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Builders
utlook
2013 issue 11
TAB Awards: Tropicana Homes recognized as Texas Builder of the Year The El Paso Association of Builders is proud to have the Texas Association of Builders J. B. Sandlin Texas Builder of the Year as a member. Tropicana Homes was honored at the Texas Association of Builders Hall of Honor and Excellence in Leadership awards dinner held at the historic Driskill Hotel in Austin on November 21. The selection of Tropicana Homes was made by the TAB leadership in rewarding Tropicana Homes for contributions to TAB, the EPAB and to the community. Accepting the award for Tropicana Homes was Randy and Greg Bowling. The Bowling’s were genuinely surprised at the announcement since they had been asked to go to the dinner with Frank Torres, Edmundo Dena and Ray Adauto under the pretense that there was an award to be given to the local association. When they realized the award was for them the surprise turned into handshakes and congratulations. “We are honored that the Texas Association of Builders singled us out for this award and we are grateful for that honor,” said Randy Bowling. Randy shared the crystal oblisque with his
Builder Confidence Holds Steady in November Builder confidence in the market for newly built, single-family homes was unchanged in November from a downwardly revised level of 54 on the National Association of Home
Texas Builders contract class coming January 15 StrucSure Home Warranty and the law office of Bush, Rudnicki, and Shelton (Dallas, Texas) will present an informative two hour lunch and learn on January 15, 2014 at the El Paso
brother Greg who told The Builders Outlook “This represents a lot to us as a company and as a family.” “I can’t wait to share this with our parents and the employees of Tropicana Homes,” Greg continued. “And we want to make sure that we share it with everyone at the EPAB also,” Randy added. Edmundo Dena, 2013 EPAB president and Frank Torres, VP, acknowledged the accomplishment as well. “We are so proud to have Tropicana Homes honored because it would have been easy to select someone from the larger associations rather than ours,” Dena said. “The fact that it was such a surprise is a credit to Ray Adauto for keeping it secret, a really neat deal,” Dena continued. “I am glad to have been here to see this,” said Frank Torres. Every year, the Texas Association of Builders recognizes distinguished service by its members. Each entry is judged on the basis of state, local, and national association involvement. Contributions are judged on previous years’ involvement, as well as current year’s activities.
Left to right:
Ron Rohrabacher (2012 award winner), Greg Bowling, Randy Bowling 2013 Recipients: J.B. Sandlin Builder of the Year: Tropicana Homes Associate of the Year: Morrison Supply Company Remodeler of the Year: Jeff Hunt Ted Schlossman Lifetime Achievement Award: George Lewis
Philanthropist of the Year: Randy French Local Association Accomplishment of the Year: Heart of Texas Builders Association Presidential Distinguished Service Awards: Greater San Antonio Builders Association, Greg Harwell, Beverly Koehn, Dan Markson, David Miller, James Rudnicki, Don Shelton, Terry Weaver, Susan Wright
Developer of the Year: Mike Sugrue
Builders/Wells Fargo Housing Market Index (HMI) released today. This means that for the sixth consecutive month, more builders have viewed market conditions as good than poor. “Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road,” said NAHB Chairman Rick Judson. “Meanwhile, builders continue to face challenges related to rising construction costs and low appraisals.” “Policy and economic uncertainty is undermining consumer confidence,”
said NAHB Chief Economist David Crowe. “The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.” Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component
are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The HMI index gauging current sales conditions in November held steady at 58. The component measuring expectations for future sales fell one point to 60 and the component gauging traffic of prospective buyers dropped one point to 42. The HMI three-month moving average was mixed in the four regions. No movement was recorded in the South or West, which held unchanged at 56 and 60, respectively. The Northeast recorded a one-point gain to 39 and the Midwest fell three points to 60.
Association of Builders office, 6046 Surety. Available only to builder/remodeler members of the Texas Association of Builders, TAB’s contracts package subscription is your blueprint for typical construction and remodeling transactions in the State of Texas. At a cost of only $299.99 plus tax, the package of contracts and related addenda is a fantastic value and can save you thousands of dollars in legal fees. The subscription includes any needed updates that may occur during the two year cycle.
In addition to addressing new legislatively mandated contractor payment requirements in locallydeclared disaster areas, many improvements have been made to the 2013 - 2015 package, which include: • a new construction services agreement between the builder and prospective clients; • performance standard updates and numerous other changes that reflect best practices and up to date construction transactions; • integration of several court decisions in the last two years that more clearly
define the rights of all parties; and • revised warranty and performance standards, including foundation performance to reflect current engineering practices. • The end result is that the contracts are even more comprehensive than before without adding length. The contracts package was prepared by a TAB committee for exclusive use by TAB builder/ remodeler members. Reservations must be made no later than January 10. The event is free to registered builder/remodeler members only.
