APRIL - MAY 2020
ROCHESTER AREA BUILDERS, INC.
Scholarship Opportunities Deadline approaching
Building Permits Rochester & Surrounding areas!
15
18
Celebrate Earth Day 2020! while practicing social distancing
24
D C
DEVELOPMENT COUNCIL a division of the Rochester Area Builders, Inc.
C OMMERCIAL C B UILDERS
OUNCIL
a division of Rochester Area Builders, Inc.
STAFF EXECUTIVE DIRECTOR John Eischen, John@RochesterAreaBuilders.com STAFF Shelly Bahlmann, Shelly@RochesterAreaBuilders.com Golf Outing, Sporting Clays, Home Show, Directory, Newsletter, RAB Update Audra Bolduan, Audra@RochesterAreaBuilders.com Builders Exchange Trustees and Showcase Committee Rebekah Nielsen, Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Community Relations, Education, Membership, Fashion Show, Program, Spike Club, Remodelers Council: Executive & Remodelers Tour, 40 Below GOVERNMENT & PUBLIC AFFAIRS CONSULTANT Rick Dold, Rick@GodwinDold.com
ROCHESTER AREA BUILDERS, INC. 2020 CALENDAR OF EVENTS MAY 25
Office Closed – Memorial Day
JUNE
1
30
PRESIDENT Alissa Moe, Bremer Bank VICE PRESIDENT Luke Stier, Stier Construction, Inc. SECRETARY Becky Holmen, Bright Ideas TREASURER Jesse Buhl, MedCity Consulting PAST PRESIDENT Jerry Jensen, Valor Mechanical, Inc. DIRECTORS Kenneth Bush, Rochester Asphalt & Concrete Adam Giannini, Meyer Borgman Johnson Spencer Holmen, TLS Companies Jennifer Lawver, ERH Developing, Inc. Tom Leimer, Knutson Construction Kevin Sternberg, Countryside Builders, LLC Kevin Reckinger, Bricewood, LLC Charlie Sweeney, Kraus-Anderson Construction Jennifer Mitchell, Edina Realty BUILDERS EXCHANGE COUNCIL REPRESENTATIVES John Honeck, Harris Company, (Chair) Kurt Hoeger, United Rentals, (Vice Chair) Jeremy Wohlfiel, Merit Contracting, Inc. (Past Chair) COMMERCIAL BUILDERS COUNCIL CHAIR Vanessa Hines, Eidseth Smith Nolting DEVELOPMENT COUNCIL CHAIR Hal Henderson, HGA Architects & Engineers REMODELERS COUNCIL CHAIR Jessica Markley, Elias Construction 40 BELOW CHAIR Katie Olson, Kimley-Horn & Associates, Inc. NATIONAL LIFE DIRECTORS Joe Weis, Weis Builders, Inc. Steve Buss, Cornerstone Builders & Real Estate, Inc. NATIONAL DIRECTORS Dana Hlebichuk, Widseth Smith Nolting Levi Kaiser, Alvin E. Benike, Inc., (Rep) Todd Severson, TLS Companies, LLC STATE DIRECTORS Mike Allen, Mike Allen Homes, LLC Jean DeWitz, DeWitz Home Builders, Inc. (Rep) Kathy Einck, Maplewood Homes.LLC John McGuine, JM Consulting David Pederson, Dunlap & Seeger Dan Severson, Dan Severson Builders, Inc.,
RAB Golf Outing - July 13th back-up date Networking Night @ Tulip Tree
Office Closed - Independence Day NAHB Mid-Year Board Meeting – Minneapolis Member Appreciation Night @ Mayowood Stone Barn
JULY 3
BOARD OF DIRECTORS
TBD 28
AUGUST SEPTEMBER 7
17 19-20 19-20,26-27 29
Office Closed – Labor Day Sporting Clay Shoot Remodelers Tour Fall Showcase of Homes General Membership Meeting @ DoubleTree by Hilton
OCTOBER 27
NOVEMBER
Networking Night @ Cambria
TBD
19 26-27
Past Presidents Dinner Celebration of Leaders Dinner Office Closed – Thanksgiving Holiday
Holiday Party @ The Hilton Office Closed – Christmas Holiday
DECEMBER 4 24-25
MISSION STATEMENT The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota. We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.
ON POSTP
ED
7 11 16
9
STUDS, STRUTS & ST ET TOS
MEMBERSHIP REPORT........................................ 4
March 2020
MN DEPARTMENT OF LABOR AND INDUSTRY....... 4
March 2020
LETTER FROM RAB PRESIDENT............................ 5
Alissa Moe, Bremer Bank, 2020 RAB President
SPRING SHOWCASE OF HOMES 2020.................... 7
25 NAHB EYE ON HOUSING...................................... 16
Virus Affecting Homeowners’ Willingness to Remodel
ROCHESTER BUILDING PERMITS......................... 18
March 2020
BYRON BUILDING PERMITS................................. 18
March 2020
OLMSTED BUILDING PERMITS ............................ 19
Dates Coming Soon
January 2020
PPP LOANS 25 FAQS.......................................... 8-9
SEMR HISTORICAL OVERVIEW............................. 19
Information provided by: Smith Schafer & Associaters, LTD
WELCOME NEW RAB MEMBERS........................... 10
April New Member
STUDS, STRUTS & STILETTOS............................. 11
Postponed
CONSTRUCTION STORMWATER PERMIT TOP 5..... 13
City of Rochester Public Works Department
PPP FORGIVENESS............................................. 14
Information provided by: Dunlap & Seeger
SCHOLARSHIP OPPORTUNITIES.......................... 15
Post Secondary Scholarships
March 2020
NAHB EYE ON HOUSING...................................... 23
Builders Respond to Virus in a Variety of Ways
Celebrate Earth Day 2020! ................................... 24
(while practicing social distancing)
RAB TOOLBOX KIT PHOTOS................................. 25
4 | APRIL-MAY 2020
ROCHESTER AREA BUILDERS, INC.
