Builders Outlook 2015 Issue 4

Builders utlookwww.elpasobuilders.com 2015: issue 4

2015: Housing Recovery Slow and SteadyForecasters looking for pace to pick up next year

Parade ofHomes2015 Kick-off Event Sells OutThe spring 2015 Parade of Homes opened on April 17

with the preview party event signaling the start of the twoweek Parade. Over 800 tickets were purchase to thesold out event. The evening, while a little cooler thannormal for this time of year saw guests enjoy the newlycompleted Parade Homes that are fully furnished anddecorated. The private party also included a cateredmeal and full complement of adult and non-adultbeverages. The show entrance was also glammed with the new

red carpet backdrop, a colorful wall with the buildersassociation and neeuhome.com logo’s prominentlydisplayed. Guests were encouraged to take a picture infront of the curtain and utilize social media to send theword out that they were at the party.

See and Read More> Page 7

Solid employment gains, attractive mortgagerates, a growing economy and pent-up demand willhelp keep the housing market moving forwardthroughout 2015 and into next year, according toeconomists who participated in yesterday’s NationalAssociation of Home Builders (NAHB) 2015 SpringConstruction Forecast Webinar.“This should be a good year for housing, buoyed

by sustained job growth, rising consumerconfidence that is back to pre-recession levels anda gradual uptick in household formations,” saidNAHB Chief Economist David Crowe. “We expect2016 to be even better, due to a significant amountof pent-up demand and an economy that will beentering a period of reasonable strength andconsistency.”Over the past seven years, Crowe estimates the

slow recovery and uncertainty in the job andhousing markets resulted in 7.4 million lost homesales. “While some of these sales will never takeplace, this does indicate how many sales were lostas fewer households decided to move. We expectat least some of these to return in the form of newhome sales as job and economic growth continue tofirm.”A key demographic to help jump-start this process

should come from the millennials. The share of first-time home buyers has traditionally averaged around40 percent, but in the aftermath of the housingdownturn it now stands at just under 30 percent.First-time buyers are expected to provide a boost tothe housing market, as the unemploymentdifferential between young people and others isshrinking, Crowe noted.

Single-Family on the RiseTurning to the forecast, the NAHB Remodeling

Market Index, which averages ratings of currentremodeling activity with indicators of future activity,stands at 57 in the first quarter of 2015 and hasbeen at or above 50 most of the past two years. Areading above 50 indicates that more remodelersreport market activity is higher (compared to theprevious quarter) than report it is lower.NAHB is projecting that residential remodeling

activity will increase 2.3 percent in 2015 over lastyear and rise an additional 2.4 percent in 2016.

Single-family housing production is expected topost a 9 percent gain in 2015 to 704,000 units andjump an additional 39 percent to 977,000 units in2016.On the multifamily side, production ran at 355,000

units last year, what could be considered a normallevel of production, and is expected to continue inthat range or modestly higher through 2015 and2016.New Home Price Growth Fastest in Coastal AreasFocusing on new home sales, Sam Khater,

deputy chief economist at CoreLogic, said that salesvolume is weak, but pockets of strength exist.“New home price growth is fastest in the coastal

states and eight of the top 10 healthiest new salemarkets are in the Carolinas and Texas,” saidKhater.Of the top 100 new-home sale markets, Houston

leads the pack at 2,000 sales per month, followedby Dallas and Atlanta which are running at abouthalf that pace. In terms of volume, the bulk of theconcentration is in southern markets.“Nashville and San Jose stand out as the fastest

growing markets, and Atlanta and San Antonio arethe best large markets,” said Khater.Only three new-sale markets are larger today than

in 2000—Nashville, Oklahoma City and SanAntonio.“We Really Have Turned the Corner”Also delving beneath the national numbers, NAHB

Senior Economist Robert Denk said that thehousing recovery continues to vary by state andregion.

“Housing demand is now being driven bypopulation growth and employment and incomegrowth,” said Denk. “We are reconnecting tounderlying fundamentals. We really have turned thecorner.”The strongest housing markets are centered in

several energy-producing states, including NorthDakota, Texas, Oklahoma, Louisiana, Wyoming andIdaho.“The recent decline in oil prices is not hurting

housing,” said Denk. “We haven’t seen it yet. Westill expect energy output to be higher at the end ofthis year than last year.”Other states exhibiting strong employment and

housing growth include North Carolina, SouthCarolina, Tennessee, Washington and Colorado.Using the 2000-2003 period as a healthy

benchmark when single-family starts averaged 1.34million units on annual basis, NAHB is projectingthat single-family production, which bottomed out atan average 27 percent of normal production in early2009, will rise to 61 percent of normal by the fourthquarter of this year and climb to 81 percent ofnormal by the end of 2016.In another way of looking at the long road back to

normal, by the end of 2016, the top 40 percent ofstates will be back to near normal production levels,compared to the bottom 20 percent, which will stillbe below 75 percent.“What we are seeing, no matter what bucket you

are in, the numbers are getting better,” said Denk.“There’s a broader recovery all around.”

