by Cynthia Sewell @ Idaho Statesman
Article published Oct 6, 2006
Eagle stakes out a role in Foothills development
City tries to ensure that large planned communities, which may be annexed, will fit with its vision for Eagle
A large swath of land in the Ada County Foothills is not part of Eagle, but the city is getting in the game to help mold how those 50,000 acres will be developed.
"We will probably inherit this land at some point," Eagle Mayor Nancy Merrill said. "Everything that is above us is going to come through us one way or another."
The possibility of annexation has Eagle officials trying to ensure the development meshes with the city's vision of a well-planned community. They want the city to stay true to its rural roots with amenities for outdoor recreation.
Up to 30,000 more homes are planned for the area by developers, who have snapped up large parcels of bare land in the Foothills in last couple of years.
And if the number of homes is bound to double or triple in the Eagle area, Merrill wants it under Eagle's purview to ensure that city roads and services don't become clogged from development over which the city had no say.
Ada County and Eagle are simultaneously creating plans to guide development in the Foothills north of Eagle between Idaho 16 and Idaho 55. The undeveloped land is under the county's jurisdiction, but that is not stopping Eagle from planning the area’s future.
Eagle is putting the time and effort into planning the area because if it were to be annexed into Eagle, the balance of power would shift from the county to the city.
One landowner, M3, already has requested annexation of 6,000 acres where the company wants to build a 12,000-home planned community.
Another landowner, SunCor, has asked Eagle to include its 20,000 acres -- which extend into Boise and Gem counties -- in the city’s comprehensive plan, setting up the basis for potential annexation.
If these two parcels alone came under Eagle’s fold, and M3 and SunCor each build 12,000 homes, Eagle’s population would increase from 20,000 to about 80,000.
Eagle would expand from about 15 square miles to 56 square miles.
By comparison, Meridian now covers about 25 square miles and has a population of about 70,000.
SunCor is keeping its options open as far as annexation into Eagle, said Bob Taunton, SunCor Idaho president.
In February, the county approved SunCor’s application to build Avimor, an 830-acre, 684-home planned community.
In its Sept. 22 application to be included in Eagle’s comprehensive plan, SunCor stated that its experience with the county during the Avimor process and since has “brought the viability of future planned communities in the Foothills into
question.
The draft (county plans) are ambiguous about their support for planned communities.”
SunCor also stated, “Avimor is currently outside the area of impact for the city of Eagle. Therefore, the city’s policies do not address (Avimor’s) property.
Without inclusion of the Avimor property in the comprehensive plan, future annexation would be unlikely.”
SunCor told Eagle that future phases of Avimor would cover 6,290 acres of SunCor’s 20,080-acre parcel, which stretches from Idaho 55 on the east to Willow Creek via Big Gulch on the west.
The northern boundary reaches nearly five miles north of the Ada-Gem county line.
Contact reporter Cynthia Sewell at cmsewell@ idaho statesman. com or 377-6428.
Friday, October 06, 2006
Business Professor promotes Boise's creative potential
by Anne Wallace Allen @ Idaho Stateman
Article published Oct 5, 2006
Business professor promotes Boise's creative potential as economic resource
Napier will conduct workshop Oct. 12-13 on how to keep creativity thriving in Valley
The potatoes are well known; so are the microchips.
Now, as Idaho competes in the world market, a Boise State University professor is looking for ways to promote another valuable state export: the creativity that has led to the success of the state's strongest industries.
Nancy Napier, professor of international business, will host her third workshop on the creative economy Oct. 12 and 13 .
The gathering of experts is aimed at helping business, education and other leaders focus on how creative work has helped Idaho's economy thrive, and how they can keep that creativity strong.
"If we're not doing something systematically, they're going to pass us by," Napier said of other countries that have focused in past decades on building creative industries including the arts, film, design and architecture, and software. "There's evidence that's happening."
Napier, a 20-year employee of BSU, believes that creative thinking has been such an integral part of pioneer cities such as Boise that it's now taken for granted. She wants business and public leaders to pay more attention to the notion of creativity, and to manage creative areas and make them stronger.
Napier closely follows the work of author Richard Florida, an economic development guru whose best-selling "The Rise of the Creative Class" theorizes that the most successful cities are the ones that attract highly educated creative workers.
After discovering Florida's work a few years ago, Napier started taking a close look at key Idaho organizations that have used creativity to excel — such as BSU's Bronco football team; the Idaho Shakespeare Festival; and ProClarity, a Boise-based software company that was recently purchased by Microsoft.
What she learned energized her. In an essay she wrote after studying those entities, she said Boise and Idaho — once little known by outsiders — were coming to be seen as a place with a high quality of life and good business environment that attracted a new wave of pioneers: creative people looking for a place to do their work.
"We have super-high technology and super-high talent," said Napier of people working in high-tech Boise jobs. Well-educated creative people are likely to support arts and education, Napier said. And those entities, in turn, attract other creative people.
"You've got smart people with talent who want to live in a nice place," Napier said. "They come to places like this, and they find interesting things to do, and they create interesting things to do. That kind of thing is likely to attract entrepreneurs."
Creativity is a new or original idea that fits its context and has value. Napier uses as an example the Idaho Shakespeare Festival, which has adapted its performances to appeal to Boise's audience of outdoor-loving, modern theatergoers.
The festival is hugely successful — 53,000 people will attend its shows in Boise this season, said its producing artistic director, Charlie Fee. That's more than 10 percent of the city's population.
"As you start to invest in the arts, the community takes on a whole new, psychological setting, which is this is a hip place to be," said Fee, who moved to Boise in 1991 to lead the Festival. "That generates more interest for the businesses, and then you get more interesting people moving to Boise."
Where the arts are concerned, Boise already has a lot of offerings — its relative remoteness long ago spurred its residents to support the symphony, the ballet, and opera.
But now other cities — including many in northern Europe that Napier has studied — have started promoting those creative industries and others such as film, and Napier thinks the United States is starting to drop behind.
"This is a competitive issue long-haul for the U.S.," she said.
Idaho has all the assets it needs to pull ahead of its competitors, Napier said. First, creative people who can choose where they live are likely to choose Idaho not only because it has some strong cultural offerings but because it's easy to get around, is relatively inexpensive, and has very accessible outdoor activities. In fact, nature might make people more creative, she said.
"In Idaho, the air is so big, the sky is so big, that people are so open that they have no borders in their thinking," she said.
Then there's Idaho's pioneer tradition.
"There's an openness and a grittiness that you have to have to live in this part of the country," Napier said. "Everything's not already there; we're creating it as we go, so to speak."
Idaho is so small that you can make things happen faster than you could somewhere else, she added.
"Everybody is accessible; I can get in to see the governor if I want to, a lowly professor"
But she said political leaders must continue working to make Downtown attractive, and businesses must keep encouraging workers to find new and better ways of doing things. Her workshop this month will have teams of workers from various Idaho organizations focus on creative problem-solving with a Canadian professor, Min Basadur.
"We've gotten costs down as much as we can; we've used technology in so many ways, but it's that creativity spark we need," she said.
Article published Oct 5, 2006
Business professor promotes Boise's creative potential as economic resource
Napier will conduct workshop Oct. 12-13 on how to keep creativity thriving in Valley
The potatoes are well known; so are the microchips.
Now, as Idaho competes in the world market, a Boise State University professor is looking for ways to promote another valuable state export: the creativity that has led to the success of the state's strongest industries.
Nancy Napier, professor of international business, will host her third workshop on the creative economy Oct. 12 and 13 .
The gathering of experts is aimed at helping business, education and other leaders focus on how creative work has helped Idaho's economy thrive, and how they can keep that creativity strong.
"If we're not doing something systematically, they're going to pass us by," Napier said of other countries that have focused in past decades on building creative industries including the arts, film, design and architecture, and software. "There's evidence that's happening."
Napier, a 20-year employee of BSU, believes that creative thinking has been such an integral part of pioneer cities such as Boise that it's now taken for granted. She wants business and public leaders to pay more attention to the notion of creativity, and to manage creative areas and make them stronger.
Napier closely follows the work of author Richard Florida, an economic development guru whose best-selling "The Rise of the Creative Class" theorizes that the most successful cities are the ones that attract highly educated creative workers.
After discovering Florida's work a few years ago, Napier started taking a close look at key Idaho organizations that have used creativity to excel — such as BSU's Bronco football team; the Idaho Shakespeare Festival; and ProClarity, a Boise-based software company that was recently purchased by Microsoft.
What she learned energized her. In an essay she wrote after studying those entities, she said Boise and Idaho — once little known by outsiders — were coming to be seen as a place with a high quality of life and good business environment that attracted a new wave of pioneers: creative people looking for a place to do their work.
"We have super-high technology and super-high talent," said Napier of people working in high-tech Boise jobs. Well-educated creative people are likely to support arts and education, Napier said. And those entities, in turn, attract other creative people.
"You've got smart people with talent who want to live in a nice place," Napier said. "They come to places like this, and they find interesting things to do, and they create interesting things to do. That kind of thing is likely to attract entrepreneurs."
Creativity is a new or original idea that fits its context and has value. Napier uses as an example the Idaho Shakespeare Festival, which has adapted its performances to appeal to Boise's audience of outdoor-loving, modern theatergoers.
The festival is hugely successful — 53,000 people will attend its shows in Boise this season, said its producing artistic director, Charlie Fee. That's more than 10 percent of the city's population.
"As you start to invest in the arts, the community takes on a whole new, psychological setting, which is this is a hip place to be," said Fee, who moved to Boise in 1991 to lead the Festival. "That generates more interest for the businesses, and then you get more interesting people moving to Boise."
Where the arts are concerned, Boise already has a lot of offerings — its relative remoteness long ago spurred its residents to support the symphony, the ballet, and opera.
But now other cities — including many in northern Europe that Napier has studied — have started promoting those creative industries and others such as film, and Napier thinks the United States is starting to drop behind.
"This is a competitive issue long-haul for the U.S.," she said.
Idaho has all the assets it needs to pull ahead of its competitors, Napier said. First, creative people who can choose where they live are likely to choose Idaho not only because it has some strong cultural offerings but because it's easy to get around, is relatively inexpensive, and has very accessible outdoor activities. In fact, nature might make people more creative, she said.
"In Idaho, the air is so big, the sky is so big, that people are so open that they have no borders in their thinking," she said.
Then there's Idaho's pioneer tradition.
"There's an openness and a grittiness that you have to have to live in this part of the country," Napier said. "Everything's not already there; we're creating it as we go, so to speak."
Idaho is so small that you can make things happen faster than you could somewhere else, she added.
"Everybody is accessible; I can get in to see the governor if I want to, a lowly professor"
But she said political leaders must continue working to make Downtown attractive, and businesses must keep encouraging workers to find new and better ways of doing things. Her workshop this month will have teams of workers from various Idaho organizations focus on creative problem-solving with a Canadian professor, Min Basadur.
"We've gotten costs down as much as we can; we've used technology in so many ways, but it's that creativity spark we need," she said.
Monday, October 02, 2006
Lender remain hungry for commercial building projects
by Brad Carlson @ Idaho Business Review
Interest rates moved up and down this year, but lenders’ appetites for new commercial real estate projects stayed steady in the Treasure Valley.
Developers typically take out long-term financing to replace a short-term construction loan after signing income-producing occupants.
Moves by the Federal Reserve Board to raise short-term interest rates at 17 consecutive meetings – during a two-year period through June – affected construction loan rates more than rates on long-term loans, said Jim Klumpp, partner in Boise commercial mortgage brokerage Harty Capital Corp.
Interest rates on long-term loans are primarily tied to the bond market’s perception of inflation and economic growth, he said.
Yields on 10-year U.S. Treasury bonds rose from around 4.4 percent at the start of the year to 5.24 percent in late June, according to Yahoo Finance. The yield was 4.6 percent last week.
Klumpp said long-term lenders got more active as Treasury interest rates fell recently, but that lending activity never really slowed this year.
“Overall I think their underwriting is becoming more rigorous on general concerns of overall economic health,” he said. “But they remain really active.”
Recent declines in Treasury yields sparked additional financing activity by long-term lenders and brought 2006 volume to a level that’s pretty consistent with last year, Klumpp said.
“The lenders are active. There are ample funds out there of long-term financing,” he said. “That part is working well.”
Brokers at Harty Capital remain busy.
“With Boise being a strong growth market population-wise and job-wise, there is a lot of interest from long-term lenders in the market,” Klumpp said. “So we have been doing all product types.”
“The challenge with commercial is to make it economically feasible,” said Rob Perez, senior vice president with U.S. Bank in Boise.
Rents haven’t kept pace with rapid increases in land and construction costs, he said.
Nevertheless, long-term lenders’ demand remains strong, Perez said.
“Long-term lenders have reduced spreads and offset some of the rate increases early in the year,” he said. “They reduced spreads because of demand for product.”
Banner Bank Vice President and Commercial Banking Officer Margaret Sato said some residential builders are feeling the impact of higher interest rates on construction loans.
Construction loan interest rates are tied to the Prime Lending Rate that banks charge their best customers, or the London Interbank Offered Rate, she said.
Prime has stayed at 8.25 percent since June, after steadily increasing two years earlier from 4.25 percent.
“It can be pretty significant, and if they are sitting on inventory, it gets pretty painful,” Sato said.
She does some commercial construction lending as well. “That certainly has not dried up,” she said.
“We’re very aggressive, very optimistic,” said Winston Moore, principal in Meridian-based developer W.H. Moore Co. “You still have to have the right location and the right product. You have to build what people want, and, of course, you have to be able to compete.”
Retail is the strongest segment, and office leasing is softer, he said.
On the industrial side, average vacancy dropped in the past year as two big buildings attracted buyer-occupants and high land prices encouraged some developers to postpone projects, Colliers International real estate broker Steve Foster said at a recent conference.
General Growth Properties Inc., the publicly traded company that owns the Boise Towne Square mall, reported that its real estate property net operating income for the second quarter rose by 6.3 percent from a year earlier.
Washington Trust Bank’s construction-loan production is up a bit from 2005, says Dean Oberst, southern Idaho and Utah senior vice president for income properties and builder services.
Interest rates moved up and down this year, but lenders’ appetites for new commercial real estate projects stayed steady in the Treasure Valley.
Developers typically take out long-term financing to replace a short-term construction loan after signing income-producing occupants.
Moves by the Federal Reserve Board to raise short-term interest rates at 17 consecutive meetings – during a two-year period through June – affected construction loan rates more than rates on long-term loans, said Jim Klumpp, partner in Boise commercial mortgage brokerage Harty Capital Corp.
Interest rates on long-term loans are primarily tied to the bond market’s perception of inflation and economic growth, he said.
Yields on 10-year U.S. Treasury bonds rose from around 4.4 percent at the start of the year to 5.24 percent in late June, according to Yahoo Finance. The yield was 4.6 percent last week.
Klumpp said long-term lenders got more active as Treasury interest rates fell recently, but that lending activity never really slowed this year.
“Overall I think their underwriting is becoming more rigorous on general concerns of overall economic health,” he said. “But they remain really active.”
Recent declines in Treasury yields sparked additional financing activity by long-term lenders and brought 2006 volume to a level that’s pretty consistent with last year, Klumpp said.
“The lenders are active. There are ample funds out there of long-term financing,” he said. “That part is working well.”
Brokers at Harty Capital remain busy.
“With Boise being a strong growth market population-wise and job-wise, there is a lot of interest from long-term lenders in the market,” Klumpp said. “So we have been doing all product types.”
“The challenge with commercial is to make it economically feasible,” said Rob Perez, senior vice president with U.S. Bank in Boise.
Rents haven’t kept pace with rapid increases in land and construction costs, he said.
Nevertheless, long-term lenders’ demand remains strong, Perez said.
“Long-term lenders have reduced spreads and offset some of the rate increases early in the year,” he said. “They reduced spreads because of demand for product.”
Banner Bank Vice President and Commercial Banking Officer Margaret Sato said some residential builders are feeling the impact of higher interest rates on construction loans.