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Builders Outlook
2013 issue 11
GIVE THANKS FOR MOMENTS LIKE THESE. Home is where traditions begin and memories are made, and a natural gas home is instantly more attractive to potential buyers. Natural gas kitchens sell themselves, and natural gas furnaces, water heaters and clothes dryers offer greater efficiency and lower operating costs than their electric counterparts. For more on how to use natural gas to turn your prospects into buyers, contact Eduardo Lucero at ealucero@texasgasservice.com or (915) 680-7216.
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Texas Gas Service provides natural gas to more than 620,000 customers in the state of Texas, including customers in Austin, El Paso, the Gulf Coast and the Rio Grande Valley. Texas Gas Service is a division of ONEOK, Inc. (NYSE: OKE), a diversified energy company. ONEOK is the general partner and owns 41.3 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded limited partnerships, which is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and owns one of the nation’s premier natural gas liquids (NGL) systems, connecting much of the NGL supply in the Mid-Continent with key market centers. ONEOK is among the largest natural gas distributors in the United States, serving more than 2 million customers in Oklahoma, Kansas and Texas. ONEOK is a Fortune 500 company. For more information, visit www.texasgasservice.com. Š 2013
2013 issue 11
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Builders Outlook
President’s Message | Edmundo Dena
El Paso Disposal
President, El Paso Association of Builders
So the reality of what a President is and does has finally hit me. Some would say that it’s a little late, but I think every President has this happen just before the end of his or her term. I also know that no matter what kind of plans you make there will always be hiccups on the way, and challenges that sometimes you can overcome and others that you just have to let go. I think that looking back is important but it’s more important to look forward, to what we can become and to how we can become. I am so grateful to the many people who have volunteered and worked on behalf of the association, and in a round about way, they worked for my presidency. We all get judged at some point and I hope that you will be kind enough to think of my tenure as a good one. I will tell you that in this chair you can’t take credit for all the good things, and you have the burden of taking the hits when something goes wrong. I’ve experienced both while your president and it has made me better as a leader and better as a man. I will continue to serve but am glad to hand this title to Frank Torres, a heck of a good guy and a friend. I won’t say all that I want to say now because I’ll save it for my last editorial. I do want to share the excitement of seeing Tropicana Homes get the Texas Association of Builders JB Sandlin Builder of the Year 2013 award. Wow, was that something to be a part of. Congratulations to the Bowling family and all the employees of Tropicana. It would be good for others to follow their lead and get involved at the local, state and national level. It’s good for the association, your business and the soul. Go out and sell something.
772-7495
Showroom: 2131 Missouri 915 • 533 • 6045
fax • 533• 6096
Thomas R. Brown, Owner
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Builders Outlook
2013 issue 11
Perspective
Ray Adauto, Executive Vice President EPAB
As the year creeps to an end there are so many things left to accomplish and so much that already has. The El Paso Association of Builders reached another accomplishment with the successful WestStar Bank Pro-Am that was held at Painted Dunes. A Pro-Am has quite a few rules to follow and it’s not always an easy thing to do, even with all the planning that has to go on. First and foremost my thanks goes to WestStar Bank and in particular Larry Patton, President of WestStar Bank, for his undying support for this event. He’s a tough negotiator but an avid fan of the EPAB and he brought significant resources to this event just like he does to so many others. Our partners included Whirlpool, HUNT, Lawyers Title, Pioneer Bank, CEMEX, and El Paso Building Materials. Tee Box partners were Stewart Title, HUNT, Lawyers Title, Southwest Land, Pointe Homes, El Paso Building Materials, Joe Bernal, Rudy Guel Construction, Joseph Homes, Bella Homes/Custom Dream Homes, Lonestar Title, and Carefree Homes. Wow, what an outstanding group of supporters and
As year winds down we have much to celebrate volunteers. Thank you one and all. A list of winners is on Sam Shallenberger’s column. As with all the planning that went on we can’t forget the work and cooperation from our member Painted Dunes Desert Golf Course. Mark Gonzalez and Anthony Bellow run the course and they are so good to work with. Thank you guys and pass along our thanks to your fine staff. We play a lot of different tournaments each year and year after year we get great comments from dealing with Painted Dunes. The course is only as good as the people running it, so obviously we know why it’s so much fun there. Our next event was traveling to Austin for the Texas Association of Builders meetings and an awards presentation. By now you’ve heard that the TAB 2013 Builder of the Year honor went to our own Tropicana Homes. I have to admit that during the nearly three hour event patience was at a premium as we waited to hear if El Paso would actually get an award or we were just teased. Low and behold the last award of the night was the TAB
Builder of the Year, and frankly it was a big surprise to Randy and Greg Bowling who I coerced into to going to the dinner. It was a little sneaky on my part as I had been asked by TAB to get the Tropicana gang there without spilling the beans. I was told it was a big award, nothing else, so frankly I was a little anxious myself as award after award was doled out during the evening. President Edmundo Dena and VP Frank Torres joined us and all they knew was what I knew and that was only a little bit. So when the
Tropicana name was announced it was truly a surprise to all of us. A great big beautiful surprise considering the thousands of builders in the state. Excellence is recognized when nothing is expected in return. I can attest, as can those that attend TAB meetings, that Tropicana Homes, Randy, Greg, and Bobby IV are respected as experts and contributors. We owe them a great deal of gratitude for the time, money and commitment they bring to us. Please thank them and congratulate them on this Big Texas Honor.