MEMBERSHIP REPORT MARCH 2020
MEMBERSHIP TOTAL: 453 RETENTION RATE: 89.3 As of February 29, 2020 ONE TO FOUR YEARS BBHA Rochester, LLC................................................2019 Carl Bolander & Sons, LLC.......................................2019 Haworth & Company, Ltd..........................................2019 ABC Supply Co., Inc. - South Rochester.................2018 Barton Brothers Construction, LLC.........................2018 Rochester Towneclub, LLC.......................................2018 Castlewood Homes, Inc............................................2017 Charlie’s Eatery & Pub..............................................2017 DoubleTree by Hilton.................................................2017 Jeff Feece Designs.....................................................2017 Med City Painting & Decorating, Inc.......................2017 J.F. Ahern Company..................................................2016
FIVE TO NINE YEARS Brennan Companies..................................................2015 Dynamic Masonry Products, LLC.............................2015 ECSI System Integrators..........................................2015 Elsmore Plumbing, LLC............................................2015 Hartman Complete Lawncare, LLC.........................2015 Rymark Construction, LLC........................................2015 Stier Construction, Inc..............................................2015 Thatcher Pools & Spas, Inc......................................2015 All Craft Exteriors, LLC.............................................2014 First Security Bank....................................................2013 Batzel Builders, Inc...................................................2012 City of Preston...........................................................2012 City of Spring Valley..................................................2012 Consolidated Communications, Inc.........................2012 The Design Connection.............................................2012 Solar Connection, Inc................................................2011 Steve Gentry Construction, LLC..............................2011
TEN TO 19 YEARS Brandon Henderson’s Construction Plus, LLC......2010 Rochester Asphalt & Concrete, Inc.........................2010 The Boldt Company...................................................2009 ABC Supply Co., Inc. - North Rochester..................2007 Hutch’s Custom Cabinets.........................................2007 Counselor Realty of Rochester, Inc.........................2006 Charterpoint Wealth Strategies...............................2003 Harris Rochester, Inc................................................2001 Pompeii Painting, Inc................................................2001
20 YEARS & MORE Appliance Village Company.....................................2000 Arcon Land, LLC.........................................................2000 Merchants Bank.........................................................2000 Rochester Concrete Products, LLC.........................2000 Quality Siding & Window, Inc...................................1991 Stadsvold’s Lawn & Landscape...............................1990 Arrow Building Center..............................................1984 Dakota Supply Group, Inc.........................................1964
We are using GoToMeeting to conduct our remote meetings until further notice. If you have a scheduled meeting you will receive an invitation from John. Please download and register ahead of time by going to https://www.gotomeeting.com/
5 | FOUNDATIONS NEWSLTR
FROM THE PRESIDENT HELLO AND HAPPY SPRING! How
the Showcase can start a positive
is everyone holding up? Although it
chain reaction of providing business
has seemed to be a long winter for
for our members. An electrician,
us Minnesotans, I want to remind
a plumber, a designer, a cabinet
you that nature does not hurry, yet
maker... the list goes on.. are all
everything is accomplished. The last
depending on the success of our
month challenged us all to adapt to
builder members putting their
new ways.
product on the Showcase. I am now asking each of you to pivot
There has been a word that has
and promote the use of this virtual
been trending in our conference
Showcase to your friends, families,
calls with committees and the board
and customers once all details
of directors. A word that prior to
are finalized. This platform could
COVID-19 only reminded me of
allow an increase in traffic “through
a FRIENDS episode where Ross,
the homes”, all while keeping our
Rachel and Chandler try to navigate
members and customers safe.
moving a couch up a narrow
We are able to track the analytics
stairway… The word is “PIVOT”.
of visits to the app and webpage,
RAB Staff, committee and
which allows us to provide you
board members have been making
with concrete evidence that your
decisions to pivot and accommodate
membership is driving business
to the new challenges we have
your way. Stay tuned for more
been facing. For example, Knutson
information!
Construction and the Showcase Committee stepped up to save
If you are not following
our event by agreeing to take the
Rochester Area Builders on
show, in part, to a virtual platform.
Facebook, I highly suggest you do.
We made this decision because we
RAB Staff and volunteers have been
know that one home presented on
putting together free take home DIY
Alissa Moe President Rochester Area Builders, Inc tool kits for kids in our community. What better way to spark interest in a career in the trades in our youth than to get them working and building things with their hands while practicing distance learning?!
We understand that these times are uncertain, but we are here for you. We are YOUR association. Please never hesitate to reach out to myself or the RAB staff with questions on how to get the most out of your membership with us.
Alissa Moe Bremer Bank 2020 RAB President
6 | APRIL-MAY 2020
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ROCHESTER MAIN 507-280-0621
STEWARTVILLE 507-504-1060
ELTON HILLS 507-280-0028
locally owned locally managed local decisions
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7 | FOUNDATIONS NEWSLTR
2020 Spring Showcase of
DATES COMING SOON!
