Number of issued building permits down

BY JOHN BURNETT | STEPHENS MEDIA

HILO — The number of building permits issued on the Big Island and their value dropped for the sixth straight year in 2011, according to county statistics.

There is hope for improvement in the new year, however, according to Craig Takamine, president of the Hawaii Island Contractors’ Association.

“I think, from the contractors I’ve spoken to, both big and small contractors, a lot of them are hopeful that 2012 will be a better year than 2011. We see somewhat of a renewed confidence in development work,” Takamine said on Thursday.

The county’s Building Division issued 2,973 permits last year, about one percent down from the 3,012 permits pulled in 2010. The value of those permits declined sharply, though, from $417.3 million in 2010 to $341 million last year, an 18.3 percent drop.

That’s a far cry from the record 5,663 permits issued in 2005, the only year island construction projects exceeded $1 billion.

Public sector construction, while anemic, actually picked up a bit in 2011 with 202 permits issued, a 25 percent hike over the 162 logged the previous year. Also up was the overall value of those permits, from $55.3 million to $57.3 million, for a 3.6 percent increase. The average value of public projects plummeted, however, from $341,388 to $282,178.

Takamine said he hopes the state’s sale late last year of $1.28 billion in general obligation bonds — including $800 million of new debt — will finance some Big Island projects, including a permanent building for the University of Hawaii at Hilo’s College of Pharmacy. The school’s website pegs the estimated price for the pharmacy school’s desired digs at $66 million.

“Hopefully, we’ll see some of those projects out to bid soon,” he said.

Any modest gains in government-funded construction last year were more than neutralized by the ongoing private sector building bust. There were 2,771 permits issued for private projects last year, 2.8 percent fewer than the 2,850 filed in 2010. The value of those permits plunged from $361.9 million to $283.7 million, a 21.6 percent drop.

“On the private side, there’s not a lot of new homes under construction,” Takamine said. “Most of the homes being built are owner-builder. What’s hurting contractors is the amount of unlicensed activity, because you have so many people that are unemployed. People are hiring them to build their homes and that’s really hurting our industry.”

Dean Au, field representative for the Hawaii Carpenters Union, said in November that about 70 percent of Hilo’s union carpenters were out of work, while in Kona, the unemployment rate for union carpenters was in the “high 90s.” Au didn’t return a phone call in time for this story, but Takamine said it’s likely those unemployment rates still apply.

Some of those carpenters should find work when ground is broken for a new Kaiser Permanente Hawaii clinic in Kona. In 2009, the health care provider bought a 9.9 acre parcel of land in the West Hawaii Business Park in Kailua-Kona for the estimated $25 million project. Tentative plans call for a 2013 opening.

“I don’t think there’s going to be a really big change, but hopefully, (there will be) an improvement from 2011,” Takamine said.

jburnett@hawaiitribune-herald.com