Despite available funding, construction and housing markets begin to slow12/11/08

Developers remain optimistic for Cottonwood, Finney Crossing

Dec. 11, 2008

By Tim Simard

Observer staff

Compared to the flurry of housing and commercial construction projects in Williston in recent years, the forecast shows a tentative future for the market.

Requests for construction permits have slowed at the town’s planning office, and the Development Review Board has seen fewer project plans as well.

All over the county, Planning Director Ken Belliveau has heard construction projects are either delayed or are up in the air because of the uncertain economy. Many contractors are currently working on sites, but future work is looking shaky.

While major projects such as Cottonwood Crossing and Finney Crossing in Taft Corners are moving ahead, whether the economy is going to cause delays is uncertain. Belliveau hopes that isn’t the case.

“The town has interest in those because it’s all part of the growth center,” Belliveau said.

Al Senecal, developer of Cottonwood Crossing and owner of Omega Electric Construction, said the project is still going through the final permitting processes with the town and state.

Cottonwood Crossing is a planned 10-acre development, with sites for commercial, retail and housing properties to the east of Maple Tree Place. Senecal hopes he’ll be able to start construction in the summer, but it’s not a 100 percent certainty even with financing.

“We’ll revisit where we are then,” Senecal said.

Finney Crossing is going through the Act 250 process and hopes to break ground in the spring, according to Jeff Davis, owner of J.L. Davis Inc. and builder of the commercial portion of the development. Plans for Finney Crossing include 356 housing units, as well as retail and office space.

Davis said he has the financing to go ahead, and the banks have been great at helping out, but he’s being cautious in light of the recession. He said the Snyder Company, which is developing the housing portion of the project, has been watching the housing market closely. Representatives from the Snyder Company had not returned calls by press deadline.

“I hope we can start constructing the road from Route 2 and give access to the housing properties,” Davis said. “But we’re being careful.”

Banks are being careful, too, but are still lending and looking for opportunities. Reggie Greene, a senior vice president for Chittenden Bank, said while there is money to be loaned, a lot of developers are waiting out the markets to see what happens.

“As far as projects in general, we aren’t changing the way we look at them,” Greene said, adding Chittenden Bank has not tightened restrictions in building loans in light of the economy.

As for other construction projects, Senecal’s Omega Electric is finishing up work on the new Texas Roadhouse Restaurant on Route 2, as well as Lowe’s in Essex Junction. After those are finished, there’s “not a lot out there.”

“This is very slow compared to what we’re normally used to,” Senecal said.

An increased number of houses on the market will also have an adverse effect on new construction.

“As long as there’s excessive capacity out there, the builders won’t be in a rush to build it,” Belliveau said.

Realtor Ed Lacroix of Lacroix Associates in Williston said there isn’t a rush to buy new homes right now, even though interest rates are at their lowest in years. There’s too much uncertainty in the economy, he said.

“People who don’t need to sell right away aren’t dropping their prices,” Lacroix said.

Some homeowners are dropping prices by as much as 10 percent. But even those homes aren’t selling, Lacroix said. He still thinks new home construction will continue, but at a much slower pace and nowhere near what is was in recent years.

“We’ve been used to a feeding frenzy from three years ago,” Lacroix said. “It’s not that way anymore. We’re back to normal.”

In all facets of real estate and construction, in terms of sales and building, the local banks also see a definite slowdown, even with loans available.

“Everybody has to recognize what’s going on in the markets,” Greene said. “The wild card right now is the economy.”

Overall, Belliveau expects growth to slow to a moderate level in Williston for the foreseeable future. He said that the sluggish market could continue for six to nine months.

“That’s a long time from now,” Belliveau said.