SALT LAKE CITY (AP) _ A post-Olympic economic slowdown combined with ripples from the nationwide recession have dampened construction activity throughout Utah.
From January through June, 9,567 permits were issued for new home construction, condominiums and apartment units, down nearly 9 percent from the first half of last year, according to the Utah Construction Report.
The study, published by the Bureau of Economic and Business Research at the University of Utah, also notes that the value of those residential units was down nearly 4 percent.
The biggest drop was in commercial construction, with the value of permits issued declining by nearly 17 percent in the first half of the year compared with the same period last year.
The drop would have been greater if not for permits taken out for two major projects – an expansion of the Dixie Regional Medical Center in St. George and a new athletic complex at Brigham Young University in Provo – both of which made up nearly one-quarter of the overall value of construction permits issued from January through June.
Little or no employment growth, combined with high vacancy rates in commercial buildings, will make developers wary of investments of new construction, according to Diane S. Gillam, author of Utah Construction Report.
“There is a lot of vacant office and industrial space,” she said..
“It’s hard to convince a bank to finance a new building if you can’t say you have enough companies leasing the space”
Some developers with properties along the Wasatch Front, such as Seattle-area developer E&H Investments, have struggled to keep the buildings filled with tenants. An affiliate of E&H recently placed one of its properties on Main St. into Chapter 11 bankruptcy reorganization to prevent foreclosure.
The difficult economic environment for developers has led to fewer big projects, such as those completed prior to the Olympics. Those include the west-side Gateway complex, the Grand America Hotel and the LDS Conference Center.
The only large-scale project in the works now, the report says, is the Intermountain Medical Center Campus in Murray, a hospital campus being built by Intermountain Health Care.
