‘Good time to build,’ Vail developer says
Vail, CO Colorado
VAIL, Colorado ” When the town of Vail put out bids looking for a company to do some roadwork this summer, it wasn’t expecting to get such a deal.
Four companies responded with bids, and all four were below town engineers’ estimates, thanks to falling prices for asphalt.
“We saw a reduction by about 40 to 45 percent of the price per ton of asphalt than we’d seen in the past year,” said Town Engineer Tom Kassmel.
According to area constructors and developers, the costs of building materials, which have generally inched up three percent to five percent each year, have dropped, with varying effects on Vail’s ongoing and upcoming construction.
For example, asphalt, along with other petroleum-based products, has seen one of the biggest drops in prices. The prices are so good, in fact, that Vail might try to get ahead on some of its road projects for the next couple years, Kassmel said.
Prices on other materials have dropped about 15 percent to 22 percent from their peak prices, estimated David Viele, president and CEO of Viele Construction.
Steel has gone down dramatically, and copper for wiring has dropped almost 50 percent.
The company is seeing drops in the price of labor, too, Viele said, adding that some of the most significant savings weren’t coming from material costs.
“We’re seeing our biggest changes in subcontractor margins that are being pinched,” he said. “They were unreasonably high, but have been coming down as a function of supply and demand. It is a good time to build right now if you have the ability to do that.”
The Eagle River Water and Sanitation District has seen lower prices “here and there” on some of its projects, which include water and sewer pipe maintenance and expansion as well as facility improvements, said Diane Johnson, spokeswoman for the district.
However, the district’s project managers agree that the lower prices aren’t the result of savings in any one area, but are the result of companies bidding more competitively, perhaps vying for the fewer number of projects that are available.
“Companies are bidding tight,” Johnson said. “Maybe it’s the amount of projects out there that are making them bid competitively.”
Projects currently under construction aren’t seeing some of the same price drops. Often prices of materials are agreed upon at the beginning of construction, although contractors may renegotiate those prices during the building process, builders said.
“Some subcontractors are stepping forward, saying that the materials are costing less , and they’ve given us a reduction,” said Howard Olsen, senior project manager for Alter Construction, which is working on the Landmark development in Lionshead.
However, while not all projects are seeing big savings, prices aren’t going up either, Olsen pointed out.
Construction costs will probably remain relatively high in Vail and other mountain developments, said Tom Miller, director of development for Vail Resorts Development Co.
Housing workers in the Vail area, where rent prices have remained high, continues to be a big cost.
“Projects in Salt Lake and Denver could drop 20 to 30 percent (in construction costs),” Miller said. “But it’s not going to have as much of an affect as we’d hope here as in the mountains because labor and housing aren’t really going down.”
Staff Writer Melanie Wong can be reached at 970-748-2928 or email@example.com.
an opportunity to develop land at the edge of town, within eyesight of Interstate 70, has town officials excited about the potential for a long-lasting revenue infusion.