8 | APRIL-MAY 2020
PAYCHECK PROTECTION PROGRAM LOANS 25 FAQS Small businesses may apply for a forgivable loan under the CARES Act. The funding from the federal government for these loans is limited. Learn more below: 1: What can I spend the loan proceeds on? A: The loan proceeds may be spent on payroll costs, including:
• • • • • • • •
Salaries Wages Tips or similar compensation Health insurance Dental insurance H.S.A. contributions Retirement plan contributions SUTA
In addition to payroll costs, up to 25% of the forgivable amount may be used for rent, personal property leases, interest, and utilities. You absolutely cannot spend the funds on non-qualified expenses during the eight-week period following the loan. Using the funds for non-qualified expenses during this period following the loan could result in fines, penalties, and potential jail time. 2: Utilities are included as a qualified expense. Which utilities qualify for reimbursement? A: There is not additional guidance as to which utilities will qualify for loan forgiveness. We anticipate the traditional utilities of: gas, electric, telephone and water will qualify. It is unclear whether cell phone bills or other utilities will qualify. In order to qualify, the expense must have been subject to a contract as of February 15, 2020. 3: When does my forgiveness period start? A: The forgiveness period starts on the date the loan is funded. Your lender has up to 10 days to fund the loan once it is approved by SBA. Expenses paid and incurred starting on the funding date are eligible for forgiveness. 4: What happens to expenses that straddle the forgiveness period, for example, payroll paid during the forgiveness period but related to the prior period? A: The CARES Act allows for loan forgiveness for payment of those expenses “paid and incurred” in the forgiveness period. Without further guidance related to this treatment, only expenses that are both paid and incurred will count for forgiveness. If your payroll includes dates that were before your loan was funded, but is paid within the forgiveness period, you will need to allocate the payroll between days prior to funding and after funding to determine which expenses are eligible for loan forgiveness. The same methodology would apply to other expenses, such as utilities, interest, and rent. You may have received funds in April, but the April rent would not qualify for an expense unless it was paid after the date the proceeds were received. Similarly, utility bills are often paid the month after the charge is incurred, and would only count for those expenses paid and incurred after the loan was funded. We anticipate further guidance in the coming weeks to clarify the “paid and incurred” language in the law and resolve the many issues created by this language. 5: Can I prepay expenses at the end of the eight-week period so they are
INFORMATION PROVIDED BY:
SMITH SCHAFER & A S S O C I A T E S,
L T D.
both paid and incurred in the eight-weeks? A: Guidance has not been issued on this topic, but based on the CARES Act, you would be able to move up the payment of those expenses incurred in the period, but not yet due. For example, moving the payroll date up to account for all the days in the period. Please note, moving your payroll date will likely require advance notice to your employees. 6: How do I determine the forgivable amount of the loan? A: The forgiveness is based on the amount of the funds spent on eligible expenses, as well as a Full Time Equivalent (FTE) count. The FTE count is based on a ratio of the average FTE per pay period for the eight-weeks after the loan date, as compared to the average FTEs from either the period from 2/15/19 – 6/30/19, or the average FTEs from the period 1/1/20 – 2/29/20. Additionally, the CARES Act specifies, if the total FTEs at 6/30/20 have been restored to the previous levels, the loan will be eligible for 100% forgiveness. There is also a reduction dollar-for-dollar for any employees making less than $100,000 annually who are reduced in pay by more than 25%. 7: How do I determine my FTE count? A: It is unclear from the guidance whether an FTE will be based on 40 hours, 30 hours, 36 hours, or some other figure. Various government models are based on differing amounts, and we do not know at this time how the FTE count will be calculated. 8: What does it mean to restore the total FTEs by 6/30/20? A: Based on the literal reading of the law, this would mean your FTE count is the same or higher at 6/30/20 as it was for either the period from 2/15/19 – 6/30/19 or the period from 1/1/20 – 2/29/20. Currently, there is not guidance related to how long the FTE count must stay at this level or whether the FTEs at 6/30/20 need to be the same level of employees as the measurement period. 9: My eight-week loan period ends before June 30, 2020. Could I lay off my employees during the eight-week period, and bring them all back on June 28, 2020 and still be eligible for loan forgiveness? A: The literal reading of the law would allow you to bring back all employees by June 30, 2020. However, if many employees are laid off during the eight-week period of the loan, it may be difficult to spend the entire corpus of the loan because payroll costs would be low. 10: Up to 25% of the funds can be spent on non-payroll expenses, how do I measure 25% of the funds? A: The law states up to 25% of the funds forgiven may be used for nonpayroll expenses. In order to measure the 25%, you first need to determine what percentage of your loan will be forgiven. This may be difficult to determine before the end of the loan. Example: If your loan is for 100,000 and it becomes fully forgivable, you would be eligible to reimburse expenses for non-payroll costs of up to 25,000. However, if it is determined only 80% of the loan is forgivable, then
9 | FOUNDATIONS NEWSLTR
the non-payroll costs reimbursed would be limited to 20,000. 11: How do I determine my lease expense? A: Your lease expense is based on leases entered into before February 15, 2020 and subject to the limits described in the previous question. 12: How do I determine interest expense? A: Include interest on any debt for obligations entered into before February 15, 2020. 13: How should I pay non-payroll expenses out of the loan if I do not know what my forgiveness will be? A: You may need to wait until closer to the end of the eight-week period, or until more guidance is issued, before determining the amount of nonpayroll costs that can be paid from the loan proceeds. 14: Do I need to pay the expenses directly from the loan proceeds or can I “reimburse” myself at a later date? A: There is not clear guidance on this topic, but it seems a clear tracing of the funds for reimbursable purposes will be sufficient to illustrate that those funds were used for the correct purposes.
