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Local construction industry adapting to changing marketplace

Spec market flattens out and local building companies refocus their work on renos and commercial work

A quick glance at the building projects on the horizon reveals a busy construction industry in Whistler.

Along with the $19 million First Nations Cultural Centre scheduled to break ground in the village in less than six months, Whistler will see a $7 million public library, a multi-million dollar residential and hotel development on Nita Lake and a host of other projects all completed within the next two years.

Plans are also in the works for extensive redevelopment on the Shoestring Lodge/Boot Pub property, as well as the Whistler Racquet Club lands, both on the edge of the village.

On top of that there’s all the Olympic-related venues which need to be built in the coming years, such as the Whistler athletes village, the Whistler Sliding Centre (bob/luge track), the Whistler Nordic Centre in the Callaghan Valley and the sledge hockey arena for the Paralympic Games.

Construction is a booming business in the resort but, despite all the work ahead, it’s a changing business and local builders are adapting accordingly.

"(2004) was our best year," said Jim Charters, president of Whistler Construction. "We’ve taken on more than we’ve ever done in the past."

Whistler Construction built the Spring Creek Fire Hall last year and will be starting on the library in the spring.

Throughout the past year Charters has been president of the Whistler chapter of the Canadian Homebuilders Association, an experience which has provided invaluable experience for his company.

"It’s been a great growing thing for us to be involved with the homebuilders and it’s given us the confidence to actually expand," said Charters. Already 2005 looks promising he said, with more custom home projects in addition to the library project.

But expanding isn’t the only trick to competing in the current marketplace. Diversifying is also a key to lasting.

Local homebuilding company Vision Pacific historically has focused on the high-end residential spec market, working on multi-million dollar homes on Treetop Lane, among other expensive locales in the resort. Vision Pacific President Tim Regan said they have now branched into other sectors, namely the commercial market, with projects such as the new Intrawest restaurant at Franz’s Trail in Creekside.

"… (T)o go forward and survive, (companies) have to broaden up the skill base," said Regan. "We are definitely looking at doing more contracting work and then more commercial work."

There’s good reason to diversify, he added.

Spec homebuilding, where a developer buys a piece of land and builds on it to sell at a profit, is now out of reach for most local builders. Spec homebuilding is a high stakes gamble which for years has paid off for most developers in Whistler, but times are changing.

"I think for a long time up until now, the usual formula was that the contractors would do contract work and they would also do a level of spec as well," explained Regan. "And so there was a whole market around the local construction industry doing contract work but also acting as developers in their own right. And now, what’s happened is the ante for the game to do that has gone up."

Building lots in Whistler have climbed in value and now the dollars needed to do the development work here are so high that a lot of local companies just aren’t interested or able to put up the cash. This means, for companies who relied on spec building as part of their workload, the construction industry has become a little less stable.

"We used to have two sources of work, one was through clients and the other was through ourselves," said Regan. "So if one of the companies wasn’t busy in the spring, and didn’t want to lose its people, then it could generate its own projects and that made a very stable work environment for the workers."

Rod Nadeau, president of the Innovation Building Group, said the spec home market slowed down about two years ago. The cost of land, coupled with the cost of construction and buyers’ expectations of a multi-million dollar home, were all much higher than what the developer could actually sell the home for, he said.

"So it just doesn’t make sense to build," he said. "(But) all real estate is cyclical. Most of the builders in town are not building high-end spec homes right now, so sooner or later there will be fewer and fewer of them. And then when demand picks up the prices will go up a little bit. It’s just a matter of balance."

Another factor which is playing into the whole equation, said Nadeau, is the fact that Whistler is not in a growth stage.

For years the local building industry has boomed as hotel developments, residential developments and commercial nodes were approved one after another by local government. Statistics from the municipality, based on the total value of construction, show the peaks and valleys of the industry. The end of the ’80s marked rapid growth, followed by a steady increase in activity from 1993 to 1996, when it peaked at almost $124 million. From 1999 to 2001 it declined and has since levelled off at around $90 million for 2002 and 2003.

Now the town is almost at buildout, which means there will most likely be no more large-scale developments in Whistler unless already identified in the Official Community Plan.

"As we’re reaching buildout there are fewer new homes and new condominiums to build, so that obviously affects the building industry here," said Nadeau. "But then at the same time, things are just changing here. We’ll probably wind up doing more renovation-type work, refurbishing older buildings."

Those pressures could force larger companies, the ones trying to do big developments, elsewhere. The smaller local companies are more easily adaptable and can refocus their efforts on renovation work or single family homes he said.

"You know, it’s all construction. It’s just a matter of refocusing what you’re doing," added Nadeau.

As the industry changes within Whistler, companies must also grapple with outside pressures on local business. Construction workers are getting older and as they retire there are fewer young people replacing them in the trades.

In addition, the industry is booming in other parts of the province, such as the Interior, Vancouver Island, the Lower Mainland and Squamish, and labour could be tempted elsewhere.

And there can be no doubt that Whistler is going to need labourers.

Regan predicts a massive influx of people coming to the resort to reap the benefits of a healthy building industry. All the more reason, he said, to keep the local builders and tradesmen busy, thereby keeping the resort economy healthy. It’s all part of keeping Whistler sustainable he added.

"The construction industry is the highest paying industry in this town," he said. "So it constitutes a big part of the middle class of Whistler.

"If you’re bringing in crews from beyond our geographical footprint, then they have families and they have financial commitments so their paycheques are going someplace else," said Regan.

He points to council’s decision to hire Jim Charters from Whistler Construction over out-of-town bidders to build the public library. Though it’s true he had the best bid, Charters also had the added bonus of being a local.

"He’s going to be more passionate, more dedicated," said Regan. "This is his community, so you’re just getting that built in social responsibility."

One way to keep the local trades busy is to ensure any civic work goes to local companies, whether it be future employee housing projects on Whistler’s 300-acre land bank or municipal infrastructure or servicing and construction of Olympic facilities. This will balance out the highs and lows in the local trade.

"(And) it wouldn’t be just about performing the work," said Regan. "It’d be about performing the work and having the pride that goes with being a member of this community."