A&A Electric & Underground, Inc. + AB Systems, Inc. + Abbco Company + ABC Seamless of Rochester, Inc. + ABC Supply Company, Inc. + Above All Roofing of Rochester, Inc. + Accord Electric, Inc. + Adair Electric Company + Adamson Motors + Advanced Builders & Remodeling + Advanced Builders, LLC + Advanced Building Center, Inc. + Advanced Disposal + Advantage Cabinets, Inc. + AgStar Home Mortgage Services + Alexander & Sons Builders + All Craft Exteriors, LLC + Mike Allen Homes, LLC + Allen Outdoor Solutions, LLC + All-Star Basements + Alpha Video & Audio + Altra Federal Credit Union + American Engineering Testing, Inc. + American Fence Company of MN, LLC + American Waterworks + Ames Construction, Inc. + Amirco, LLC + Andersen Windows, Inc. + Anderson Construction + Appliance Village Company + Arcon Development, Inc. + Arrow Building Center + Associated Bank + Athelon Enterprises, LLC + B&C Plumbing & Heating, Inc. + Al Barker Custom Homes, Inc. + Barrier Free Access, Inc. + Basement Water Control + Batzel Builders, Inc. + Beckley's Office Products + Beetles Bar & Grill, Inc. + Alvin E. Benike, Inc. + Scott Berberich Construction, LLC + Scott Berg Construction, LLC + Bessler Management + Beyond Kitchens, LLC + Bigelow & Lennon Construction, LLC + Bigelow Homes + K.W. Billman, Inc. + The Blue Book of Building & Construction + Bobcat of Rochester + Bob's Construction, Inc. + The Boldt Company + Bouquet Builders, Inc. + Bowman's Door Solutions + Brandrup Builders + Brauer Roofing, Inc. + Braun Intertec Corporation + Brekke Fireplace Shoppe + Bricewood, LLC + Briese Iron Works, Inc. + Bright Ideas + Brinkman Builders, LLC + Brock White Company + Tom Brogan Heating & Air Conditioning + Brooks Excavating Company, Inc. + C.O. Brown Agency + Bruce Bucknell Construction, Inc. + Budget Blinds + Building Products, Inc. + Burdick Builders, Inc. + By Design Builders + Byrne Electric, Inc. + Cachiaras Building & Remodeling + Cambria + Carpet One + CarpetsPlus of Rochester + Castlewood Homes, Inc. + Charter Communications/Media + Chladek Construction, LLC + Chosen Valley Testing, Inc. + Christian Brothers Cabinets, Inc. + CHS, Inc. + City of Byron + City of Chatfield + City of Eyota + City of Preston + City of Spring Valley + Citywide Insulation, Inc. + Clarey's Safety Equipment + Clayton Thomas Blinds of Rochester + Clear Channel Radio (Laser/Fox/KFAN) + Clements Chevrolet Cadillac Subaru + Closet Organizers + Coldwell Banker Burnet + Commercial Leasing Services + Construction Partnership + Corban Homes, LLC + Cordes Construction + Cornerstone Builders & Real Estate, Inc. + Cornerstone Designs of Rochester, Inc. + Corporate Web Services, Inc. + Counselor Realty of Rochester, Inc. + Countryside Builders, LLC + Cravath Homes, LLC, dba Accessibility Solutions + Creative Hardwood Floors + Crescent Electric Supply Company + CRW architecture + design group, inc. + Culligan of Rochester & Kasson + Curry's Custom Cut Gutter, LLC + Curtin Drywall, Inc. + Custom Alarm/Custom Communications, Inc. + Custom Retaining Walls & Landscaping, Inc. + D2E, LLC + Dahl Home Builders, Inc. + Data-Smart Computers, Inc. + DeCook Builders, LLC + DeGeus Tile & Granite + Derby Construction LLC + The Design Connection + Design Studio B + DeWitz Home Builders, Inc. + DiNicola & Pestka Appraisals + DMC Plumbing & Heating, Inc. + Dolan's Landscape Center, Inc. + Donlar Construction Company + DoubleTree by Hilton - Mayo Clinic Area + DreamMaker Bath & Kitchen + Dunham Associates, Inc. + Dunlap & Seeger + J.E. Dunn Construction + Dura-Oak Kitchen Make Overs + M.H. Dutton Construction, LLC + E&M Consulting, Inc. + Eastwood Bank + eci, llc + Eckert Construction, Inc. + Edel Construction, LLC + Edge Homes & Construction, Inc. + Edina Realty Home Services + Todd Eidem Construction, Inc. + Elcor Construction, Inc. + Electrical Solutions & Service + Elias Construction, LLC + Energy Panel Structures + Energy Products & Design, Inc. + Enventis + Excel Homes + The Excelsior Group, LLC + Exclusive Home Builders & Remodelers + Expert Insulation, Inc. + Express Employment Professionals + Extreme Panel Technologies, Inc. + Fairway Outdoor Advertising, LLC + Fat Willy's Bar & Grill + Ferguson Enterprises + Fieldstone Family Homes, Inc. + First Alliance Credit Union + First Choice Homes, LLC + First General Services of SE MN + First Security Bank + R. Fleming Construction, Inc. + Ford Metro Glass, Inc. + Foster Construction, Inc. + Franklin Energy + Friedrich Construction, Inc. + Chris Fritsch Custom Homes, LLC + GAF + Gander Plumbing & Heating, Inc. + Dale Gathje Construction, Inc. + Steve Gentry Construction, LLC + Gerhards + Gift Book Plus + Robert Gill Builder, Inc. + Goodin Company + Great River Overhead Door + Green Lawncare Irrigation & Service Co. + Gregor Builders, Inc. + GulfEagle Supply + Habitat for Humanity - Rochester Area + Habitat for Humanity - Winona/Fillmore County dba Habitat ReStore + Haley Comfort Systems (Authorized FireSide Dealer) + W.L. Hall Company + Hammer Homes, Inc. + Hanson Construction & Specialty Cabinets, LLC + Hayfield Window & Door Company + HDR Architecture + Heartman Insurance + Heartwood Homes of Rochester, Inc. + Brandon Henderson's Construction Plus, LLC + Hentges Glass Company + HG Electric, LLC + HGA Architects and Engineers + Hicks Electric, Inc. + Higgins Custom Cabinetry + High Definition Homes, LLC + Hiller's Flooring America + HiMEC at Home + Jeff Hinkle Custom Homes + Hirshfield's Decorating Center + Holt Title Guaranty Company, Inc. + The Home Depot + Home Federal Savings Bank + Home Improvement Professionals, Inc. + Home Systems Installation, LLC + Howe Countertops + Hunt Electric Corporation + Hutch's Custom Cabinets + Int'l Brthrhd of Electrical Wrkrs Local 343 + Innovative Surfaces, Inc. + Institute for Environmental Assessment + Insty Prints + IntegraSpec Central/Jeff Mueller Construction + Michael Jack, LLC + JNS Builders, LLC + J.P. Johnson Custom Builders, Inc. + JP's Construction Remodeling & Repair, Inc. + K&M Glass Company + K&S Heating, A/C, Plumbing & Electrical + Kahler Hospitality Group + Tom Kalmes Construction, Inc. + Kane & Johnson Architects, Inc. + Keller Williams Premier Realty + Key Builders, Inc. + King's Flooring, LLC + Kinzler Construction Services, Inc. + Kirkland Enterprises, LLC + Kitchen Concepts + The Kitchen Design Studio + Kitchens