Construction loan interest rates are tied to the Prime Lending Rate that banks charge their best customers, or the London Interbank Offered Rate, she said.
Prime has stayed at 8.25 percent since June, after steadily increasing two years earlier from 4.25 percent.
“It can be pretty significant, and if they are sitting on inventory, it gets pretty painful,” Sato said.
She does some commercial construction lending as well. “That certainly has not dried up,” she said.
“We’re very aggressive, very optimistic,” said Winston Moore, principal in Meridian-based developer W.H. Moore Co. “You still have to have the right location and the right product. You have to build what people want, and, of course, you have to be able to compete.”
Retail is the strongest segment, and office leasing is softer, he said.
On the industrial side, average vacancy dropped in the past year as two big buildings attracted buyer-occupants and high land prices encouraged some developers to postpone projects, Colliers International real estate broker Steve Foster said at a recent conference.
General Growth Properties Inc., the publicly traded company that owns the Boise Towne Square mall, reported that its real estate property net operating income for the second quarter rose by 6.3 percent from a year earlier.
Washington Trust Bank’s construction-loan production is up a bit from 2005, says Dean Oberst, southern Idaho and Utah senior vice president for income properties and builder services.
Idaho Trust National Bank opens in BoDo
by IDAHO BUSINESS REVIEW
Idaho Trust National Bank opened last week at 888 W. Broad St., Boise, in the BoDo development downtown.
The 12-year-old company recently expanded into business and personal banking, making Idaho Trust the first new bank to open in Boise in a decade.
Syringa Bank was Boise’s last new bank, opening in February 1997, although existing banks have entered the market in recent years.
Idaho Trust National Bank employs 32, has $50 million in assets and manages about $360 million in client assets. Officials said the expansion into business and personal banking was in response to clients’ requests for a single-source banking solution.
Former trust and estate attorneys Dan and Tom Prohaska founded Idaho Trust and are CEO and president, respectively. A few years ago they moved the headquarters to Boise from Coeur d’Alene, where the company operates an office.
Phil Bratton is executive vice president of Idaho Trust National Bank. He has been involved in numerous bank start-ups, mergers and acquisitions in nearly 30 years in the banking industry.
Idaho Trust was vacating a downtown Boise office space at 300 Main St. last week.
The bank targets professionals and owners of small businesses.
Officials said Idaho Trust combines business and private banking with a concierge service, filling a void created in the 1980s and ‘90s when consolidation transferred many trust and investment services from local offices to out-of-state service centers.
The community banks that opened during the period restored a level of personal service, and chose a traditional banking approach, Tom Prohaska said in a statement.
“By starting instead with trust administration and investment management, and then adding business and personal banking services, our approach acknowledges the synergy between our clients’ business activities and personal wealth management needs,” he said.
“Added to this is a service mentality that respects their accomplishments while helping them move to the next level in their financial life.”
Idaho Trust National Bank opened last week at 888 W. Broad St., Boise, in the BoDo development downtown.
The 12-year-old company recently expanded into business and personal banking, making Idaho Trust the first new bank to open in Boise in a decade.
Syringa Bank was Boise’s last new bank, opening in February 1997, although existing banks have entered the market in recent years.
Idaho Trust National Bank employs 32, has $50 million in assets and manages about $360 million in client assets. Officials said the expansion into business and personal banking was in response to clients’ requests for a single-source banking solution.
Former trust and estate attorneys Dan and Tom Prohaska founded Idaho Trust and are CEO and president, respectively. A few years ago they moved the headquarters to Boise from Coeur d’Alene, where the company operates an office.
Phil Bratton is executive vice president of Idaho Trust National Bank. He has been involved in numerous bank start-ups, mergers and acquisitions in nearly 30 years in the banking industry.
Idaho Trust was vacating a downtown Boise office space at 300 Main St. last week.
The bank targets professionals and owners of small businesses.
Officials said Idaho Trust combines business and private banking with a concierge service, filling a void created in the 1980s and ‘90s when consolidation transferred many trust and investment services from local offices to out-of-state service centers.
The community banks that opened during the period restored a level of personal service, and chose a traditional banking approach, Tom Prohaska said in a statement.
“By starting instead with trust administration and investment management, and then adding business and personal banking services, our approach acknowledges the synergy between our clients’ business activities and personal wealth management needs,” he said.
“Added to this is a service mentality that respects their accomplishments while helping them move to the next level in their financial life.”
Foothills projects
by Lora Volkert @ Idaho Business Review
Dorothy McKay’s request to Boise Planning and Development Services seems fairly straightforward.
McKay owns eight acres that she wants transferred from one planning area to another. Her parcel was orphaned in a land swap between the cities of Boise and Eagle. It’s separated from the rest of the land in the planning area by a road, a canal, a cemetery, a subdivision and a landfill. It no longer has much of anything in common with the rest of the area.
McKay may sell the land one day for residential development, according to her application to the city, and the change would allow a developer to build four units to an acre instead of one.
There’s just one problem: The land is in the Foothills Planning Area.
The planning staff has decided to recommend that the city approve her request, Comprehensive Planner Bruce Eggleston said. The parcels, located on Hill Road Parkway, are flat, not hilly. There are no threatened or endangered species on the land. Any scenic values the land may once have held were lost when Dry Creek Cemetery, the landfill and the subdivision were built.
But that doesn’t stop it from being a touchy subject to bring up.
“‘Tricky’ is a rash understatement,” Eggleston said when asked how tricky it is to deal with Boise Foothills land.
People get emotional about the Foothills, he said. “They’re the identity of all Ada County, especially Boise.”
So even in seemingly clear cases like McKay’s, city planners have to be doubly careful when evaluating requests and provide a clear justification for their decisions, Eggleston said.
“We don’t want to establish a precedent where just any land could be taken out of the Foothills,” he said. “The standard has to be as high as possible.”
It’s especially important to set good standards now. For the last four years, the city hasn’t had a single application for a building or a zone change in the Foothills area, Eggleston said. But that’s changing.
Harris Ranch plans about 350 housing units in the Foothills in its next phases. Avimor and The Cliffs are planned entirely in Foothills areas. Kastera Homes is working on feasibility studies and preliminary plans for a 270-acre Foothills development around Hill Road and 28th Street, and Capital Development is doing the same for a 160-acre development across Collister from Quail Ridge in the Foothills.
Developers want to be seen as doing their part to develop responsibly and preserve as much of the Foothills as possible.
Wayne S. Forrey said Kastera is working with the city to analyze what areas of the land the company purchased need to be preserved and made accessible to the public, and what areas are appropriate for development.
“We don’t want to be an insensitive developer,” he said. “We love the Foothills as much as your readers do. Just because we own the land doesn’t mean we can’t be good stewards of the land.”
Avimor developer SunCor plans to preserve open space within the planned community and make the trails it builds in those areas available to the general public, said developer Bob Taunton. It also sited the community in a way that would minimize any changes to the view from the highway.
“We approached what we’re doing from the standpoint that we want the community to have a benefit to the region beyond the residents in there,” he said.
But some citizens are bound to be upset by development in the Foothills.
“I think you build up there, you’re going to step on somebody’s toes,” said Jeannette Duwe, spokeswoman for Skyline Development, which plans to build The Cliffs.
* * *
Dorothy McKay’s request to Boise Planning and Development Services seems fairly straightforward.
McKay owns eight acres that she wants transferred from one planning area to another. Her parcel was orphaned in a land swap between the cities of Boise and Eagle. It’s separated from the rest of the land in the planning area by a road, a canal, a cemetery, a subdivision and a landfill. It no longer has much of anything in common with the rest of the area.
McKay may sell the land one day for residential development, according to her application to the city, and the change would allow a developer to build four units to an acre instead of one.
There’s just one problem: The land is in the Foothills Planning Area.
The planning staff has decided to recommend that the city approve her request, Comprehensive Planner Bruce Eggleston said. The parcels, located on Hill Road Parkway, are flat, not hilly. There are no threatened or endangered species on the land. Any scenic values the land may once have held were lost when Dry Creek Cemetery, the landfill and the subdivision were built.
But that doesn’t stop it from being a touchy subject to bring up.
“‘Tricky’ is a rash understatement,” Eggleston said when asked how tricky it is to deal with Boise Foothills land.
People get emotional about the Foothills, he said. “They’re the identity of all Ada County, especially Boise.”
So even in seemingly clear cases like McKay’s, city planners have to be doubly careful when evaluating requests and provide a clear justification for their decisions, Eggleston said.
“We don’t want to establish a precedent where just any land could be taken out of the Foothills,” he said. “The standard has to be as high as possible.”
It’s especially important to set good standards now. For the last four years, the city hasn’t had a single application for a building or a zone change in the Foothills area, Eggleston said. But that’s changing.
Harris Ranch plans about 350 housing units in the Foothills in its next phases. Avimor and The Cliffs are planned entirely in Foothills areas. Kastera Homes is working on feasibility studies and preliminary plans for a 270-acre Foothills development around Hill Road and 28th Street, and Capital Development is doing the same for a 160-acre development across Collister from Quail Ridge in the Foothills.
Developers want to be seen as doing their part to develop responsibly and preserve as much of the Foothills as possible.
Wayne S. Forrey said Kastera is working with the city to analyze what areas of the land the company purchased need to be preserved and made accessible to the public, and what areas are appropriate for development.
“We don’t want to be an insensitive developer,” he said. “We love the Foothills as much as your readers do. Just because we own the land doesn’t mean we can’t be good stewards of the land.”
Avimor developer SunCor plans to preserve open space within the planned community and make the trails it builds in those areas available to the general public, said developer Bob Taunton. It also sited the community in a way that would minimize any changes to the view from the highway.
“We approached what we’re doing from the standpoint that we want the community to have a benefit to the region beyond the residents in there,” he said.
But some citizens are bound to be upset by development in the Foothills.
“I think you build up there, you’re going to step on somebody’s toes,” said Jeannette Duwe, spokeswoman for Skyline Development, which plans to build The Cliffs.
* * *
Housing Market Update
Bill Young @ Metro Capital Mortgage
Long-term interest rates and commodities are in the natural rebound upward following any straight-line decline.
The 10-year T-note is 4.64 percent (from 4.54 percent), taking mortgages a little above 6.25 percent (6.125 percent bottom), gold $605 (from $575), all in step with energy: oil $63 (from $59), and natural gas $5.45 (from $4.75). Only gasoline is still unwinding, and wholesale $1.48 might break two bucks at the pump after Halloween.
All of these markets are struggling to identify the slope of economic slowdown. "If" is in the past; the economy is slowing, and the Fed's "moderation" is the most optimistic description in play. (Fed note: from now to the election, the Fed will attempt total invisibility, avoiding the appearance of favoritism with either party.)
You know we're in a slowdown when every observer drags out the ol' soft landing and hard landing economic airport, and then drifts to metaphorical sea, hedging his or her forecast with the always-slow-to-turn supertanker.
The newest economic data show steady slowing -- neither abrupt nor stabilizing. August consumer spending rose a meager .1 percent, but that followed a .8 percent spike in July; reality is in the middle somewhere, slowing. Weakness in August orders for durable goods was a surprise, as everybody's model has assumed a strong business sector and capital spending; two declines in a row say that slowing is spreading.
Housing is the gorilla in the slowdown, and perceptions are all over the place. (Ever hear the one about the blind men and the gorilla? Safer to feel elephants.) Analysis by people not connected to housing is now a competitive auction to see who can predict the worst disaster. Robert Shiller (of "Irrational Exuberance" fame, published the day the stock market nosed over in 2000) is in the lead, predicting a nationwide 25 percent decline in home prices. Stocks he knows; housing ... he lives in.
Newsies know that bad news sells, and they are selling, putting on camera a parade of nouveau housing experts, one gleeful I-told-you-so after righteous it's-about-time, or they-deserve-it-don't-they.
Housing people are notorious for their immemorial "It's a great time to buy!" and it's hard to tell which of the genuinely experienced housing experts are playing it straight, and which are shills. Even the straights can get it wrong; we are, after all, in the aftermath of the biggest housing-price run ever.
The best thing is to stick with the data, and evaluate commentators by what they say about it. Example: this week the National Association of Realtors announced that median home prices fell in July, headlines shrieking. Someone who really wanted to know what is going on would have to dig deep to find reality: a decline in median prices just means that more cheaper homes are selling than expensive ones; the median says nothing about the fate of an individual house or neighborhood, or city.
So far, declines in price from prices actually paid a year ago are very minor, and centered in economically weak zones. So far, we have a 20 percent year-over-year decline in new home construction. So far, we have a 50 percent nationwide increase in inventories of unsold homes, but from all-time lows. So far, there is no sign of a downward price spiral in any market. We know that we have a decline in home-equity extraction to support consumer spending, and can't identify alternate stimulus to replace it.
Stick with the airplanes and supertankers, and let the catastrophists handle Iraq.
Also, while waiting this out, for black comedy never miss David Lereah, top economist for the Realtor association. Latest in a line of the inept in that job, he has decided that the only thing wrong with the housing market is that sellers want too much money for their houses. Cut prices far enough, and demand will return.
Noting that the median price of homes rose in the West in July, he said, "Something is going to give in the West. Sellers are stubborn there."
Long-term interest rates and commodities are in the natural rebound upward following any straight-line decline.
The 10-year T-note is 4.64 percent (from 4.54 percent), taking mortgages a little above 6.25 percent (6.125 percent bottom), gold $605 (from $575), all in step with energy: oil $63 (from $59), and natural gas $5.45 (from $4.75). Only gasoline is still unwinding, and wholesale $1.48 might break two bucks at the pump after Halloween.
All of these markets are struggling to identify the slope of economic slowdown. "If" is in the past; the economy is slowing, and the Fed's "moderation" is the most optimistic description in play. (Fed note: from now to the election, the Fed will attempt total invisibility, avoiding the appearance of favoritism with either party.)
You know we're in a slowdown when every observer drags out the ol' soft landing and hard landing economic airport, and then drifts to metaphorical sea, hedging his or her forecast with the always-slow-to-turn supertanker.
The newest economic data show steady slowing -- neither abrupt nor stabilizing. August consumer spending rose a meager .1 percent, but that followed a .8 percent spike in July; reality is in the middle somewhere, slowing. Weakness in August orders for durable goods was a surprise, as everybody's model has assumed a strong business sector and capital spending; two declines in a row say that slowing is spreading.
Housing is the gorilla in the slowdown, and perceptions are all over the place. (Ever hear the one about the blind men and the gorilla? Safer to feel elephants.) Analysis by people not connected to housing is now a competitive auction to see who can predict the worst disaster. Robert Shiller (of "Irrational Exuberance" fame, published the day the stock market nosed over in 2000) is in the lead, predicting a nationwide 25 percent decline in home prices. Stocks he knows; housing ... he lives in.
Newsies know that bad news sells, and they are selling, putting on camera a parade of nouveau housing experts, one gleeful I-told-you-so after righteous it's-about-time, or they-deserve-it-don't-they.
Housing people are notorious for their immemorial "It's a great time to buy!" and it's hard to tell which of the genuinely experienced housing experts are playing it straight, and which are shills. Even the straights can get it wrong; we are, after all, in the aftermath of the biggest housing-price run ever.
The best thing is to stick with the data, and evaluate commentators by what they say about it. Example: this week the National Association of Realtors announced that median home prices fell in July, headlines shrieking. Someone who really wanted to know what is going on would have to dig deep to find reality: a decline in median prices just means that more cheaper homes are selling than expensive ones; the median says nothing about the fate of an individual house or neighborhood, or city.
So far, declines in price from prices actually paid a year ago are very minor, and centered in economically weak zones. So far, we have a 20 percent year-over-year decline in new home construction. So far, we have a 50 percent nationwide increase in inventories of unsold homes, but from all-time lows. So far, there is no sign of a downward price spiral in any market. We know that we have a decline in home-equity extraction to support consumer spending, and can't identify alternate stimulus to replace it.