2013 issue 11
Builders Outlook
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Industry News Federal Backstop Essential Element of Housing Finance Reform, NAHB Tells Congress The National Association of Home Builders (NAHB) told Congress that an effective housing finance reform plan must include a federal backstop to ensure that 30-year, fixed-rate mortgages and reliable mortgage financing for multifamily housing remain readily available and affordable. Testifying before the Senate Banking Committee, NAHB Chairman Rick Judson, a home builder from Charlotte, N.C., said that NAHB is a strong
proponent of housing finance system reform. “NAHB believes that the U.S. housing finance system must be multifaceted both competing and with complementary components, including private, federal and state sources of housing capital,” said Judson. “To achieve this, it is important to reform and restructure the conventional mortgage market and also improve other parts of the housing finance system, including FHA, the Federal Home Loan Banks and state housing finance agencies.” The key to the sustainability of the 30year, fixed-rate mortgage is a securitization outlet, because originators do not have sufficient capacity to hold such long-term assets which are funded with short-term deposits. Currently, Fannie Mae and Freddie Mac provide the securities vehicle along with a government guarantee for investors. “There are serious doubts on whether
a private housing finance system would be capable of supporting this type of product without some government backing,” said Judson. “At a minimum, the cost and terms of 30-year mortgages would be significantly less favorable under a totally private system and many fewer families would be eligible for home loans.” NAHB recommends establishing a new securitization model for singlefamily and multifamily mortgages where Fannie Mae and Freddie Mac would be transitioned to private housing finance entities that would aggregate mortgages into securities for sale to investors worldwide. Private capital from mortgage originators and securities issuers would be in the first loss position, but the principal and interest for investors in the mortgagebacked securities would be guaranteed through a privately capitalized, federally-backed insurance fund. The new system would be overseen by a strong and independent regulator.
NAHB believes that the Housing Finance Reform and Taxpayer Protection Act (S. 1217), introduced by Sens. Bob Corker (R-Tenn.) and Mark (D-Va.), represents an Warner important bipartisan step in the debate on overhauling the U.S. housing finance system and incorporates many of the elements recommended by the association. “NAHB looks forward to continuing to work with Senate Banking Committee Chairman Tim Johnson (D-S.D.), Ranking Member Michael Crapo (RIdaho), and all the members of the committee to achieve comprehensive housing finance reform that maintains the proper level of federal support necessary to provide much-needed long-term stability for this critical sector of the economy,” said Judson. The array of federal and state government programs that have been developed over the years in response to identified needs are essential elements in ensuring that there are affordable options for providing housing. Therefore, NAHB believes that the future housing finance system must be viewed as more than the private conventional market. “The Federal Housing Administration’s single-family mortgage programs are a unique and vital component of the housing finance system, providing access to homeownership for underserved communities, primarily first-time home buyers, minorities and those with limited downpayment capabilities,” he said. The FHA has also historically played an important role in the financing of multifamily rental housing. “These products have allowed the construction of needed affordable and market rate rental housing units, and enabled property owners to acquire, refinance, rehabilitate and preserve the nation’s existing stock of rental housing,” said Judson. He also noted that programs operated by the U.S. Department of Agriculture’s Rural Housing Service have played an important role in providing mortgage credit in underserved rural areas. Moreover, the VA home loan guarantee program is an integral component of housing finance for our nation’s service members, Judson said, and provides an outstanding example of how a low-to-no downpayment program can perform even in difficult economic markets like we recently experienced. Another significant factor in the quest to provide affordable homes and rental housing is the cost and availability of the credit required to produce such housing. Builders continue to have difficulty accessing production credit from the traditional financial institution sources, forcing some to turn to more costly non-traditional equity and debt sources. “NAHB greatly appreciates the efforts of Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) for introducing the Home Building Lending Improvement Act (S. 1002), legislation that addresses several regulatory barriers that inhibit access to construction credit,” said Judson. “We hope that this committee will consider this legislation and other regulatory barriers to both construction and broader small business credit.”