Plus + Gary Kline Roofing, Inc. + Knutson Construction Services + Koball's Poured Walls, Inc. + Kraus-Anderson Construction Company + Kreofsky Building Supplies + Kruger Electric, Inc. + Kruse Lumber + KTTC/KXLT-TV + Kuehn Motor Company, Inc. + Kuntz Electric, Inc. + Kwik Trip, Inc. + L&L Cabinets + Lacina Siding & Windows, Inc. + Laitala Tile Company + Larsen Industries, Inc. + Larson Siding & Windows + Legends Concrete, Inc. + Leitzen Concrete Products, Inc. + Leyendecker Homebuilders, LLC + Lodermeier's, Inc. + Lowe's Home Improvement + Luxury Bath Remodeling + Maas Companies, Inc. + Maier Tree & Lawn + Majestic Homes, Inc. + R . J . Manemann Custom Homes + Manufacturer's Bank & Trust + Maplewood Homes, LLC + Markham Homes, LLC + markit + Marvin Windows & Doors + Massey Land Surveying & Engineering + Master Builders, Inc. + Mavo Systems, Inc. + McGhie & Betts - a Division of WSB & Associates, Inc. + McGladrey + McGough Construction + MDH, Inc. + Meadow Lakes Builders + MEC Construction, Inc. + Med City Builders of Rochester, LLC + Menards South + MEP Associates + Merchants Bank + Merit Contracting, Inc. + Michael's Custom Cabinets, Inc. + Mid American Financial Group + Midwest LeafGuard of Rochester, Inc. + Midwest Walls, LLC + Miller & Sons Construction, Inc. + Minnesota Energy Resources Corporation + Minnwest Bank + MLT Group + Morris Concrete, Inc. + Larry Newman Drywall + Nickelson Painting, Inc. + North Central States Regional Council + North Star Stone & Masonry + Northern Lights & Furnishings + Nuss Truck & Equipment + O'Connor Homes, Inc. + Ohly Law Office + Olmsted County Planning Dept, Insp. Div. + Olmsted County Public Health + Olmsted National Bank + J.B. O'Meara Company + nies + Otis Custom Homes, LLC + Overhead Door Co. of Olmsted On Site CompaCounty + Owner's Plumbing, Inc. + Oxi-Fresh Carpet Cleaning + Paape Energy Services + Pahl & Kaye, Inc. + Palmer Soderberg, Inc. + Walt Pappas struction + Paramark Corporation + Payne Company + PC C o n cations Consultants, Inc. + Pearson Builders, Inc. + Pebble AppliCreek/Western Walls + Pella Windows & Doors + Pendle Hansen Bagne Insurance + Penz Custom Homes, Inc. + People's Energy Cooperative + Peterson Well Drilling, Inc. + Pine Island Lumber + Pompeii Painting, Inc. + Post-Bulletin Company, LLC + Powers Ventures + Prehn Building Sales, Inc. + Premier Bank Rochester + Premier Builders of Rochester, Inc. + Price Financial Services, Inc. + Prime Time Painting of Rochester, LLC + PrimeLending + Priority Claims Service + Pro Image Promotions & Apparel + ProBuild Company, LLC + Quality Overhead Door pany, Inc. + Quality Siding & Window, Inc. Com+ Michael Quinn Law Office + R&M Development Company + R. Thomas Consulting, LLC + Radcliffe Homes & Remodeling + Range Custom Homes, LLC + RCON Homes, Inc. + RCTC Carpentry Program + RE/MAX of Rochester + Region Millworks, Inc. + David Reiland Building Contractor, LLC + Reliable Contractors, Inc. + Reynolds Design and Construction + Rochester Area Appraisals, LLC + Rochester Area Chamber of Commerce + Rochester Area Econ. Development, Inc. + Rochester Area Foundation + Rochester Asphalt, Inc. + Rochester Building Safety Department + Rochester Concrete Products, tional Event Center + Rochester Plumbing & Heating/Roto Rooter + Rochester Public LLC + Rochester InternaUtilities + Rochester Public Works + Rochester Ready Mix Concrete Co + Rochester Sign Service, Inc. + Rochester Title & Escrow Company, Inc. + Rock Solid Retaining Walls + Ronningen Roofing, Inc. + RSP Architects + Ryan & Grinde, Ltd. + Ryan Electric, Inc. + Ryan Windows & Siding, Inc. + S&S Overhead Door, Inc. + Sargent's Landscape Nursery, Inc. + Sawyer Construction Services, Inc. + Schad Tracy Signs, Inc. + Schmidt Goodman Office Products + Schoeppner, Inc. + Schumann Granahan Hesse & Wilson, Ltd. + Schwickert's Tecta America, LLC + Seavey Builders, Inc. + Dan Severson Builders, Inc. + Shanahan Building & Remodeling, LLC + Sherwin Williams Company + Shingobee Builders, Inc. + Sign Here, Inc. + Simonson Builders, LLC + SL Contracting + Smart Home Innovations & Engineering, Inc. + Smith Schafer & Associates, Ltd. + Solar Connection, Inc. + Somerby Golf Community + Space Concepts, Inc. + Spahn & Rose Lumber Company + Greg Speedling Contracting, Inc. + Spring Valley Overhead Door, Inc. + Stadsvold's Lawn & Landscape + Stantec + Steel Constructors, Inc. + Sterling State Bank + Stevens Heating, Inc. + Stewartville Economic Development Authority + StoneBridge Builders + Structural Design Group, Inc. + Struve's Paint and Decorating + Robert G. Suk Law Office, PA + Summit Custom Homes, LLC + Summit Fire Protection Company + Superior Mechanical + Craig Swanson Builders, Inc. + Swenke Ims Contracting, LLC + Kenny Sylvester Construction, LLC + Synergy Products + Tag's Drywall, Inc. + Tamarack Materials of Rochester, Inc. + TDS Metrocom + Thermo-Tech Windows + Thiemann Construction, Inc. + Thimijan Custom Homes, LLC + Think Mutual Bank + Thomas Tool & Supply + Thompson's Garage Door and Openers + Thrivent Financial - Rochester Group + Tile Superstore & More + TLC Surfaces + Tonna Mechanical, Inc. + Top Shop of Rochester, Inc. + Total Electric of Rochester, Inc. + Townsquare Media Rochester + Tradesmen International, Inc. + Traditional Wood Builders + Tri Star Insulation + Tri State Insulated Concrete Forms + TSP Architects & Engineers + Turri Crane Service, Inc. + Turtle Creek Construction, Inc. + United Heating & Cooling + United Products/Allied Building Products Corp. + United Rentals + The Urban Studio, LLC + US Bank + Valor Mechanical, Inc. + Val-U-Blinds + Van Haren ICF + Vector Windows + Veit Companies + Vennehjem Building Corporation + Vertical Limit Construction + Viking Automatic Sprinkler Company + Viking Electric Supply + Vision Homes & Remodeling, LLC + Vollara Global/DPS + WA Insurance + Waddell & Reed + Warners' Stellian Appliance Co., Inc. + Waste Management + Weis Builders, Inc. + Greg Wellik Construction + Wells a publication of Fargo Bank Minnesota NA + Wells Fargo Home Mortgage + Wendland Utz + Werner Electric Supply + West Bank + Jim Whiting Nursery & Garden Center, Inc. + WHKS & Company + Widseth Smith Nolting + Wildwood Sports Bar and Grill + Women Communications, LLC + Woodruff Company + Wright Homes, Inc. + WT
J U N E
2 01 4
F O U N D AT I O N S Rochester Area Builders, Inc.
