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Transcript of Builders Outlook 2015 Issue 1
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8/9/2019 Builders Outlook 2015 Issue 1
1/16
Builders utlookwww.elpasobuilders.com 2015: issue 1
International Show hits the mark in Vegas
The 2015 International Builders
Show/KBIS was held in Las
Vegas January 20-22. The
combined show brought over 65,000
industry professionals and press into
the Las Vegas Convention Center.
Several El Paso area members
attended the show or participated in
the events leading up to it. While the
displays of materials and new
fandangos is what most people go to
each year there is a serious education
side to the event as well as election of
officers and changes to bylaws forNAHB. This year was no different as
the education started up on the
Saturday before the exhibits did.
The 2015 NAHB International
Builders Shows (IBS) theme was
All Homes Start Here, and thats
precisely the message attendees
heard throughout the three-day event.
From the Opening Ceremonies to IBS
Live! And from show floor
conversations to education sessions,
building industry professionals were
reminded time and again that it all
starts with them. Home is the
foundation of family life, communities
and economic growth.
This year over 3,700 exhibitorsacross five shows made up the
second Design & Construction
Week (DCW). Here are just a few of
the many highlights:
Keynote speaker Jon Gruden kicked
off IBS with the message to take the
momentum of the uptick in housing
starts and do great things!
NAHB and NKBA announced that
they have agreed to co-locate IBS
and KBIS and continue Design &
Construction Week through 2020!
Attendees were inspired by the
many details found in the Design &
Construction Week Concept
Kitchen, where designer Jonas
Carnemark, CKD, created a kitchenfocused on full-family livability from
products supplied by this years
sponsors, Thermador, Caesarstone,
Fabuwood, Brizo, Mohawk & Daltile
and Berenson Hardware.
Thousands of building professionals
attended more than 100 education
sessions that were available on
topics that included 50+ housing,
sales and marketing and technology
to name a few.
Talks at IBS Live!, demonstrations,
Tech Forums and celebrity
appearances were hot-spots
throughout the show bringing
innovative ideas and information to
all in a lively, entertaining manner.
The 2015 New American Home
the 32nd edition of NAHBs show
home welcomed thousands. This
years home integrated the most
cutting-edge building technology,
products and materials into a
production community.
Each day, many new solutions werediscovered through networking
breakfasts and coffee chats at each
of the six IBS Centrals.
Nighttime events included the
Official IBS House Party, Best in
American Living Awards and the
Young Professionals After Hours
Party.
Closing out the show, iconic trio ZZ
TOP performed during Thursday
evenings IBS Spike Concert.
El Paso members included Leti and
Javier Navarette from Custom Dream
Homes and Rudy and Moni Guel from
Guel Construction. Leti said that the
show overwhelmed her and Javier.
There was so much to see that youcant do it all in just a day, you
definitely need at least two days on
the exhibits, she told the Outlook.
Rudy Guel on the other is an old hand
at these events and said that he
particularly enjoyed the Kitchen and
Bath Show. When I do remodels the
customer sees something in a
magazine or on HGTV and wants us
to install it, Rudy said. Here I got to
see some of the items that will be
used in homes in the next decade,
and I got to see them demonstrated,
Guel continued.
When it comes to giant sized shows
this isnt your regular home show as
Ray Adauto pointed out. First of allyou have these massive displays that
take up football field sizes of the
convention center, and having
experience with home shows I know
these exhibits must cost a fortune,
Ray told the Outlook. As an example
Ray mentioned the water features
area of the KBIS. You cant imagine
the work it took to set up these water
displays, and the beauty of what they
put up is first class, he continued.
Pictures just cant capture the reality
of this International show. And by the
way, this isnt just a name; its a reality
calling it International. Take for
instance Christopher Makumbo, a
builder from Africa. The Outlook
asked him why he had traveled so far
to visit this event. I must tell you that
many of the things I get to see here
will not be available to us in the near
future, but I will have the advantage of
knowing about it before my peers,
Makumbo told us. A special welcome
to the International visitors was
posted at the IBS International
welcome center. All sorts of
languages was heard at the show and
inside the Builder Books store where
the El Paso Association of Builders
was represented by Ray Adauto,identified as an official Ambassador.
My opportunity to welcome folks from
all over the world always amazes me,
and they are hungry to learn, meaning
they came here to find materials and
books to take back home, Ray said.
Each visitor to the book store during
Rays time there got them a 10%
discount on purchases made there
and if they were members of NAHB
they got free shipping. What is cool
is that visitors also got a chance to
win a free registration for next years
show returning to Las Vegas in mid-
January, 2016, Ray continued.
Of course not all the visit was
strictly on the showroom floor. Many
events were held at the various hotels
and centers. One event, the Texas
Association of Builders party,
sponsored by Morrison Supply and
StrucSure went over very well
according to the reports. I think we
couldnt of fit one more person in the
place without a shoe horn, said Sam
Shallenberger. That was echoed by
Scott Whisenant of StrucSure. The
venue was outstanding as was the get
together, hopefully one we can do
again next year, Scott added.
The 2015 NAHB InternationalBuilders Show was nothing short of
extraordinary! IBS and Design &
Construction Week return to Las
Vegas next year, January 19-21,
2016. You wont want to miss it!
More photos from IBS>page 7
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2 Builders Outlook 2015 issue 1
HEAT UP YOUR SALES
WITH NATURAL GAS.Nothing is more attractive to homebuyers than the right mix of comfort and value. Natural
gas homes can provide both.
Natural gas furnaces are more efficient than their electric counterparts, and natural gas
dryers can dry two loads of laundry for the cost of drying one load in an electric model.*
For more on how to use natural gas to turn your prospects into buyers,
contact Eduardo Lucero at [email protected] or (915) 680-7216.