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Builders Outlook
2013 issue 11
2013 ISSUE 11
Builders
Builders Outlook
utlook on the scene |
Sam Shallenberger Western Wholesale Supply EPAB Associates Council Chair
Thank you to all of our partners and volunteers who participated in the EPAB Golf tournament, the Pro-Am. Thank you also to Painted Dunes for all their help in securing the pros and putting on this tournament. Our winners were: in First place, Sierra Title; Second place, HUNT 1; third place, Texas Gas. We really appreciate all the teams that came and played: CD Lee/Britton Insurance, Foxworth Galbraith, GECU, GMF Homes, HUNT, CEMEX, JOBE, Mountain Vista Builders, MTI Ready Mix, Passage Supply, Palo Verde Homes, Sierra Title, Texas Gas Service, Tropicana Homes, Western Wholesale Supply, WestStar Bank 1, and WestStar Bank 2.
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el paso development news Mulligan Building Façade Makes Big Strides
Mulligan building prior to construction this year. (In*Situ Architecture)
New Urbanism Puts El Paso in Spotlight City Approached to Help Others Learn Planning Concepts
An updated look at the Mulligan Building’s façade. (In*Situ Architecture)
After less than a year of construction, the newly-renamed Mulligan Building is starting to look like its old self. An updated photograph posted by architecture firm In*Situ on its Facebook page shows that windows have been installed on the façade facing North Campbell Street. The building looked much different earlier this year after decades of inactivity left the structure empty and with a previously “renovated” look. The brown and beige façade covered up historic brickwork and details. Paul Foster, one of the partners involved in bringing a Triple-A ball club to El Paso, donated the 62,400 square foot building to the City in September of 2012 after officials voiced concern over the sales price of the building. The City had been looking for office space in order to facilitate relocation of departments so that the former City Hall could be emptied to make room for the Triple-A baseball stadium. Two months ago, the building was renamed from the “Luther” to the “Mulligan” Building in honor of John Mulligan, the Irish immigrant who built the structure in 1915. The $13.7 million project should be completed later this year, according to In*Situ’s website (www.insituarc.com). The building will house the City’s Information Technology and Engineering & Construction Management departments.
The City of El Paso shifted its focus a few years back to promoting smart growth, mixed-use, and walkable developments, and now officials in other U.S. cities are reaching out to El Paso when it comes to learning about new urbanism. El Paso officials developed a nineweek session on new urbanism to help affiliate internal department heads and engineers with the principles of mixeduse and sustainable neighborhood
East El Paso, Fort Bliss to See More Highway Construction Projects Lined Up for Loop 375, US 62, Zaragoza Rd. The Texas Department of Transportation (TXDOT) will has held community meetings in recent weeks to inform the public about three new projects planned for East El Paso and Fort Bliss. Projects include widening of highways and roads, building new frontage roads, and a first-of-its-kind interchange in El Paso. Loop 375 Widening The first project will widen Loop 375 from Spur 601 to Montana Avenue, adding a lane in each direction. Currently, the freeway has two travel lanes in each direction and the project will add a third. Bicycle “accommodations” will also be included in the project, according to the Public Meeting Notice. Frontage roads will also be added, though it is unclear if this is for the entire 5.3 mile stretch. Diverging Diamond Intersection – Loop 375 at Spur 601 A separate project will create a new type of interchange at the intersection of Spur 601 and the Loop 375 ramps. A Diverging Diamond Intersection (DDI) will
development, led by Mathew McElroy, Director of the City Development Department. Shortly thereafter, the sessions were opened up to local developers. The fruits of the City’s labors have become clear as developments using new urbanism ideals are sprouting up. The developer of the Montecillo smart growth community has begun construction on SmartCode zoned lots, a first for El Paso, and another SmartCode development, Aldea, is planned immediately to its south. Now, officials from other cities have taken notice and invited the City to teach new urbanism to their engineers and development personnel. In January, McElroy will run a learning session for scores of government workers in Oklahoma City, and another session is planned for Austin. An article last month in Governing Magazine (www.governing.com) highlights the City’s efforts and goals in
replace the current diamond configuration and may speed up traffic by reducing the number of traffic lights. DDIs work by shifting non-freeway traffic approaching the interchange to the left, then back to the right after the interchange. This allows traffic turning left onto the freeway to continue without needing to wait for a green left turn light. It also reduces the number of traffic signals and their respective delays. These interchanges are relatively new and made their first appearance in the United Stated in 2009. Officials may need to educate drivers on use of the interchange as driving on the “wrong” side of the road could be disorienting to some. Also, drivers who exit Loop 375 by mistake will not be able to simply get back on the freeway at the signal. Exits will force drivers to either turn left or right onto Spur 601. US 62 Main Lanes, Frontage Roads A third project may turn Montana Avenue (US 62) into more of a freeway. The Public Meeting Notice for this project states the proposed improvements would include constructing frontage roads, sidewalks, and bike lanes in addition to two or three main lanes in each direction. Generally, main lanes refer to freeway lanes while frontage roads are the gateways that run alongside the main lanes. The project would stretch 7.6 miles from Global Reach/Yarbrough Drive to Zaragoza Road.