20: Can I reduce employee hours or employee pay and still be reimbursed for my expenses? A: You may reduce employee pay by less than 25% and still be eligible for full forgiveness. However, if you reduce the pay for any employee who makes less than 100,000 annually by more than 25%, your loan forgiveness will be affected dollar for dollar related to that reduction.
Example: You may not want to pay your payroll directly out of the loan proceeds account because your employer FICA is not an eligible expense so only a portion of the payroll expense would qualify. You may want to continue to pay payroll as normal and then “reimburse” yourself for these costs. Likewise, you may not want to pay rent directly from the loan proceeds because you are unsure whether the entire amount will be eligible for forgiveness.
21: How do I account for the loan proceeds and expenditures on my financial statement? A: We recommend you include the loan on your books as a short-term liability, similar to any other loan. Pay your expenses as you normally would and include those on your income statement as you ordinarily would. Once the forgiveness is determined, record the debt forgiveness income as an extraordinary item. The loan forgiveness is a tax-free forgiveness.
15: My business is currently shut-down. Do I need to pay my employees even though they are not working? A: You may be able to restore your FTE count by June 30, 2020 (see numbers 8 and 9 above) and not have to pay your employees while they are not working, but would need to spend the money on payroll costs in order for it to be forgivable.
22: How do I track the expenses, if I am not offsetting them on my income statement? A: We recommend tracking your expenses outside of the financial statement using an excel spreadsheet or other detail accounting of expenses. If you would like to use Smith Schafer’s template, it is available by clicking the button below.
16: If my loan is fully forgivable, what is my out-of-pocket cost for my employee payroll? A: You will be out of pocket for your employer share of FICA, 7.65% of the total payroll.
23: Should these funds be kept in a segregated account? A: Yes. We recommend the PPP proceeds are kept in a segregated account. Pay your expenses as you ordinarily would and reimburse yourself for the expenses. For example, if you have an account only used for payroll, continue to pay your payroll costs out of this account. Determine the amount eligible for use from the loan proceeds, and then reimburse yourself for those expenses. A careful tracking and tracing of these funds is essential.
17: Could I bring my employees back for the last week of the forgiveness period and pay them a bonus for coming back to cover the payroll expense? A: There is no guidance suggesting an employer could not pay the employees a bonus for returning to work. The maximum to be paid for any individual for wages in the period is 15,385. However, there is not guidance as to any other compensation upper limits. 18: Do new employees count in my FTE count? A: Yes, new employees would count in the total FTE count. 19: I am not going to be able to spend all of the funds on employee wages, can I make a retirement plan contribution for my employees to spend the remaining amount of the funds? A: There is no guidance suggesting an employer cannot fund a retirement plan contribution to account for any remaining funds and have it count as a payroll expense for the calculation. In funding the loan, there were not limits on the amount of benefits for employees, there were only limits on the amount of wages for employees.
24: What documentation is required for the reimbursed expenses? A: At a minimum, payroll reports and payroll tax returns is required to illustrate qualified expenses. Additionally, cancelled checks may be required for certain expenses. We recommend keeping copies of all receipts paid and reimbursed. 25: I am a sole proprietor with no employees, how do I document “payroll costs” to myself? A: When you apply for loan forgiveness, you will include an amount equal to 8/52 of the 2019 Schedule C income, limited to 100,000 and this will be automatically forgiven. Related maximum forgiveness for your payroll costs is $15,385. There is no additional documentation required at this point.
10 | APRIL-MAY 2020
WELCOME NEW RAB MEMBERS APRIL 2020
MCNEILUS PROPERTIES, LLC
As a member of RAB, you have an opportunity to join one of our popular Councils. We also have many Committees to get involved with. Below is a list of ones that have openings. We would love to have you! Email us!
COMMITTEES
Sue Blaisdell
Residential Real Estate (507) 374-6336 mcneilusproperties.com
• Ambassadors Club
• Home Show
• Sporting Clay Shoot
• Community Relations
• Membership & Retention
• Education
• Program
• Golf Outing
• Remodelers Tour
• Green Building
• Showcase
COUNCILS C OMMERCIAL C B UILDERS
OUNCIL
a division of Rochester Area Builders, Inc.
D C
DEVELOPMENT COUNCIL a division of the Rochester Area Builders, Inc.
11 | FOUNDATIONS NEWSLTR
POSTPONED UNTIL FURTHER NOTICE
P
O P T OS
D E N
Attendees have the opportunity to vote on their favorite and support Habitat at the same time!
CLICK HERE TO VIEW MORE INFORMATION ABOUT THE EVENT
PRESENTED BY:
A BENEFIT FOR:
STAY TUNED FOR NEW DATE
Find us on Facebook! Click here to view pictures from past events and stay up to date with the latest news on Studs, Struts & Stilettos!