*Source: Council for Responsible Energy
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8/9/2019 Builders Outlook 2015 Issue 1
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First and foremost, I would like to
wish everyone a prosperous 2015. I am
excited at the opportunity of serving our
association as President. I am coming
in bright eyed, bushy tailed, and ready
to work. The incoming Executive Board
is hitting the ground running as we have
already held an associates open house,
had our first board meeting, approved14 new members, and created new
committees and elected chairs to run
them.
There are several opportunities that
we will be facing this year, but none are
greater than the upcoming 2015 IRC
adoptions. We are currently workingwith the City of El Paso to determine
what will and will not be adopted from
the 2015 IRC. The biggest impact that I
see is the Energy portion of the IRC as
this will surely impact affordability and
the way many of us are building homes.
Other opportunities include increasing
membership and raising association
awareness.
I would like to personally extend an
invitation to join the El Paso Association
of Home Builders to all non-member
area home builders and contractors,
especially those that we have lost touch
with over the years. We, members andnon-members, are all an integral part of
our economy, and united we can
accomplish many great things that will
benefit our industry. For those members
that have not renewed, I invite you to
contact me so that we can see if there
is an opportunity to unite once again.One of my goals for the year is to
have our committees meet, set goals,
and implement any changes that may
be needed to improve our association.
Committees include:
Membership (Chair: Patrick Tuttle),
Assessment/Bylaws (Chair: Greg
Bowling), Finance (Chair: Henry
Tinajero), Installation (Chair: Letti
Navarrete), and Social Media (Chair:
Kathy Parry).
I am open to evaluating other
committee recommendations, so do not
hesitate to let us know if there is
something else that we should beconsidering. I will be meeting with each
committee individually in the coming
weeks to establish goals for the year. If
anyone would like to participate on one
of our committees, please send me an
email expressing your interest,
[email protected]. Wedefinitely need members to help out
with each of the committees, and we
will try organizing them in the least time
consuming manner possible.
As a reminder, our first General
Meeting will be on February 11, 2015 at
noon (Location TBD). We are putting
together an informative guest speaker
line-up that will be sure to please
everyone. Our first speaker will be Mr.
Roberto Coronado, Assistant Vice
President in Charge and Senior
Economist of the
Federal Reserve Bank of Dallas, El
Paso Branch. Mr. Coronado will beproviding insight in to our industry, the
local economy, and Texas economy. I
invite you to no miss this exciting
opportunity to learn from and interact
with one of our regions leading
economists.
I challenge each of you to join theassociation and if you are already a
member I challenge you to bring in one
new member in 2015. May God bless
each of your companies, employees,
customers, and families.
32015 issue 1 Builders Outlook
Edgar MontielPresident,El Paso Associationof Builders New year brings many challenges, opportunities for association
Presidents Message
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The year has just started and wereon our way to a good year. Edgar
Montiel from Palo Verde Homes wasinstalled in December and took officeJanuary 1. I wish Edgar much
success and have a word of advice forthis young gungo! Theres nothinglike enthusiasm from a new president
to get things riled up and moving. Itsgratifying that this enthusiasm ismixed with youth and gives the EPAB
a look into the future of what allassociations are headed. The bottom
line is that we are fortunate to havebuilder members who come fromoutside the normal route of working asa sub and moving into building. No
these young men and women comefrom a varied background, sometimegood, sometimes not so much. Some
have not been through the ups anddowns associated with this industryand may find the downs too hard to
handle, but they have other skill setsthat makes them a little more bulletproof. The new executive team is
already going and getting newmembers, involving new members andlooking for the opportunity to serve.
Congratulations on the upcoming year.
A new year also brings the IBS, theindustrys big showcase held this year
in Las Vegas. Amazing, huge,incredible, awesome, wowallsuperlatives associated with this show.
I hope that youll make plans for the2016 show again in Las Vegas. Makeyour plans now because youll miss
out if you dont go.Edgar talks about the need for you
to keep up with the new codes coming
to home construction. Im one of thosegrowing numbers that asks the
question why do we need new codes?I laid out my views in the last issue butIm here to tell you that nothing haschanged from then. Matter of fact Im
more convinced than ever after the tripto IBS that codes need to beupgraded when they make sense, not
just to change codes. My questionstill is this: Does the new code makesense and does it really do something
good? I cant get that answered byofficials but its become more of atopic within the industry. Do I propose
we have NO codes? Absolutely not, aswith all things leaving it up to somethey would build helter skelter. Safety
is paramount but changing things just
for change and additional cost just
doesnt make sense anymore. Thechallenge for housing is to keep costsreasonable while building a safe,
affordable home. I think this can bedone without making changes just forthe sake of an ISO rating.
Finally make plans to join us in
Austin for Rally Day March 4th. Get
your flights now because they keepgetting more expensive on a dailybasis. If you plan on staying the night
we will be headquartered at the Driskilldowntown. Reservations are goingfast.
Perspective
Ray Adauto,
Executive
Vice President
EPAB
4 Builders Outlook 2015 issue 1
All indications show 2015 looks promising
Rally Day 2015
March 4
Austin, TX
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2015 issue 1 Builders Outlook
New Home SalesRise 11.6 Percent
Sales of newly built, single-family homesrose 11.6 percent in December to aseasonally adjusted annual rate of 481,000units, according to newly released data bythe U.S. Department of Housing and UrbanDevelopment and the U.S. Census Bureau.