developing the learning sessions. The City’s biggest new urbanism effort has been the implementation of Plan El Paso, the extensive planning document that was adopted into the comprehensive plan last year. The plan calls for creating walkable, smart growth neighborhoods throughout the city, incorporating many concepts of new urbanism. Plan El Paso won the Environmental Protection Agency’s 2011 National Award for Smart Growth Achievement and has been lauded by development agencies and publications throughout the United States. The entire Plan El Paso document can be seen at planelpaso.org. The Lead Consultant on the project was Dover, Kohl & Partners of Florida (www.doverkohl.com). Above: Mesa Street near UTEP reimagined using new urbanism and smart growth principles. (Plan El Paso)
Zaragoza Road/Montwood Drive The fourth proposal actually consists of two projects. The first will widen Zaragoza Road from two to three lanes in each direction between Sun Fire Boulevard and Montana Avenue, approximately five miles in length. The second project will add a lane to Montwood Drive in each direction from Firehouse Drive to Sun Fire Boulevard. Montwood currently has two lanes of traffic in each direction. Zaragoza Road at Loop 375 may also be extended west and take a turn southward to connect with the portion of Zaragoza Road that is south of Montwood Drive. Currently, northbound drivers on Zaragoza must turn right or left at Montwood Drive. Aside from the added capacity, the project will also add lighting, bike lanes, and sidewalks to both projects. No timeline has been publicized for these projects. Information can be found at www.txdot.gov.
Builders Outlook Issue 11.2013
Content provided by El Paso Development News visit: elpasodevnews.com
‘Fountains at Farah’ Officially Opens Lifestyle Promenade Filled with Amenities, Empty Spaces The Fountains at Farah shopping center celebrated its official Grand Opening in November, debuting the promenade area to the public. Despite the throng of visitors to the Fountains, many spaces along the lifestyle area remain empty with only a few stores open. Patrons at the center were greeted by entertainment, activities, and various fountains along the 1,800-foot “main street” promenade, the shopping area closest to Interstate 10. This lifestyle portion of the center includes one lane of traffic in each direction divided by a large median. Vehicles can park in angled spaces along the drive. In the park-like median, shoppers will find interactive and decorative fountains, kiosks, and an amphitheater. An ice skating rink will soon join the lineup and is scheduled to be operational before the end of November. Shops and restaurant spaces line each side of the “main street,” with storefronts along the northwestern side hiding the lower level of the parking garage. Escalators help shoppers get to and from the upper big-box level of the Fountains. And pleasant music fills the air from outdoor speakers placed strategically along paths. Walking along the promenade on grand opening weekend was a steamy affair, even in the November sun. Somewhat mature trees should help shade pedestrians from the bright sunlight as the trees grow larger and increase the canopy over the years. Very few retailers were actually open on the promenade. Only Charlotte Russe, Altar’d State, and Ann Taylor Loft have officially opened along the storefronts positioned in front of the lower parking level. On the other side, Verizon, AT&T, and the Vitamin Shoppe were also open. Other retailers and restaurants scheduled to open in the next few weeks include Deutsch & Deutsch, Designer Studio, Kona Grill, Chipotle, and Barriga’s. Many spaces
Ballpark Readies for ‘Chihuahuas’ New Team Name Gets National Attention
Visitors to the Fountains at Farah shopping center get an up close look at the “splash pad” fountain (Armando Landin/El Paso Development News) remain empty, including sizeable glass and steel structures in the wide median which resemble conservatories. The site’s developer, Centergy Retail of Dallas, has recently stated that 75% of the Fountains at Farah has been leased, a statistic clearly boosted by the popularity of the big-box upper level of the center. Nearly all the retailers here have opened. The more interesting lifestyle area of the center is far more vacant. “I’m not impressed,” stated El Paso resident Gustavo Gonzalez during a visit to the center on Saturday, adding, “So much of the lifestyle area is empty. They even had to bring in food trucks due to the lack of restaurants. Considering it’s the grand opening, I was expecting more stores and restaurants.” Still, Gonzalez remains hopeful, stating,
Whether or not you like the Triple-A team name revealed in October for El Paso’s coming ball club, work on the stadium continues at full speed in anticipation of opening day in April. Still, the newly named Chihuahuas are turning heads and garnering attention throughout the country after the announcement of the team name. Steel columns and girders have turned construction vertical at the ballpark construction site, helping define archways under which visitors to the stadium will pass. The columns will support the club
“It’s a great looking shopping center, and I wish trendy spots like Cheesecake Factory and California Pizza Kitchen could see the potential. Maybe in a few months there will more of a selection.” Traffic was also an issue at times as vehicles entering the promenade area encountered a line of cars, particularly when coming from Hawkins Boulevard. Entrances to the lower parking level are all located along the promenade. Holiday traffic will test the center’s design in the coming months. There were clear signs that the Fountains is still transitioning from construction site to functional shopping center. Some decorative sections of wall were missing in spots, and portable restrooms lined the entrances to the parking structure because the permanent restrooms were and press levels, rising about 50 feet above Durango Street. Nearly 1,000 tons of steel will be used in constructing the stadium. Construction can also be