Stick with the airplanes and supertankers, and let the catastrophists handle Iraq.
Also, while waiting this out, for black comedy never miss David Lereah, top economist for the Realtor association. Latest in a line of the inept in that job, he has decided that the only thing wrong with the housing market is that sellers want too much money for their houses. Cut prices far enough, and demand will return.
Noting that the median price of homes rose in the West in July, he said, "Something is going to give in the West. Sellers are stubborn there."
Thursday, September 28, 2006
Old developer allowed to sell downtown Boise hole
by Lora Volkert @ Idaho Business Review
Most people know it as “The Hole In The Ground.”
The empty pit of concrete and rebar at Eighth and Main in Boise was the beginning of a 25-story office and residential building that inspired artwork, vitriol, lawsuits and its own Web site.
Although the hole was only the beginning, during 10 long years city officials and residents realized the project had no middle. But they are tentatively, tepidly listening to an idea that could mean the saga’s end.
It began in 2001, when the Capital City Development Corp. — the redevelopment agency for downtown Boise — sold the lot at Eighth and Main to developer Rick Peterson for $265,000.
Peterson promised 25 glorious stories and said he had financing to make it happen. But that financing fell through again and again. The developer put some of his own money into the project, but construction was stop and start, with little work done after the first year. Contractors did just enough to keep the building permit valid — a little concrete here, some rebar there — while Peterson sought other financing deals, none of which panned out.
Contractors went unpaid and filed liens. The building permit was revoked, then reinstated.
Headlines in this paper tracked the lack of progress.
June 2001: “Boise Tower groundbreaking ceremony postponed.”
February 2002: “Work to resume on Boise Tower.”
May 2002: “Boise Tower seeks new construction financing.”
November 2002: “Developer says work on Boise Tower may resume.”
January 2003: “Boise Tower announces third lender; construction to go forward.”
June 2003: “Boise Tower default declared.”
October 2003: “Work on Boise Tower starts up again.”
Boiseans waited. They stewed. They sniped. The Tower became a running joke.
A snarky Web site sprang up, www.theboisehole.com, with a forum for readers to submit ideas for filling the hole. Among the suggestions: an ice skating rink, PETA supporters, people who use air quotes, and bacon.
The city put up plywood fences around the site and had murals painted so citizens wouldn’t have to look at the hole. But a nearly 60-foot banner with the ironic proclamation that Boise Tower is “what’s going up downtown” remained for years.
In June 2003, CCDC declared Peterson’s firm — Boise Tower Associates — in default and asked for the site back.
But Peterson refused to hand it over. The resulting court battle seemed to be settled in February of this year, when Judge Kathryn Sticklen told Peterson to return the site to CCDC. The ruling was appealed.
However, in April Peterson’s firm agreed to pay CCDC $950,000, according to court documents. That agreement was part of a three-way deal to transfer title of the land to Charterhouse Boise Downtown Development, a new firm that wants to build a 31-story building at the site.
But CCDC has not been paid most of its money, and it may be a long time coming.
Sub
Rather than turn the title back to CCDC, Peterson is selling the property.
CCDC Executive Director Phil Kushlan said it was only when Peterson faced losing the title in his appeal of Sticklen’s ruling that he agreed to transfer the property to Rogers.
But Peterson’s firm sold the land for considerably more than the $100,000 CCDC has received from the sale, according to an attorney involved in the case.
“Charterhouse paid quite a bit more than that,” said Rick Boardman, an attorney at Perkins Coie who represented CCDC in the settlement, said.
Gary Rogers, the developer who founded Charterhouse, hasn’t disclosed what he paid for the site.
“We paid more money than I wish we had to acquire the site,” Rogers said. “We paid more money than we wanted to solve a problem.”
The Ada County Office of the Assessor has set the site’s value at $943,300. Assessments tend to lag behind purchase prices, Deputy Assessor Brad Smith said.
According to court documents, the $100,000 Charterhouse paid to CCDC as part of the sale will be applied to what Peterson owes the agency.
Boise Tower Associates will pay a portion of the remaining $850,000, and Charterhouse will pay the rest, Kushlan said.
But CCDC won’t receive the rest of its money from Charterhouse until the company’s construction financing closes, Boardman said. Rogers has said he has two investment firms interested in his project, and he wants to begin construction by Christmas.
It may take longer for CCDC to receive its money from Boise Tower Associates. According to court documents, payments to CCDC are contingent on the firm winning or settling its lawsuit against Washington Capital Management, which at one point committed to provide financing for the original project.
The transfer of property from Rick Peterson to another developer was what CCDC wanted all along, Kushlan said. It was a better scenario for CCDC than simply getting the property back.
“We didn’t want the title back. We wanted a building there,” he said.
City suit
A provision of the agreement between Peterson and CCDC gave the group the right to take back the title to the site if Boise Tower Associates failed to fulfill its part of the bargain. CCDC tried to exercise that right, but Peterson refused to return the title.
Boise Tower Associates countersued CCDC, the city of Boise and former Boise Planning and Development Services Director Timothy Hogland.
The company claimed that CCDC unreasonably withheld approval of financing and that CCDC interfered with the construction process by conspiring with the city of Boise to revoke the building permit before it had lapsed.
The settlement terms for CCDC’s lawsuit required Peterson to drop his countersuit against CCDC.
However, Peterson has not dropped his suit against the city of Boise, which is scheduled for trial on March 12, 2007.
In a deposition, Peterson’s attorneys asked Hogland about the permit revocation. According to court records, he was asked if he had any reason to dispute work was done the day concrete was poured.
“Well, if you call 14 yards of concrete work, yeah,” Hogland said.
“I guess I don’t have a feel for what 14 yards is,” the attorney said.
“A project that size, it’s like I said, it would be equivalent to nailing a few nails on a house,” Hogland said.
* * *
Most people know it as “The Hole In The Ground.”
The empty pit of concrete and rebar at Eighth and Main in Boise was the beginning of a 25-story office and residential building that inspired artwork, vitriol, lawsuits and its own Web site.
Although the hole was only the beginning, during 10 long years city officials and residents realized the project had no middle. But they are tentatively, tepidly listening to an idea that could mean the saga’s end.
It began in 2001, when the Capital City Development Corp. — the redevelopment agency for downtown Boise — sold the lot at Eighth and Main to developer Rick Peterson for $265,000.
Peterson promised 25 glorious stories and said he had financing to make it happen. But that financing fell through again and again. The developer put some of his own money into the project, but construction was stop and start, with little work done after the first year. Contractors did just enough to keep the building permit valid — a little concrete here, some rebar there — while Peterson sought other financing deals, none of which panned out.
Contractors went unpaid and filed liens. The building permit was revoked, then reinstated.
Headlines in this paper tracked the lack of progress.
June 2001: “Boise Tower groundbreaking ceremony postponed.”
February 2002: “Work to resume on Boise Tower.”
May 2002: “Boise Tower seeks new construction financing.”
November 2002: “Developer says work on Boise Tower may resume.”
January 2003: “Boise Tower announces third lender; construction to go forward.”
June 2003: “Boise Tower default declared.”
October 2003: “Work on Boise Tower starts up again.”
Boiseans waited. They stewed. They sniped. The Tower became a running joke.
A snarky Web site sprang up, www.theboisehole.com, with a forum for readers to submit ideas for filling the hole. Among the suggestions: an ice skating rink, PETA supporters, people who use air quotes, and bacon.
The city put up plywood fences around the site and had murals painted so citizens wouldn’t have to look at the hole. But a nearly 60-foot banner with the ironic proclamation that Boise Tower is “what’s going up downtown” remained for years.
In June 2003, CCDC declared Peterson’s firm — Boise Tower Associates — in default and asked for the site back.
But Peterson refused to hand it over. The resulting court battle seemed to be settled in February of this year, when Judge Kathryn Sticklen told Peterson to return the site to CCDC. The ruling was appealed.
However, in April Peterson’s firm agreed to pay CCDC $950,000, according to court documents. That agreement was part of a three-way deal to transfer title of the land to Charterhouse Boise Downtown Development, a new firm that wants to build a 31-story building at the site.
But CCDC has not been paid most of its money, and it may be a long time coming.
Sub
Rather than turn the title back to CCDC, Peterson is selling the property.
CCDC Executive Director Phil Kushlan said it was only when Peterson faced losing the title in his appeal of Sticklen’s ruling that he agreed to transfer the property to Rogers.
But Peterson’s firm sold the land for considerably more than the $100,000 CCDC has received from the sale, according to an attorney involved in the case.
“Charterhouse paid quite a bit more than that,” said Rick Boardman, an attorney at Perkins Coie who represented CCDC in the settlement, said.
Gary Rogers, the developer who founded Charterhouse, hasn’t disclosed what he paid for the site.
“We paid more money than I wish we had to acquire the site,” Rogers said. “We paid more money than we wanted to solve a problem.”
The Ada County Office of the Assessor has set the site’s value at $943,300. Assessments tend to lag behind purchase prices, Deputy Assessor Brad Smith said.
According to court documents, the $100,000 Charterhouse paid to CCDC as part of the sale will be applied to what Peterson owes the agency.
Boise Tower Associates will pay a portion of the remaining $850,000, and Charterhouse will pay the rest, Kushlan said.
But CCDC won’t receive the rest of its money from Charterhouse until the company’s construction financing closes, Boardman said. Rogers has said he has two investment firms interested in his project, and he wants to begin construction by Christmas.
It may take longer for CCDC to receive its money from Boise Tower Associates. According to court documents, payments to CCDC are contingent on the firm winning or settling its lawsuit against Washington Capital Management, which at one point committed to provide financing for the original project.
The transfer of property from Rick Peterson to another developer was what CCDC wanted all along, Kushlan said. It was a better scenario for CCDC than simply getting the property back.
“We didn’t want the title back. We wanted a building there,” he said.
City suit
A provision of the agreement between Peterson and CCDC gave the group the right to take back the title to the site if Boise Tower Associates failed to fulfill its part of the bargain. CCDC tried to exercise that right, but Peterson refused to return the title.
Boise Tower Associates countersued CCDC, the city of Boise and former Boise Planning and Development Services Director Timothy Hogland.
The company claimed that CCDC unreasonably withheld approval of financing and that CCDC interfered with the construction process by conspiring with the city of Boise to revoke the building permit before it had lapsed.
The settlement terms for CCDC’s lawsuit required Peterson to drop his countersuit against CCDC.
However, Peterson has not dropped his suit against the city of Boise, which is scheduled for trial on March 12, 2007.
In a deposition, Peterson’s attorneys asked Hogland about the permit revocation. According to court records, he was asked if he had any reason to dispute work was done the day concrete was poured.
“Well, if you call 14 yards of concrete work, yeah,” Hogland said.
“I guess I don’t have a feel for what 14 yards is,” the attorney said.
“A project that size, it’s like I said, it would be equivalent to nailing a few nails on a house,” Hogland said.
* * *
Boise Airport updating master plan
Soaring to new heights (Business Barometer)
by John Anderson @ Idaho Business Review
Imagine, if you can, Boise without a major air carrier airport.
Passengers would travel by private auto or bus. Goods would travel by truck, or the limited backhaul of rail. Micron, HP, and all of our high-tech businesses could not exist in Boise. Headquarters, including Boise Cascade, Albertsons, Washington Group, and the banking industry would not tolerate driving over six hours to Salt Lake City, the nearest air carrier airport. Imagine, if you can, a quaint little Boise city of about 15,000 people.
To guarantee that Boise Airport (BOI) remains a leader in providing aviation access, we are updating our Master Plan, looking at the short-run capital plan, and the long-run strategic plan to remain viable 50 years in the future.
Zoning off and on the airport and the proposed Lake Hazel extension to I-84 are being reviewed to make certain no new housing is placed near the airport, and that compatible industrial or commercial uses are encouraged.
We will also recommend that no new housing be allowed within 20,000 feet off the east end of our runways, and 15,000 to the west. This would extend about a half mile beyond the Micron campus and almost to Maple Grove. On airport property we will propose a new “airport zone,” similar to the university zoning around BSU.
On the capital side of Master Planning, we are working to add more readily developable land to our aviation inventory. With the development of new corporate aviation facilities by Micron and Appleton Air Sports, we have little land on which we could build a hangar on today. To increase our inventory, we are taking several steps:
• Relocate Orchard adding 60 acres, spring 2007.
• Extend the south parallel taxiway east beyond the Air National Guard, 2008, adding several hundred acres.
• Move National Guard Munitions Storage area, 2008-2011, adding about 60 acres.
• Construct new Air Traffic Control Tower (shifting target), allows development of our newest runway areas, adding about 1,000 developable acres for aviation uses.
• Open third runway for all users when new Air Traffic Control Tower (ATCT) is commissioned. FAA is now saying it will not be completed until 2013.
• Construct new taxiway connecting third runway with the main airport complex. Target to complete with ATCT completion.
By opening new lands for aviation development, opportunities for small and large employers will be created. As an example, the Idaho National Guard, Boise Airport’s largest tenant, has well in excess of 1,000 full-time employees on airport property.
Western Aircraft, situated on about 10 acres of airport property, employs from 120-140 full-time mechanics, specialists, and sales people. And Precision Propeller located on one acre of airport land has a very small workforce that provides a valuable service to the aviation community and a good living for the sole proprietor.
We have had multiple inquiries recently from businesses that could locate from dozens to hundreds of new aviation jobs on Boise Airport. Opening up new land for direct aviation development will likely bring new and decent-paying jobs to our economy.
From a 2004 survey of airport tenants, we found that there were well over 4,200 employees located on airport property with an annual payroll of $250 million. This makes the airport campus one of the largest employers in the Valley. New aviation development will likely push these numbers even higher.
Developing BOI as an air cargo center has been discussed for some time. Land will be available, and we can build our third runway to exceed the standards of any air cargo aircraft in the world. We are well situated for non-stop flights to Europe and Asia. Airports on the West Coast are overcrowded.
The National Interagency Fire Center (NIFC) is one of the major employers with direct aviation access to the airport. Indeed, they could not exist as they do today without our major air carrier airport. In the long run, we would like to make more land available to NIFC in our south runway area, relocating their existing campus, and perhaps expanding their facilities. This is a process that will take at least a decade or more to facilitate.
Then there is the passenger terminal complex, which absorbs much of our capital funding. In addition to the obvious need for a parking garage expansion, there will be needs to build a new concourse in the three- to eight-year time frame, and build new U.S. Customs and Border Control facilities in both the short and long term.
Even though BOI is completely self-supporting, the State of Idaho makes it very difficult for airports to borrow the money that is needed to complete these projects. Boise Airport has passed Airport Revenue Bond measures with over the two-thirds majority required in the 1960s and 1980s. We believe there is a significant education process required for voters to understand that there is no payment from local taxes, even in default, from Airport Revenue Bonds.
In addition to passing an Airport Revenue Bond with a two-thirds majority, alternatives could include the following:
• Change the Idaho Constitution.
• Define Airports as Ports, which are allowed to issue Revenue Bonds.
• Privatize individual projects.
Privatization may be a short-term fix for a parking garage expansion. While we may examine this more closely, privatizing passenger facilities, U.S. Customs facilities (which pay no rent), or runways is very unlikely to work. Over the long run, we need to find a way to leap from the 19th century to the 21st century in terms of Airport Revenue Bonding capabilities.
BOI is more than just a place for airline passengers to come and go. BOI is an economic juggernaut that allows Boise and the surrounding areas to prosper. As one of the largest employers in our area, the airport must be protected from incompatible development, and we must develop more land for direct aviation development, as well as continue to develop the passenger terminal complex. These developments will require a reliable access to the bond market.
Over the next 50 years of our long-term strategic plan, we believe that BOI has the potential to be, and in fact will be, the leading airport in the Pacific Northwest.
John Anderson is the director for the Boise Airport.
by John Anderson @ Idaho Business Review
Imagine, if you can, Boise without a major air carrier airport.