Studs, Struts & Stilettos is a community event and fundraiser for Two Rivers Habitat for Humanity and is presented by Rochester Area Builders, Inc. It is a construction-based fashion show with a twist! Models strut the runway in custom couture designs made from raw building materials such as tile, wood, landscaping fabric, window screen and more. Anyone can submit a design entry as long as it meets the requirements.
Follow us on STUDS, STRUTS & ST ET TOS
12 | APRIL-MAY 2020
13 | FOUNDATIONS NEWSLTR
CONSTRUCTION STORMWATER PERMIT TOP 5
COMPLIANCE
VERSUS
VIOLATION
Perimeter Control & Silt Fences
Inlet Protection
Construction Site Entrance
Site & Slope Stabilization
Tracking For more information contact: Aaron Cunningham City of Rochester Public Works Department 507-696-3887 or 507-328-2446 acunningham@rochestermn.gov www.rochesterstormwater.com
14 | APRIL-MAY 2020
PAYCHECK PROTECTION PROGRAM FORGIVENESS BY JOHN GIESEN, DUNLAP & SEEGER ON APRIL 24, 2020 If you’ve received Paycheck Protection Program (PPP) funds,
Finally, there are exceptions to the exceptions. Neither the
you should know what to do next to maximize forgiveness.
employee-count nor pay cut forgiveness reductions apply
Forgiveness determines how much money you will have to
where layoffs or pay cuts occurred between February 15 and
pay back to your lender.
April 26, 2020, and employees or wages were restored by
Under the CARES Act, borrowers are eligible for forgiveness in an amount equal to the following “costs incurred and payments
June 30, 2020. Of course, getting employees back is no given. Employees may quit. Furloughed employees may not want
to come back. It’s not uncommon to hear about employees made” during the 8 weeks after loan origination: payroll making more money staying at home collecting unemployment costs, mortgage interest payments, rent payments, and utility benefits. Employees are supposed to go back to work when payments. A borrower is eligible for loan forgiveness if it has
work is available, and you can advise them of that. But the
used at least 75 percent of loan proceeds for payroll costs, impact this situation will have on your forgiveness remains with any balance going towards covered mortgage interest uncertain. payments, covered lease payments, or covered utilities. Be sure to stay within these parameters. If you use PPP proceeds
Document everything when it comes to PPP funds. You will
for ineligible expenses, you may be personally liable.
need evidence to obtain forgiveness. Hold PPP funds in a single account. Document number of employees and their
Forgiveness will be greatest if workforce reductions are kept wages. Retain cancelled checks, payment receipts, transcripts low. The CARES Act says that forgiveness is reduced where the of accounts, and other verification documents. borrower has a lower “average number of full-time equivalent employees per month” over the 8 weeks after loan origination
Finally, special guidelines were announced for self-employed
than during a comparable pre-coronavirus period. You can individuals, such as independent contractors or some LLCs. choose one of two comparison periods, either immediately
These regulations limit forgiveness of owner compensation
before the outbreak (January 1 through February 29, 2020), or replacement for individuals with self-employment income, a year before (February 25 through June 30, 2019). Calculate who file a Schedule C, to 8 weeks’ worth of 2019 net profit. your average full-time equivalent employees for either period. The regulations also specify that loan proceeds should be Choose the lower. We can’t perform this calculation with
used for existing operations and payroll and not for business
certainty yet. We are still waiting for a definition of “full-time expansion. Further details of these regulations are beyond equivalent employees” from the federal government. Forgiveness will also be greatest if wage reductions are kept low. The CARES Act says that forgiveness is reduced by the amount that an employee’s total wages during the 8 weeks after PPP, when compared to total wages during “the most recent full quarter” before PPP, have been reduced by more than 25 percent. Pay cuts for employees receiving more than $100,000 annually don’t count. Again, it is anticipated that there will be more guidance on this calculation soon.
the scope of this article. Contact your professional advisor for personalized guidance.
15 | FOUNDATIONS NEWSLTR
GRADUATING HIGH SCHOOL STUDENTS POST-SECONDARY SCHOLARSHIPS Rochester Area Builders, Inc. is proud to announce their 2020 scholarship program. Either $1000 or $500 non-renewable scholarships are available for graduating high school seniors and college freshmen. Scholarships are made available through the Remodelers Council, the Commercial Builders Council, the Builders Exchange of Rochester, and the Youth Sporting Clay Shoot. Scholarships are for attendance in a post-secondary program in a construction-related field including technical school, trade school, apprenticeship, or college. Scholarship recipients will be announced in June 2020. To be eligible for any scholarships, applications must be postmarked by May 4, 2020. Application can be found HERE. CRITERIA: 1. Applicant must be a resident of Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Steele, Wabasha, Winona counties; be recommended by a RAB or BER member; or participated in the RAB Youth Sporting Clay Shoot. 2.
Applicant must be accepted by a post-secondary program in a construction related field including technical school, trade school, apprenticeship, or college.
3.
Applicant must have a 2.5 or better G.P.A. – High School Transcript Required
4.
Applicant must demonstrate financial need.
5.
Scholarship will be paid directly to the school.
C OMMERCIAL C B UILDERS
OUNCIL
a division of Rochester Area Builders, Inc.