This uptick is in line with what ourbuilders are telling us in surveys and onthe ground that they are seeingincreased traffic and more serious buyersin the market for single-family homes, saidTom Woods, chairman of the NationalAssociation of Home Builders (NAHB) anda home builder from Blue Springs, Mo.
After a slow start to 2014 precipitated bybad weather conditions, new home saleshave ramped up in the second half of theyear, said NAHB Chief Economist DavidCrowe. We can expect this momentum tocontinue into 2015 with the release of pent-up demand, particularly as existing homeowners are trading up.
The inventory of new homes for salerose to 219,000 in December, which is a
5.5-month supply at the current sales pace.Regionally, new home sales rose 53.6
percent in the Northeast, 17.7 percent inthe South and 3.1 percent in the West.Sales dropped 11.5 percent in theMidwest.
Nations HomeBuilders Elect
LeadershipMembers of the National Association ofHome Builders (NAHB) elected four SeniorOfficers to top leadership positions withinthe federation during the associationsInternational Builders Show in Las Vegas.
With more than 800 affiliated state andlocal home builders associations and morethan 140,000 members across the country,NAHB represents the interests of thenations housing professionals throughadvocacy, education and research.
Taking the helm as NAHBs Chairman ofthe Board this year is Tom Woods, aMissouri builder with more than 40 yearsof experience in the housing industry.Woods is president of Woods CustomHomes. He has developed scores of
communities and more than 1,000 homesin the Greater Kansas City area.
To keep housing and the economy onan upward trajectory, this year NAHB willurge the White House and the Republican-controlled Congress to work together in abipartisan spirit to advance comprehensivehousing finance reform and immigrationreform, along with other policies thatpromote homeownership, rental housingopportunities and job growth, said Woods.
Also moving up on the associations
leadership ladder during NAHBs LasVegas board meeting was Ed Brady, aBloomington, Ill.-based home builder. Hewas elected as the 2015 First ViceChairman of the Board. Brady is presidentof Brady Homes, a company founded in1962 by his father, William Brady Sr.
One of the largest home building firms incentral Illinois, Brady Homes hasdeveloped 20 residential communitiesthroughout the state, building more than1,800 single-family homes, 2,000apartment units and more than 100,000square feet of light commercial property.
Granger MacDonald, a Kerrville, Texas-based builder and developer with 40 yearsof experience in the home buildingindustry, was elected as Second Vice
Chairman of the Board. MacDonald ispresident of the MacDonald Companies, a
diverse development, construction, andmanagement enterprise with more than 35neighborhoods completed throughoutTexas.
Randy Noel joined the NAHB leadershipladder with his election as Third Vice
Chairman of the Board. A Louisiana-basedcustom home builder with more than 30years of experience in the home buildingindustry, Noel is president of Reve Inc., acustom home building firm that hasdeveloped more than 1,000 custom homesin the greater New Orleans area.
2014 NAHB Chairman Kevin Kelly, fromWilmington, Del., remains on theleadership ladder as Immediate PastChairman. Kelly is president of Leon N.Weiner & Associates, Inc. and is asuccessful builder and developer withseveral decades of experience in landdevelopment, multifamily and single-familyhome building, and property management.
Rounding out the associationsleadership is NAHB Chief Executive
Officer Jerry Howard, from Washington,D.C. Howard heads up a professional staffof more than 230 working out of theNational Housing Center in Washington.He has served as the associationsCEO/EVP since February of 2001.Previously, Howard was NAHBs chief taxcounsel.
NAHB ProfessionalWomen in BuildingHonors EO Fawcet
Executive Officer Dottie Fawcett of theHome Builders Association of Bucks andMontgomery Counties has been named
EO of the Year by the ProfessionalWomen in Building, a council of theNational Association of Home Builders(NAHB).
Professional Women in Buildingmembers work in all aspects of thebuilding industryas owners, builders,remodelers, architects, suppliers,marketing experts, designers and infinance and real estate. The HBA of Bucksand Montgomery Counties, like otherProfessional Women in Building councilsthroughout the country, offers networking,education and advocacy opportunitiesthrough the HBA and through state andnational events.
Fawcett was nominated by Amy Martino,the 2014 PWB council chair of Bucks and
Montgomery Regions. Martino saysFawcett was instrumental in the formationof the council. Dottie not onlyspearheaded our Board of Directorsapproval of our PWB charter last year, butshe was one of four founding chartermembers, she said. She is our biggestsupporter.
Through Fawcetts support, her localPWB chapter has grown in membershipand continues to be a vital part of theassociation because of her efforts. Fromthe inception of the local chapter in late2013 with only four members, the councilnow stands at 21 members and isexpected to grow under Fawcettsguidance and leadership.
Dottie understands the importance ofthe PWB council, and we applaud herinitiative of starting a chapter at her localassociation, said 2014 NAHB PWB ChairCarol Morgan, who presented the awardduring the NAHB International BuildersShow in Las Vegas. Through her hardwork, the newly-formed chapter is alreadythriving. We hope Dotties efforts will serveas inspiration for others who are thinkingabout forming a PWB council at the locallevel.
TEXAS BUILDER OF THE YEAR
A W A R D E D
We build so you can
GROW
Industry News
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8/9/2019 Builders Outlook 2015 Issue 1
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Looking at 2015, the domestic
economic landscape finally looks solid
if unspectacular. Unemployment rates
should keep
falling, house
prices are likely
to rise by 5%,
and despite poor
global economic
conditions, the
American
economy will
strengthen.
Moreover,
despite a deep
partisan divide in Washington, the
government will not close down nor will
it fail to pay its bills. In addition, the
ongoing improvement in household
balance sheets, the improving fiscalhealth of state and local governments,
and the likely rise in capital
expenditures by firms, albeit not very
large, all but insures better economic
growth. The only serious domestic
problems are weak wage growth and
inflation that is a bit low.
