The dust has settled after the news broke in mid-February about the surprising bankruptcies of two of Tamarack Resort’s majority owners. Still, important questions remain: if Idaho’s most prominent resort has such difficulties, what will follow? What does it all mean?
Not much, really. Idaho construction insiders insist, despite the financial problems at its most prominent resort, that the overall economy of the state has a decent shine to it, and may even be improving.
(Tamarack CEO Jean-Pierre Boespflug said the bankruptcy will have no impact on the resort’s day-to-day operation. “You can continue to do business with Tamarack Resort in a complete and normal way,” he said at the time of the filing.)
“Residential building has hit bottom, and we’re on the ascent,” said Steve Martinez, president of the Idaho Building Contractors Association. “Permits are going back up, the phone is ringing again. For months, it’s been remodel orders, but now we are seeing clients. It’s a little slower than the usual early-spring rush, but not much.”
If Martinez is right, the uptick couldn’t come at a better time. Idaho’s state economist reported at 79 percent drop in state tax revenue, “largely due to Idaho’s housing industry.”
Hitting bottom seems about right. Over the 15 months starting in January, 2006, residential construction dropped by $1.4 billion in Idaho. Commercial construction increased by only $27 million over the same time period, according to the Idaho Department of Labor. Federal statistics show an overall 3.9 percent decline in all construction in Idaho.
Some trends appear to be somewhat promising, though. The state’s population continues to grow. Idaho’s unemployment rate in 2007 was just 2.6 percent, and job growth ranked sixth in the nation.
Cash for builders remains a sticking point, said Clayn Sonderegger, president of commercial builder Benchmark Construction in southwest Idaho, although none of his clients have backed out of projects because of financing difficulties.
Even high-end, complicated projects are moving forward. Grant Allan, CEO of Idaho Studios at Bryans Run, is building a 150-acre, $125 million mixed-use development including film studios, a performing arts center, housing, a hotel and a vineyard. He said his financing is solid, with both local and national investors who see Idaho as a rare, steady market.
Sonderegger agreed. A shortage of building materials – including metals prices – is a bigger issue than either the market or the availability of capital, he said.
Mark Kreizenbeck, president of 25-year-old Kreizenbeck Constructors in Boise, said 2008 looks good. Kreizenbeck says he will build two hotels this year and has enough business in the wings to remain busy.