Passengers would travel by private auto or bus. Goods would travel by truck, or the limited backhaul of rail. Micron, HP, and all of our high-tech businesses could not exist in Boise. Headquarters, including Boise Cascade, Albertsons, Washington Group, and the banking industry would not tolerate driving over six hours to Salt Lake City, the nearest air carrier airport. Imagine, if you can, a quaint little Boise city of about 15,000 people.
To guarantee that Boise Airport (BOI) remains a leader in providing aviation access, we are updating our Master Plan, looking at the short-run capital plan, and the long-run strategic plan to remain viable 50 years in the future.
Zoning off and on the airport and the proposed Lake Hazel extension to I-84 are being reviewed to make certain no new housing is placed near the airport, and that compatible industrial or commercial uses are encouraged.
We will also recommend that no new housing be allowed within 20,000 feet off the east end of our runways, and 15,000 to the west. This would extend about a half mile beyond the Micron campus and almost to Maple Grove. On airport property we will propose a new “airport zone,” similar to the university zoning around BSU.
On the capital side of Master Planning, we are working to add more readily developable land to our aviation inventory. With the development of new corporate aviation facilities by Micron and Appleton Air Sports, we have little land on which we could build a hangar on today. To increase our inventory, we are taking several steps:
• Relocate Orchard adding 60 acres, spring 2007.
• Extend the south parallel taxiway east beyond the Air National Guard, 2008, adding several hundred acres.
• Move National Guard Munitions Storage area, 2008-2011, adding about 60 acres.
• Construct new Air Traffic Control Tower (shifting target), allows development of our newest runway areas, adding about 1,000 developable acres for aviation uses.
• Open third runway for all users when new Air Traffic Control Tower (ATCT) is commissioned. FAA is now saying it will not be completed until 2013.
• Construct new taxiway connecting third runway with the main airport complex. Target to complete with ATCT completion.
By opening new lands for aviation development, opportunities for small and large employers will be created. As an example, the Idaho National Guard, Boise Airport’s largest tenant, has well in excess of 1,000 full-time employees on airport property.
Western Aircraft, situated on about 10 acres of airport property, employs from 120-140 full-time mechanics, specialists, and sales people. And Precision Propeller located on one acre of airport land has a very small workforce that provides a valuable service to the aviation community and a good living for the sole proprietor.
We have had multiple inquiries recently from businesses that could locate from dozens to hundreds of new aviation jobs on Boise Airport. Opening up new land for direct aviation development will likely bring new and decent-paying jobs to our economy.
From a 2004 survey of airport tenants, we found that there were well over 4,200 employees located on airport property with an annual payroll of $250 million. This makes the airport campus one of the largest employers in the Valley. New aviation development will likely push these numbers even higher.
Developing BOI as an air cargo center has been discussed for some time. Land will be available, and we can build our third runway to exceed the standards of any air cargo aircraft in the world. We are well situated for non-stop flights to Europe and Asia. Airports on the West Coast are overcrowded.
The National Interagency Fire Center (NIFC) is one of the major employers with direct aviation access to the airport. Indeed, they could not exist as they do today without our major air carrier airport. In the long run, we would like to make more land available to NIFC in our south runway area, relocating their existing campus, and perhaps expanding their facilities. This is a process that will take at least a decade or more to facilitate.
Then there is the passenger terminal complex, which absorbs much of our capital funding. In addition to the obvious need for a parking garage expansion, there will be needs to build a new concourse in the three- to eight-year time frame, and build new U.S. Customs and Border Control facilities in both the short and long term.
Even though BOI is completely self-supporting, the State of Idaho makes it very difficult for airports to borrow the money that is needed to complete these projects. Boise Airport has passed Airport Revenue Bond measures with over the two-thirds majority required in the 1960s and 1980s. We believe there is a significant education process required for voters to understand that there is no payment from local taxes, even in default, from Airport Revenue Bonds.
In addition to passing an Airport Revenue Bond with a two-thirds majority, alternatives could include the following:
• Change the Idaho Constitution.
• Define Airports as Ports, which are allowed to issue Revenue Bonds.
• Privatize individual projects.
Privatization may be a short-term fix for a parking garage expansion. While we may examine this more closely, privatizing passenger facilities, U.S. Customs facilities (which pay no rent), or runways is very unlikely to work. Over the long run, we need to find a way to leap from the 19th century to the 21st century in terms of Airport Revenue Bonding capabilities.
BOI is more than just a place for airline passengers to come and go. BOI is an economic juggernaut that allows Boise and the surrounding areas to prosper. As one of the largest employers in our area, the airport must be protected from incompatible development, and we must develop more land for direct aviation development, as well as continue to develop the passenger terminal complex. These developments will require a reliable access to the bond market.
Over the next 50 years of our long-term strategic plan, we believe that BOI has the potential to be, and in fact will be, the leading airport in the Pacific Northwest.
John Anderson is the director for the Boise Airport.
Wednesday, September 27, 2006
Analyst: Mortgages going down
by Brad Carlson @ Idaho Business Review
A slowdown in the housing market won’t lead to a meltdown in the mortgage market, according to an executive with mortgage giant Countrywide.
Home buying and refinancing will continue in a housing market that’s active but down from last year’s highs, William Berliner said.
Berliner is executive vice president of Countrywide Securities Corp. He spoke in Boise Sept. 20 at a Chartered Financial Analyst Society of Idaho luncheon meeting at the Owyhee Plaza Hotel.
“It remains relatively robust, despite the higher level of (interest) rates,” he said.
He’s optimistic despite Coutrywide’s mortgage production being down by about 25 percent from last year largely on fewer refinances.
“It’s a market that is trending downward, but is not by any means a bubble popping or collapsing,” Berliner said.
Mortgage defaults and home foreclosures should move higher. However, many homeowners can tap equity, and that should keep defaults and foreclosures well below levels from 2000 and 2001.
Berliner said defaults would mainly be seen on sub-prime loans issued to people with lower credit ratings.
One reason the mortgage market remains active despite higher interest rates is that borrowers are focused on payment choices, not just interest rates, Berliner said.
Borrowers are more comfortable with adjustable-rate mortgages now compared to a decade ago, he said.
About 75 percent of second mortgages are adjustable-rate, and 40 to 50 percent of “ARMs” are interest-only or pay-option, he said.
High-income borrowers continue to use the new products as cash-management tools, supporting demand, Berliner said.
The top 20 percent of wage earners drive mortgage production and pay the bulk of mortgage interest, he said. The top 40 percent of earners account for more than 70 percent of mortgage equity withdrawal. That’s a factor in his expectation that equity withdrawal will diminish but not collapse.
Home ownership has fallen recently among lower-income groups, said Berliner, who is based in Calabassas, Calif.
Cash-strapped borrowers who can make only minimum payments on the non-traditional mortgages run the risk of failing to maintain or build equity given higher interest rates, he said. However, “hybrid” mortgage rates remain below fixed mortgage rates.
Conventional fixed mortgages were used on 63 percent of purchases in 2003, compared to 42 percent last year and 37 percent in the first half of this year. On the refinance side, 47 percent of loans were fixed compared to 76 percent in 2003.
***
A slowdown in the housing market won’t lead to a meltdown in the mortgage market, according to an executive with mortgage giant Countrywide.
Home buying and refinancing will continue in a housing market that’s active but down from last year’s highs, William Berliner said.
Berliner is executive vice president of Countrywide Securities Corp. He spoke in Boise Sept. 20 at a Chartered Financial Analyst Society of Idaho luncheon meeting at the Owyhee Plaza Hotel.
“It remains relatively robust, despite the higher level of (interest) rates,” he said.
He’s optimistic despite Coutrywide’s mortgage production being down by about 25 percent from last year largely on fewer refinances.
“It’s a market that is trending downward, but is not by any means a bubble popping or collapsing,” Berliner said.
Mortgage defaults and home foreclosures should move higher. However, many homeowners can tap equity, and that should keep defaults and foreclosures well below levels from 2000 and 2001.
Berliner said defaults would mainly be seen on sub-prime loans issued to people with lower credit ratings.
One reason the mortgage market remains active despite higher interest rates is that borrowers are focused on payment choices, not just interest rates, Berliner said.
Borrowers are more comfortable with adjustable-rate mortgages now compared to a decade ago, he said.
About 75 percent of second mortgages are adjustable-rate, and 40 to 50 percent of “ARMs” are interest-only or pay-option, he said.
High-income borrowers continue to use the new products as cash-management tools, supporting demand, Berliner said.
The top 20 percent of wage earners drive mortgage production and pay the bulk of mortgage interest, he said. The top 40 percent of earners account for more than 70 percent of mortgage equity withdrawal. That’s a factor in his expectation that equity withdrawal will diminish but not collapse.
Home ownership has fallen recently among lower-income groups, said Berliner, who is based in Calabassas, Calif.
Cash-strapped borrowers who can make only minimum payments on the non-traditional mortgages run the risk of failing to maintain or build equity given higher interest rates, he said. However, “hybrid” mortgage rates remain below fixed mortgage rates.
Conventional fixed mortgages were used on 63 percent of purchases in 2003, compared to 42 percent last year and 37 percent in the first half of this year. On the refinance side, 47 percent of loans were fixed compared to 76 percent in 2003.
***
Monday, September 25, 2006
Feds hold short-term rates
Fixed Rates Like the Fed
FW Market Update
Underlying credit markets may have been roiled this week, but you can't tell that from that stance of the Federal Funds Rate and the average 30-year fixed-rate mortgage (FRM). After this week's FOMC meeting, Fed Funds remained at 5.25%, while fixed rate mortgages closed the nation's leading mortgage survey at an average rate of 6.50%. However, the average five-one Hybrid ARMs ticked two basis points (.02%) higher, landing at 6.26% for the week.
The statement which the Fed released at the close of the FOMC meeting sounded a lot like the one from August: "moderation in growth"... "cooling of the housing market"... "readings on core inflation elevated"... "some inflation risks remain." As with last time, the decision to hold short-term rates unchanged was not unanimous.
What wasn't included this time, though, was a characterization that the housing market was cooling "gradually." Also absent was the assertion that "lagged effects of increases in interest rates and energy prices" were contributing to the slowdown. Housing seems to be cooling more quickly than the Fed anticipated, perhaps, and the effects of previous interest rate increases and high energy costs appear to be part of the picture now.
The National Association of Home Builders
FW Market Update
Underlying credit markets may have been roiled this week, but you can't tell that from that stance of the Federal Funds Rate and the average 30-year fixed-rate mortgage (FRM). After this week's FOMC meeting, Fed Funds remained at 5.25%, while fixed rate mortgages closed the nation's leading mortgage survey at an average rate of 6.50%. However, the average five-one Hybrid ARMs ticked two basis points (.02%) higher, landing at 6.26% for the week.
The statement which the Fed released at the close of the FOMC meeting sounded a lot like the one from August: "moderation in growth"... "cooling of the housing market"... "readings on core inflation elevated"... "some inflation risks remain." As with last time, the decision to hold short-term rates unchanged was not unanimous.
What wasn't included this time, though, was a characterization that the housing market was cooling "gradually." Also absent was the assertion that "lagged effects of increases in interest rates and energy prices" were contributing to the slowdown. Housing seems to be cooling more quickly than the Fed anticipated, perhaps, and the effects of previous interest rate increases and high energy costs appear to be part of the picture now.
The National Association of Home Builders
West Ada County-Meridian will plan for new I-84 interchange
Article published Sep 25, 2006
by Kathleen Kreller @ The Idaho Stateman
Meridian will plan for new I-84 interchange
City will bring design experts, public together for 4 days to craft Ten Mile area's future
Meridian leaders are hoping a days-long blitzkrieg of planning sessions, public meetings and debate will hammer out the layout and look for a four-square-mile area around the future Ten Mile freeway interchange.
City leaders know that once the new interchange is installed, the area's current rural nature will change forever over the next 10 years. Developers are planning huge new shopping centers, apartments, office buildings, stores and homes.
So Meridian is launching a $65,000 study to decide what the area around the interchange will look like. And local transportation agencies are amassing funds to construct the interchange and making plans to improve and expand roads that will someday feed the interstate at Ten Mile Road.
The four-day study starts today and runs through Thursday, Sept. 28 at the empty Jabil building, 1303 E. Central Drive in Meridian. The study is known as a "charette," and involves a series of intensive workshops where design experts work with the public to develop the plan. The public is encouraged to attend.
"The Ten Mile interchange is a critical need for our region. We've been asking for it and planning for it for 30 years. It's finally becoming a reality," said Meridian traffic planner Steve Siddoway. "We are really trying to interface the planning of land use and transportation together in a way we have never really done before. We want the public to come ... to make this a better plan."
Developers and city planners have said the area just north of a future interchange at Ten Mile Road likely will develop first, with large retail stores, malls, office buildings and restaurants. Apartments, duplexes and townhouses likely will be built farther away from the interchange, they say. A developer has purchased acres of land near the Ten Mile overpass with plans to build commercial centers and office buildings.
Ten Mile Road is the next logical place for commercial growth in Meridian because all the available land along other commercial areas such as Eagle Road and Main Street will be built out in the next five years, David Turnbull, president of Brighton Corp., who co-owns about 120 acres near Ten Mile, has said.
Residents, traffic planners and city staff have discussed a new interchange at Ten Mile for years, and city leaders like Meridian Mayor Tammy de Weerd have zealously lobbied for it.
The Idaho Transportation Department secured $19.6 million in federal money in July to build the interchange, and remaining funds could come from former Gov. Dirk Kempthorne's $1.6 billion highway plan that is paid for with GARVEE (grant anticipation revenue vehicle bonds. The entire interchange project is estimated to take about two years and could start sometime in 2009.
The plan will include the area running from Linder Road west to McDermott Road and from Overland Road north across the interstate to the rail line.
by Kathleen Kreller @ The Idaho Stateman
Meridian will plan for new I-84 interchange
City will bring design experts, public together for 4 days to craft Ten Mile area's future
Meridian leaders are hoping a days-long blitzkrieg of planning sessions, public meetings and debate will hammer out the layout and look for a four-square-mile area around the future Ten Mile freeway interchange.
City leaders know that once the new interchange is installed, the area's current rural nature will change forever over the next 10 years. Developers are planning huge new shopping centers, apartments, office buildings, stores and homes.
So Meridian is launching a $65,000 study to decide what the area around the interchange will look like. And local transportation agencies are amassing funds to construct the interchange and making plans to improve and expand roads that will someday feed the interstate at Ten Mile Road.
The four-day study starts today and runs through Thursday, Sept. 28 at the empty Jabil building, 1303 E. Central Drive in Meridian. The study is known as a "charette," and involves a series of intensive workshops where design experts work with the public to develop the plan. The public is encouraged to attend.
"The Ten Mile interchange is a critical need for our region. We've been asking for it and planning for it for 30 years. It's finally becoming a reality," said Meridian traffic planner Steve Siddoway. "We are really trying to interface the planning of land use and transportation together in a way we have never really done before. We want the public to come ... to make this a better plan."
Developers and city planners have said the area just north of a future interchange at Ten Mile Road likely will develop first, with large retail stores, malls, office buildings and restaurants. Apartments, duplexes and townhouses likely will be built farther away from the interchange, they say. A developer has purchased acres of land near the Ten Mile overpass with plans to build commercial centers and office buildings.
Ten Mile Road is the next logical place for commercial growth in Meridian because all the available land along other commercial areas such as Eagle Road and Main Street will be built out in the next five years, David Turnbull, president of Brighton Corp., who co-owns about 120 acres near Ten Mile, has said.
Residents, traffic planners and city staff have discussed a new interchange at Ten Mile for years, and city leaders like Meridian Mayor Tammy de Weerd have zealously lobbied for it.
The Idaho Transportation Department secured $19.6 million in federal money in July to build the interchange, and remaining funds could come from former Gov. Dirk Kempthorne's $1.6 billion highway plan that is paid for with GARVEE (grant anticipation revenue vehicle bonds. The entire interchange project is estimated to take about two years and could start sometime in 2009.
