhaven’t 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 be“locked” into negative equity. Onaverage, a U.S. homeowner in negativeequity owes $73,059 more than whattheir house is worth, or 42% more thanthe home’s 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 fromTransUnion, 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, 2,500counties 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

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 significantlyimpacted. 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 theirhome’s value. This number comparesfavorably to how deeply underwaterLas Vegas homeowners were a yearago. 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 toforeclosure, 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 morethan 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 don’t 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 homeowner’s 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 homevalues 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 anadditional 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 morevulnerable to foreclosure, most homeowners innegative equity will not end up in default. Themajority of underwater homeowners continue tomake regular payments on their mortgage..”

Builders utlook on the scene |

The 2013 Young Designer competition

saw 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. Participating

schools included the Career Center for

Technical Education (CCTE), Socorro High

School and Montwood High School. The

students were required to work a problem

submitted by the National Association of

Women in Construction (NAWIC). This year

the problem was a single story home with

three children, an office, and special display

cases for the projects owner. The simulated

construction problem required a complete

set of blueprints, landscaping, foundation,

Mechanical and electrical plans along with

drawings of the cabinets and their measure-

ments. A model then needed to be made of

the design and those two items submitted for

judging. This year our judges were headed

up by Past President Kelly Sorenson and

included Ryan Harding, Carlos Sarinana,

Juan Estala, Edgar Montiel, Margaret Adauto

and Ray Adauto.

The judges scores were tabulated and the

top three submittals were awarded scholar-

ships. In first place, and a returning winner

from last year was Adalberto Coronel, a sen-

ior studying at CCTE. In second place was

Eric Nunez, while third place went to Alix

Herrera, both with CCTE. John Chaney,

longtime chairman of the event represented

the EPAB at the award ceremony and pre-

sented the scholarship letters to the sur-

prised teens. “I want to thank the builders

association for this award and want

to assure you that the money from

last year and this year will really help me,”

said Adalberto. “The effort that our kids do in

this shows up pretty well in the completed

project,” said Ceci Orozco, CCTE instructor.

“Thank you to every member at the

Association for their support and encourage-

ment,” she continued. A special thanks goes

to Tropicana Homes and Gus Loy who have

hosted the students early in the year at an

actual construction site. This hands on

learning experience is invaluable to the stu-

dents. Our appreciation to Aurea Herrera

teacher from Montwood High and to Lynn

Cordova from Socorro High School. Look for

information on the 2014 YD contest coming

when the school year starts again.

EPAB honors 2013 Young Designers

2013 issue 5


CITY BEAT |

Store, Contractor WebsitesReveal Possible Retailers

The 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 Carter’s apparel store havebeen disclosed at the website(www.carters.com) for the seller ofbaby and children’s clothing. A searchfor stores in the El Paso area reveals afuture location at the Fountains atFarah that is “Opening October 2013.”Carter’s history dates back to 1865,and the retailer now sells bothCarter’s and OshKosh B’gosh 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 beenconfirmed.

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

Rack Room Shoes/Off Broadway

Shoe 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 andone 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 Marshall’s 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 Dick’s

Sporting Goods. Another, Best Buy,has reportedly signed a lease but hasnot made an announcement.Posted byEPDNews

Retail Buzz: Potential ‘Fountains’ Tenant Names Emerge


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Downtown UpgradesSeveral Public andPrivate Projects Plannedfor Downtown El Paso

For years, El Paso officials and businessowners alike have made all sorts of movesto get the city’s 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 projectsplanned 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 city’s 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 iteasier 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 revitalizationeffort soon in the form of mixed use thatcould include housing options.

D. The Savoy – The vacant upper levels ofthis 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/Walgreen’s – 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 newWalgreen’s 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


Expert Advice

In most surveys, employees rank health

insurance as the most important benefit.

That’s a good thing, because health

insurance represents a sizeable

investment for employers. Premiums for

the average employer-sponsored

individual-only policy reached an average

of $5,615 in 2012, with employers paying

an average of 83 percent of the cost,

reported the Kaiser Family Foundation.