seen on structures along Santa Fe Street. These will house the outfield buildings which will include levels to be used for parties and events. “We are entering a phase of construction in which we’ll see rapid progress,” states Alan Shubert, the Project Manager for the stadium construction site, on the City’s website. “While the steel work is the most visible, work is progressing rapidly on all corners of the construction site.” The team’s website has undergone a change, switching to an official Minor League Baseball (MiLB) page. Fans can now go to epchihuahuas.com to visit the page which includes the team schedule for 2014, pictures, logos, and merchandise. Merchandise for the Chihuahuas officially went on sale the same day the name was announced, and sales have been impressive according to team officials. As of Friday, orders had come in from 35 different states, including as far away as Massachusetts, with some items selling out. The team posted a map on its Facebook page with the Chihuahuas
not yet ready. The center’s website is also under transition. Visitors to the site will find a “New Website Coming Soon” message with no links, a sign that the website is will soon most likely resemble a shopping center site with information like hours of operation, a map, and tenants list. The Fountains at Farah shopping center replaced a long-vacant, blighted factory building that was highly visible from Interstate 10. Local businessman Paul Foster purchased the property years back and tapped Centergy Retail to develop the land into a shopping center. The City of El Paso approved incentives for the center to help guarantee that the eyesore warehouse would be demolished.
team logo showing from where items have been purchased. The Facebook page had over 22,000 likes as of Sunday night. And media in national and other markets has turned its attention to El Paso, mainly due to the controversial team name. The Thursday following the announcement, the Texas Monthly (www.texasmonthly.com) published an article proclaiming that “It’s Time to Embrace the El Paso Chihuahuas,” noting that other MiLB teams have embraced “fun” team names. The following Sunday, the San Francisco Chronicle published an article lauding the marketing decision behind the Chihuahuas name. The team has been mentioned on ESPN, trended on Twitter, and inspired national attention. Still, the story points out the change.org petition calling for a name change that had over 9,000 supporters as of the same Sunday night. A Google search for news on the El Paso Chihuahuas shows stories from sources ranging from the Seattle Times, which predicts the “world’s smallest strike zones,” to the Latin Times calling the name “racist stereotyping.” It’s clear, the new team name has struck a chord. Opening day for the Chihuahuas is scheduled for April 11, 2014, at the 9,500 seat stadium in Downtown El Paso.
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Builders Outlook
2013 issue 11
Expert Advice
Joe Bernal Employee Benefits of El Paso
SIMPLE IRAs: The Low-Cost Retirement Plan Only 28 percent of small and medium-sized organizations offer retirement benefits to their full-time employees. And the reasons are simple: Many don’t want to deal with the administrative hassles and cost of a 401(k). SIMPLE IRA plans provide these employers with an alternative. A SIMPLE IRA plan (Savings Incentive Match PLan for Employees) allows employees and employers to contribute to traditional IRAs set up for employees. It works well for small employers not currently sponsoring a retirement plan, as it does not have the start-up and operating costs of a conventional retirement plan. The Basics Any business with 100 or fewer employees that does not have another retirement plan can easily establish a SIMPLE IRA plan by using a form available on the IRS’s website: Form 5304-SIMPLE or 5305-SIMPLE. The form you choose depends on whether you or your employees select the financial institution where your employees’ individual IRA accounts will be held. Alternatively, you can use a SIMPLE IRA prototype available from a bank or financial institution or an individually designed plan document. You can set up a SIMPLE IRA plan effective on any date from January 1 through October 1 of a year, provided you did not previously maintain a SIMPLE IRA plan. This requirement does not apply for new employers that set up a SIMPLE IRA plan as soon as administratively feasible after the business comes into existence. If you previously maintained a SIMPLE IRA plan, you can set up a SIMPLE IRA plan effective only on January 1. All employees who received at least $5,000 in compensation from you during any two preceding calendar years (consecutive or not) and who you reasonably expected to receive at least $5,000 in compensation during the calendar year can participate in the SIMPLE IRA plan for the calendar year. Employees have the option of making salary reduction contributions. For 2013, employees can contribute up to $12,000. Employees age 50 or over can make an additional catch-up contribution of up to $2,500 in 2013. While employees can contribute or not, employers must contribute to the plan each year. They must either make a 1) matching contribution up to 3% of
compensation, or 2) 2% nonelective contribution for each eligible employee. Under the “nonelective” contribution formula, even if an eligible employee doesn’t contribute to his or her SIMPLE IRA, the employer must make a contribution equal to 2 percent of the employee’s compensation. Unlike other plans, SIMPLE IRAs have no filing requirements. They also do not require discrimination testing, which can be complicated and timeconsuming. And while some other types of retirement plans have several types of fees, SIMPLE IRAs generally involve only a small per-participant or peremployer fee per year, payable to the financial institution(s) that holds your employees’ SIMPLE IRA accounts. Pros and Cons Pros: • Employees can choose to contribute pre-tax dollars, thus reducing employees’ taxable income and the employer’s payroll tax liability. • Funds accumulate tax-free.