The plan will include the area running from Linder Road west to McDermott Road and from Overland Road north across the interstate to the rail line.
Thursday, September 21, 2006
Planned communties could add 50,000 homes
by Lora Volkert @ Idaho Business Review
09/18/2006
The developers of nine planned communities hope to build nearly 48,800 homes in Ada County over the next 15 to 20 years.
That’s enough for most of the 53,000 additional households Ada County is projected to have by 2020, according to the Community Planning Association of Southwest Idaho.
It’s also more than twice the 22,686 homes built in Ada County over the last five years of the state’s building boom, according to U.S. Census Bureau estimates from the Idaho Department of Commerce and Labor.
And, finally, the total doesn’t account for additional phases of the Avimor development near Eagle or a planned community at Blacks Creek, neither of which had housing estimates available.
They are, in short, expecting big things.
The total was compiled by the Idaho Business Review using public records and estimates from developers.
Some of the first homes from the batch of planned communities will enter the market in May 2007, when Avimor plans to hold its grand opening, SunCor General Manager Bob Taunton said.
The volume of planned communities could lead to a crowded market for developers of regular subdivisions or condominium projects, especially as new homebuilders continue to enter the market.
But that doesn’t mean Ada County is in for 20 years of overbuilding, said Steve Barbey, an associate broker with Group One Real Estate.
If developers pace their building evenly, the nine planned communities would add about 2,440 houses per year to the housing market. Real estate agents sold nearly 3,000 homes just in the last three months, according to the Intermountain Multiple Listing Service.
Build-out schedules for the planned communities suggest housing won’t enter the market that evenly, but developers may be forced to delay, Barbey said.
It’s not in a developer’s best interest to build more houses than the market can absorb. If they do, Barbey said, the houses will sit empty or won’t fetch a good price.
Developers may say they’ll build thousands of homes per year now, Barbey said, but that doesn’t mean they will. If the market can only absorb 500 of their homes per year, they’ll make adjustments, he said.
“What they plan on doing and what actually comes to pass are two different things.”
Some developers have ambitious plans. Dennis Baker plans to build 3,300 homes per year in a 20,000-unit planned community called Isaac’s Canyon, according to Ralph Perez, senior vice president of Isaac’s Canyon Development Co.
Other planned community developers are playing it safe. Tucker Johnson, the developer of a 1,350-unit community called The Cliffs and of the 600-unit Hazelwood South, said he plans to build conservatively in 50-lot phases rather than 100-lot chunks.
Some planned community developers expect demand for their housing products to be higher than for the rest of their market. They’re relying on what they see as a unique product.
Eighty acres of soccer, tennis, swimming and golf academies at the center of The Legacy, a 1,350-unit planned community planned in west Eagle, will be a draw in a market where so many people are active in the outdoors, said project manager Todd Santiago.
Isaac’s Canyon could be set apart from other planned communities because it plans be the first LEED-certified green planned community in the country. Leadership in Energy and Environmental Design is developing green building standards for residential communities, Perez said. Isaac’s Canyon Development plans to develop its building standards to coincide with LEED’s requirements, he said.
Isaac’s Canyon also plans to offer fiber optic cable to every home and build denser, more city-like housing, Perez said. The developer plans to build four or five elementary schools, two middle schools and a high school, he said.
Perez said he expects the real estate market to be cyclical, and during downturns Isaac’s Canyon Development plans to change its product mix and offer more small homes and fewer high-end houses.
But he still banks on Isaac’s Canyon being so unusual he’ll be able to sell houses no matter what the rest of the market is doing.
“There are no planned communities in the Valley like the type of planned community we’re doing,” Perez said.
* * *
09/18/2006
The developers of nine planned communities hope to build nearly 48,800 homes in Ada County over the next 15 to 20 years.
That’s enough for most of the 53,000 additional households Ada County is projected to have by 2020, according to the Community Planning Association of Southwest Idaho.
It’s also more than twice the 22,686 homes built in Ada County over the last five years of the state’s building boom, according to U.S. Census Bureau estimates from the Idaho Department of Commerce and Labor.
And, finally, the total doesn’t account for additional phases of the Avimor development near Eagle or a planned community at Blacks Creek, neither of which had housing estimates available.
They are, in short, expecting big things.
The total was compiled by the Idaho Business Review using public records and estimates from developers.
Some of the first homes from the batch of planned communities will enter the market in May 2007, when Avimor plans to hold its grand opening, SunCor General Manager Bob Taunton said.
The volume of planned communities could lead to a crowded market for developers of regular subdivisions or condominium projects, especially as new homebuilders continue to enter the market.
But that doesn’t mean Ada County is in for 20 years of overbuilding, said Steve Barbey, an associate broker with Group One Real Estate.
If developers pace their building evenly, the nine planned communities would add about 2,440 houses per year to the housing market. Real estate agents sold nearly 3,000 homes just in the last three months, according to the Intermountain Multiple Listing Service.
Build-out schedules for the planned communities suggest housing won’t enter the market that evenly, but developers may be forced to delay, Barbey said.
It’s not in a developer’s best interest to build more houses than the market can absorb. If they do, Barbey said, the houses will sit empty or won’t fetch a good price.
Developers may say they’ll build thousands of homes per year now, Barbey said, but that doesn’t mean they will. If the market can only absorb 500 of their homes per year, they’ll make adjustments, he said.
“What they plan on doing and what actually comes to pass are two different things.”
Some developers have ambitious plans. Dennis Baker plans to build 3,300 homes per year in a 20,000-unit planned community called Isaac’s Canyon, according to Ralph Perez, senior vice president of Isaac’s Canyon Development Co.
Other planned community developers are playing it safe. Tucker Johnson, the developer of a 1,350-unit community called The Cliffs and of the 600-unit Hazelwood South, said he plans to build conservatively in 50-lot phases rather than 100-lot chunks.
Some planned community developers expect demand for their housing products to be higher than for the rest of their market. They’re relying on what they see as a unique product.
Eighty acres of soccer, tennis, swimming and golf academies at the center of The Legacy, a 1,350-unit planned community planned in west Eagle, will be a draw in a market where so many people are active in the outdoors, said project manager Todd Santiago.
Isaac’s Canyon could be set apart from other planned communities because it plans be the first LEED-certified green planned community in the country. Leadership in Energy and Environmental Design is developing green building standards for residential communities, Perez said. Isaac’s Canyon Development plans to develop its building standards to coincide with LEED’s requirements, he said.
Isaac’s Canyon also plans to offer fiber optic cable to every home and build denser, more city-like housing, Perez said. The developer plans to build four or five elementary schools, two middle schools and a high school, he said.
Perez said he expects the real estate market to be cyclical, and during downturns Isaac’s Canyon Development plans to change its product mix and offer more small homes and fewer high-end houses.
But he still banks on Isaac’s Canyon being so unusual he’ll be able to sell houses no matter what the rest of the market is doing.
“There are no planned communities in the Valley like the type of planned community we’re doing,” Perez said.
* * *
Don't forget home warranties
by Ken Miller
09/18/2006
In all the excitement of moving into a new home and the blizzard of paperwork that comes with it, it’s important to keep track of all the warranties for the myriad appliances and gadgets that come with the house.
But besides the warranties for such things as your new refrigerator, range, microwave, and everything else, industry experts caution against ignoring the most important warranty of all – the one on the house itself.
“Most builders carry a one-year warranty on homes,” said Wendy Rhodes of Holton Homes in Nampa. “We do an 18-month warranty. It has been a selling point for our homes and it encourages buyers.
“Most of the time,” Rhodes said half-jokingly, “if something’s going to happen to a home, it happens in month 13.”
Home builders, real estate agents and consumer protection groups say home warranties generally aren’t complicated, but they can vary dramatically in terms of what they cover, how long they cover it, and the overall hassle factor in resolving issues that can arise with new homes.
One-year builder warranties on new homes are the industry standard, although some builders, such as Holton, find extended warranties an attractive lure for buyers.
In the case of existing homes, warranties are almost always recommended. Sellers like to include them as a plus in attracting buyers; buyers typically demand them whether they pay for them or not. Often, the seller and buyer will split the cost of a one-year or 13-month warranty on an existing home.
Beyond the standard warranty is an array of additional products that cover problems out to 10 years or more.
Just because a home is new doesn’t mean it’s less prone to leaks, cracks or other headaches. In fact, new homes are more likely to develop problems related to settling than older ones.
So how do you know how much warranty is enough, and whether you should consider buying additional insurance to cover problems after the warranty expires?
For starters, basic problems such as foundation settling and wall cracks, basement leaks and electrical and plumbing flaws are generally covered during the life of your 12- or 18-month builders warranty. When that warranty expires, the builder is generally only liable for significant defects in the home, and even that can be up to dispute. That’s why many buyers opt for additional insurance products that generally run $300 to $400.
“When people are getting ready to purchase a home, they should always make sure they get an inspection done,” said Beve Bryant of the Better Business Bureau in Boise. Bryant said inspectors can identify existing problems in new or older homes, but they can also warn buyers of issues that may turn into problems later on.
Beyond the standard new-home warranty, “in buying an insurance policy, know who you’re dealing with,” Bryant said. “The obvious thing people tend to forget is to check out their reliability report online at our Web site.”
A quick stop at the Idaho BBB Web site at www.askbbb.org can help home buyers check out a home warranty company’s history, among other things.
“It’ll tell you how long they’ve been around, if they’ve had any complaints, what the complaints were about, and how they took care of them,” she said. “Having a complaint isn’t necessarily bad; that’s part of being in business. How they deal with it is more important.”
Real estate agents should also be considered a resource in helping home buyers determine whether the standard warranty that comes with a house is sufficient, or whether it’s a better bet to purchase additional coverage for problems that crop up after that critical first year.
“The builders give a one-year warranty usually, and within that one-year warranty they pretty much take care of most tings,” said Chris Findlay at Holland Realty. “They don’t do paint touch-up and that kind of thing. Some will do house-settling issues, but some don’t do any of that.”
Findlay recommends obtaining a copy of the warranty in advance and studying it closely before buying a home so you’ll know in advance whether the coverage meets your comfort level.
Problems, especially with new homes, are almost inevitable, he said. It’s how the builder handles them that makes the difference, and that’s why it’s a good idea to ask the builder for references from prior customers to attest to how the builder resolved any problems.
“But it’s not the first year that’s the problem,” Findlay said. “You want the builder to be really on the hook for the first year. That first-year stuff should be taken care of by the builder, and if you have a Realtor, that’s part of our job.
“I’m always in contact with the buyer’s agent when they have a problem. And I’ll tell the buyer, if you can’t get hold of your Realtor or the builder, then call me. The quicker you can get it nipped in the bud, the better.”
Back at Holton Homes, Rhodes said her company sends customers a letter nine months after the new home sale to schedule an appointment to check the house for any problems. Holton does the same after 18 months, at the end of the standard warranty.
Holton also provides a 10-year structural warranty that covers such things as cracks from foundation settling, she said.
“Before we close, we have a final walk-through,” Rhodes said, noting that Holton also provides home buyers with a list of all subcontractors who worked on the home, so owners can reach the subs directly for such problems as a plumbing issue.
Just in case, Holton has an employee who does nothing but warranty work on the company’s houses, she said.
“Some companies take longer to get out to you,” said Holland’s Findlay, adding local companies such as First American Title that offer additional home buyer’s protection plans are good bets because they’re easily accessible.
Findlay said home buyers should be aware that if they buy additional coverage such as a 10-year warranty, that policy should be scrutinized because the coverage may diminish over the life of the warranty.
Warranty tips
For those in the market for a new or existing home, here are some tips from industry experts on what to look for and what to ask in looking for home warranty protection.
• First and foremost, determine what the warranty covers. New homes should come with standard one-year warranties; some 18 months or more. These warranties should cover such essentials as appliances but more importantly the home’s plumbing, heating and cooling, electrical and other systems. For existing homes, warranty policies that last 12 or 13 months typically cover these major mechanical systems, but also major appliances that come with the home.
• Those buying policies for existing homes should also make sure they know exactly what’s covered, particularly for such things as a swimming pool or septic tank or even roof problems.
• In the case of existing homes, warranties are popular both among buyers and sellers. Since the builder’s warranty has lapsed on an existing home, sellers often find including a warranty with the home an attractive addition in the package. In some cases, buyers of existing homes split the cost of a warranty product with the seller. Regardless of which side of the transaction you’re on, it’s worth asking your real estate agent about.
• If you buy additional home warranty insurance, what are the deductibles? Who will you call if something goes wrong? Can you have the problem fixed and submit the bill, or must you clear it with the warranty company for them to send someone to help? Know how the problem will be addressed.
• Buyers of existing homes should always have the home inspected, which is typically required regardless by the lender. That inspection should flag the kinds of problems that may arise down the road. Increasingly, new-home buyers are also paying for an inspection just to be safe.
• For new-home buyers, make sure to keep all your warranties for such things as appliances and whatever else comes with protection together. This warranty protection lasts beyond the life of your builder warranty, but you generally need to contact the manufacturer to resolve complaints.
* * *
09/18/2006
In all the excitement of moving into a new home and the blizzard of paperwork that comes with it, it’s important to keep track of all the warranties for the myriad appliances and gadgets that come with the house.
But besides the warranties for such things as your new refrigerator, range, microwave, and everything else, industry experts caution against ignoring the most important warranty of all – the one on the house itself.
“Most builders carry a one-year warranty on homes,” said Wendy Rhodes of Holton Homes in Nampa. “We do an 18-month warranty. It has been a selling point for our homes and it encourages buyers.
“Most of the time,” Rhodes said half-jokingly, “if something’s going to happen to a home, it happens in month 13.”
Home builders, real estate agents and consumer protection groups say home warranties generally aren’t complicated, but they can vary dramatically in terms of what they cover, how long they cover it, and the overall hassle factor in resolving issues that can arise with new homes.
One-year builder warranties on new homes are the industry standard, although some builders, such as Holton, find extended warranties an attractive lure for buyers.
In the case of existing homes, warranties are almost always recommended. Sellers like to include them as a plus in attracting buyers; buyers typically demand them whether they pay for them or not. Often, the seller and buyer will split the cost of a one-year or 13-month warranty on an existing home.
Beyond the standard warranty is an array of additional products that cover problems out to 10 years or more.
Just because a home is new doesn’t mean it’s less prone to leaks, cracks or other headaches. In fact, new homes are more likely to develop problems related to settling than older ones.
So how do you know how much warranty is enough, and whether you should consider buying additional insurance to cover problems after the warranty expires?
For starters, basic problems such as foundation settling and wall cracks, basement leaks and electrical and plumbing flaws are generally covered during the life of your 12- or 18-month builders warranty. When that warranty expires, the builder is generally only liable for significant defects in the home, and even that can be up to dispute. That’s why many buyers opt for additional insurance products that generally run $300 to $400.
“When people are getting ready to purchase a home, they should always make sure they get an inspection done,” said Beve Bryant of the Better Business Bureau in Boise. Bryant said inspectors can identify existing problems in new or older homes, but they can also warn buyers of issues that may turn into problems later on.
Beyond the standard new-home warranty, “in buying an insurance policy, know who you’re dealing with,” Bryant said. “The obvious thing people tend to forget is to check out their reliability report online at our Web site.”
A quick stop at the Idaho BBB Web site at www.askbbb.org can help home buyers check out a home warranty company’s history, among other things.
“It’ll tell you how long they’ve been around, if they’ve had any complaints, what the complaints were about, and how they took care of them,” she said. “Having a complaint isn’t necessarily bad; that’s part of being in business. How they deal with it is more important.”
Real estate agents should also be considered a resource in helping home buyers determine whether the standard warranty that comes with a house is sufficient, or whether it’s a better bet to purchase additional coverage for problems that crop up after that critical first year.
“The builders give a one-year warranty usually, and within that one-year warranty they pretty much take care of most tings,” said Chris Findlay at Holland Realty. “They don’t do paint touch-up and that kind of thing. Some will do house-settling issues, but some don’t do any of that.”