A special offer for members only. Register now and save 2% on your Lowe’s Accounts Receivable purchases.** Plus, get free delivery on purchases of $500 or more.† To register, visit LowesForPros.com/NAHB or call 877-435-2440.
*Offer is not automatic. See store for details.**Offer valid now through 12/31/2014. Cannot be combined with any other statement discount. To be eligible for the 2% discount, you must register your NAHB membership by 12/31/2014 and make a purchase with your Lowe’s Accounts Receivable by 12/31/2014. Allow one to two complete billing cycles for your registration to be processed and for your discount to appear on your billing statement. Offer and discount provided by Lowe’s, and not GE Capital Retail Bank. Excludes Lowe’s Business Account Card, Lowe’s Consumer Credit Card, Lowe’s Visa Accounts, Lowe’s Business Rewards from American Express Card and all Lowe’s Canada Credit projects. Offer not valid on purchases made prior to registering NAHB membership at LowesForPros.com. Call 877-435-2440 for questions about this program. All purchases subject to credit approval. †Standard delivery rules apply. ©2014 Lowe’s. LOWE’S, Gable Mansard Design are registered trademarks of LF, LLC.
HOOK UP
Lowes_2014 NAHB-HALFPAGE.indd 1
11/26/13 12:22 PM
BEST VALUE with the
ENERGY
WE’RE HERE TO HELP.
Natural gas is a great energy
value. Xcel Energy can help you with all of your energy-related building needs including natural gas and electric. We even offer rebates for qualifying natural gas appliances. Contact us today and find out how we can help you.
xcelenergy.com/EnergyPartners
Visit xcelenergy.com/EnergyPartners today, call 1-800-628-2121 or fax 1-800-628-2521.
© 2013 Xcel Energy Inc.
13-XCL-00255-B_MNB_HookUp(Combo)_7.3125x4.75_4c_LO.indd 1
www.RochesterAreaBuilders.com 2 | June 2014
5/6/13 3:21 PM
News from The President “Van Halen requests that the brown M&M’s be removed.”
May 22, 2014
Index News from the President ......................... 3 Thank Yous ............................................... 3
Fellow RAB Members: “back in the day,” did you ever hear about this peculiar request made by the rock band to their concert promoters at each arena? Urban tales abounded- all completely false- about the band trashing dressing rooms if they found the despised brown M&M’s in the catering area. At the time, this quirky demand was attributed to the egotistical excesses of a group whose ascent to fame had gone to their heads.
RAB Golf Outing ........................................ 4
Much like the issues that RAB works on, though- from fire sprinklers to historic preservation- jumping to a sweeping conclusion based on emotion, hype, or some of the information can often be more misleading than forming an opinion based
Committee Updates ............................... 17
June Networking Night ............................. 5 Green Building Expo..............................6-7 Association Scrapbook .......................8-11 Hey Matt! What’s up with that? ....... 12-13 Public Works Dept. News ................. 14-15 Remodel It Right News ..........................18 Commercial Builders Council ................19
on no information at all.
Rochester Permits ..................................20
Here’s the real story about the M&M’s:
Byron/Pine Island Permits ..................... 21
Van Halen was an early pioneer in bringing large-arena rock shows to medium-sized venues. Doing this successfully, though, required that each city’s local stage, sound equipment, and main lights be placed and prepared with absolute precision according to the band’s specific directions. There was no margin for error. In communicating these instructions with promoters and arenas around the country in very detailed contracts, a simple litmus test was written into the later pages of this lengthy document: no brown M&M’s in the candy dish.
Real Estate Data .................................... 21
As David Lee Roth, the band’s on-again, off-again front man would later admit, the band could truly have not cared less about brown M&M’s. They did care greatly, though, about putting on an awesome show, every night, for fans who paid their hard-earned money to come and see them. One look at the candy dish when they arrived in a new city and were being shown the backstage area showed them all that they needed to know about their workload for that day. If the candy dish was free of brown M&M’s, the band knew with near certainty that every other detail spelled out in the contract had also been attended to. The presence of brown M&M’s in the dish, though, meant that all elements specified to execute their high-impact concert needed to be checked and rechecked before showtime. Accuracy could no longer be taken for granted. As a few high-impact issues for RAB seem to be coming to a peak simultaneously, much has been said and written about our positions- unfortunately some of it based on less than the full facts. Let’s do our best to make sure we know…and share with good cheer…the full story of our positions with those who ask. Let’s also assume the best intentions in those who have a different opinion than us, knowing that we may not have their full set of facts either.
Elliot Eisenberg Article ...........................22 Membership Information .......................23 NAHB Member Discounts ...................... 24
Executive Director/Editor John Eischen Production Ryan Kling-Punt The Rochester Builders newsletter is the official publication of Rochester Area Builders, Inc. This newsletter is published and distributed monthly to its members and others associated with the building industry. Neither the advertisers, nor RAB will be responsible or liable for misinformation, misprints, typographical errors, etc., herein contained.
And while you’re at it, feel free to pass the brown M&M’s! Enjoy the first rays of summer, and have a great month.
Kevin Worden 2014 RAB President
Thank You! April GMM Thank you to Tradesman International for being the Social Hour Sponsor for our April General Membership Meeting held at the Events by Canadian Honker at the Ramada. They were represented by Brad Hoffman. Thank you to Carpet One for being the Desert Sponsor. They were represented by Kathy Swygman.
Our game night this year was Builder Feud, hosted by “Richard Dawson” aka, John Eckerman, Boldt Construction. The “set” was design by RAB’s own Ryan Kling-Punt. The Builder Family was: Mike Coats, MEC Construction; Kathy Einck, Maplewood Homes; John McGuine, Schoeppner Construction; Les Radcliffe, Radcliffe Homes and Remodeling; and Gary Zander, Honorary Member. The Association Family was: Karen Blissenbach, Design Studio B; Brain Carlson, Widseth Smith & Nolting; Wayne Eisen (no relation to John), Advanced Building Center; David Kane; Kane & Johnson Architects; and Jennifer Maas, Kitchen Concepts.