“Housing demand is nowbeing driven by populationgrowth and employmentand income growth,” saidDenk. “We arereconnecting to underlyingfundamentals. We reallyhave turned the corner.”

2 Builders Outlook 2015 issue 4

STAY SAFE. CALL 811 BEFORE YOU DIG.If you have digging or excavation work to do, remember to call 811 at least two business days in advance.

Natural gas and other utility lines may be buried beneath the surface. By calling 811, utility crews can mark locations of underground lines at no charge. The markings are done in paint and will eventually wash away. Marking line locations can help prevent you from accidentally damaging a natural gas line or another utility line.

Always call 811 before you dig. It can help keep you and your construction crew safe, and failing to do so can result in a fine.*

* Texas Utilities Code 251.201 Civil Penalties

Another month is in the books andit was just as busy as the last one.These ‘President Messages’ keepsneaking up on me. It seems thatjust as soon as I hit the send buttonRay is asking me for the next one.Since my last message, the bigticket items that have occurred arethe Spring Pachanga GolfTournament, our General meeting,and the launch of the 2015 SpringParade of Homes. Our GeneralMeeting was once again sold outand a huge success. Our guestspeakers were from the El Paso Inc.and they offered amazing insight into their publication. Needless to say,I am now a subscriber. The SpringPachanga on April 10th was a blast.The weather held up nicely andpeople seemed to have a lot of fun. Our Spring Parade of Homes is

currently underway at The Village ofRio Valley in the Upper Valley at thecorner of Westside and Borderland.It will run through May 3rd. So far, ithas been an overwhelmingsuccess. We had close to 600people at the opening night partythen 1,100 on Saturday and Sundaywith the majority of those thatSunday. That is incredible for thebuilder participants as well as oursponsors. The Parade features sixvery distinctive homes that offer alittle bit of everything. Architecturalstyles range from Traditional toTransitional Prairie School toCraftsman. The Village of Rio Valleyis unique in itself offering acombination of commercial,multifamily, and single family buildsites. The community park isamazing with its basketball court,

play equipment, skate park, largegrassy area, and many trees.Eventually, the community willfeature an orchard. The idea is towork, live, and play in the samecommunity. I would like to personally thank our

Immediate Past President, FrankTorres of GMF Homes, forcoordinating this amazing event. Iask you to buy him, and his lovelywife, a tall cold one if you run in tothem anywhere. I would also like torecognize Ray and Margaret Adautofor managing the ticket booth,opening/closing the event,marketing, paying the bills, andkeeping us builders in line and ontime. This event would not bepossible without our wonderfulsponsors (Foxworth Galbraith,Morrison, Sierra Title, Interceramic,

Lawyers Title, Whirlpool, First LightFederal Credit Union, InterNationalBank, and Dominguez InsuranceAgency) and amazing builders (BIC,New Traditions, Palo Verde, Pointe,Rio Valley, and Winton). As far as our industry is

concerned, single family closingswere up in March, interest ratesremain low, and the reduced MIPand loosened requirements have allgone in to affect. All of thesecontinue to be catalysts for buyersto go out and buy. Remember to‘LIKE’ the El Paso BuildersAssociation Facebook page andvisit our new website when you areperusing the internet. Thank you forsupporting your association andbest of luck to each of yourbusinesses.

32015 issue 4 Builders Outlook

Edgar MontielPresident,El Paso Association of Builders Business Opportunities Abound at EPAB

President’s Message

Experience the service and synergy of our Westside team. Everyone works together to make your closing efficient, accurate and downright enjoyable.

WEST 5500 North Desert, Suite A-2 (915) 225-8300 stewart.com/el-paso

Your Stewart Westside home team.