Findlay recommends obtaining a copy of the warranty in advance and studying it closely before buying a home so you’ll know in advance whether the coverage meets your comfort level.
Problems, especially with new homes, are almost inevitable, he said. It’s how the builder handles them that makes the difference, and that’s why it’s a good idea to ask the builder for references from prior customers to attest to how the builder resolved any problems.
“But it’s not the first year that’s the problem,” Findlay said. “You want the builder to be really on the hook for the first year. That first-year stuff should be taken care of by the builder, and if you have a Realtor, that’s part of our job.
“I’m always in contact with the buyer’s agent when they have a problem. And I’ll tell the buyer, if you can’t get hold of your Realtor or the builder, then call me. The quicker you can get it nipped in the bud, the better.”
Back at Holton Homes, Rhodes said her company sends customers a letter nine months after the new home sale to schedule an appointment to check the house for any problems. Holton does the same after 18 months, at the end of the standard warranty.
Holton also provides a 10-year structural warranty that covers such things as cracks from foundation settling, she said.
“Before we close, we have a final walk-through,” Rhodes said, noting that Holton also provides home buyers with a list of all subcontractors who worked on the home, so owners can reach the subs directly for such problems as a plumbing issue.
Just in case, Holton has an employee who does nothing but warranty work on the company’s houses, she said.
“Some companies take longer to get out to you,” said Holland’s Findlay, adding local companies such as First American Title that offer additional home buyer’s protection plans are good bets because they’re easily accessible.
Findlay said home buyers should be aware that if they buy additional coverage such as a 10-year warranty, that policy should be scrutinized because the coverage may diminish over the life of the warranty.
Warranty tips
For those in the market for a new or existing home, here are some tips from industry experts on what to look for and what to ask in looking for home warranty protection.
• First and foremost, determine what the warranty covers. New homes should come with standard one-year warranties; some 18 months or more. These warranties should cover such essentials as appliances but more importantly the home’s plumbing, heating and cooling, electrical and other systems. For existing homes, warranty policies that last 12 or 13 months typically cover these major mechanical systems, but also major appliances that come with the home.
• Those buying policies for existing homes should also make sure they know exactly what’s covered, particularly for such things as a swimming pool or septic tank or even roof problems.
• In the case of existing homes, warranties are popular both among buyers and sellers. Since the builder’s warranty has lapsed on an existing home, sellers often find including a warranty with the home an attractive addition in the package. In some cases, buyers of existing homes split the cost of a warranty product with the seller. Regardless of which side of the transaction you’re on, it’s worth asking your real estate agent about.
• If you buy additional home warranty insurance, what are the deductibles? Who will you call if something goes wrong? Can you have the problem fixed and submit the bill, or must you clear it with the warranty company for them to send someone to help? Know how the problem will be addressed.
• Buyers of existing homes should always have the home inspected, which is typically required regardless by the lender. That inspection should flag the kinds of problems that may arise down the road. Increasingly, new-home buyers are also paying for an inspection just to be safe.
• For new-home buyers, make sure to keep all your warranties for such things as appliances and whatever else comes with protection together. This warranty protection lasts beyond the life of your builder warranty, but you generally need to contact the manufacturer to resolve complaints.
* * *
Tuesday, September 19, 2006
Old pals team up on subdivision
Article published Sep 19, 2006
by Joe Estrella @ The Idaho Stateman
Developers say lots on 73-acre Two Rivers neighborhood in Payette will sell for less than lots elsewhere in the Valley
Brad Smith and Stan Clements have been friends since they attended elementary school together in Emmett more than 50 years ago.
So it was no surprise when the two went into business together as developers of Two Rivers Estates, a 73-acre, 170-lot residential project northeast of downtown Payette where building sites are selling for as much as 50 percent less than in other areas of the Treasure Valley.
"It's farmland that can be seen from Stan's house. It's close to downtown, but still in the country," Smith said. "For years, we would sit drinking coffee at his dining room table and talk about how we should buy that land and develop it."
Both men bring a certain expertise to the project. Smith, who lives in Boise now after 20 years in the construction business, oversees day-to-day on-site operations. Clements, who has owned various area business over the last 30 years, including All Valley Insurance Agency in Payette, handles the financial side of the business.
"And we managed to put the deal together through outside investors and without having to borrow any money," said Clements, who expects the project to be popular with retirees who are looking for a more laid-backed environment.
He says the property has some of the best views in the area, with Cuddy Mountain visible to the north and Blue Mountains to west. At its highest point, the property overlooks the junction where the Snake and Payette rivers meet.
Lots on the first 40 acres to be developed have been annexed by Payette and come with city services, including water, sewer and natural gas.
Clement said a 14,000-square-foot building lot, or the equivalent of a third of an acre, sells for $59,000.
"In Meridian, something like that would cost you $130,000," he said.
Kim Bruce, the Century 21 Parkview agent who is marketing the project, says six of the first 11 lots offered in the first phase of the development have been sold, with a deal pending for the remaining five locations.
"We were able to sell the first lot before the sidewalks were even put in," Bruce said.
Another feature that their clients like is that they can bring in their own builder, compared to some area communities where buyers are required to use a builder selected by the real estate company that is marketing the project.
That was enough to convince Payette native Ken Eckhart, 53, who was one of the first in line when Two Rivers began marketing the project.
Eckhart purchased a quarter-acre lot with an eye toward the day when he retires from his job as an assistant manager at the Outdoorsman sporting goods store in Ontario.
His says his decision was easy after he learned he would be able to do a lot of the work on his new home himself, rather than having to use a pre-selected builder.
"I couldn't find a lot in Payette where you didn't have to use their builders," Eckhart said. "And I wouldn't have bought a lot where they said I had to use their builder."
by Joe Estrella @ The Idaho Stateman
Developers say lots on 73-acre Two Rivers neighborhood in Payette will sell for less than lots elsewhere in the Valley
Brad Smith and Stan Clements have been friends since they attended elementary school together in Emmett more than 50 years ago.
So it was no surprise when the two went into business together as developers of Two Rivers Estates, a 73-acre, 170-lot residential project northeast of downtown Payette where building sites are selling for as much as 50 percent less than in other areas of the Treasure Valley.
"It's farmland that can be seen from Stan's house. It's close to downtown, but still in the country," Smith said. "For years, we would sit drinking coffee at his dining room table and talk about how we should buy that land and develop it."
Both men bring a certain expertise to the project. Smith, who lives in Boise now after 20 years in the construction business, oversees day-to-day on-site operations. Clements, who has owned various area business over the last 30 years, including All Valley Insurance Agency in Payette, handles the financial side of the business.
"And we managed to put the deal together through outside investors and without having to borrow any money," said Clements, who expects the project to be popular with retirees who are looking for a more laid-backed environment.
He says the property has some of the best views in the area, with Cuddy Mountain visible to the north and Blue Mountains to west. At its highest point, the property overlooks the junction where the Snake and Payette rivers meet.
Lots on the first 40 acres to be developed have been annexed by Payette and come with city services, including water, sewer and natural gas.
Clement said a 14,000-square-foot building lot, or the equivalent of a third of an acre, sells for $59,000.
"In Meridian, something like that would cost you $130,000," he said.
Kim Bruce, the Century 21 Parkview agent who is marketing the project, says six of the first 11 lots offered in the first phase of the development have been sold, with a deal pending for the remaining five locations.
"We were able to sell the first lot before the sidewalks were even put in," Bruce said.
Another feature that their clients like is that they can bring in their own builder, compared to some area communities where buyers are required to use a builder selected by the real estate company that is marketing the project.
That was enough to convince Payette native Ken Eckhart, 53, who was one of the first in line when Two Rivers began marketing the project.
Eckhart purchased a quarter-acre lot with an eye toward the day when he retires from his job as an assistant manager at the Outdoorsman sporting goods store in Ontario.
His says his decision was easy after he learned he would be able to do a lot of the work on his new home himself, rather than having to use a pre-selected builder.
"I couldn't find a lot in Payette where you didn't have to use their builders," Eckhart said. "And I wouldn't have bought a lot where they said I had to use their builder."
86% of Idaho Jobs pay $7.25 per hour or more
Analysis: 86 Percent of Idaho Jobs Pay $7.25 an Hour or More
Idaho Govenment Website
Over 86 percent of Idaho’s jobs pay more than the $7.25-an-hour minimum wage under consideration in Congress, a new analysis by Idaho Commerce & Labor researchers shows.
The study, conducted at the request of state Rep. Shirley Ringo of Moscow, found that two of every 15 jobs in the state last year paid between the current minimum wage of $5.15 an hour and the $7.25 rate proposed in the federal legislation that has stalled in a dispute over an attached provision cutting the federal estate tax.
The analysis by Research Analyst Supervisor Salvador Vazquez updates work he and other researchers did on the minimum wage a year ago, using 2005 information to estimate the economic impact in Idaho of increases the minimum wage to various levels.
The new analysis does not draw any conclusions or make any recommendations about revising the state’s minimum wage. It only estimates the number of Idaho jobs in 2005 paying within the designated wage ranges and the costs to Idaho employers if the wages for these jobs were increased to a higher level. The employer cost estimate also assumes that no jobs are being compensated at less than the legally mandated minimum of $5.15 an hour.
The cost to employers of bringing all 80,100 jobs paying less than $7.25 an hour up to that level was estimated at $142.5 million in 2005. That is just three-quarters of 1 percent of the 2005 statewide payroll of $19 billion.
The cost estimate does not include the effect of higher social security, pension, unemployment insurance and other fringe benefit contributions employers must make on higher wage rates or the payroll impact of avoiding wage compression for jobs that had been paying just above the higher minimum wage rate.
There was also no attempt to gauge the effect a higher minimum wage would have on job creation or retention.
A change in the federal minimum wage would affect the vast majority of jobs in Idaho, but there is a comparatively small proportion of Idaho jobs covered only by the state minimum wage. Should the federal minimum wage be increased, those jobs would continue to be governed by the state minimum wage until the state Legislature chooses to change it.
The minimum wage analysis a year ago focused only on a proposal being circulated at the time to raise Idaho’s minimum wage one dollar to $6.15 an hour. Based on 2004 information, the analysis determined that 32,100 jobs paid less than $6.15 an hour, and the cost to employers to raise the pay for those jobs to $6.15 would be $24.1 million.
The updated analysis found the number of Idaho jobs paying between $5.15 and $6.15 an hour in 2005 had increased by 2,675 to nearly 34,800 but remained essentially at the same proportion of all jobs at about 5.8 percent.
The analysis assessed the impact in 2005 of increasing the hourly minimum wage to $6.15, $6.50, $6.75, $7.00 and $7.25.
Pay
Rate Number of Jobs Cumulative Jobs Cumulative % of
Total Jobs Cost Increase
Per Hour Annual Cost
Increase (in millions)
Under $6.15 34,775 34,775 5.8% $14,605.5 $26.7
Under $6.50 14,517 49,292 8.3% $29,389.8 $53.8
Under $6.75 10,368 59,660 10.0% $43,008.8 $78.7
Under $7.00 10,016 69,676 11.7% $59,175.8 $108.3
Under $7.25 10,404 80,080 13.4% $77,895.3 $142.5
$7.25 or higher 516,920 86.6%
Total Jobs 597,000
Raising the minimum wage to $6.15 an hour would mean an average pay increase of 42 cents an hour, or 6.8 percent, for those 34,800 jobs.
Additionally:
• Raising the minimum wage from $5.15 to $6.50 would affect an additional 14,500 jobs at a cost a total of $53.8 million to bring all jobs under $6.50 to that level.
• Raising the minimum wage up to $6.75 would bring in another 10,400 jobs and increase the total cost to $78.7 million to bring all jobs to that level.
• Raising the minimum wage to $7 would benefit an additional 10,000 jobs and boost the total cost of bringing all 70,000 jobs paying less than that up to $7.
• And raising the minimum wage to $7.25 per hour would affect another 10,400 workers, bringing the cost of raising all 80,100 jobs to $7.25 an hour to $142.5 million.
According to the Bureau of Labor Statistics, nationally people earning the minimum wage are between 16 and 19 years of age and more likely to be unmarried. Four percent of the female population and 2 percent of all men make a minimum wage of $5.15 per hour. The jobs they hold are more likely to be part-time than full-time. About 60 percent work in leisure and hospitality, primarily in food services and drinking establishments.
Idaho Govenment Website
Over 86 percent of Idaho’s jobs pay more than the $7.25-an-hour minimum wage under consideration in Congress, a new analysis by Idaho Commerce & Labor researchers shows.
The study, conducted at the request of state Rep. Shirley Ringo of Moscow, found that two of every 15 jobs in the state last year paid between the current minimum wage of $5.15 an hour and the $7.25 rate proposed in the federal legislation that has stalled in a dispute over an attached provision cutting the federal estate tax.
The analysis by Research Analyst Supervisor Salvador Vazquez updates work he and other researchers did on the minimum wage a year ago, using 2005 information to estimate the economic impact in Idaho of increases the minimum wage to various levels.
The new analysis does not draw any conclusions or make any recommendations about revising the state’s minimum wage. It only estimates the number of Idaho jobs in 2005 paying within the designated wage ranges and the costs to Idaho employers if the wages for these jobs were increased to a higher level. The employer cost estimate also assumes that no jobs are being compensated at less than the legally mandated minimum of $5.15 an hour.
The cost to employers of bringing all 80,100 jobs paying less than $7.25 an hour up to that level was estimated at $142.5 million in 2005. That is just three-quarters of 1 percent of the 2005 statewide payroll of $19 billion.
The cost estimate does not include the effect of higher social security, pension, unemployment insurance and other fringe benefit contributions employers must make on higher wage rates or the payroll impact of avoiding wage compression for jobs that had been paying just above the higher minimum wage rate.
There was also no attempt to gauge the effect a higher minimum wage would have on job creation or retention.
A change in the federal minimum wage would affect the vast majority of jobs in Idaho, but there is a comparatively small proportion of Idaho jobs covered only by the state minimum wage. Should the federal minimum wage be increased, those jobs would continue to be governed by the state minimum wage until the state Legislature chooses to change it.
The minimum wage analysis a year ago focused only on a proposal being circulated at the time to raise Idaho’s minimum wage one dollar to $6.15 an hour. Based on 2004 information, the analysis determined that 32,100 jobs paid less than $6.15 an hour, and the cost to employers to raise the pay for those jobs to $6.15 would be $24.1 million.
The updated analysis found the number of Idaho jobs paying between $5.15 and $6.15 an hour in 2005 had increased by 2,675 to nearly 34,800 but remained essentially at the same proportion of all jobs at about 5.8 percent.
The analysis assessed the impact in 2005 of increasing the hourly minimum wage to $6.15, $6.50, $6.75, $7.00 and $7.25.
Pay
Rate Number of Jobs Cumulative Jobs Cumulative % of
Total Jobs Cost Increase
Per Hour Annual Cost
Increase (in millions)
Under $6.15 34,775 34,775 5.8% $14,605.5 $26.7
Under $6.50 14,517 49,292 8.3% $29,389.8 $53.8
Under $6.75 10,368 59,660 10.0% $43,008.8 $78.7
Under $7.00 10,016 69,676 11.7% $59,175.8 $108.3
Under $7.25 10,404 80,080 13.4% $77,895.3 $142.5
$7.25 or higher 516,920 86.6%
Total Jobs 597,000
Raising the minimum wage to $6.15 an hour would mean an average pay increase of 42 cents an hour, or 6.8 percent, for those 34,800 jobs.
Additionally:
• Raising the minimum wage from $5.15 to $6.50 would affect an additional 14,500 jobs at a cost a total of $53.8 million to bring all jobs under $6.50 to that level.
• Raising the minimum wage up to $6.75 would bring in another 10,400 jobs and increase the total cost to $78.7 million to bring all jobs to that level.