108 Elton Hills Lane NW Rochester, MN 55901 Phone: 507-282-7698 Fax: 507-282-6351 E-mail: RAB@RochesterAreaBuilders.com
The game was hard played by all and while there were some contentious calls by the judges, the Builder Family emerged victorious. Thanks to all who participated! GIVE AWAY’S Gary Zander, Honorary Member, won a $30 Loop gift card given by the Post Bulletin. NEW MEMBERS The following new members were in attendance: Ole Olson, GAF and Scott Phiefer, All Craft Exteriors. Welcome to the Association!
Www.RochesterAreaBuilders.com June 2014 | 3
Join us at the RAB Golf Outing
Thursday, June 5, 2014 WILLOW CREEK GOLF COURSE
Presented By:
1700 48th St SW
Hours: 10:00 A.M. Registration Starts - Lunch provided by Think Mutual Bank 11:00 A.M. Shotgun Start 4:30 P.M. 19th Hole - Appetizers and Social Time 5:00 P.M. Announcements and Prizes
Golf is SOLD OUT, but you can still join us for the social hour! Tickets are just $15 each. Rochester Area Builders, Inc. is excited to be bringing you our annual golf outing. Willow Creek Golf Course will be hosting the event, which includes lunch, an 18 hole round on Willow Creek, and a “19th Hole” appetizer reception following the round. Our format is a four-person scramble - you can form your own four-some or we will assign you to a team. We hope you’ll join us for a great day of Golf, Networking and Fun!
We listened to you! The 11 AM Shotgun start was a popular change last year, so we’re bringing it back! It means you’re done earlier, so you can attend Thursday’s on First, your kids’ sporting events, or you can just go home and relax!
Also returning this year: BREAK THE GLASS Sponsored by Marvin Windows It time for you to make your Big Break! We’ve got a new contest on the driving range this year, where you can relive your childhood days of playing golf in the backyard. But this time if you break a window, you won’t get grounded, and you might just win big!
WIN A NEW CAR! Sponsored by Clements Chevrolet Cadillac Subaru This one speaks for itself! Get a hole in one on #6 and you win! www.RochesterAreaBuilders.com 4 | June 2014
Join us at the June
Summer Networking Night Tuesday, June 24th,
at the Valor Mechanical, Inc. 416 S Broadway Hours: 5:00 pm - 7:00 pm OUR HISTORY Valor Mechanical was founded in June 2006 by Ty Bestor. The dream, vision and the current evolution of Valor was implemented in September 2012. Ty has over 35 years of experience in the mechanical construction industry. Ty was born and raised in a small, rural community in southeast Minnesota, which prompted his desire to own and operate a company with the same moral values, integrity, and trust found in his small-town community. WHO WE ARE Valor Mechanical is a full-service commercial mechanical contractor based out of Harmony, MN, with a second location in Rochester, MN. Valor operates on these principle core values: integrity, trust and strong relationships, all with a high level of customer service. These values were instilled by Ty Bestor, CEO, and all who work at Valor share in these values and in Ty’s business passion. WHAT WE DO The experienced team at Valor Mechanical listens to the customers’ needs and objectives, then creates a customized solution. Valor creates cost-efficient solutions by allowing our team to approach every project from an engineering-first perspective. Before finalizing mechanical numbers, we explore every issue and concern with the project team. The main constants among our technicians, engineers and trained craftsmen is experience, dedication and their commitment to Valor’s core values.
Hosted By:
President
Kevin Worden, Rochester Area Habitat for Humanity
Vice President
John Eckerman, The Boldt Company
Secretary
Lindsey Rippentrop, Olmsted National Bank
Treasurer
Carla Kilpatrick, Home Federal Savings Bank
Past President
Jean DeWitz, DeWitz Home Builders, Inc.
Directors
Karen Blissenbach, Design Studio B Christy Buchan, Energy Products & Design, Inc. Delbert Feenstra, Knutson Construction Services Rob Jones, Superior Mechanical Levi Kaiser, Alvin E. Benike, Inc. Bruce Laufenburger, First General Services of SE MN Sam Peyton, King’s Flooring, LLC Brian Shehan, Weis Builders, Inc.
Builders Exchange Council Representatives
J.J. Webster, Kraus-Anderson Construction Company, Chair Jake Schleusner, Merit Contracting, Inc., Vice Chair Tony Wintheiser, Hentges Glass, Past Chair
Commercial Builders Council
Chris Terry, Knutson Construction Services, Chair Nick Leimer, Kraus-Anderson Construction Company, Vice Chair
Development Council Chair
John Sipple, Rochester Area Appraisals, LLC
Remodelers Council Chair Sam Peyton, King’s Flooring, LLC
National Life Directors Joe Weis, Weis Builders, Inc.
National Directors
Steve Buss, Cornerstone Builders & Real Estate, Inc. Mike Coats, MEC Construction, Inc. David Kane, Kane & Johnson Architects, Inc., Rep. Rory Lenton, Minnesota Energy Resources Corp.
State Directors
Jim Gander, Superior Mechanical John McGuine, Schoeppner, Inc., Rep. Mike Paradise, Bigelow Homes David Pederson, Wendland Utz Dan Severson, Dan Severson Builders, Inc.
Executive Director
John Eischen JEischen@RochesterAreaBuilders.com
Staff
Audra Bolduan ABolduan@RochesterAreaBuilders.com Marketing, Builders Exchange Trustees
Matt Limoges MatthewL@RochesterAreaBuilders.com Government Affairs, Commercial Builders Council, Development Council, Building Safety Advisory Group, Public Works Advisory Group, Community Relations, Green Building, Marketing Sharill Mueller SMueller@RochesterAreaBuilders.com Home Show, Showcase Committee Rebekah Nielsen RNielsen@RochesterAreaBuilders.com Ambassadors, Education, Membership, Program, Spike Club, Remodelers Council -Executive-Home TourRyan Kling-Punt RPunt@RochesterAreaBuilders.com Golf Outing, Sporting Clays, Directory, Newsletter, E-News Update
Www.RochesterAreaBuilders.com June 2014 | 5
EXHIBITORS NEEDED! What: Green Building Expo—an event for the public
GREEN building EXPO
When: Saturday September 20, 2014 Where: Cascade Meadow Wetlands and Environmental Science Center Time: 9am– 3pm
Who: You! If your business has anything to do with making a home more energy efficient, more sustainable, sign up for a booth and we will review Areas we are looking for:
Buildings, Health and Wellness, Site Development, Landscaping and Drainage Cost: $200—for a measly $200 you get a 6 foot booth and countless members of the public to talk to about your business
$50 to present. The comtopics to be presented.