With this in mind, I expect full-year
2015 GDP to come in at no less than
2.85%, a healthy rise from the
expected 2.4% GDP growth
experienced in 2014, and the strongest
since 2005. As for new housing starts,
they should rise by about 14%, with
total starts coming in at 1.14 million.For all of 2015, single-family starts
should total 750,000 up from 640,000,
while multifamily starts should hit
390,000, up from 350,000. Housing
sales should rise by about 5% and end
the year at 5.6 million. Housing
inventories should rise by about
200,000 units, to 5.5 months of
inventory up from 5.0 months now.
Given the improving labor market,
expect net new monthly job growth to
average roughly 220,000/month, which
while down from 240,000/month in
2014, is excellent given the shrinking
size of the working age population. As
a result, the unemployment rate should
steadily fall from 5.8% today to 5.2%
by year end and possibly lower,
depending upon the behavior of the
labor force participation rate (LFPR). If
the LFPR rises, and that would be a
good thing, unemployment may end at
5.3%, but if the LFPR falls, an
unemployment rate of 5% would not be
out of the question.Inflation will remain completely
benign, with overall inflation possibly
drifting lower, while core inflation
(which excludes food and energy)
shows modest upward drift. The
combination of anemic growth in
Europe and Japan and declining oil,
gas and commodity prices will keep the
CPI essentially where it is now, slightly
below 2%. Add to this declining import
prices due to the rising US dollar and
slow wage growth, and core personal
consumption expenditure inflation, the
Feds preferred inflation measure, will
not exceed 1.7%, well below their 2%target. This will give the Federal
Reserve ample time to slowly raise the
federal funds rate from where it is now,
between 0% and 0.25%, to 1% by year
end, with the first rate rise probably
occurring in June. The thing to keep in
mind is that this rate rise, the first in a
decade, is likely to be accompanied by
some stock and bond market volatility.
As a result of faster GDP growth in
2015, 10-year Treasuries will end the
year at 2.7% and 30-year mortgage
rates will probably hover around 4.5%
as the yield curve flattens due to faster
rising short-term rates. But a
combination of slightly easing credit
market conditions and increasing
consumer spending due to increased
employment and rising wages will keep
the economy and the housing market
on track despite mildly rising interest
rates. Finally, I put the chances of a
recession in 2015 at 5%. So look
forward to steady economic activity in
2015 and fear not rising interest rates.
Elliot Eisenberg, Ph.D. is President of
GraphsandLaughs, LLC and can be reached
at [email protected]. His daily 70
word economics and policy blog canbe seen
at www.econ70.com
6 Builders Outlook 2015 issue 1
El Paso Disposal
772-7495
Showroom:2131 Missouri
915 533 6045 fax 533 6096
Thomas R. Brown, Owner
The Economy
Economic Forecast for 2015: Sunny Days with Occasional Cloudy Periods
Elliot Eisenberg
Your New Home/Su Casa Nueva
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8/9/2019 Builders Outlook 2015 Issue 1
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72015 ISSUE 1 Builders Outlook
Builders utlook on the scene |
IBS
Las Vegas
2015
By Ray Adauto, EPAB
Welcome to 2015. When I was a kid, as mygrandchildren say in the last century, I couldntwait to get to the 21st century to see the wizbang things that would make life easier if notcheaper. The flying car, the automatic transport,TV on your wrist, giant screens filling you withinformation, travel to the moon and back justlike regular thing. Well as you see today notmuch of this is real. A few things like the wristTV are here but not some of the really coolthings like the flying car. During my visit to theIBS in Las Vegas there were a number ofnotable items that get close to that really coolidea. One of them is the removable windowscreen that allows you to project any picture orvideo right onto you current windows. Its anelectronically charged polymer screen that youcan cut to size and stick right onto the glass.By turning it on you make the screen opaque
thus allowing you to use it to view the picturesor videos. Or you can use the screen to shieldout the outside, kind of like a modern windowcovering. Quad Smart Film out of Las Vegaswill turn clear windows into an opaque piece ofglass, stopping anyone from seeing in or seeingout. Privacy at the flick of a switch. Others dothis by creating glass with the feature insidelayers, but this application can be applied to anyglass, window or glass door, cut to size andready.
The other really cool item I saw was a simple(why didnt I think of this) way to charge yourelectronic devices without the need for aspecific charger. You know that every chargingdevice for your phone or tablet has a USBcable, and you hook that cable to yourconverter, then plug the converter into the wallsocket. Well this little charging box lets you
have conventional plugs on top, while givingyou a USB slot on the bottom side, all modular.In other words you can interchange the type ofslots you need according to your needs, not themanufacturer. This little device also has a builtin power surge protector so no need to worry.These smart wall sockets are easy to use, easyto change out and make charging yourelectronics so much easier. Designed andpatented in China, the product is just beginningto make itself known.
This was just a couple of innovative productsthat were on display at the 2015 IBS. Makeplans to attend the 2016 IBS in Las Vegas nextJanuary.
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The new Mesa Park Drive overpass is denoted here by a green arrow. The new interchange will provid-
ed access to the Aldea El Paso project on the West Side. (Schematic: City Council Agenda)
el paso development news
The developer of the future AldeaSmartCode project in West El Pasoreceived a Chapter 380 incentivesagreement for construction of a free-way overpass adjacent to the proper-
ty.A new overpass is planned at
Interstate 10 for Mesa Park Drive, themain thoroughfare that will take I-10commuters into and out of the 196acre Aldea development. Mesa Parkwill cross I-10 about three quarters ofa mile north of Executive CenterBoulevard.