• Employees can manage their accounts by moving funds around within the financial institution that holds their account (subject to the institution’s rules and fund participation requirements). • The employer need not conduct annual discrimination testing. • The employer has no annual filing requirements. • The employer has minimal administrative responsibilities. Cons: • The employer must contribute each year, even when cash flow is poor. • Employees are immediately 100 percent vested in their entire SIMPLE IRA account balance. This can counter their appeal as a tool to encourage employee loyalty. • SIMPLE IRAs have lower contribution limits than some other retirement plans. • Participants cannot take loans from their IRA accounts, unlike with
401(k)s. While this might discourage some employees from contributing to their account, it also preserves savings for retirement. Funds will be taxed at the employee’s regular income rate when withdrawn after retirement. As with other retirement plans, employees making withdrawals before age 59 ½ must pay an additional penalty of 10 percent. If withdrawals are made within the first two years of participation, the 10% additional tax is increased to 25%. As you search for the right financial institution for you and your employees, you should have an idea of what sort of investment options your plan’s IRAs should include and what level of service to expect. For more information on retirement benefit options, please contact us.
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2013 issue 11
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Builders Outlook
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Builders Outlook
2013 issue 11
The Economy
Tampering with Tapering Economist Elliot Eisenberg is a regular contributor to the Builders Outlook. His wealth of experience on housing has been the model for HBA’s across the country over the past decade. Now in private practice, Dr. Eisenberg brings his insight every month to our members.
While Q4 GDP growth will probably be about 2.4%, slightly above the average rate of growth since the end of the Great Recession, it would be very surprising if the Federal Reserve Board (the Fed) were to begin reducing its monthly purchases of $45 billion in Treasuries and $40 billion in mortgage backed securities anytime soon. While there are many reasons why, the most potent is that the mere suggestion last June that tapering might commence as early as mid-September rattled markets enough to raise interest rates on 30-year home mortgages by close to one-and-a-half percent in a matter of weeks, and in the process stop forward progress in the housing market dead in its tracks. The housing
market is crucial to the recovery because with auto sales and manufacturing activity having all but returned to pre-recession levels, construction activity in general and its biggest component, new single family residential activity, is the last large cyclical sector not fully participating in the economic recovery. To have a selfsustaining recovery it is essential for all cyclical sectors to be at or near full capacity or rapidly moving in that direction. In addition to a flat housing market, the labor market is showing signs of slowing down. During the first quarter of 2013 job creation averaged while it was 207,000/month, 182,000/month in the second quarter but just 143,000/month in the third quarter. Worse, while the unemployment rate has been steadily falling since the end of the Great Recession, it has been primarily thanks to the steady decline in the labor force participation (LFPR) rate from 65.5% at the end of the recession to just 63.2% today, the first time ever that the LFPR has declined after the end of a recession.