Signature Event Sponsors
www.RochesterAreaBuilders.com 6 | June 2014
GREEN building EXPO
Please note that Rochester Area Builders will ability of your business to the Green Building
respond to you by August 22, 2014 with the ďŹ nal decision. Space is limited, so sign up fast!
faxing it to Rochester Area Builders at 507-282-6351. If you would like to mail in the form please mail it to: Rochester Area Builders 108 Elton Hills Ln NW
Rochester, MN 55901
Business: Contact Name: Nature of Business: Payment Method (Please Circle):
Check
Credit Card
Credit Card Number :
Security Code: Yes
No
Signature Event Sponsors
Www.RochesterAreaBuilders.com June 2014 | 7
Association Scrapbook
www.RochesterAreaBuilders.com 8 | June 2014
April GMM
May Networking Night
Association Scrapbook
Www.RochesterAreaBuilders.com June 2014 | 9
Association Scrapbook
www.RochesterAreaBuilders.com 10 | June 2014
Studs, Struts, & Stilettos
Studs, Struts, & Stilettos
Association Scrapbook
Click here to see the entire gallery of photos, including all the designs, on our Facebook Page Www.RochesterAreaBuilders.com June 2014 | 11
To Session, or not to Session? That is the question that Matt answers in this month’s
���������
���������� ����������
It’s time for another installment of “Hey Matt, received $35 Million in funding for the Mayo Civic what’s up with that?” This week’s topic is the Center. This was the biggest single project in the Bonding Bill, and kudos to the city for all their recently closed MN Legislative Session. hard work on finally getting this included in the “Hey Matt, I heard that this Legislative Bonding Bill.
Session was being called an ‘Unsession.’ Fire Sprinklers. We found ourselves at the What’s up with that?” Whew, what a fast and busy legislative session the “unsession” turned out to be! The Governor, earlier this year, requested that lawmakers take this session to focus on two main things: the Bonding Bill and cleaning up Minnesota’s Laws. Because the Governor asked this of lawmakers, the session was dubbed the “unsession”. While lawmakers did clean up a lot of language in existing laws, and repealed unnecessary ones, they were busy making strides in a lot of other areas as well. Passing laws on topics as far ranging as Bullying and Legalized Medical Marijuana, this session was anything BUT the “unsession.” Two things I wanted to cover: Fire Sprinklers, and the Bonding Bill. First, the Bonding Bill. The Bonding Bill is basically a giant construction bill, giving communities money for projects that they wouldn’t be able to afford without state assistance. The reason it is called the “Bonding Bill” is because the state borrows money for these projects. This includes projects like the Mayo Civic Center rehabilitation and expansion. This year, lawmakers passed over a $1 Billion bonding bill and construction package. Rochester www.RochesterAreaBuilders.com 12 | June 2014
legislature again trying to prevent a single family home indoor fire sprinkler mandate. This has been an uphill battle from the beginning. The Governor has twice vetoed stand-alone legislation that was passed with bipartisan support. We received a lack-luster ruling from our administrative law judge hearing in February. All the odds were against us, so it was a bit of a miracle that we became the political bargaining chip that we did. Here is how it happened: Senator Senjem had previously unsuccessfully tried to add an amendment to the Bonding Bill regarding the prohibition of a fire sprinkler mandate. However, he was able to craft an amendment that was added to the language in the Senate’s version of the Bonding Bill. This is important because in a Bonding Bill, the Governor has the power to, what is called, “line-item veto” certain projects. This means that the Governor can take the Bonding Bill, and scratch certain projects from it after the legislature has passed it through both houses of the legislature. Rochester should remember when Governor Pawlenty line-itemed the Mayo Civic Center funding from the 2010 bonding bill. But I digress. While the Governor is able to veto certain projects, the
Hey Matt, I heard that this Legislative Session was being called an “Unsession.” What’s up with that? Governor does not have the power to line-item veto policy in the Bonding bill. This means that if the Governor wanted to prevent the legislature from passing a prohibition on the mandate of fire sprinklers in single family homes, he would have to veto the ENTIRE $1 BILLION BONDING BILL. Politically we thought there was no way he would do something like that, especially in an election year, so that is why what Senator Senjem did was so important for us.
not include language regarding fire sprinklers. So, we were officially out of the bonding bill.
Now, for what happened next. The House and the Senate both have to pass versions of a Bonding Bill, and then it, usually, has to be resolved in what is called the conference committee. It was apparent the House of Representatives was not going to include the fire sprinkler language Senator Senjem had gotten inserted into the Senate version. Then the Governor held a press conference, the sole purpose of which was to say that he would veto the Bonding Bill if it included any language regarding the prohibition of a fire sprinkler mandate in single family homes. This was the moment we had been waiting for. Money cannot buy the kind of press you get from a Governor threatening to veto a $1 Billion bonding bill. All of a sudden, the public wanted to know what was going on with these fire sprinklers. After years of fighting, the conversation had reached the public. That is the good news. The bad news is that because the legislature was operating under a tight schedule, the DFL leadership of the Senate and the House negotiated a bonding bill that did
What a session the “unsession” turned out to be!
While it is disappointing we didn’t get the result we wanted, we got a lot of free press out of the situation, which is invaluable when trying to get the public on your side of an issue. The final date when fire sprinklers will be required in single family homes larger than 4,500 sq ft is unknown, but it appears it will be sometime in early 2015.
If you have any questions, ideas, or anything at all you want to talk to me about, give me a call! Or email!
Matt
���������
���������� ���������� Www.RochesterAreaBuilders.com June 2014 | 13
Erosion and Sediment Control at Residential Construction Sites Spring is here and so is the rain. As you move into construction mode this year, be sure your site adequately provides erosion and sediment control (ESC) – no matter how big or small the storm. Planning and good practices are essential for keeping sediment on site and preventing enforcement actions. Follow the steps below to be prepared for the next rain: •
Before breaking ground, review the approved Grading Plan for your site to verify grades on your lot and on adjacent properties (if you have questions on the Grading Plan please contact us).
•
Review the approved grading plan for your site and the adjacent properties to be sure that drainage easements, ditches, slopes and conveyance areas have correct grades and positive drainage.
•
Preserve existing vegetation and topsoil on-site; preserving existing vegetation is especially important around the perimeter! By preserving existing vegetation, this may save you from installing additional perimeter sediment control measures and saving topsoil can save you and the homeowner money.
•
Insure that perimeter and internal ESC BMPs are properly anchored and functioning. Perimeter sediment control measures are required at all downslope locations on-site.
•
Provide stabilized vehicle entrances and exits at your site. Options to prevent track-out of sediment onto streets include rock entrances, wood chips, and mud mats. Be certain that your subcontractors are aware of and use the designated access points.
POOR ESC
•
All area catch basins should have appropriate inlet protection installed in order to prevent soil and debris from entering the storm sewer and draining to our receiving waters. Sediment must be regularly removed from inlet protection to prevent street flooding.
•
Develop and utilize a concrete washout management plan and facility or return concrete
www.RochesterAreaBuilders.com 14 | June 2014
washout to the concrete vendor. No liquid or solid concrete waste from washout operations can be in contact with the ground.
GOOD ESC
•
Keep a clean construction site. One of the biggest complaints the City receives about construction sites is the construction debris and litter. Create and use a garbage corral or dumpster and empty them before they overflow. Ask contractors to compact their debris so it doesn’t blow out of the container on windy days.
•
Place topsoil and vegetate all exposed soil areas as soon as fine grading is complete. The City of Rochester standards require a minimum of 4” of topsoil on disturbed areas; don’t substitute subsoil for topsoil.
•
Learn more about useful storm water management practices and state construction storm water permit requirements at the MPCA website: www.pca.state.mn.us/water/stormwater.