The agreement provides Geltmore,LLC, the developer, with incentives in
the form of rebates on the City's por-tion of sales and use tax. The incen-tives could total between $3.7 millionand $4.7 million, depending on thecost of construction. The rebates will
be calculated on sales by retailerswithin the Aldea development.
According to the agreement, thecurrent estimated cost of the projectis $22.6 million, with the TexasDepartment of Transportation, theCity of El Paso, and Geltmore all con-tributing to the ultimate cost.
The agreement states that con-struction must begin by April 1, 2016and must be completed within three
years, or in mid-2019. In 2013, theCamino Real Regional MobilityAuthority approved a frontage roadand overpass agreement between allstakeholders. (Story: Aldea Seeks
Frontage Road & OverpassAgreement)
The new agreement will be the sec-ond Chapter 380 package provided tothe developer, which also has anagreement for construction of thedevelopment itself. It's also the firstmajor news regarding the project,which received a 12-month extensionfrom the City in May of 2014. Thismeans that construction must begin
by May of 2015, based on the latestamendment. (Story: SmartCodeProject Requests 12-MonthExtension)
Aldea El Paso will be one of the
largest SmartCode developments inthe city and is located immediatelysouth of the Montecillo SmartCodeproject already under construction. Itwas first unveiled in 2012.
City Council approved the agree-ment at its December 16, 2014 meet-ing.
Aldea Developer Seeks Incentives Agreement for I-10 Overpass
H&M opened its second El Paso store this month at Cielo Vista Mall on the
East Side. The popular apparel retailer opened an outlet store earlier this yearon the West Side at the Outlet Shoppes at El Paso.The new Cielo Vista store is a larger, 29,000 square foot location which
occupies two levels next to Macy's on the mall's east end.H&M's new store opened on Thursday, December 18, 2014, just in time for
the final Christmas shopping rush.
H&M Opens at Cielo Vista Mall
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The City of El Paso has unveileddetails on the planned 31-acre transit-oriented mixed-use project slated forthe former Northpark Mall site inNortheast El Paso at the corner ofDyer Street and Diana Drive. The pro-posal, submitted by HuntDevelopment Group, was approvedby Council on December 2, 2014.
Renderings of the project, which iscalled Metro 31 in several places
within the development agreement,show buildings laid out in an urbanfashion with little to no setbacks fromstreets. Structures are of varyingheight and scale, with some apart-ment buildings rising four stories.
The property's uses can roughly becategorized into three areas, thelargest being the residential sectionthat takes up nearly the eastern halfof the development. The central areaand southwest corner contain mainlyretail and office uses, and the north-west corner is dedicated to transit andincludes a Sun Metro terminal.
According to site plan data, theproject includes 135,115 square feet
of retail space and approximately100,000 square feet of office space.Included in the retail area is a 50,000square foot grocery store.
In addition, the development willinclude 373 market-rate apartmentunits, 79 affordable units, and 43live/work units.
Parks and plazas are sprinkledthroughout including a central squarewith a small concert stage. Multiple"public greens" are located in different
spots on the site plan.Parking spaces are spread through-
out the development, including wide-spread street parking, larger surfacelots, and parking structures. Onegarage will be located within a resi-dential block, with apartment buildingslining each side of the structure. Thisparking garage will rise 4.5 levels andinclude space for 472 cars.
The development documents also
include a phasing plan, indicating theproject will go up in five phases.Phase 1 includes building streets,parks, and other infrastructure; Phase2 will see the construction of themajority of market-rate apartmentbuildings as well as the transit facility;and Phase 3 involves construction ofthe grocery store.
Phase 4 includes construction ofthe retail/office structures, some ofwhich will include loft apartments onthe upper floors. And Phase 5 will seeconstruction of the affordable housingapartments.
Vertical construction may not beseen for a few years, according the
development agreement's timeline.Completion of Phase 1's infrastructureis tentatively scheduled for June of2017. However, the agreement alsostates that phases may be completedin any order and concurrently if need-ed.
The ultimate design of the projectmay also change, with final designdocuments due on September 1,2015.
The City is entering into a Chapter
380 incentives agreement with Huntin order to move forward with the proj-ect. The incentives amount to $13.7million in sales and use tax rebates,and property tax rebates (of the City'sportion).
The City of El Paso purchased theproperty years ago and demolishedthe Northpark Mall complex that had
stood mostly empty for many years.The property, which is also known asNorthgate, has remained vacant whilethe City has looked for solutions forthe relatively large plot of land.
In recent years, the City beganseeking proposals for redevelopmentof Northgate, receiving some withinthe last year.
The estimated cost of the proposeddevelopment is $112 million.
Builders Outlook Issue 1 2015
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8/9/2019 Builders Outlook 2015 Issue 1
10/16
10 Builders Outlook 2015 issue 1
COBRA Basics
Expert Advice
Joe Bernal
Employees
Benefits of
El Paso
COBRA, the Consolidated OmnibusBudget Reconciliation Act of 1985, allowsqualifying people formerly covered by anemployers group plan and their dependentsto temporarily continue health coverage atgroup rates. Employers who dontunderstand their COBRA obligations canface penalties.
Certain employer-sponsored health plansmust offer COBRA continuation coverage toemployees who undergo a qualifying eventthat causes them to lose group healthcoverage.
Which employers must comply withCOBRA?