Interestingly, the least expensive age

group to insure was the only group that

didn’t put employer-provided health

insurance at the top of their wish list. New

college graduates ranked employer-paid

health insurance fourth in order of

preference, after annual salary increases,

401(k) company matches and tuition

reimbursement. This is a change from

earlier surveys, where new college

graduates placed employer-paid medical

insurance at the top of their list. Marilyn

Mackes, executive director of the National

Association of Colleges and Employers,

which conducted the survey of college

grads, attributes the change to the

Affordable Care Act. “Graduates know that

they can now stay on their parents’

coverage until they are 26 years old,

making medical benefits somewhat less

critical in their list of priorities,” she said.

Employers Not Giving Up MedicalBenefits

As more details of health insurance

exchanges under the Affordable Care Act

come to light, many employers are

deciding to stick with the status quo, at

least for the near future. After the Supreme

Court decided in July 2012 to uphold the

Affordable Care Act, the National Business

Group on Health (NBGH) and Towers

Watson found 88 percent of employers

planned to continue offering health

insurance for employees working 30 or

more hours per week. That represents an

increase of 17 percent over 2011 survey

results.

Employers also recognize the strong

link between health insurance, employee

health and productivity. Many studies have

shown that individuals who lack health

insurance are generally less healthy, since

they may put off getting healthcare when

they need it.

The Commonwealth Fund estimates

that 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 work

due to employee absences due to illness.

They lost another 478 million days

because some 55 million workers were

“unable to concentrate at work because of

their own illness or that of a family

member,” according to the Commonwealth

Fund’s study “Health and Productivity

among U.S. Workers.”

Health Benefits and Recruiting

As the economy heats up and

employers look to recruit new employees,

benefits could prove more important.

Some 19 million American workers plan to

find a new job in 2013, which will cost their

employers an estimated $2 trillion in

recruiting and retraining costs. (Source:

2013 U.S. Employee Report, Cornerstone

OnDemand) Employees surveyed for the

Cornerstone report said that the top two

factors that would influence their decision

to stay were “a good manager,” cited by 48

percent, and “feeling appreciated by

employer,” cited by 46 percent.

The 10th Annual MetLife Survey of

Employee Benefit Trends found a

correlation between employees’

satisfaction with their benefits and their

feelings of being appreciated by their

employer. Employees who were very

satisfied with their benefits were four times

more likely to agree with the statement,

“My employer has a very strong sense of

loyalty to me” than those who reported

being very dissatisfied with their benefits.

Loyalty works the other way as well: 61

percent of employees who were very

satisfied with their benefits also had a

“very strong sense of loyalty” to their

employer, compared to only 24 percent of

employees who were very dissatisfied with

their benefits.

Most employers would agree that health

benefits were essential to rewarding and

retaining employees. Employers surveyed

by the International Foundation of

Employee Benefit Plans opted to provide

health 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 employers

cited health benefits as essential to

employee recruitment and retention. For

the near future at least, it seems that

employer-provided benefits will remain an

important tool for employers who want to

remain competitive.

Changes to Come That’s not to say you shouldn’t change

your health benefits in response to the

ACA. Many employers regard retiree

benefits as of little value in their staffing

strategies. Health insurance exchanges

will make it easier for early retirees to find

coverage on the individual market, making

this an easier cut for budget-conscious

employers. More than half of employers

surveyed by the National Business Group

on health plan to drop coverage for

retirees (53 percent) and part-time

employees (33 percent).

Many surveys have also found

employers plan to fine-tune the design of

their health plans in 2014 and beyond.

Consumer-driven plans will likely increase

in popularity. The NBGH reported that 61

percent of employers expect to offer these

plans in 2013, versus 59 percent in 2012.

Once exchanges are full in place, an

overwhelming majority (80 percent) of

employers expect to offer these plans in

2015.

Consumer-driven plans can help control

healthcare cost inflation by giving

employees more hands-on control of their

healthcare spending and incentives for

price-shopping. These health plans

consist of a high-deductible health plan

(HDHP) paired with a healthcare spending

account—either a health savings account

(HSA) or health reimbursement

arrangement (HRA)—both of which have

tax advantages for employers and

employees.

We can help you review your benefit

portfolio to ensure it aligns with company

goals and budgets. For more information,

please contact us.