Rochester residents want good water quality and quality construction. Improper ESC on construction sites has a direct negative impact on our waterways. Be proactive and take the time to properly inspect and maintain your ESC best management practices to stabilize your construction site and prevent unintentional water pollution. For more information about this topic, please contact Mike Kraszewski (328-2431) or Kevin Kuisle (328-2457) at the Rochester Public Works Department.
UPDATE: New State Storm Water Permit The MPCA recently informed the City of Rochester that no comments were received on the City’s new storm water permit application during the public notice period, which ended May 1st. Therefore, MPCA will extend permit coverage to the City under the August 2013 permit and the City’s effective date will be Thursday, May 8th. Under the new 2013 permit, the City must continue the permit activities already in place and meet the added requirements. The new tasks that the City must address before May 7, 2015 include: •
Completing a storm water management plan update
•
Preparing a new storm water ordinance that incorporates the new permit requirements
•
Updating all standard operating procedures and preparing new enforcement response procedures
•
Assessing the City’s status in meeting Total Maximum Daily Load Waste Load Allocations
•
Developing a pond effectiveness assessment plan
•
Enhancing the City facilities and operations inventory
•
Creating an employee and business technical education program
Of particular interest to RAB members will be the new ordinance. The City expects to have a draft ready for public review by October. Any questions about the new permit can be directed to Barb Huberty at bhuberty@rochestermn.gov. Www.RochesterAreaBuilders.com June 2014 | 15
www.RochesterAreaBuilders.com 16 | June 2014
Committee Chairpersons AMBASSADORS Greg Hird, First Alliance Credit Union AWARDS TBA BUILDING MAINTENANCE TJ Schutz, Advanced Building Center, Inc. BUILDING SAFETY ADVISORY Mickey Elias, Elias Construction, LLC COMMUNITY RELATIONS Tony Kunz, Hiller’s Flooring America DISPUTE RESOLUTION John Kuntz, Kuntz Electric, Inc. EDUCATION Vacant EXECUTIVE Kevin Worden, Rochester Area Habitat for Humanity FASHION SHOW Karen Blissenbach, Design Studio B FINANCE Carla Kilpatrick, Home Federal Savings Bank GOLF OUTING Lindsey Rippentrop, Olmsted National Bank GOVERNMENT AFFAIRS John Eckerman, The Boldt Company GREEN BUILDING Kelly O’Marro, XRG Concepts, LLC HOME SHOW – 2013 Jeff Kalmes, Hillers Flooring America MARKETING Rob Easthouse, Electrical Solutions & Service MEMBERSHIP & RETENTION Dan Bochman, Kruse Lumber NOMINATING Kerk Johnson, Schwickert’s Tecta America, LLC
Committee Updates NOMINATING COMMITTEE CHAIRPERSON: John Eckerman, Boldt Construction The Nominating Committee will be meeting soon to discuss nominations for the 2015 Board of Directors, as well as chairpersons for our many committees and councils. If you would like to recommend a member for a position, or if you would like to recommend yourself, please call John at the office 282-7698! We are always looking for new people to be involved in the management of our association. SHOWCASE COMMITTEE CHAIRPERSON: Brandon Vagt, XRG Concepts The Fall Showcase of Homes is scheduled for September 13th, 14th and 20th, 21st. Have you started building a home to enter in the Showcase? It’s a wonderful opportunity to have your home seen by thousands of potential customers. Information packets have been mailed to residential builders and the first of three deadlines is June 19th.
PERSONNEL Kevin Worden, Rochester Area Habitat for Humanity PROGRAM Dan Plizga, Weis Builders, Inc. PUBLIC WORKS ADVISORY Jeff Broberg, McGhie & Betts - a Division of WSB & Associates, Inc. SHOWCASE OF HOMES Brandon Vagt, XRG Concepts, LLC SPIKE CLUB Jay Burke, Heartwood Homes of Rochester, Inc. SPORTING CLAYS James Coyle, Kane & Johnson Architects, Inc.
Councils
BER EXECUTIVE COMMITTEE JJ Webster, Kraus-Anderson Construction Company CBC EXECUTIVE COMMITTEE Chris Terry, Knutson Construction Services DEVELOPMENT COUNCIL John Sipple, Rochester Area Appraisals, LLC REMODELERS EXECUTIVE COMMITTEE Sam Peyton, King’s Flooring, LLC REMODELERS TOUR Karen Blissenbach, Design Studio B
Www.RochesterAreaBuilders.com June 2014 | 17
��������������������� ���������
������������� ��������� ��� construction fashion expose
�������������������������������������������������������������������� ������������������������������������������������������������������� ����������� ��� ���� ����������� ��� ���� ���������� ��� ���� ������� ��� ���������������������������������������������������� � � � � � � � � � �
������������������������������������� ����������������������������������������� ������������������������������������������� ������������������������������������� ������������������������������������������������� ����������������������������������������� ��������������������������������������� ��������������������������������� �������������������������������� ������������������������
����������������� ���������������������������������� ������������������������� �������������
��������������������������� ���������������������������� �������������
������������ ������������������ ����������������������� ��������
������������������������������ ������������������������������ �������
������������������������������������������������������� ����������������������������������������������������������������� ������������������������������������������������������������������� ���������������������������������������������������������������������
May Meeting Thank you to King’s Flooring for sponsoring the May Meeting, held at the RAB Office. We had a nice turnout, and enjoyed the beautiful weather as we sat outside and networked and enjoyed the lunch that King’s Flooring provided. We hope to see you all again in June!