An employer must offer COBRA continuingcoverage if it had 20 or more employees inthe prior year and offers a group health plan.Please note that COBRA will apply to someemployers that do not have to comply withthe Affordable Care Act because they havefewer than 50 employees. As long as youhave 20 or more employees and offer groupcoverage, COBRA applies. Each part-timeemployee counts as a fraction of a full-timeemployee, with the fraction equal to thenumber of hours that the part-time employeeworked divided by the hours an employeemust work to be considered full-time. If youemploye a lot of part-time employees buthave fewer than 20 employees on yourhealth plan, COBRA rules still apply to yourplan.
Which employees are eligible forCOBRA continuation benefits?
An employee must have had coverageunder the group health plan on the daybefore a qualifying event occurs.Qualifying events include:
Termination of employment, unless it isfor gross misconduct, or a reduction inhours worked (e.g., from full-time to part-time) that causes loss of benefits.
An employees death, divorce, legalseparation or eligibility for Medicare.
A change in status of a covered
dependent or spouse. Under theAffordable Care Act, children can remainon a parents plan until age 26. Thisapplies regardless of whether they are astudent, dependent or even married.
Being called up for active military duty.Types of coverage.
Employers must offer COBRAbeneficiaries the same coverage andcoverage choices (such as during openenrollment periods) as they do to non-COBRA beneficiaries. Any benefit changesfor active employees will also apply toCOBRA beneficiaries. Length of coverage.COBRA provides for up to 18 monthscoverage for qualifying events such as jobtermination or a reduced work schedule.Certain qualifying events, or a second
qualifying event during the initial coverageperiod, may extend coverage to a maximumof 36 months. Cobra coverage begins on thedate that benefits would otherwise havebeen lost because of a qualifying event. Anemployer may terminate coverage if abeneficiary does not pay premiums on time,or if the employer stops offering any grouphealth plan.
Notification and election. In the case ofdivorce, legal separation or a dependentschange of status, such as turning 26, aqualified beneficiary has 60 days to notifythe plan administrator. The administratorthen has two weeks to notify the personentitled to COBRA benefits, who must decide
within 60 days whether to electcoverage. Keep in mind that though an
employee may choose coverage onbehalf of all other qualified beneficiaries,each beneficiary has the right toindependently elect COBRA coverage.For example, if an employee has a familymember with an illness at the time he isterminated, that person alone can electcoverage, should he choose.
Cost of coverage. In most cases, thebeneficiary pays the full cost of theinsurance premiums. In fact, employersmay charge up to 102 percent of thepremium and keep the extra two percentto cover administrative costs. COBRAbeneficiaries must make the initialpremium payment within 45 days afterthe election date, and employers canterminate COBRA coverage if payments
are late.Special rules apply to reservists called
up for military service. If military serviceis for 30 or fewer days, military members
and their dependents can continue theircoverage at the same cost they were
paying before their short service. Ifmilitary service is longer, the employercan require reservist and dependents topay as much as 102 percent of the fullpremium for coverage. However, theState law. Most states have lawsconcerning the continuation of benefits.Some cover all employers, includingsmall employers, so your organizationmight be subject to a state law even ifyour company is exempt under thefederal COBRA law. To find out moreabout your states laws regardingcontinuation of coverage, contact yourhealth insurance broker or anemployment law professional. Be sure toinquire about the types of benefit planscovered, eligibility rules, what constitutes
a qualifying event, notificationrequirements, length of coverage andhow coverage may be terminated.militarys health plan should cover a
family in this situation.In our next issue, well cover COBRA
audits and how they can save youmoney. If youd like more information onadministering your COBRA obligations inthe meantime, please contact us
The information presented andconclusions within are based upon ourbest judgment and analysis. It is notguaranteed information and does notnecessarily reflect all available data. Webaddresses are current at time ofpublication but subject to change. Thismaterial may not be quoted orreproduced in any form withoutpublishers permission. All rightsreserved. 2014 The Insurance 411. Tel.877-762-7877.http://theinsurance411.com.
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8/9/2019 Builders Outlook 2015 Issue 1
11/16
As Millennials begin to enter thehome buying market in larger numbers,homes will get a little smaller, laundryrooms will be essential, and hometechnology will become increasinglyprevalent, said panelists during an
International Builders Show press
conference on home trends andMillennials home preferences held lastweek.
NAHB Assistant Vice President ofResearch Rose Quint predicted that the
growing numbers of first-time buyerswill drive down home size in 2015.Three million new jobs were created in2014, 700,000 more than the previousyear and the most since 1999, Quintsaid. At the same time, regulators have
reduced downpayment requirementsfor first-time buyers from 5 percent to 3percent and home prices have seenonly moderate growth.
All these events lead me to believe
that more people will come into the
market, and as younger, first-timebuyers, they will demand smaller, moreaffordable homes, Quint said. Builderswill build whatever demand calls outfor.
Quint also unveiled the results of twosurveys: one asking home builderswhat features they are most likely toinclude in a typical new home this year,and one asking Millennials whatfeatures are most likely to affect their
home buying decisions.Of the Top 10 features mentioned by
home builders, four have to do withenergy efficiency: Low-E windows,Energy Star-rated appliances and
windows and programmablethermostats. The top features: a masterbedroom walk-in closet and a separatelaundry room.
Least likely features include high-endoutdoor kitchens with plumbing and
appliances and two-story foyers andfamily rooms. Consumers dont likethem anymore, so builders arent goingto build them, Quint said.
When NAHB asked Millennials whatfeatures fill their most-wanted
shopping list, a separate laundry roomclearly topped the list, with 55 percent
responding that they just wouldnt buy anew home that didnt have one. Storageis also important, with linen closets, awalk-in pantry and garage storagemaking the Top 10 along with EnergyStar certifications. In fact, this group is
willing to pay 2-3 percent more for
energy efficiency as long as they cansee a return on their power bills.