We’ll Get You Home

The ability to plan and produce aParade of homes requires manydifferent elements. First andforemost you must have an availablesubdivision, a willing developer andinterest from builders. Once that’sestablished then everything is just amatter of planning, reviewing theplan, changing the plan, acceptingthat the original plan isn’t going towork and then executing theunplanned plan. What I mean here is that you have

to have a vision, and then plan to thatvision while allowing for changes tothe plan and maybe even the vision.Case in point is the latest edition of aParade. We originally had buy infrom the developer (Jack Winton andthe Winton Group) to get 8 to 12homes in a newly establishedsubdivision called Rio Valley. Nextwas a meeting with potential builderswho once they heard the plan eithervoted to commit or left the roomnever to be heard from again. Of theoriginal 9 builders we were able to

give the vision to six. A winter holidaythemed Parade of Homes, withfestive holiday cheer and presents,and Santa, and …well you see thatplan went out with the Christmastree. Couldn’t quite get everyone onboard. So we moved it to March,scrapped that, and ended up with ado or die date of April 18- to May 3.Do or die, not the best words for aplanner, but we had to put up or shutup. We put up as did thesemagnificent six builders and thedeveloper. Our meeting in January laid it out,

get the homes ready or we can’t doit. Time is not a friend to a show likethis as the planning included logisticsmost people would shy away from.The good news was that FrankTorres, aka Mr. Parade, was willing tohandle the deep duty of the previewparty, set up the location and movethe ticket booth in place. Thedevelopment was gearing up and thehomes were being finished. And likemagic, on April 17 the street came

alive with the preview party and wasjammed from the gate opening to theclosing. Frank, his wife Isela,Margaret and me worked all day toput the event on, then until nearly1am Saturday cleaning and adjustingfor the public opening at 11 thatmorning. The weather cooperated inspite of the cool it wasn’t windy.Food was good, as was the music.But the stars were and are theHomes, those beautiful man-madestructures many want but few willever have. A Parade Home, shiningwith new stuff, mixed with old stuff,and a show stopping mix of both. Our first weekend was HUGE and

even through the first full week thevisitors came. Weather forced us totighten down the hatch a few days,but going into the last week of theshow we’re happy to report goodtraffic, a contract on a home, and lotsof happy visitors. Like I said a showlike this requires a lot of differentthings to go right, and thank God,most have this time around. We owe

our volunteer ticket takes lots ofKudo’s; the builder’s agents havebeen truly professional andsupportive; and of course we wouldn’thave a Parade without Edgar,Edmundo, Carlos, Sergio, Antonio,Mark, Herschel, Scott and JackWinton. Nope wouldn’t have aParade without the continuous helpfrom Margaret, who makes sure thegate and ticket booth is ready andmanned even if she has to do itherself. Thanks to our Partners,Sierra Title; Foxworth Galbraith;Morrison Supply; Interceramic andBuilders Source. Our specialsponsors First Light FCU, InterNational Bank, and DominguezInsurance Agency who stepped up tothe plate. Our agency EP MassMedia for the advertising work. Like Isaid, the plan eventually comestogether. Without folks like these I’vementioned however, nothing wouldbe done or could be done. That’sthe plan and I’m sticking to it.

Perspective

Ray Adauto,Executive Vice PresidentEPAB


Successful Parade of Homes begins with a plan


RemodelersConfident The National Association of Home

Builders’ (NAHB) Remodeling MarketIndex (RMI) posted a reading of 57 inthe first quarter of 2015, off slightlyfrom the historically high level of 60 inthe last quarter of 2014, but above thekey break-even point of 50.An RMI above 50 indicates that

more remodelers report market activityis higher (compared to the priorquarter) than report it is lower. Theoverall RMI averages ratings ofcurrent remodeling activity withindicators of future remodeling activity.The RMI was 59 in the Northeast, 54in the Midwest, 56 in the South and 62in the West.“Remodelers remain positive about

the gradual pace of marketimprovement, but that confidence wastempered by a severe winter andcontinued labor shortages,” saidNAHB Remodelers Chair RobertCriner, GMR, GMB, CAPS, aremodeler from Newport News, Va.