16 | APRIL-MAY 2020
Virus Affecting Homeowners’ Willingness to Remodel BY PAUL EMRATH on APRIL 22, 2020 A recent NAHB survey shows the negative effect the coronavirus pandemic is having on the decision to remodel. Over 90 percent of remodelers in the survey reported a slowdown in both the rate at which inquiries are coming in, and in the general willingness of homeowners to remodel at this time. This information was collected via a question added to the survey for NAHB’s first quarter 2020 Remodeling Market Index (RMI). The RMI question listed eight possible impacts of the coronavirus and asked the professional remodelers in the panel if each has so far had a major, minor, or no adverse effect on their businesses. As indicated above, at the top of the list 96 percent of remodelers said the virus was hurting the rate at which inquiries are coming in and 93 percent said the virus was hurting the general willingness of homeowners to remodel at this time. A full 70 percent characterized the negative impact on inquiries as major rather than minor. Other adverse impacts on the list have also become widespread. Over 80 percent of remodelers said the virus was having a noticeable, adverse impact on homeowners’ concerns about interacting with remodeling
crews (86 percent), supply of n95 respirator face masks (84 percent) and cancellations or delays of existing projects (also 84 percent). Although somewhat less widespread, willingness of workers and subs to report to a remodeling site, supply of building products and materials, and amount homeowners are willing to pay for remodeling work were still cited as significant negative effects of the pandemic by over half of the remodelers. In some respects, the impact of the coronavirus on the remodeling market mirrors what we’re seeing in the market for new homes. In both cases, the pandemic is having a number of significant negative impacts,
but the strongest ones are the negative impacts on the behavior of potential customers.
17 | FOUNDATIONS NEWSLTR
GREAT TIME TO LOCK IN YOUR RATE
R E F I NAN C E YO U R H O M E GREG JOHNSON
JEANNE STRUCKMANN
LOAN ORIGINATOR
LOAN ORIGINATOR
Direct Line 507-258-2192 Email gjohnson@altra.org NMLS# 516974
Direct Line 507-421-7655 Email jstruckmann@altra.org NMLS# 411311
3833 Cascade Creek Rd. NW
(Corner of 19th St. & West Circle Drive)
123 16th Ave. SW, Suite 500 Rochester, MN
507-258-4500 • 800-755-0055 www.altra.org Contact Altra for more information. Equal Housing Lender. Federally insured by NCUA.
18 | APRIL-MAY 2020
ROCHESTER BUILDING PERMITS 2020
VALUATION 2019
MARCH 2020
2011 2012 2013 2014 2015 2016 2017 2018
VALUATION
2019 2020
NEW RESIDENTIAL Single Family Dwelling Townhome Dwelling
26
7,839,291
22
5,756,048
January
6
1,716,000
4
1,090,000
February
3
6
19
11
20
25
15
19
6
17
8
20
15
14
19
15
20
16
5
13
24
32
29
28
30
31
44
25
27
32 62
Two-Family Houses
0
0
0
0
March
Manufactured Home
0
0
0
0
TOTAL
11
26
34
25
39
40
35
35
27
Multi-Family Bldgs (Units)
0
0
0
0
April
19
29
39
25
22
33
45
40
23
May
14
22
27
35
19
56
43
28
27
June
26
32
33
47
51
41
52
38
31
July
8
39
39
38
29
44
45
36
26
August
18
38
21
60
33
47
30
31
24
September
19
22
22
23
27
52
35
39
12
October
16
23
34
35
49
25
36
29
27
November
20
22
26
26
23
12
41
21
47
December
16
14
22
27
42
37
33
25
34
*total may differ been voided. TOTAL 191as permits 299 may 326 have369 369 418
429
347
289
EXISTING RESIDENTIAL Deck Addition
0
0
5
34,860
Room Addition
0
0
0
0
Porch Additions
0
0
0
0
Other Additions
1
5,560
2
5,990
Basement Finish
15
363,895
28
448,036
Alterations
24
285,671
48
429,380
Multi-Family Addition
0
0
0
0
Multi-Family Alterations
6
3,567,174
17
5,220,998
Assembly (Church)
0
0
0
0
Assembly (General)
0
0
0
0
Assembly (Restaurant/Bar)
0
0
0
0
Business
0
0
0
0
Education
0
0
0
0
Factory/Industrial
0
0
0
0
BUILDING PERMITS ISSUED TO DATE
Institution
0
0
0
0
Mercantile
0
0
0
0
Miscellaneous
0
0
0
0
Residential (Apartment)
0
0
0
0
Residential (Care/Assisted Living)
0
0
0
0
Residential (Care/Hotel/Motel)
0
0
0
0
Storage (General)
0
0
0
0
Storage (Parking Garage)
0
0
0
0
Storage (Warehouse)
0
0
0
0
Utility (General)
0
0
0
0
Utility (Private Garage)
0
0
0
0
62
*total may differ as permits may have been voided.
NEW COMMERCIAL
1
3,965,000
0
0
22
5,042,637
23
21,900,318
Structural Shell
1
1,324,988
0
0
“White Box”
0
0
1
55,000
Interior Demolition Only
1
5,000
0
0
Other Phased Permits
0
0
0
0
Alterations
OTHER CONSTRUCTION Business Signs
9
131,884
11
88,258
Advertising Signs
0
0
1
4,500
Footings & Foundations
0
0
0
0
Demolition
1
0
1
0
Information and downloads available at Rochester Building Safety Department’s website: https://www.rochestermn.gov/departments/building-safety/reports-building-permits/ building-permits-2019
2020 VALUATION
NO.
