Permit plunge

CHARLOTTE — Last year was a  historic one for Charlotte, thanks to its hosting of the Democratic National Convention, an event which put a  national spotlight on the city.

The event didn’t just give the city more media attention. In a year when the construction industry was still in recovery mode, the DNC  contributed to the city’s commercial construction permit numbers as Time Warner Cable Arena and other venues had to be readied for the event.

That resulted in a flurry of permit  applications in early 2012, county officials say.

Now, one and a half months into 2013, commercial construction permits awarded by Mecklenburg County have plummeted 22 percent compared with the same period in 2012. Also, the total value of permits is down 33.5 percent.

The drop is being blamed, in large part, on the DNC inflating permitting figures at the beginning of 2012. If the trend continues, permitting figures could be lower than they were in 2012, when the county awarded 6,467 commercial permits.

Still, Dan Watson is optimistic.

“For us, things have picked up,” said Watson, co-owner of Fort Mill, S.C.-based Simon & Watson Construction. “We’re seeing some things that surprise us. We’re seeing retail (construction), which you don’t see if the economy is down.”

Simon & Watson has been issued fewer Mecklenburg County commercial permits in the first month and a half of 2013 compared with the same period last year. According to the county, the company was issued six permits, with a total value of about $300,000, in the first month and half of 2012. The number of permits the county has issued the company so far this year: 0. Watson said the company is keeping busy, though, working on projects that were permitted before 2013 began.

According to the county, it issued 928 commercial permits, valued at a total of roughly $363 million, between Jan. 1 and Feb. 15, 2012. In the same period this year, it issued 720 commercial permits, with a total value of about $241 million.

Jim Bartl, the county’s code enforcement director, offering a theory for the decline in permitting activity, says the DNC pumped up permitting figures in 2012.

“The short answer is that there was a ton of work at the front end of last year” for the DNC, Bartl said. “That’s probably the main reason you’re seeing that difference.

“You have to put it in historic context. Last year was heavily influenced by the DNC. But if you go back a couple of years, we’re seeing way more commercial work than we were.”

Bernie Funk, owner of Charlotte-based Ranger Construction, has also been seeking fewer permits this year compared with the same period last year. From Jan. 1 to Feb. 15, Mecklenburg County has issued the company 22 permits, valued at a total of about $2.3 million. For the same period this year, the county has issued the company only five permits, valued at a total of $597,000.

Despite the decline in permits, Funk is looking at the bright side.

“We’re seeing a recovery,” Funk said. “It’s so much better than 2009.”

County permitting figures back up Funk’s observation. In the first month and a half of 2009, the county issued 524 commercial construction permits, down 27 percent from the amount issued during the same period this year.

Patrick Granson, Mecklenburg County’s director of plan review, offers a different explanation for why permitting numbers are down this year. In the Charlotte area, larger construction projects, which generally take longer to finish than smaller projects, are on the rise, he said. For large projects, more time passes between when such projects’ permits are issued compared with smaller projects.

“There is a bit of a disparity in the numbers, but we’re starting to see the bigger projects more than we were before,” Granson said. “We’re seeing those bigger projects, which are built out over time.”

Scott Hensley said permitting activity is down in the county because there are more renovations than new construction right now.

“What you’re seeing is people are looking at second-generation space rather than building a (new) shell,” said Hensley, president of the Charlotte Region Commercial Board of Realtors and principal of Charlotte-based Piedmont Properties. “The only new construction we’re likely to see is build-to-suit property.”

Stuart Simon, co-founder of Simon & Watson Construction, said he, like Hensley, has noticed an increase in renovations.

“We’re finding companies now prefer to renovate existing space and not build new,” Simon said. “But as far as construction goes, we’re as optimistic as we’ve been in four years about the future.”

GUION can be reached at (704) 817-1344, [email protected] or on Twitter at @paytonguion.