If they cant quite afford that firsthome, respondents said theyd behappy to sacrifice extra finished space
or drive a little farther to work, shopsand schools, but are unwilling tocompromise with less expensivematerials.
A whopping 75 percent of thisgeneration wants to live in single-family
homes, and 66 percent of them preferto live in the suburbs. Only 10 percentsay they want to stay in the central city.Compared to older generations,millennials are more likely to want to
live downtown, but its still a small
minority share, Quint said.Panelist Jill Waage, editorial director
for home content at Better Homes andGardens, discussed Millennialsemphasis on the importance of outdoor
living and that generations seamlessuse of technology, and how those twotrends play into their home buying andhome renovation decisions.
Because they generally dont have asmuch ready cash or free time as
older home owners, Millennials seekless expensive, low-maintenancechoices like a brightly painted frontdoor, strings of garden lights, andlandscaping that needs less watering
and mowing, like succulent plants andlarger patios.
Theyre also very comfortable withtheir smartphones and tablets, andincreasingly seek ways to control theirheating and air-conditioning and
security and lighting as well aselectronics like televisions and soundsystems from their phones. They wantto use their brains for other things, notfor remembering whether they adjustedthe heat or closed the garage door,
Waage said.
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8/9/2019 Builders Outlook 2015 Issue 1
12/16
January existing homesales come in flat
compared to December2015 sales expected to pick upwhere 2014 left offTrey Garrison, Housingwire.com
Auction.com projects that existing homesales for January will fall betweenseasonally adjusted annual rates 4.9-5.21million annual sales, with a targetednumber of 5.06 million.
This suggests that January sales will beup from one year ago and essentially flatcompared to December sales.
Theres nothing pointing towards aquantum leap in January home sales, saidAuction.com Executive Vice President RickSharga. Demand continues to be tepid,reflected by the relatively weak search
activity that were tracking in GoogleTrends data. And inventory levels ofavailable homes continue to fall, whichmeans that even if demand picks up, theremight not be enough homes to meet it.
On January 23rd, the NationalAssociation of Realtors released its existinghome sales data for December, reportingthat home sales increased to 5.04 millionunits following Novembers unexpectedlyweak performance.
One month prior, the Auction.com RealEstate Nowcast predicted that existinghome sales for December would be 4.98million, providing the market with anaccurate picture of December sales activitywell in advance of publically available salesdata.
According to the latest Auction.com
Nowcast, the housing market is likely tolevel out this month, rather than repeatDecembers impressive month-on-month
improvement.The existing home sales pace of the
past several months shows that housinghas shaken off the weakness itexperienced in 2013 and early 2014, saidAuction.com Chief Economist Peter Muoio.But difficult mortgage conditions, stagnantwages and lingering wariness abouthomeownership benefits have kept annualsales right around 5 million units, wheretheyve been for the past few years.
Muoio also cited potential fallout fromweaker economies in the oil producingstates, particularly Texas, as a concern forthe housing market in 2015. White-hotsales growth in Texas has well outpacedU.S. existing home sales growth over thepast three years, pushing the Texas shareof U.S. existing home sales up to a near-record 6.2%, he said. Low oil will cool theTexas economy and likely with it homesales within the state, exerting a drag onU.S. sales in 2015.
The Auction.com Real Estate Nowcastcombines industry data, proprietarycompany transactional data and Googlesearch activity to predict market trends asthey are occurring weeks before thefindings of other benchmark studies arereleased.
Building upon the groundbreaking workby Google Chief Economist Hal Varian, theNowcast model extends a traditionalautoregressive-forecasting model toincorporate contemporaneous informationthat provides significantly enhancedaccuracy.
Freddie Mac: HybridARMs are hot
Annual Adjustable-RateMortgage Survey shows impactof low interest ratesBen Lane, Housingwire.com
Hybrid adjustable-rate mortgagescontinue to be the most popular ARM loanproduct offered by lenders and chosen byborrowers, according to the 31st AnnualAdjustable-Rate Mortgage Survey of primeloan offerings from Freddie Mac.
According to Freddies survey, which wasconducted from Jan. 5 through Jan. 8,nearly all of the ARM lenders participatingin the survey offered a hybrid.
The 5/1 hybrid, a five-year fixed-rateinitial period before the rate resetsannually, was by far the most common,
followed by the 7/1, 3/1 and 10/1, Freddiesaid.Far less popular among the survey
participants are ARMs where the repricingfrequency is fixed for the life of the loan,such as a one-year adjustable; a 3/3 ARM,which adjusts once every three years; or a5/5 ARM, which adjusts every fifth year.
According to Freddies survey, thecurrent low rate environment is contributingto the popularity of ARMs, with currentARM initial-period rates down over 2014srates.
For a one-year, 5/1 or 10/1 Treasury-indexed ARM, the average initial rate was2.39%, 2.98%, and 3.71%, respectively,down 0.2 percentage points for the one-year and 5/1 products and 0.3 percentagepoints for the 10/1 ARM, Freddie said.
Borrowers chose a hybrid ARM becauseof the substantial payment savings duringthe initial years of the loan, Freddie said.In early January 2015, the interest ratesavings for the 5/1 hybrid ARM with a 30-year term -- the most common ARM offeredin today's market -- compared to the 30-year fixed-rate mortgage amounted to 0.75percentage points, Freddie said.
For a $250,000 loan, the monthlyprincipal and interest payment on a 5/1hybrid would be about $103 less than onthe 30-year fixed-rate loan over the firstfive years of the loan, Freddie added.