“Clients continued to call forconsultations for home remodelingjobs at the beginning of 2015.”Small renovation jobs continued to

show strength. The homemaintenance and repair component ofthe RMI increased four points to 64 inthe first quarter, the highest reading onrecord. Overall, the current marketconditions of the RMI declined twopoints to 58 this quarter.The RMI’s future market conditions

index fell to 55 from 60 in the previousquarter. All four of itssubcomponents—calls for bids,amount of work committed for the nextthree months, backlog of jobs andappointments for proposals—decreased slightly from the previousquarter’s reading.“Like the rest of the home building

industry, remodelers are facing thepressure of increasing costs for laborand materials, but an RMI above 50indicates that they still feel positiveabout the market on balance,” saidNAHB Chief Economist David Crowe.“The strength of the RMI’smaintenance and repair component

was likely due in part to the harshweather conditions that struck manyparts of the country during the firstquarter and necessitated repairs.”For more information about

remodeling, visit nahb.org/remodel.

Housing ProductionUp 2 Percent Nationwide housing starts rose 2

percent to a seasonally adjustedannual rate of 926,000 units in Marchfrom an upwardly revised Februaryreading, according to newly releaseddata from the U.S. CommerceDepartment. Single-family housing production

rose 4.4 percent to a seasonallyadjusted annual rate of 618,000 inMarch while multifamily starts dropped2.5 percent to 308,000 units.“Today’s reading demonstrates that

the housing industry continues tomake gains at a gradual pace,” saidNAHB Chairman Tom Woods, a homebuilder from Blue Springs, Mo. “Thereare still some price sensitive buyers

who remain on the fence.”“Builders are being careful not to

add inventory beyond expecteddemand, especially as they strugglewith increasing costs for lots, laborand materials,” said NAHB ChiefEconomist David Crowe. “However,pent-up demand, low mortgageinterest rates and a growing economyshould keep the housing industrymoving forward throughout the rest ofthe year.” Regionally, combined single- and

multifamily starts increased theNortheast and Midwest, withrespective gains of 114.9 percent and31.3 percent. Housing productiondropped 3.5 percent in the South and19.3 percent in the West.Led by a drop in the volatile

multifamily sector, overall permitissuance declined 5.7 percent inMarch to a rate of 1.039 million.Multifamily permits fell 15.9 percent

to a rate of 403,000 while single-familypermits rose 2.1 percent to 636,000.Regionally, the Northeast registered

a permit gain of 39.8 percent, whilethe Midwest, South and West postedrespective losses of 4.4 percent, 14.2percent and 4.3 percent.

Builder ConfidenceRises Four Points Builder confidence in the market for

newly built, single-family homes inApril rose four points to a level of 56on the National Association of HomeBuilders/Wells Fargo Housing MarketIndex (HMI) released today.“As the spring buying season gets

underway, home builders are confidentthat current low interest rates andcontinued job growth will drawconsumers to the market,” said NAHBChairman Tom Woods, a home builderfrom Blue Springs, Mo. “The HMI component index

measuring future sales expectationsrose five points in April to its highestlevel of the year,” said NAHB ChiefEconomist David Crowe. “This uptickshows builders are feeling optimisticthat the housing market will continueto strengthen throughout 2015.”Derived from a monthly survey that

NAHB has been conducting for 30years, the NAHB/Wells Fargo HousingMarket Index gauges builderperceptions of current single-familyhome sales and sales expectations forthe next six months as “good,” “fair” or“poor.” The survey also asks buildersto rate traffic of prospective buyers as“high to very high,” “average” or “lowto very low.” Scores for eachcomponent are then used to calculatea seasonally adjusted index whereany number over 50 indicates thatmore builders view conditions as goodthan poor.All three HMI components registered

gains in April. The component chartingsales expectations in the next sixmonths jumped five points to 64, theindex measuring buyer trafficincreased four points to 41, and thecomponent gauging current salesconditions rose three points to 61.Looking at the three-month moving

averages for regional HMI scores, theSouth rose one point to 56 and theNorthwest held steady at 42. TheMidwest fell by two points to 54 andthe West dropped three points to 58.

TEXAS BUILDER OF THE YEAR

2013

A W A R D E D

We build so you can GROW

Last year, GDP growth was amediocre 2.4%. While it was the

best growthsince 2010when GDPgrowth was a“sparkling”2.5%, it meansyet anotheryear, the ninthin a row, of sub3% GDPgrowth. Therehas never been