www.RochesterAreaBuilders.com 18 | June 2014
������������� ������������������������
����������� ������ ������ ������ ��� ���������� ������ ��������� ��������� �� ���������� ������� ������� ����������� ������������������������������������������������� ������ ��� �������� ����� ����� ����������� �������� �������� ��� ����������� � ���� ��������� ������� ��������� ������� ���������� ������ �� ��������� ���������������������������������������������������� ���� ����� ���� ����� ������ ������������� ���������������������� �� ������� ������� ���� ������ ����� �� ��������� ������������������������� ���������������������� ��� ��������� �����
���������������������
Members
2014 Commercial Builders Council
107 Members as of 12/31/13 McGough Construction AB Systems, Inc. MEC Construction, Inc. Accord Electric, Inc. MEP Associates Advanced Disposal Merchants Bank Alpha Video & Audio Merit Contracting, Inc. Associated Bank Minnesota Energy Alvin E. Benike, Inc. The Blue Book Resources Corporation of Building & Minnwest Bank Construction Nickelson Painting, Inc. The Boldt Company Olmsted National Bank Braun Intertec OnSite Corporation Palmer Soderberg, Inc. Briese Iron Works, Inc. Pella Windows & Doors Brock White Company People’s Energy C.O. Brown Agency Cooperative Cambria Pompeii Painting, Inc. Carpet One Prehn Building Sales, Century Painting & Inc. Decorating, LLC Premier Bank Rochester Chosen Valley Testing, ProBuild Company, LLC Inc. Reliable Contractors, Construction Inc. Partnership, Inc. Rochester Area Counselor Realty of Appraisals, LLC Rochester, Inc. Rochester Area Economic County Materials Development, Inc. Corporation Rochester Public CRW architecture + Utilities design group, inc. Custom Alarm/Custom Rochester Ready Mix Communications, Inc. Concrete Co Dunlap & Seeger Rochester Sign Service, Eastwood Bank Inc. eci, llc Rochester Title & Elcor Construction Escrow Company, Inc. Energy Panel Structures Ryan Electric of Energy Products & Rochester, Inc. Design, Inc. Schoeppner, Inc. Enventis Schwab, LLC Expert Insulation, Inc. Schwickert’s Tecta Ferguson Enterprises America, LLC Friedrich Construction, Stantec Inc. Structural Design Gerhards Group, Inc. Goodin Company Superior Mechanical Haley Comfort Systems Tamarack Materials of (Authorized FireSide Rochester, Inc. Dealer) Think Mutual Bank W.L. Hall Company Tonna Mechanical, Inc. HGA Architects and TSP Architects & Engineers Engineers HDR Architecture TW Construction Heartman Insurance Solutions, LLC Hiller’s Flooring America United Rentals HiMec at Home The Urban Studio Home Federal Savings US Bank Bank Valor Mechanical, Inc. Hunt Electric Veit Companies Corporation Vertical Limit K&M Glass Company Construction K&S Heating, A/C, Viking Automatic Plumbing & Electrical Sprinkler Company Kane & Johnson Viking Electric Supply Architects, Inc. Weis Builders, Inc. Key Builders, Inc. Wells Fargo Bank Knutson Construction Minnesota NA Services Wendland Utz Komitt Concrete, Inc. Widseth Smith Nolting Kraus-Anderson Yaggy Colby Associates Construction Company Kreofsky Building Supplies Kruse Lumber Kuntz Electric, Inc. Kwik Trip, Inc. Leitzen Concrete Products, Inc. Ed Lunn Construction, Inc. Marvin Windows & Doors Mavo Systems, Inc. McGhie & Betts, Inc.
C OMMERCIAL C B UILDERS
OUNCIL
a division of Rochester Area Builders, Inc.
June MEETING DATE: Wednesday, June 4th, 2014 TIME: Registration & Networking at 7:00 A.M.
Program at 7:30 A.M.
PLACE: Ramada Hotel & Conference Center PROGRAM: Olmsted County Comprehensive Housing Needs Assessment SPEAKERS: Matt Mullins, Vice President, Maxfield Research, Inc. EXECUTIVE COMMITTEE Chairperson: Chris Terry, Knutson Construction Services Vice Chairperson: Nick Leimer, KrausAnderson Construction Company Past Chairperson: Sue Hanson, Rochester Title & Escrow Company, Inc. Members-at-Large: John Hill, Schwab, LLC Shaun Knode, AB Systems, Inc. John Kuntz, Kuntz Electric, Inc. Levi Kaiser, A.E. Benike, Inc. Matt Mohs, WHKS & Company Mike Nordstrom, Superior Mechanical
June Meeting Come to the June meeting and hear an in depth discussion of the Comprehensive Housing Needs Assessment for Olmsted County, conducted by Maxfield Research Inc. The study projects housing demand for submarkets in the Olmsted County Market Area from 2013 through 2030. It also provides recommendations on the amount and types of housing that could be built to satisfy demand from current and future residents over the next decade and beyond.
Www.RochesterAreaBuilders.com June 2014 | 19
Rochester Building Permits New Residential Single Family Dwelling
2014
25
VALUATION
2013
VALUATION
5,531,411
39
9,046,592
April 2014
Single Family Homes January
2005
2006
2007
2008
33
39
27
20
2009
3
2010
13
2011
2012 2013
3
6
19
2014
11
Townhome Dwelling
0
0
0
0
February
Two-Family Houses
0
0
0
0
31
31
19
13
1
8
8
20
15
14
Multi-Family Bldgs
0
0
0
0
March
59
37
30
29
16
27
24
32
29
28
Manufactured Home
0
0
0
0
April
58
58
44
27
29
25
19
29
39
25
TOTAL
181
165
122
89
49
73
54
87
102
78
77
69
50
30
33
20
14
22
27
May
Existing Residential Deck Addition
19
107,504
11
June
81
59
43
36
36
12
26
32
33
July
58
36
60
23
21
23
8
39
39
August
69
36
43
28
26
15
18
38
21
September
65
31
33
28
33
10
19
22
23
294,745
October
71
49
34
19
31
14
16
23
34
40
38
23
26
30
21
20
22
26
39,350
Room Addition
3
278,763
4
569,729
Porch Additions
0
0
1
15,925
Other Additions
0
0
0
0
Basement Finish Alterations Multi-Family Addition Multi-Family Alterations
29
342,255
27
50
516,115
36
341,383
November
0
0
0
0
December
2
113,000
5
40,095
Assembly (Church)
0
0
0
0
Assembly (General)
0
0
0
0
Assembly (Restaurant/Bar)
1
1,561,000
1
198,000
Business
0
0
1
300,000
Education
0
0
0
0
Factory/Industrial
0
0
0
0
Institution
0
0
0
0
Mercantile
0
0
0
0
Miscelaneous
0
0
0
0
Utility (General)
1
130,000
0
0
Residential (Care/Assisted Living)
0
0
0
0
Storage (General)
1
45,000
1
56,000
Storage (Warehouse)
0
0
0
0
Existing Commercial 8
5,812,413
1
3,669,000
34
5,984,762
32
5,633,723
Structural Shell
0
0
0
0
“White Box”
1
15,000
0
0
Interior Demolition Only
3
48,500
1
39,775
Other Phased Permits
0
0
0
0
Business Signs
15
106,565
23
175,223
Alterations
Other Construction Advertising Sign
1
18,000
0
0
Footings & Foundations
2
220,000
0
0
Demolition
3
www.RochesterAreaBuilders.com 20 | June 2014
60
23
11
16
15
12
16
14
22
702
506
417
302
274
200
191
299
326
78
*total may differ as permits may have been voided.
New Commercial
Addition
TOTAL
0
Year To Date Statistics 2014 VALUATION
NO.
NO.