The above notwithstanding, the economy is really recovering. Household deleveraging is almost over, manufacturing and transportation activity have recovered to pre-recession levels, banks are once again healthy, corporate and household balance have recovered and sheets employment is almost back to where it was before the recession began. Given how far the economy has come, I think the Fed would prefer to essentially “buy” some downside economic insurance by continuing their current level of Treasury and MBS purchases. Something that would change my prediction will be the success or failure the congressional budget of negotiations that were part of the deal to end the two week government closure. Lawmakers have a deadline of December 13th to produce a budget blueprint that will drive government spending for FY2014. The deadline is just days before the Fed’s last meeting of the year. A congressional deal would give the Fed some clarity on the fiscal front, and undoubtedly hasten the date of the first taper. On the other hand, negotiations that end in stalemate
would increase fiscal uncertainty and reduce government spending by leaving sequestration in place, thereby reducing GDP growth. In short, the economy is currently growing, but slowly. As a result, the labor force participation rate continues to decline, employment growth is weak, and due to poor Fed communication about interest rates, the all-important housing market has stopped growing. For all these reasons, the Fed may give lip service to the idea of commencing tapering following its mid-December meeting, but any tapering is more likely to start after its end of January meeting, and most likely following the Fed’s midMarch meeting, the first in 2014 to be followed by a press conference. And remember, short term rates will remain at their current rock bottom levels for another 18 months.
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.
2013 Issue 11
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Builders Outlook
www.elpasobuilders.com www.epbuilders.org
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Builders Outlook
2013 issue 11
Expert Advice Are you building a new home?
David De Rego Hardware Specialities & Glass Co., Inc.
Are you thinking of building a new home or in the process of working with a builder to create the sweet house you always dreamed of having? Building a new home can be quite a process, filled with paying close attention to big and small details. The options are often times endless, and in many cases it can be a rather stressful situation. Let me help by shedding a little light on door hardware. You’ve invested a lot into your new home – but protecting your family is the most important investment you’ll make. When it comes to securing your new home high security deadbolts are your first line of defense. Then whether you want to incorporate wireless technology or make an expression of style that compliments your home’s
over all look is all up to your personal taste. For finishes, door locks with a satin nickel finish tie in a modern feel. Or consider bronze door locks can give a touch of rustic with a slight traditional feel. Other colors are available, so don’t be afraid to experiment. When choosing knobs or levers always go with what feels right. One note though levers are designed to help those with disabilities but can be aesthetically pleasing. That’s part of the beauty of building your own home is that you get to bring your unique sense of style to the table and by selecting a more decorative style of door locks allows
you to truly customize your home. This can be done at an affordable price without sacrificing quality of residential security. With so many choices to consider in buying locks for your new home, keep in mind not all door locks or brands are equal. Let's face it - if it doesn't keep the bad guys out, then it doesn't really matter how pretty or fashionable your lock is. For assistance please consult your trusted and local designer or hardware specialist...
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Builders
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www.elpasobuilders.com www.epbuilders.org 6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038 ■ execuTive oFFicerS edmundo Dena – President Accent Homes Frank Torres – vice President GMF Custom Homes edgar montiel – Secretary/Treasurer Palo Verde Homes Sam Shallenberger – Associates chair Western Wholesale Frank Arroyos- immediate Past President Cisco Homes ray Adauto – executive vice President El Paso Association of Builders
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TexAS ASSociATioN oF ■ couNciL/commiTTee cHAirS Associates council Sam Shallenberger Build PAc Randy Bowling Desert Green Building council Javier Ruiz Land use council Sal Masoud Young Designer Award John Chaney remodelers council Rudy Guel membership retention Mike Santamaria, Greg Bowling Finance committee Edgar Montiel Women’s council Lorraine Huit ■ ADviSorY To THe BoArD J. Crawford Kerr, Attorney, Firth, Johnston & Martinez ■ BoArD oF DirecTorS Juanita Garcia, Icon Custom Builders Samira Gonzalez, Edwards Homes Walter Lujan, Dawco Construction Carlos Villalobos, Pointe Homes Don Rassette, Rassette Homes Beverly Clevenger, Automated Division 6 Builders Frank Spencer, Aztec Contractors Kathy Parry, Hunt Communities Sal Masoud, Del Rio Engineering Robert L. Foster, Southwest Land Development Services Leti Navarette, Custom Dream Homes Linda Troncoso, TR-Engineering Lance VanDeman, Hub International John Chaney, Passage Supply Joe Bernal, El Paso Employee Benefits Ken Wade, El Paso Building Materials Ruben Orquiz, MTI Ready Mix Kathy Carrillo, Pioneer Bank Henry Tinajero, West Star Bank Paul Zacour, Zacour & Associates Chuck Gabriel, Carpets West Ted Escobedo, Snappy Publishing Lorraine Huit, Cardel Design Javier Ruiz, Border Solar & Senercon
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2012 Builder member of The Year Frank Arroyos Cisco Homes 2012 Pat cox Award Mike Santamaria Mountain Vista Homes 2012 Associate of The Year Sam Shallenberger Western Wholesale Supply John Schatzman Award Hunt Companies
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ePAB mission Statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization. © 2013 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Snappy Publishing 240 Thunderbird • Suite C El Paso • Texas • 79912 915-820-2800