• Raising the minimum wage to $7 would benefit an additional 10,000 jobs and boost the total cost of bringing all 70,000 jobs paying less than that up to $7.
• And raising the minimum wage to $7.25 per hour would affect another 10,400 workers, bringing the cost of raising all 80,100 jobs to $7.25 an hour to $142.5 million.
According to the Bureau of Labor Statistics, nationally people earning the minimum wage are between 16 and 19 years of age and more likely to be unmarried. Four percent of the female population and 2 percent of all men make a minimum wage of $5.15 per hour. The jobs they hold are more likely to be part-time than full-time. About 60 percent work in leisure and hospitality, primarily in food services and drinking establishments.
"Economic growth has moderated" say Feds
With a Fed meeting closing in, mortgage rates edged downward a little this week, closing the nation's leading mortgage survey at an average 6.5%, the lowest level since March. The last time fixed rate mortgages held near these numbers, the Fed Funds rate stood 50 basis points -- a full one-half of one percent -- below present levels. Five-one Hybrid ARMs went in the other direction, ticking two basis points (.02%) higher to 6.24% for the week.
After the last FOMC meeting, the Fed's statement asserted that "Economic growth has moderated" and that "inflation pressures seem likely to moderate over time," but "some inflation risks remain." Essentially, the Fed put its faith in the ability of slowing economic growth to quell rising inflation, and hoped for the economic data to bear this out. So far, that has been turned out to be a pretty fair bet, and one that the market increasingly trusts. Of course, continued moderation is the key: should growth hold at these moderate levels, inflation should diminish over time, if in an uneven pattern.
There are some signs that inflation has begun to moderate. The latest report covering the Consumer Price Index was actually somewhat better than expected, with headline CPI rising by only 0.2% for August. Stripping out food and energy costs, the so-called 'core CPI' edged higher by a like amount. Over the past year, the annualized rate for headline CPI is 3.8% and core, 2.8%. While those numbers are still thought to be rather above the Fed's preferred levels, they represent a falloff from annualized figures over the past few months (4.3% in June, 4.2% in July), and the pattern does seem to be one of gentle decline.
The latest look at the prices of Imported and Exported Goods was out this week, too. Prices for Imports climbed by 0.8% for the month of August, and have climbed by 6.6% over the past year, but ignoring the effects of petroleum that increase notches just 2.7%. As with the CPI, the recent pattern has been one of a downward trend. Goods priced for export rose by 0.4% for the month, and have risen by 5.4% over the past year. Since the export number has risen for five consecutive months, it appears as though we are also exporting a little inflation to our trading partners. Higher costs for goods and services may also serve to temper growth somewhat in those countries, with potential for inflation cooling abroad as well.
Of course, we continue to import far more goods and materials than we export. As a result, the nation's imbalance of trade got a little bigger in July, leaping to a record $68.0 billion as oil prices held in the mid-$70 per barrel range for much of the month. Thankfully, that's no longer the case, so there's some reason to expect some improvement in the trade deficit when the August data comes due. For the month, the dollar value of exports declined, while the reverse was true for imports.
Retail sales posted a meager gain during August, climbing just 0.2% for the month, although the increase was dragged downward (for a change) by slipping gasoline prices. Still, the positive number was a surprise to the upside, as forecasts called for a decline of 0.2%. Perhaps those easing gas prices provided some additional cash for last minute back-to-school spending.
The nation's utilities and factories slowed a bit in August. Industrial Production fell by 0.1%, largely due to less output by mines and utilities.
Manufacturing continues to show strength, but the percentage of factory floors in active use trimmed from 82.7% in use to 82.4% for the month. Some upward movement was seen in the localized survey of manufacturing activity in the New York Federal Reserve district, where their activity index moved to 13.8 in September from 11.0 in August.
Optimism levels among consumers pressed downward in July and August, but at least some signs of improvement have come lately. The weekly ABC News/Washington Post poll of Consumer Comfort continues its rebound, ticking higher to -13 during the week ending September 10. It stood at a near-term nadir of -19 just three weeks ago. As well, the University of Michigan's survey of Consumer Sentiment sported a mild gain in the September preliminary survey. Their gauge rose from a final 82.0 in August to an 84.4 mark at mid-month September.
With employment near 'full,' hiring has been holding at subdued levels. Then again, so have layoffs, with weekly applications for unemployment benefits holding just above the 300,000 level for much of the summer. Last week, some 308,000 new applications for benefits were filed, the lowest number since late July.
On balance, the economy is slowing slightly and seems to be pushing inflation gently in the right direction. With slower growth, though, comes a bit of a problem for the Fed. Confounding their hope for weaker growth are lower interest rates, engineered not by the Fed but the markets themselves.
In recent weeks, mortgage rates have backed off their highs by almost a half-percentage point, and applications for refinancing -- stronger than you might think, given the levels of interest rates -- have picked up again, as borrowers seek to trade in poor-performing ARMs and look to recast balance sheets. For many borrowers, that will translate into additional equity-fueled purchasing power. In addition, purchase applications, while still in a long slide, have also turned higher, at least for the moment.
Economy-wise, housing has been among the weaker performers this year, but the slowdown here is probably the biggest contributor to the period of economic placidity the Fed has worked hard to engineer.
Falling gasoline prices may add fuel to the fire as well. High prices work much like a tax, removing money from consumer wallets and funneling them in into a narrow economic channel. With prices sliding by maybe 50 cents a gallon in some markets, that could produce many millions of dollars of new spending in a hurry, flaring both growth and inflation higher at a time when a gentler trend would probably be more welcomed.
It's with this backdrop that the Fed meets. So far, their plans and forecasts seem to have largely worked out, and there has been little news since the last meeting which should make the Fed feel compelled to move interest rates. Inflation does still remain a problem, though, and even if the trend is mildly downward for the moment, the Fed probably won't feel that it has any breathing room until it's much closer to 2% than the 3% we're hanging near. So, we'll get a second pause come the close of Wednesday's meeting, but I'm still of the opinion that another quarter-percentage point move may come yet this fall. Will the committee change the statement to allude to such potential? We'll see.
For next week, the Fed's the biggest game in town, but Housing Starts and PPI are due out as well. If current trends hold, a mild PPI and falling housing starts are to be expected, and mortgage rates wander in a couple basis point range.
After the last FOMC meeting, the Fed's statement asserted that "Economic growth has moderated" and that "inflation pressures seem likely to moderate over time," but "some inflation risks remain." Essentially, the Fed put its faith in the ability of slowing economic growth to quell rising inflation, and hoped for the economic data to bear this out. So far, that has been turned out to be a pretty fair bet, and one that the market increasingly trusts. Of course, continued moderation is the key: should growth hold at these moderate levels, inflation should diminish over time, if in an uneven pattern.
There are some signs that inflation has begun to moderate. The latest report covering the Consumer Price Index was actually somewhat better than expected, with headline CPI rising by only 0.2% for August. Stripping out food and energy costs, the so-called 'core CPI' edged higher by a like amount. Over the past year, the annualized rate for headline CPI is 3.8% and core, 2.8%. While those numbers are still thought to be rather above the Fed's preferred levels, they represent a falloff from annualized figures over the past few months (4.3% in June, 4.2% in July), and the pattern does seem to be one of gentle decline.
The latest look at the prices of Imported and Exported Goods was out this week, too. Prices for Imports climbed by 0.8% for the month of August, and have climbed by 6.6% over the past year, but ignoring the effects of petroleum that increase notches just 2.7%. As with the CPI, the recent pattern has been one of a downward trend. Goods priced for export rose by 0.4% for the month, and have risen by 5.4% over the past year. Since the export number has risen for five consecutive months, it appears as though we are also exporting a little inflation to our trading partners. Higher costs for goods and services may also serve to temper growth somewhat in those countries, with potential for inflation cooling abroad as well.
Of course, we continue to import far more goods and materials than we export. As a result, the nation's imbalance of trade got a little bigger in July, leaping to a record $68.0 billion as oil prices held in the mid-$70 per barrel range for much of the month. Thankfully, that's no longer the case, so there's some reason to expect some improvement in the trade deficit when the August data comes due. For the month, the dollar value of exports declined, while the reverse was true for imports.
Retail sales posted a meager gain during August, climbing just 0.2% for the month, although the increase was dragged downward (for a change) by slipping gasoline prices. Still, the positive number was a surprise to the upside, as forecasts called for a decline of 0.2%. Perhaps those easing gas prices provided some additional cash for last minute back-to-school spending.
The nation's utilities and factories slowed a bit in August. Industrial Production fell by 0.1%, largely due to less output by mines and utilities.
Manufacturing continues to show strength, but the percentage of factory floors in active use trimmed from 82.7% in use to 82.4% for the month. Some upward movement was seen in the localized survey of manufacturing activity in the New York Federal Reserve district, where their activity index moved to 13.8 in September from 11.0 in August.
Optimism levels among consumers pressed downward in July and August, but at least some signs of improvement have come lately. The weekly ABC News/Washington Post poll of Consumer Comfort continues its rebound, ticking higher to -13 during the week ending September 10. It stood at a near-term nadir of -19 just three weeks ago. As well, the University of Michigan's survey of Consumer Sentiment sported a mild gain in the September preliminary survey. Their gauge rose from a final 82.0 in August to an 84.4 mark at mid-month September.
With employment near 'full,' hiring has been holding at subdued levels. Then again, so have layoffs, with weekly applications for unemployment benefits holding just above the 300,000 level for much of the summer. Last week, some 308,000 new applications for benefits were filed, the lowest number since late July.
On balance, the economy is slowing slightly and seems to be pushing inflation gently in the right direction. With slower growth, though, comes a bit of a problem for the Fed. Confounding their hope for weaker growth are lower interest rates, engineered not by the Fed but the markets themselves.
In recent weeks, mortgage rates have backed off their highs by almost a half-percentage point, and applications for refinancing -- stronger than you might think, given the levels of interest rates -- have picked up again, as borrowers seek to trade in poor-performing ARMs and look to recast balance sheets. For many borrowers, that will translate into additional equity-fueled purchasing power. In addition, purchase applications, while still in a long slide, have also turned higher, at least for the moment.
Economy-wise, housing has been among the weaker performers this year, but the slowdown here is probably the biggest contributor to the period of economic placidity the Fed has worked hard to engineer.
Falling gasoline prices may add fuel to the fire as well. High prices work much like a tax, removing money from consumer wallets and funneling them in into a narrow economic channel. With prices sliding by maybe 50 cents a gallon in some markets, that could produce many millions of dollars of new spending in a hurry, flaring both growth and inflation higher at a time when a gentler trend would probably be more welcomed.
It's with this backdrop that the Fed meets. So far, their plans and forecasts seem to have largely worked out, and there has been little news since the last meeting which should make the Fed feel compelled to move interest rates. Inflation does still remain a problem, though, and even if the trend is mildly downward for the moment, the Fed probably won't feel that it has any breathing room until it's much closer to 2% than the 3% we're hanging near. So, we'll get a second pause come the close of Wednesday's meeting, but I'm still of the opinion that another quarter-percentage point move may come yet this fall. Will the committee change the statement to allude to such potential? We'll see.
For next week, the Fed's the biggest game in town, but Housing Starts and PPI are due out as well. If current trends hold, a mild PPI and falling housing starts are to be expected, and mortgage rates wander in a couple basis point range.
Thursday, September 14, 2006
Pleo the lifelike robot was born in Eagle
Article published Sep 14, 2006
by Ken Dey @ The Idaho Stateman
Pleo the lifelike robot was born in Eagle
New toy from co-inventor of Furby already creating buzz for its charismatic behavior
Idaho, say hello to Pleo — a week-old Camarsaurus dinosaur from the Jurassic era.
If you startle him, he's scared. If you talk softly and pet him, he feels better. Play with him, he's happy. Keep food away from him and he gets cranky. And if you think you can trick him into walking off a tabletop — think again.
At a coffee shop in Eagle, Pleo charmed people at neighboring tables with his impromptu performance. He wagged his tail and walked playfully across the table, stopping when he sensed the edge was near.
Pleo isn't alive, but you wouldn't know it by his charismatic performance. And inventor Caleb Chung is hoping people connect to Pleo like they would a kitten or a puppy when the $250 toy hits the market next spring.
Chung knows a few things about bringing toys to life. Chung has worked at big companies like Mattel and holds more than 20 patents. But Furby, the '90s sensation he invented with a friend, was his biggest accomplishment.
Children and adults embraced the hamster-like Furby, fascinated by the cute toy's life-like behaviors. More than 50 million Furbys — worth $1.2 billion — were sold.
Chung co-founded the company Ugobe — as in "you go and be" — to develop Pleo. The company is based in Emeryville, Calif., but its research and development lab with 10 employees is in Eagle.
Based on early interest from retailers and the buzz created online, Pleo is already shaping up to eclipse Furby.
Pleo's first public appearance was in February in Phoenix at Demo 2006, an annual showcase of new technology for corporate executives, potential investors and industry media.
The company already has raised $2.7 million from investors and will close the deal on another $8 million this month. Chung says the company has $18 million in purchase orders from retailers to carry Pleo. The toy is being marketed at children, pre-teens and adults. Chung feels there's too much competition from video games and other items to target Pleo at teens.
Chung hopes Pleo will take the fascination of Furby a step further and help people embrace the concept of artificial intelligence by showing robots with the most human trait of all: emotion.
"Furby did that with only a little bit of memory and a few sensors," Chung said. "We created a balanced illusion of life so that people accepted the product as a little sort of life form."
Pleo's not on the market yet, but it's already developing fans.
The online video of Pleo's Demo 2006 unveiling has had thousands of hits and spawned dozens of Internet blogs devoted to Pleo. At www.robotsrule.com, one blogger describing himself as a "manly-macho type of guy" offered a challenge to anyone who saw the video.
"I defy you to suppress the involuntary grin that will come over you when you watch Pleo's tail curl up as Caleb strokes its lower back," the blogger said. The blogger also said Pleo will be remembered as the first artificial "life form" that made people believe it was real.
The August Forbes magazine called Pleo one of the "seven amazing robots that will change your life."
Chung and his team of developers have done everything they can to make Pleo as lifelike as possible, starting with modeling Pleo after a real baby dinosaur. The team researched to get skeletal structure and movements correct; designers wanted Pleo to move naturally like a baby dinosaur, not a robot.
Dozens of motors and sensors control Pleo's movements and responses to the environment. Sensors detect touch, light, sounds and motions. The sensors feed processors that determine Pleo's responses to stimulation. Stroking Pleo's head soothes him; yelling can scare him.
John Sosoka, Ugobe's chief technology officer in Eagle, said the company is building Pleo with accessible software. The "open source platform" will let owners individually program Pleo by downloading new behaviors from the company's Web site or write their own programs.
The company hopes this feature will set it apart from other robotic products, where behaviors are set.
"If the computer controls the interaction and the device can't really respond differently to different inputs it doesn't feel right," Sosoka said. "It's not that interesting. You figure it out and then you're done."
Neena Buck, an analyst with Strategy Analytics, an industry market research firm, said similar robotic products on the market, such as Robosapien and the Roboraptor, don't appear to have Pleo's emotional connection. Pleo is more a pet than a robot, she said.
"The design philosophy is unique," she said. "They spent a lot of time on the emotional interface so someone believes that it's alive to create a relationship between the pet and consumer."
Whether that realism will pay off in sales remains to be seen. But Chung and Sosoka see Pleo as the perfect introduction to the artificial intelligence that they say will be a big part of the future.
"As with Furby, consumers will drive the usage," Chung said. "But if at the end of the day if we've created nothing more than a new platform for learning and creativity, then we die happy."
by Ken Dey @ The Idaho Stateman
Pleo the lifelike robot was born in Eagle
New toy from co-inventor of Furby already creating buzz for its charismatic behavior
Idaho, say hello to Pleo — a week-old Camarsaurus dinosaur from the Jurassic era.
If you startle him, he's scared. If you talk softly and pet him, he feels better. Play with him, he's happy. Keep food away from him and he gets cranky. And if you think you can trick him into walking off a tabletop — think again.
