Building boom grows louder

The city of Spokane is in the midst of a multi-year building boom that shows no sign of letting up soon.

The value of building permits issued by the city is expected to break last year’s all-time record of $407.8 million. Building activity in the city should continue through 2007 as several major projects, including Kendall Yards on the North Side, move from planning to construction.

A robust local economy is also yielding dividends for the city’s general tax fund as well. Sales tax collections are up $1.9 million more than anticipated through the end of June. Building construction is a major contributor to sales taxes.

The crush of building permit applications is also causing a backup in the city’s building services department where permits that used to take four weeks to process are now taking seven to eight weeks. Delayed inspections caused by backups also will slow projects.

As a result, the City Council was asked on Monday to add nine new positions to the 29 employees now handling permits in the building services department. The department uses fees charged to projects to pay for the costs of reviewing plans and conducting inspections. A vote on the increased staff is expected next Monday.

“We’ve continued to see the last few years an expansion of the economy,” said Gavin Cooley, chief financial officer for the city. “It is certainly a boom cycle in Spokane.”

Spokane, he said, has become one of the top localities in the country when it comes to increases in residential real estate values, which is also an indication that local wages are moving upward.

Assessed home values in Spokane County are up 31 percent over the past two years.

The city’s building boom could accelerate further next year when the 80-acre Kendall Yards project gets under way with its $300 million first phase.

Cooley said there are ongoing conversations about spin-off projects, including the possibility of developing a public market on the north bank of the Spokane River west of Riverfront Park.

Building permit figures for the first seven months of 2006 show a marked increase over 2005, when the city set a record for building activity.

The city issued 2,963 permits for new construction or additions worth $286.7 million by the end of July compared with 2,276 permits worth $250.5 million by the end of July 2005.

If permit activity stays on its current pace, the total value of permits could reach $459 million by the end of the year. That is more than double the $215.7 million in permits issued just three years ago.

When other miscellaneous permits are included, the department had processed 10,000 permits as of Tuesday, a threshold that was reached more than three weeks earlier than last year.

As a result, the building services fund has seen a surplus in revenue over the past year or more, and the city is now purchasing a new building permit computer system to help speed processing of applications.

Councilman Al French said he will support the hiring of additional staff because he wants to keep projects moving ahead without delays.

Officials have said they are seeking to help developers finish projects on time so they can get them posted on property tax rolls sooner, and thus help ease city budget problems.

John Pilcher, the city’s economic development director, said it could take six months to a year to fully train the new staff.