2019 VALUATION
379
51,117,923
381
82,165,474
Single Family Dwelling
54
16,257,521
33
9,801,924
Multi-Family Buildings Total Units: 0
0
0
1
718,262
TRADE PERMITS ISSUED TO DATE
2321
36,954,474
1988
25,332,306
877
18,419,625
776
13,027,797
Electrical Electrical (Temp. Service)
68
35,150
38
51,996
Mechanical (HVAC)
542
8,936,150
527
5,701,130
Mechanical (Gas Piping)
158
269,350
107
158,146
Mechanical (Fireplace)
86
376,450
65
326,750
Mechanical (Hydronic)
62
1,906,056
35
2,724,244
526
7,011,693
440
3,342,243
3,079
138,634,539
2369
107,497,780
Plumbing
EXISTING COMMERCIAL Addition
YEAR TO DATE STATISTICS
NO.
TOTAL PERMITS YTD
MARCH 2020
BYRON
BUILDING PERMITS
NUMBER
VALUATION
Single Family Attached
NEW RESIDENTIAL
0
0
Single Family Detached
6
1,666,000
Basement Finish
2
50,300
Deck Addition
0
0
Existing Residential
19 | FOUNDATIONS NEWSLTR
OLMSTED COUNTY PERMITS YTD
2020
VALUATION
2019
VALUATION
7
Single Family-Detached
2020
NEW RESIDENTIAL
MARCH 2020 VALUATION
2019
VALUATION
COMMERCIAL/INDUSTRIAL
1,691,240
5
Addition
1,497,446
1
422,867
0
0 4,220
Single Family-Attached
0
0
0
0
Alterations
1
2,850
1
Garage
1
61,010
0
0
Re-roofing
0
0
0
0
0
0
2
4,848
Pool, Retaining Wall, etc.
1
53,383
0
0
35,000
Manufactured Homes
1
0
5
0
Mechanical
48
285,348
39
366,572
Plumbing
31
163,646
14
107,632
116
3,024,628
79
2,273,551
RESIDENTIAL
OTHER STRUCTURES
Deck Addition Alterations Garage Addition
2
24,960
1
22
309,712
14
176,834
1
9,612
0
0
MISCELLANEOUS PERMITS
NEW COMMERCIAL/INDUSTRIAL Recreational
0
0
0
0
Church/Religious
0
0
0
0
Industrial/Warehouse
0
0
0
0
Store/Restaurant
0
0
0
0
Nonresidential Building
0
0
0
0
Service/Repair Station
0
0
0
0
2019
VALUATION $0 PERMITS 0
TOTAL PERMITS
OLMSTED COUNTY PERMITS MARCH
2020
VALUATION $15,000 PERMITS 1
EYOTA
VALUATION $420,584 PERMITS 12
VALUATION $439,138 PERMITS 22
VALUATION $103,000 PERMITS 7
MARION
VALUATION $978,292 PERMITS 18
VALUATION $0 PERMITS 0
ORONOCO TWP
VALUATION $527,522 PERMITS 13
VALUATION $0 PERMITS 0
QUINCY
VALUATION $461,618 PERMITS 20
STEWARTVILLE
Activity Overview Key metrics by report month and for year-to-date (YTD) starting from the first of the year.
Key Metrics
Historical Sparkbars
New Listings 3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
3-2017
3-2018
3-2019
3-2020
Pending Sales
Closed Sales
Days on Market
Median Sales Price
Avg. Sales Price
Pct. of Orig. Price Received
Affordability Index
Homes for Sale
Months Supply
3-2019
3-2020
Percent Change
YTD 2019 YTD 2020
639
690
+ 8.0%
1,407
1,509
+ 7.2%
519
569
+ 9.6%
1,175
1,379
+ 17.4%
377
438
+ 16.2%
945
1,089
+ 15.2%
69
68
- 1.4%
69
72
+ 4.3%
$198,000
$210,000
+ 6.1%
$190,000
$207,500
+ 9.2%
$211,476
$238,826
+ 12.9%
$208,574
$235,567
+ 12.9%
96.7%
96.7%
0.0%
95.7%
95.8%
+ 0.1%
193
191
- 1.0%
201
194
- 3.5%
1,263
1,099
- 13.0%
--
--
--
2.5
2.0
- 20.0%
--
--
--
Percent Change
Current as of April 4, 2020. All data from Southeast Minnesota REALTORS® and NorthstarMLS®. Provided by the Minnesota Association of REALTORS®. Report © 2020 ShowingTime. | 2
20 | APRIL-MAY 2020
We’re in the offering NAHB members up to $1,000 business.