2013 VALUATION
Building Permits Issued to Date
617
99,659,586
576
55,353,067
Single Family Dwelling
78
19,118,519
102
23,271,991
Multi-Family Buildings Total Units: 39
1
3,702,052
0
0
2,163
22,421,315
2,077
19,001,370
719
10,304,793
649
10,630,028
65
14,350
79
23,350
Mechanical
570
4,962,388
543
4,383,007
Gas Piping
135
348,756
141
120,700
Fireplace
113
303,426
117
283,801
Trade Permits Issued to Date Electrical Electrical (Temp. Service)
Hydronic System Plumbing
Total Permits YTD
57
1,939,043
40
736,592
504
4,548,559
508
2,823,892
2,780
122,180,901
2,653
74,354,437
Information and downloads available at Rochester Building Safety Department’s Website: http://www.rochestermn.gov/departments/bldgsafety/reports/building/index.asp
Byron
Building Permits MARCH 2014 New Residential
NUMBER
VALUATION
7
1,027,450
Basement Finish
5
81,500
Alterations
1
$500
Single Family Detached Existing Residential
Building Permits MARCH 2014 Single Family Existing Residential
March 2014 Monthly Housing Data
Pine Island New Residential
Rochester Real Estate Monthly Housing Data New Listings Active Listings Year to Date Pending Listing Sold Listings Sold Listings Year to Date Median Sales Price (SOLD) SOLD Days on Market (DOM) Avg. Year to Date (DOM)
March 2014
March 2013
% Change
311 1,087
320 1,195
-2.8% -9.0%
173 128 312
212 144 342
-18.4% -11.1% -8.8%
158,000
153,150
3.0%
81
100 -19.00%
86
110 -21.82%
Information and downloads available at South East Minnesota Association of REALTORS’ NUMBER
VALUATION
3
455,000
NUMBER
VALUATION
Heating
1
3,600
Basement Finish
1
20,000
Website: http://semnrealtors.org/general/stats_market-trends.html
Information Provided By:
Www.RochesterAreaBuilders.com June 2014 | 21
Beijing Balancing Elliot Eisenberg, Ph.D.
Much has recently been made of the notion that China has enough serious structural problems with its economy that chances are good it will experience a “hard landing,” defined as economic growth quickly slowing from 7.5% today to the low single digits. This slowdown would weaken commodity prices, hurting developing nations, and reduce Chinese imports of high-quality finished goods from developed nations, also hurting the US, Europe and Japan. While the Chinese economy has problems, many are chronic and I believe the government has sufficient resources to manage the acute ones and avoid a hard landing. The key problems the Chinese economy suffers from are threefold; a profound overreliance on large trade surpluses, massive government overinvestment in infrastructure and a weak financial system that has resulted in both bad loans made by irresponsible local and regional governments and a highly leveraged and lightly regulated shadow banking system (sound familiar?) that may well implode. The first problem is fading away. After running trade surpluses in the $45 billion/year range through 2003, they skyrocketed to $400 billion/ year by the end of 2008. However, that highpoint coincided with the Great Recession which resulted in a huge contraction in trade and simultaneously an effort by many nations to boost exports to help their domestic economies. As a result, Chinese trade surpluses have averaged about $300 billion/ year (about two-thirds of that with the US) since early 2009 and show no discernable upward trend. Moreover, as the Chinese economy is about twice as big today as it was in 2005, the economic impact of the now smaller trade surpluses on the overall economy is much smaller.
The second problem of roads to nowhere, massive over building of plant leading to ruinous excess capacity along with the construction of uninhabited ghost towns is being rectified. And rectified they can be, because these destructive outcomes are the direct result of policies pursued by the central government that are now being overhauled. GDP growth targets are being reduced, artificially low interest rates earned by savers are likely to rise in the near future and the currency, which has been profoundly undervalued, is slowly appreciating. Collectively these policies will curb wasteful overinvestment and slowly replace it with increased domestic consumption and reduced exports. As for the substantial dodgy debt on the books of local and regional governments and shadow banks due to weakening housing prices and raw land values that act as collateral for many loans, here the problem is serious. That said China’s debt is about 25% of GDP, giving the central government ample room to borrow should it be necessary. Moreover, the central government is beginning to force local and regional governments to sell some of the $7 trillion in assets they own in an effort to shore up their financial condition. Moreover, with $4 trillion in foreign reserves and the ability to weaken the Chinese currency at will to boost exports, China has tools other nations don’t have. Lastly, expect Beijing to re-stimulate sagging housing markets by relaxing home-purchase requirements, and local governments to augment this policy by giving residency benefits to outof-towners to further boost demand. Combining the above with looser monetary policy makes me think that those making key policy decisions, the brightest minds in the nation, will see to it that China comes through this relatively unscathed.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com.
www.RochesterAreaBuilders.com 22 | June 2014
Membership Information
Membership Renewals
as of 4/30/14
One Year
Altra Federal Credit Union J.E. Dunn Construction The Kitchen Design Studio West Bank Xcel Energy
2013 2013 2013 2013 2013
NEW APPLICANTS: The firms listed below have applied for membership in the Rochester Area Builders. Any member who objects to admission of any applicant shall notify the RAB Board of Directors in writing of the objection before the next Board of Directors meeting
NONE
MEMBERSHIPS PENDING: NONE
Two to Four Years
Elias Construction, LLC Lacina Siding & Windows, Inc. Solar Connection, Inc. Chladek Construction, LLC MEP Associates Rochester Asphalt, Inc. Wildwood Sports Bar and Grill
2011 2011 2011 2010 2010 2010 2010
Five to Nine Years
Beckley’s Office Products Beetles Bar & Grill, Inc. Data-Smart Computers, Inc. HDR Architecture Legends Concrete, Inc. RCON Homes, Inc. Michael Jack, LLC WA Insurance Anderson Construction
2009 2008 2008 2008 2007 2007 2006 2006 2005
Ten to 19 Years
Scott Berberich Construction, LLC First General Services of SE MN Todd Eidem Construction, Inc. Ames Construction, Inc. Expert Insulation, Inc. HiMEC at Home Habitat for Humanity - Rochester Area Home Improvement Professionals, Inc.
2004 2003 2002 2001 2001 2001 2000 1999
25 Years & More
Countryside Builders, LLC Radcliffe Homes & Remodeling Thomas Tool & Supply Kreofsky Building Supplies Tile Superstore & More Barrier Free Access, Inc. R&M Development Company
1989 1988 1987 1985 1985 1984 1970
MEMBERSHIP TOTAL: 453 RETENTION RATE: 92.9% As of 4/30/14
WE WELCOME THE FOLLOWING NEW MEMBERS IN APRIL: FAT WILLY’S BAR & GRILL 4325 Maine Ave SE Rochester, MN 55904 Phone: 507- 206-4301 Contact: Bill Henderson Associate Member Restaurant/Bar Sponsored by: David Kane, Kane & Johnson Architects, Inc. KAHLER HOSPITALITY GROUP 20 2nd Avenue SW Rochester, MN 55902 Phone: 507- 280-6200 Contact: Marnie Glynn Associate Member Hotel Sponsored by: None Listed MANUFACTURER’S BANK & TRUST 2020 2nd Street SW Rochester, MN 55902 Phone: 507- 226-8460 Contact: Thomas Heepke Associate Member Bank Sponsored by: Sue Hanson, Rochester Title & Escrow Company, Inc. SAWYER CONSTRUCTION SERVICES, INC. 9472 65th Street NE Elgin, MN 55932 Phone: 507-272-1740 Contact: Marv Sawyer Associate Member Lawn Care/Tree Service Sponsored by: Christy Buchan, Energy Products & Design, Inc.
Www.RochesterAreaBuilders.com June 2014 | 23
National Association of Home Builders
Put your membership to work now. Money-saving discounts that benefit your business, your employees, and your family
www.nahb.org/MA
R
www.RochesterAreaBuilders.com 24 | June 2014