And the savings can be even greater ona loan with a high initial balance, accordingto Frank Nothaft, Freddie Macs vicepresident and chief economist.
Because consumers who choose anARM often are taking out a higher-balanceloan, their payment savings can add upover the first few years of the loan, Nothaftsaid.
The average loan size for aconventional ARM for home purchase wasmore than $400,000 during 2014 and aboutdouble the size of an average fixed-rateloan, according to data from the FederalHousing Finance Agency. On a $400,000loan, a family would save about $9,000during the first five years of a 5/1 hybridcompared with a 30-year fixed-rate loan,based on interest rates collected in oursurvey.
Nothaft also predicts that the expectedrise in interest rates in 2015 could lead to
an increased interest in ARMs."Today's low mortgage rates will not bearound forever. Even a majority of theFederal Reserve's policy-making committeeexpect interest rates to rise by year-end,Nothaft said. Higher rates on both ARMand fixed-rate products, and further gainsin home values, could lead more borrowersto opt for an ARM.
According to Nothaft, ARMs comprisedabout 10% of home-purchase loans in theconventional market, in 2014, citing datafrom the FHFA. If fixed-rate loans becomemore expensive and home values rise
further, we expect more consumers to takeanother look at ARMs and project the ARMshare rising to 12% of the conventional
home-purchase market in 2015," Nothaftsaid.
California settlement putsOcwen on a leashProhibited from acquiring California
MSRs without states approval
Ben Lane, Housingwire.com
It appears that the frustrating skirmishbetween the State of California and OcwenFinancial (OCN) over Californias threat tosuspend the mortgage license is over, atleast for now.
In a filing with the Securities andExchange Commission, Ocwen confirmedthat it reached a settlement agreement withthe California Department of Business
Oversight, which was threatening to suspendOcwens mortgage license because thecompany failed to turn over documentationshowing that it complies with the stateslaws.
Under the terms of the agreement, inaddition to the previously disclosed $2.5million fine Ocwen must pay California,Ocwen is also prohibited from acquiring anyadditional mortgage servicing rights for loansin California until the CDBO is satisfied that(Ocwen-subsidiary) Ocwen Loan Servicingcan satisfactorily respond to the requests forinformation and documentation made in thecourse of a regulatory exam.
Perhaps most importantly though, thesettlement only covers Ocwens failure toprovide the documents to the CDBO, not
what the documents contain.The consent order addresses and
resolves the examination disputes betweenthe CDBO and OLS, and does not involveany accusation or admission of wrongdoingwith regard to OLSs servicing practices,Ocwens SEC filing states.
In a statement, Ocwen said it is ready tomove past this situation.
This allows us to get down to thebusiness of doing our job for consumers anddetermining if Ocwen has followed the law,said Owens spokesman, Tom Dresslar.Were pleased this frustrating skirmish overwhat should have been a routine matter isfinally resolved.
Under the terms of the agreement, theCDBO will choose an independent third-party
auditor, who will be tasked with assessingOcwen Loan Servicings compliance withlaws and regulations impacting Californiaborrowers for a period of at least two years.
The auditors examination of Ocwenscompliance may be extended at thediscretion of the CDBO, Ocwens SEC filingstates. Also, Ocwen is required to pay allreasonable and necessary costs for theauditor.
The auditor will report back to the CDBOperiodically with updates on Ocwensservicing practices, and Ocwen will berequired to submit a written action plan toaddress and implement corrective measuresand address any deficiencies identified bythe auditor.
According to the SEC filing, if Ocwen failsto meet the requirements of the settlement, it
could be subject to additional regulatoryaction by the CDBO.
The Department is committed tosupporting a fair and secure financialservices marketplace for all Californiaconsumers, Jan Lynn Owen, Californiascommissioner for business oversight, said ina statement to the Los Angeles Times. Thissettlement allows us to move forward andensure that Ocwen is meeting its obligationsunder the law.
12 Builders Outlook 2015 issue 1
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14 Builders Outlook 2015 issue 1
The Associates Council is looking forwardto making 2015 a banner year for the EPAB.Our focus this year is to have fun, provideeducation and raise money. Theres amisconception that the association cansurvive on the dues we all pay, but thereality is that it takes a lot more to open thedoors and represent us. Thats why you seethings like our upcoming Speed Networking,Golf Tournament and Parade of Homes.Lets start with Speed Networking. This isan opportunity for associates to go one onone with builders in a two hour event.Litterally you sit in front of decision makerswho are ready to buy your product if itssomething they have been wanting orlooking for. We offer only 20 tables so its
pretty exclusive. The cost is minimal, only$100 for the table and a $50 gift card thatsraffled to the attending builders. Its fun andit goes quickly. From our personalexperience we want to be included becauseit gives us business, really some plusbusiness with builders we already have insome cases. The association makes a littlebit of income from this and it all helps. Ourgolf tournament is scheduled for April 10 atHorizon and is presented by HaskinsElectric. Chuck, we appreciate youstepping up and sponsoring the golf. Its alot of fun and teams are already signing up.Ray and Margaret will be sending out signup sheets and some advertisingopportunities you can get involved with.
HUNT and Morrison Supply will make sureyou have a delicious lunch and FoxworthGalbraith will make sure youre not thirsty.Thanks to all. This is a major fund raiser forthe association and important to our annualbudget. Again we have fun while raisingmoney. We will announce some otherevents and education classes soon. Dontforget to join us in Austin for Rally DayMarch 4. This one is an education you cantake back with you as you see what we dofor our members at the Capitol. I would saythis trip can permanently change yourperspective of the EPAB. See you soon.
Sam ShallenbergerMorrison Supply
Associates Council
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