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Health benefits not disappearing despite ACA

Joe BernalEmployee Benefits

of El Paso

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915-630-6699

Membership News

Thanks to our MAY

SODA SPONSOR:Cisco Homes

11395 James Watt, Suite A-11 79936915-633-8002

132013 Issue 5 Builders Outlook

www.elpasobuilders.com www.epbuilders.org

UPCOMING EVENTS |

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JUNE13BOARD MEETING

11:00 GENERAL MEETING

12:00 NOONEL PASO CLUB

CHASE BANK BLDG. DOWNTOWN

JUNE 22 – JULY 7PARADE OF HOMES

THE FALLS AT CIMARRON

JUNE 24-25SUNBELT SHOW

SAN ANTONIO, TEXAS

RENEWALS |

NEW MEMBERS |

SODA SPONSOR |

Welcome to the middle of the

year, or at least the month before

that. Wow, what a great time at the

Pachanga Golf Tournament, in

spite of the weather and all that

Mother Nature threw at us. My

sincere thanks to all of the golfers,

the sponsors, advertisers and to

Ray and Margaret. The Women’s

Professional Council did a great job

and thanks to all who bought

mulligans to help support their

scholarship. Our next big event is

the Parade of Homes and we will

need to get volunteers for the ticket

booth, so expect Margaret to send

you a schedule request. Please,

help us out. We’re working on

some incentives for those that help

out. I also want to thank the Board

of Directors for coming over to

Western Wholesale for the

meeting. I hope you enjoyed your

food and the surroundings. We

enjoyed having you. Get ready to

have an Associates meeting on

June 5 at 3:00 pm so we can work

on the Parade, the house re-do,

and the summer bowling event.

There’s a lot to do in the next few

months.

See you June 5, at 3PM at the

EPAB 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 the

El Paso Club.

� execuTive oFFicerS

edmundo Dena – President

Accent Homes

Frank Torres – vice President

GMF Custom Homes

edgar montiel – Secretary/Treasurer

Palo Verde Homes

Sam Shallenberger – Associates chair

Western Wholesale

Frank Arroyos- immediate Past President

Cisco Homes

ray Adauto – executive vice President


� couNciL/commiTTee cHAirS

Associates council

Sam Shallenberger

Build PAc

Randy Bowling

Desert Green Building council

Javier Ruiz

Land use council

Sal Masoud

Young Designer Award

John Chaney

remodelers council

Rudy Guel

membership retention

Mike Santamaria, Greg Bowling

Finance committee

Edgar Montiel

Women’s council

Lorraine Huit

� ADviSorY To THe BoArD

J. Crawford Kerr, Attorney, Firth, Johnston

& Martinez

� BoArD oF DirecTorS

Juanita 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 Builder member of The Year

Frank Arroyos

Cisco Homes

2012 Pat cox Award

Mike Santamaria

Mountain Vista Homes

2012 Associate of The Year

Sam Shallenberger

Western Wholesale Supply

John Schatzman Award

Hunt Companies

Honorary Life members

Rudy Guel

Brad Roe

Cliff Anthes

Wayne Grinnell

Chester Lovelady

Don Henderson

Anna Gil

Past Presidents

committed to Serve

ePAB mission Statement:

The El Paso Association of Builders is a

federated professional organization representing

the home building industry, committed to

enhancing the quality of life in our community by

providing affordable homes of excellence and

value.

The El Paso Association of Builders is a

501C(6) trade organization.

© 2013 Builder’s Outlook

is published and distributed for the


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

� TAB STATe DirecTorS

Doug Borrett, Karam Co., Life Director

Randy Bowling, Tropicana Homes

� NATioNAL DirecTorS

Bobby Bowling IV.

Demetrio Jimenez

NATioNAL ASSociATioN oF

Home BuiLDerS

(800) 368-5242

TexAS ASSociATioN oF

BuiLDerS

(800)252-3625

www.elpasobuilders.com www.epbuilders.org

Builders utlook

Hunt is developing family focused neighborhoodsin 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 buyerto those searching for their ultimate dream home.

www.huntcompanies.com

DEVELOPING DREAMS.IN EAST AND WESTEL 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

buildersoutlook2013issue5

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