2018 Chevrolet Low Cab Forward 3500HD
2018 Chevrolet Express 2500 Cargo Van
2018 Chevrolet Silverado 2500HD
2018 GMC Sierra 1500
USING THE PRIVATE OFFER FOR NAHB MEMBERS IS EASY: 1. Get your NAHB Proof of Membership by logging into NAHB.org and obtaining your verification form. 2. Visit your local Chevrolet dealer and mention this Private Offer. 3. Select an eligible vehicle(s) to purchase or lease and present your NAHB proof of membership. For even more value, combine this offer with the National Fleet Purchase Program and Business Choice Offers. For full details on the Private Offer, NAHB members should visit nahb.org/gm. Example offer for NAHB members who are business owners purchasing a 2018 Chevrolet Express 2500 Cargo Van. Up to
$1,000 Private Offer1
+
$3,750
National Fleet Purchase Program (FVX)2
Up to
+
$1,200
Eligible Accessory Cash Allowance3
Up to
=
$5,950 In Potential Value
¹Private offer amount varies by model. City Express and Low Cab Forward receive a $250 Offer for both Fleet and Retail deliveries. Fleet deliveries on the Buick Enclave, Chevrolet Traverse, Silverado, Express, Suburban, Tahoe, GMC Acadia, Sierra, Savana, Yukon, XL receive a $1,000 Offer. All other Fleet or Retail deliveries receive a $500 Offer. Valid toward the purchase or lease of eligible new 2017 and 2018 model year vehicles. Offer excludes Chevrolet Bolt, Camaro, SS, Corvette, Sonic, Spark, Trax, Volt, Buick Cascada, LaCrosse, Regal, Verano, and all Cadillac vehicles. Additional GM models may be excluded from time to time at GM’s sole discretion. Customer must take delivery by 1/2/2019. Not compatible with some other offers. Not valid on prior purchases. See dealer for details. 2Offer available to qualified fleet customers through 1/2/2019. Not compatible with some other offers. Take delivery by 1/2/2019. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/non-business-related transportation purposes. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties, and ordering, consult your dealer or visit www.gmbusinesschoice.com. Requires $500 minimum purchase. Cash Allowance will be equal to the amount spent up to $1,200. Not eligible on Associated Accessories from third-party independent suppliers. Not available with some other offers. Take delivery by 1/2/2019. See dealer for details. ©2018 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates, or licensors.
21 | FOUNDATIONS NEWSLTR
22 | APRIL-MAY 2020
23 | FOUNDATIONS NEWSLTR
Builders Respond to Virus in a Variety of Ways BY PAUL EMRATH on APRIL 17, 2020 In a recent NAHB survey, the vast majority of builders said they were allowing non-construction employees to work from home, but they were also implementing several measures to allow them to continue selling homes during the coronavirus pandemic. The most common of these is private showings of model homes, but online and drive-through closings are also being offered. This information was collected through a question added to the survey for the April 2020 NAHB/ Wells Fargo Housing Market Index (HMI). The question listed eight possible measures and asked the single-family builders in the HMI panel if they were currently doing each, or planned to do it in the near future, in response to the coronavirus. At the top of the list, 84 percent of builders were allowing nonconstruction employees to work from home or planning to do so in the near future. According to a study published by NAHB last year, the average single-family builder has between 5 and 6 nonconstruction employees. As noted above, of the measures designed to allow builders to keep selling homes under the effects of the pandemic, private showings of model homes is the most common, with 59 percent of builders saying they doing this
already or planning to in the near future, but significant numbers are also offering online closings or other services (46 percent) and offering drive-through closings or other services (34 percent). All of these are attempts to keep selling homes while adhering to a form of social distancing.
of policies to mitigate the shutdowns’ effects. These Consistent with the decline in housing starts reported yesterday, include loans to provide needed 48 percent of builders are halting funding to small residential construction businesses, and the construction in some or all of number of states that classify my projects. So far however, a significantly smaller 25 are laying residential construction as an essential business during the off or furloughing employees. shutdown. What happens to these percentages in the future depends on the duration of the virusinduced shutdowns, of course, as well as the effectiveness
24 | APRIL-MAY 2020
Celebrate Earth Day 2020 (while practicing social distancing) This year marks the 50th Anniversary of Earth Day, people are getting creative on ways to celebrate by taking action at a safe distance, and this is true in the Rochester area. Here are some ways that you can celebrate at home and at work: 1. Keep construction site cleans The Minnesota Pollution Control Agency’s Construction Stormwater Permit overview states: “Pollution prevention management measures include the storage, handling and disposal of construction products, materials and wastes to minimize exposure to stormwater and prevent polluted runoff.” Proper waste management will not only help you comply with your permit, it improves environmental quality and shows community pride. 2. Sign up for Rochester’s Litter Bit Better Event May 9 – May 17 is the tentative week for volunteers from our community to be out collecting trash and recycling to beautify the City of Rochester and give a helping hand to our great outdoors. The event planning team will virtually meet at the end of April to decide the best plan for moving forward. Sign-ups are still being accepted and plans will be communicated to groups as soon as their available. www. RNeighbors.org/litterbitbetter 3. Adopt-a-Drain near your home Adopt-a-Drain is a program that asks residents to protect nearby lakes, rivers, and wetlands by “adopting” a storm drain near their home. Volunteers sweep leaves, trash, and other debris off the drain and nearby surfaces year-round. Jana Larson, director of the Adopt-a-Drain program, says, “Even though many community cleanup events have been canceled, we can still honor Earth Day by taking joint action to protect Minnesota’s lakes and rivers. Adopt-a-Drain invites everyone to participate in a safe way during social distancing.” See if a drain near your home is available at: https://www.adopt-a-drain. org/
Happy Earth Day April 22, 2020!
25 | FOUNDATIONS NEWSLTR
Over the last month Rochester Area Builders provided 125 toolbox kits for families in the community to work on together. While offering parents a constructive experience to share with their kids, it also exposed our youth to tools and working with their hands.
THANK YOU! Thank you to 40 Below Members and Jay Burke for cutting, drilling and branding the materials provided by The Home Depot.
family fun
Rochester Area Builders, Inc.
26 | APRIL-MAY 2020
Members Save Millions Put Your NAHB Membership to Work Now. Money-saving discounts that benefit you, your business and your family
nahb.org/Savings