Eau Claire recorded its third-biggest year for construction last year based on value estimates tied to building permits issued in 2018.
There were $187.2 million worth of building projects that took out permits from City Hall last year, about a third of which were for local education and government institutions.
“The largest performing sector was the public sector,” said Ned Noel, associate city planner who compiled a recently released report on 2018’s building permits.
There were $64.3 million worth of new buildings and other construction work in the miscellaneous category of projects, which includes government buildings, churches and schools.
UW-Eau Claire took out permits for $28 million in work for a new residence hall on upper campus last year and $14.7 million in renovations to Karlgaard Towers North. Major renovation and remodeling projects for City Hall, Chippewa Valley Technical College’s Clairemont Campus and Eau Claire school district’s McKinley Charter School contributed to the large amount of public sector construction.
Years with large public projects are often among the biggest for construction in Eau Claire, Noel noted, but the record high set in 2017 was due to a few new major commercial buildings. The $198 million in commercial building alone in 2017 beat all prior years’ totals for all sectors combined.
“That’s hard to continue with,” Noel said.
Marshfield Clinic Health System’s new hospital and nearby cancer center combined for $98 million in 2017’s tally.
Some of that hospital work carried over into 2018 with $2.85 million in finishing work to the hospital being the largest single commercial-sector project last year.
Last year tallied $31.8 million in commercial construction with many of the largest projects being renovations or completion of prior years’ buildings.
Two new large retail stores that opened last year were part of the commercial building tally.
Hobby Lobby’s $2.26 million transformation of the former Macy’s store in Oakwood Mall and about $2.25 million in finishing touches to the Fleet Farm store on the city’s south side were included in 2018’s figures.
While permits issued last year had dropped for the commercial sector, projects that got issues in prior years were wrapping up to make 2018 notable for growth in that arena.
“For the first time in four years, the Eau Claire area commercial real estate market saw some significant retail and office construction projects completed,” Stuart Schaefer, president of Commonweal Development Corp., said in the Eau Claire-based company’s annual market report.
The company noted that the 220,000-square-feet Fleet Farm completed last year was the largest commercial building made in Eau Claire since the 1990s.
And while Sears and Younkers stores went out of business at Oakwood Mall, other retailers opened in leased storefronts, namely Hobby Lobby, HomeGoods and Gander Outdoors.
The vacancy rate in the retail sector dropped to 11.66 percent last year, compared to 12.29 percent in 2017, based on the company’s research.
Industrial construction saw a boost in 2018 with permits for $35.9 million of work taken out — up from the previous year’s $30.3 million.
The biggest industrial project last year was $6 million that Xcel Energy is putting into its service center on Western Avenue by adding a new building and service bays for the utility company’s trucks and other equipment.
Two new large warehouses on the city’s north side, valued at $4.7 million and $4 million, were among other new buildings contributing to last year’s industrial construction. Also, the Brewing Projekt’s transformation of an old building at 1807 N. Oxford Ave. along the Chippewa River into its new brewery and taproom took out permits for $3.7 million in major renovation work.
Though there were fewer private-sector building permits issued last year, Commonweal remained optimistic that 2019 will be another good year, but couldn’t make a forecast for what the area will see for new construction.
“There are no major retail or office buildings currently under construction, so we can’t predict, with certainty, additional activity the way we could last year,” Commonweal’s report stated. “It looks as if there are several office and retail projects that may get under way during 2019, but won’t be completed until 2020.”
Homebuilding continues to heat up with a steady rise in new single-family homes and notable jump in twin homes.
Permits for 83 new single-family homes were issued last year — the most taken out since 2006.
“We’re still not back to where we were pre-recession, but building has been going strong,” said Christina Thrun, executive officer of the Chippewa Valley Home Builders Association.
New home figures would be higher if there was more labor available in the area, which saw the number of builders shrink in the recession and never come back to previous levels.
“Everybody is struggling to keep up with the demand,” she said.
Builders are booked out well in advance — some association members have work already lined up for one to two years, Thrun said. To attract more to the field, the average starting wage for a construction worker has grown by $1 an hour in the past year.
High demand, rising costs for some building materials and shortage of available labor has pushed up average home prices as well.
The average new single-family home was built for $254,350 last year in Eau Claire, which is about $22,375 lower than 2017’s figure. Prior to 2015, the average had stayed below the $200,000 mark.
One way that homebuyers are looking to trim costs is to get into a twin home, which is similar to a duplex but each unit is owner-occupied.
“It’s a lot more of an affordable house for somebody starting out,” Thrun said.
There were permits for 50 housing units in twin home or condominiums issued last year — double 2017’s figure.
All told, Eau Claire issued permits for 251 new housing units last year, including owner-occupied and rental arrangements. That’s up from 228 units in 2017, but down from 271 in 2016.