At a coffee shop in Eagle, Pleo charmed people at neighboring tables with his impromptu performance. He wagged his tail and walked playfully across the table, stopping when he sensed the edge was near.
Pleo isn't alive, but you wouldn't know it by his charismatic performance. And inventor Caleb Chung is hoping people connect to Pleo like they would a kitten or a puppy when the $250 toy hits the market next spring.
Chung knows a few things about bringing toys to life. Chung has worked at big companies like Mattel and holds more than 20 patents. But Furby, the '90s sensation he invented with a friend, was his biggest accomplishment.
Children and adults embraced the hamster-like Furby, fascinated by the cute toy's life-like behaviors. More than 50 million Furbys — worth $1.2 billion — were sold.
Chung co-founded the company Ugobe — as in "you go and be" — to develop Pleo. The company is based in Emeryville, Calif., but its research and development lab with 10 employees is in Eagle.
Based on early interest from retailers and the buzz created online, Pleo is already shaping up to eclipse Furby.
Pleo's first public appearance was in February in Phoenix at Demo 2006, an annual showcase of new technology for corporate executives, potential investors and industry media.
The company already has raised $2.7 million from investors and will close the deal on another $8 million this month. Chung says the company has $18 million in purchase orders from retailers to carry Pleo. The toy is being marketed at children, pre-teens and adults. Chung feels there's too much competition from video games and other items to target Pleo at teens.
Chung hopes Pleo will take the fascination of Furby a step further and help people embrace the concept of artificial intelligence by showing robots with the most human trait of all: emotion.
"Furby did that with only a little bit of memory and a few sensors," Chung said. "We created a balanced illusion of life so that people accepted the product as a little sort of life form."
Pleo's not on the market yet, but it's already developing fans.
The online video of Pleo's Demo 2006 unveiling has had thousands of hits and spawned dozens of Internet blogs devoted to Pleo. At www.robotsrule.com, one blogger describing himself as a "manly-macho type of guy" offered a challenge to anyone who saw the video.
"I defy you to suppress the involuntary grin that will come over you when you watch Pleo's tail curl up as Caleb strokes its lower back," the blogger said. The blogger also said Pleo will be remembered as the first artificial "life form" that made people believe it was real.
The August Forbes magazine called Pleo one of the "seven amazing robots that will change your life."
Chung and his team of developers have done everything they can to make Pleo as lifelike as possible, starting with modeling Pleo after a real baby dinosaur. The team researched to get skeletal structure and movements correct; designers wanted Pleo to move naturally like a baby dinosaur, not a robot.
Dozens of motors and sensors control Pleo's movements and responses to the environment. Sensors detect touch, light, sounds and motions. The sensors feed processors that determine Pleo's responses to stimulation. Stroking Pleo's head soothes him; yelling can scare him.
John Sosoka, Ugobe's chief technology officer in Eagle, said the company is building Pleo with accessible software. The "open source platform" will let owners individually program Pleo by downloading new behaviors from the company's Web site or write their own programs.
The company hopes this feature will set it apart from other robotic products, where behaviors are set.
"If the computer controls the interaction and the device can't really respond differently to different inputs it doesn't feel right," Sosoka said. "It's not that interesting. You figure it out and then you're done."
Neena Buck, an analyst with Strategy Analytics, an industry market research firm, said similar robotic products on the market, such as Robosapien and the Roboraptor, don't appear to have Pleo's emotional connection. Pleo is more a pet than a robot, she said.
"The design philosophy is unique," she said. "They spent a lot of time on the emotional interface so someone believes that it's alive to create a relationship between the pet and consumer."
Whether that realism will pay off in sales remains to be seen. But Chung and Sosoka see Pleo as the perfect introduction to the artificial intelligence that they say will be a big part of the future.
"As with Furby, consumers will drive the usage," Chung said. "But if at the end of the day if we've created nothing more than a new platform for learning and creativity, then we die happy."
Micron shares hit four-year high
Article published Sep 14, 2006
by Ken Dey @ The Idaho Statesman
Micron shares hit four-year high
Increased price, stock upgrade follow Boise tech giant's strong third-quarter earnings
Micron Technology's stock is trading at a four-year high this week, after a JPMorgan analyst upgraded his recommendation for the Boise company's stock based on higher prices for its primary product.
The stock recorded a high of $18.65 a share earlier this week, but pulled back somewhat as investors took profits. It closed at $18 a share Wednesday.
Over the past year, Micron stock has traded as low as $11.60 a share.
The boost in the company's stock price comes on the heels of a strong third quarter that saw revenues up nearly 25 percent over the third quarter of 2005.
Analysts say the increased stock price and improved market conditions are further good news for the company, which employs more than 10,000 people at its Boise headquarters and is the region's top private employer.
JPMorgan analyst Shawn Webster said in a research note to clients Monday that he was changing his rating from the equivalent of a hold to a buy.
Webster said the company would benefit from an increase in the price of DRAM — dynamic random access memory. DRAM chips are primarily used in personal computer applications and make up about half of Micron's business.
"Our checks indicate DRAM memory pricing continues to improve during the third quarter of 2006, ahead of our expectations for roughly flattish pricing," Webster said in his note.
Stock prices for most semiconductor companies saw a boost this week on the news that DRAM prices are expected to increase.
Bill Dezellem, with Tieton Capital Management in Yakima, Wash., said Micron's stock moved steadily up for the first part of the year, dropped back in July and is now on its way back up.
"The stock price is acting as though there is a continued increase in the level of conviction the investment community has that Micron is well positioned," Dezellem said.
Webster and other analysts say DRAM prices are being driven up by supply as companies move from DRAM production to making products like Flash memory.
Micron has done the same, but Webster said Micron still produces enough DRAM to benefit from the increased prices.
Webster expects demand for DRAM to remain strong as computer manufacturers need more memory to meet the demands of Microsoft's upcoming VISTA operating system.
Because Micron has diversified, Webster said, it's also in a better position to weather any downturn in the DRAM market.
Dezellem said demand for memory is typically strong as companies build up products for the Christmas season.
Micron fortunes have historically depended on the DRAM market. But the company has sought to insulate itself from the dramatic shifts in DRAM prices by diversifying the company with a better mix of products.
Micron's third-quarter 2006 earnings released in late June were the first time in the company's history that DRAM sales didn't account for the majority of Micron's revenue.
Company officials say they're moving to a mix where only a third of Micron revenues would be tied to DRAM. The rest would be split equally between flash memory and imaging chips.
by Ken Dey @ The Idaho Statesman
Micron shares hit four-year high
Increased price, stock upgrade follow Boise tech giant's strong third-quarter earnings
Micron Technology's stock is trading at a four-year high this week, after a JPMorgan analyst upgraded his recommendation for the Boise company's stock based on higher prices for its primary product.
The stock recorded a high of $18.65 a share earlier this week, but pulled back somewhat as investors took profits. It closed at $18 a share Wednesday.
Over the past year, Micron stock has traded as low as $11.60 a share.
The boost in the company's stock price comes on the heels of a strong third quarter that saw revenues up nearly 25 percent over the third quarter of 2005.
Analysts say the increased stock price and improved market conditions are further good news for the company, which employs more than 10,000 people at its Boise headquarters and is the region's top private employer.
JPMorgan analyst Shawn Webster said in a research note to clients Monday that he was changing his rating from the equivalent of a hold to a buy.
Webster said the company would benefit from an increase in the price of DRAM — dynamic random access memory. DRAM chips are primarily used in personal computer applications and make up about half of Micron's business.
"Our checks indicate DRAM memory pricing continues to improve during the third quarter of 2006, ahead of our expectations for roughly flattish pricing," Webster said in his note.
Stock prices for most semiconductor companies saw a boost this week on the news that DRAM prices are expected to increase.
Bill Dezellem, with Tieton Capital Management in Yakima, Wash., said Micron's stock moved steadily up for the first part of the year, dropped back in July and is now on its way back up.
"The stock price is acting as though there is a continued increase in the level of conviction the investment community has that Micron is well positioned," Dezellem said.
Webster and other analysts say DRAM prices are being driven up by supply as companies move from DRAM production to making products like Flash memory.
Micron has done the same, but Webster said Micron still produces enough DRAM to benefit from the increased prices.
Webster expects demand for DRAM to remain strong as computer manufacturers need more memory to meet the demands of Microsoft's upcoming VISTA operating system.
Because Micron has diversified, Webster said, it's also in a better position to weather any downturn in the DRAM market.
Dezellem said demand for memory is typically strong as companies build up products for the Christmas season.
Micron fortunes have historically depended on the DRAM market. But the company has sought to insulate itself from the dramatic shifts in DRAM prices by diversifying the company with a better mix of products.
Micron's third-quarter 2006 earnings released in late June were the first time in the company's history that DRAM sales didn't account for the majority of Micron's revenue.
Company officials say they're moving to a mix where only a third of Micron revenues would be tied to DRAM. The rest would be split equally between flash memory and imaging chips.
Tuesday, September 12, 2006
Valley hiring expected to rise
Article published Sep 12, 2006
by Joe Estrella at The Idaho Stateman
Valley hiring expected to rise
Survey indicates more employers plan to add staff in 4th quarter
A majority of Treasure Valley employers will increase or maintain their staffing levels during the fourth quarter, according to a Manpower Employment Outlook Survey to be released today.
The survey found that employment in the Boise area is accelerating, with more businesses planning to add workers during the last three months of the year than did in the third quarter.
Don Holley, professor of economics at Boise State University, said a surge in late-year hiring is not surprising, given that fourth-quarter retail employment always spikes significantly ahead of the Christmas shopping season.
The Manpower report indicated that 30 percent of area companies surveyed plan to add staff between October and December, while 64 percent plan to maintain current staffing levels. Three percent of respondents expected to cut jobs, while another 3 percent were undecided.
Manpower's nationwide survey of 16,000 employers found that 28 percent expect to add payroll, while 58 percent expect no change. Eight percent plan jobs cuts, while 6 percent were undecided.
"Boise area employers have stronger hiring intentions than in the third quarter when 20 percent of companies interviewed intended to add staff, and 3 percent planned to increase head-count," said Boise-based Manpower spokeswoman Wendie Gregory, in a statement. "Employers also have more positive hiring intentions than they did a year ago, when 24 percent of companies surveyed thought employment increases were likely and 10 percent intended to cut back."
The Manpower report showed that more jobs are expected to be available in the fourth quarter in the construction, transportation/public utilities, wholesale/retail and education/services sectors.
The number of jobs in the durable and non-durable goods manufacturing, finance, insurance and real estate sectors is expected to be remain unchanged.
Holley said that with the residential homebuilding market apparently beginning to slump, the planned hiring in construction will likely be in the commercial sector, which is still trying catch up with the new housing that has been built in the Treasure Valley.
"The news about manufacturing is good for the economy, too, because that's Hewlett-Packard and Micron," he added. "There are certain industries that are critical to the economy. If Dillard's went away, another retailer would come in to take its place. But if HP, Micron, Simplot and state government went away, this town would dry up."
by Joe Estrella at The Idaho Stateman
Valley hiring expected to rise
Survey indicates more employers plan to add staff in 4th quarter
A majority of Treasure Valley employers will increase or maintain their staffing levels during the fourth quarter, according to a Manpower Employment Outlook Survey to be released today.
The survey found that employment in the Boise area is accelerating, with more businesses planning to add workers during the last three months of the year than did in the third quarter.
Don Holley, professor of economics at Boise State University, said a surge in late-year hiring is not surprising, given that fourth-quarter retail employment always spikes significantly ahead of the Christmas shopping season.
The Manpower report indicated that 30 percent of area companies surveyed plan to add staff between October and December, while 64 percent plan to maintain current staffing levels. Three percent of respondents expected to cut jobs, while another 3 percent were undecided.
Manpower's nationwide survey of 16,000 employers found that 28 percent expect to add payroll, while 58 percent expect no change. Eight percent plan jobs cuts, while 6 percent were undecided.
"Boise area employers have stronger hiring intentions than in the third quarter when 20 percent of companies interviewed intended to add staff, and 3 percent planned to increase head-count," said Boise-based Manpower spokeswoman Wendie Gregory, in a statement. "Employers also have more positive hiring intentions than they did a year ago, when 24 percent of companies surveyed thought employment increases were likely and 10 percent intended to cut back."
The Manpower report showed that more jobs are expected to be available in the fourth quarter in the construction, transportation/public utilities, wholesale/retail and education/services sectors.
The number of jobs in the durable and non-durable goods manufacturing, finance, insurance and real estate sectors is expected to be remain unchanged.
Holley said that with the residential homebuilding market apparently beginning to slump, the planned hiring in construction will likely be in the commercial sector, which is still trying catch up with the new housing that has been built in the Treasure Valley.
"The news about manufacturing is good for the economy, too, because that's Hewlett-Packard and Micron," he added. "There are certain industries that are critical to the economy. If Dillard's went away, another retailer would come in to take its place. But if HP, Micron, Simplot and state government went away, this town would dry up."
Monday, September 11, 2006
State labor rate stays strong
State labor rate stays strong
by IDAHO BUSINESS REVIEW
09/11/2006
Seasonally adjusted unemployment in Idaho dropped to 3.3 percent in August, from 3.6 percent in July and 3.7 percent in August 2005.
More than 400 employers began operations in July, contributing to August employment growth, according to an Idaho Commerce & Labor Department press release.
The number of people working in Idaho last month totaled 735,100, about 21,000 more than a year earlier. New hires by Idaho’s more than 48,000 businesses hit 21,000 for just the fourth month since the 2001 economic slowdown. The 6,100-worker gain from July was the state’s fourth highest month-to-month increase.
Employers continued to seek and hire skilled workers, and the low unemployment rate appeared to be requiring operators in the typically lower-paying retail and food service sectors to dip deeper into the labor pool to meet manpower needs, state officials said. Education and wildland fire-related payrolls expanded.
Nearly two-thirds of the job growth occurred in the Boise–Nampa metro area.
At the same time, an Idaho county recorded a double-digit unemployment rate for the first time since August 2005. Power County’s unemployment rate, at 10.3 percent, was the highest in the state, the result of a layoff at a food processing facility.
Clearwater County at 9.6 percent and Benewah County at 9.2 percent followed. Both rely heavily on natural resource industries, state labor officials said.
Idaho has about 23,000 agriculture workers year-round, and 39,000 during peak season in July and August, Commerce & Labor spokesman Bob Fick said. Totals do not include 10,000 operators such as farm owners and unpaid family members.
by IDAHO BUSINESS REVIEW
09/11/2006
Seasonally adjusted unemployment in Idaho dropped to 3.3 percent in August, from 3.6 percent in July and 3.7 percent in August 2005.
More than 400 employers began operations in July, contributing to August employment growth, according to an Idaho Commerce & Labor Department press release.
The number of people working in Idaho last month totaled 735,100, about 21,000 more than a year earlier. New hires by Idaho’s more than 48,000 businesses hit 21,000 for just the fourth month since the 2001 economic slowdown. The 6,100-worker gain from July was the state’s fourth highest month-to-month increase.
Employers continued to seek and hire skilled workers, and the low unemployment rate appeared to be requiring operators in the typically lower-paying retail and food service sectors to dip deeper into the labor pool to meet manpower needs, state officials said. Education and wildland fire-related payrolls expanded.
Nearly two-thirds of the job growth occurred in the Boise–Nampa metro area.
At the same time, an Idaho county recorded a double-digit unemployment rate for the first time since August 2005. Power County’s unemployment rate, at 10.3 percent, was the highest in the state, the result of a layoff at a food processing facility.
Clearwater County at 9.6 percent and Benewah County at 9.2 percent followed. Both rely heavily on natural resource industries, state labor officials said.
Idaho has about 23,000 agriculture workers year-round, and 39,000 during peak season in July and August, Commerce & Labor spokesman Bob Fick said. Totals do not include 10,000 operators such as farm owners and unpaid family members.
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