a run of such weak GDP growthsince record keeping began in1930. Yes, there were terribleperiods but they were all blessedlybrief, never lasting more than twoor three years and they alwaysoccurred during recessions. In ourcase, the recession ended in June2009. What is going on? The factis that our weak GDP growth is notsurprising at all, let me explain. GDP growth is composed of twothings, growth in the labor forceand growth in labor productivity.GDP rises when more people work,and better yet, when they workmore productively. Productivitygrowth is particularly importantbecause it boosts living standards. GDP growth was very goodfollowing WWII because annuallabor force growth grewdramatically from 0.5% in 1950 toalmost 2.5% in 1975. As a result,the prime-aged working population,those between the ages of 25 and54, grew from 60 million to almost80 million in 25 short years. Whilepopulation growth then began todecline, it remained above 1%through 2003. As a result, theprime-aged population continuedgrowing, hitting 122 million in 2003.As a matter of fact, the labor forcegrew much faster than thepopulation during the 1970s and1980s due to the huge influx ofwomen into the labor force. As aresult, the prime-aged workingpopulation grew by over 3% peryear during the 1980s. Since 2003, population growthhas slowed further and is nowbarely 0.7%. Moreover, the

Boomers have begun retiring inlarge numbers and the number ofworking men and women has, for anumber of reasons, continued toslowly decline. As a result, the sizeof the prime-aged workingpopulation has essentially flat-linedsince 2003. As a matter of fact, itpeaked in 2007. If the size of theprime-aged working population isflat, it’s hard to experience rapidGDP growth even if laborproductivity growth is good. Regrettably, labor productivitygrowth has not been particularlygood of late. But first some history:from 1948 through 1973 laborproductivity grew at an amazingaverage annual rate of 2.8%. Addto that rapid labor force growth, andit’s no wonder GDP growthaveraged 4.1% per year. Between1974 and 1990, labor productivitygrew by an anemic 1.4% percentbut given good population growth,GDP growth was a solid 3.0% peryear. From 1991 through 2007,productivity perked up to a veryrespectable 2.4%, and despiteweak population growth, GDP stillaveraged 3% per year.

Since the start of the GreatRecession, however, we haveexperienced anemic laborproductivity growth of, again, 1.4%per year and a trivial increase inthe working population. As a result,GDP growth has averaged a dismal1.2% per year. Luckily the prime-aged working population is againstarting to rise, which is good. Themillion dollar question is “How willlabor productivity growth perform?”Will it be a replay of the boomyears of 1974 through 1990, thecrummy years since 2007, or morelikely something in between?While nobody knows for sure, GDPgrowth should drift upwards asdemographics become morefavorable and labor productivityhopefully rises.

Elliot Eisenberg, Ph.D. is President ofGraphsandLaughs, LLC and can bereached at [email protected] daily 70 word economics and policyblog can be seen at www.econ70.com


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72015 ISSUE 4 Builders Outlook

Builders utlook on the scene |ParadeContinued from page 1

By Ray Adauto, EPAB“It’s a wonderful night with so much to

see,” said Belinda Velasquez, one of theguests enjoying the preview. “I think thereare some favorites, but my big surprise ishow different each home is to the othersmaking the site really unique,” shecontinued. Her husband, Roger was alsoreally happy with the show. “I agree, thedifferent styles and colors are really great tolook at, fun too,” he said. The theme, ifthere is one, is that this subdivision will notlook like a cookie cut plan, but rather offerunique architectural styles in each block.“What this new urbanism really showcasesis that you can have homes look differentyet function well in a new design like whatwe have here,” said Scott Winton,developer of Rio Valley. “The night is full ofparty, but the true stars of the show are thehomes,” he continued.The Winton Group is responsible for the

subdivision where there will be singlehomes, duplexes, quadraplexes, multi-family and light retail all within walkingdistance of each other. This neighborhoodwhere the Parade Homes are has smallfront and back yards, and rear entry throughand alley. “What we enjoy about this is thatcars are parked in the back of the homeand don’t clutter the streets,” said EdmundoDena, President of Accent Homes. “Webuilt our Rio Valley parade home to bestutilize the tighter lots, yet give thecustomers a sense of expanse,” hecontinued. The Rio Valley home is aCraftsman style home, reminiscent ofhomes found in Kern or Manhattan Heightsin Central. “We want this to be the newversion of something comforting, somethingmost have either lived in or visitedsometime in the past,” Dena said. The Parade of Homes is sponsored by

Sierra Title, Foxworth Galbraith,Interceramic Tile and Stone, MorrisonSupply and Builders Source. “I think thatthese homes are what people are lookingfor, especially those young professionalslooking for a little something different, “saidAngelique Roman of Sierra Title. Theevidence in her statement was the trafficcount for the first weekend of the Parade,as over 1700 people trekked through thegates to see the homes. The homes continue their run open

weekdays 4-7 pm and on Saturday andSunday 11 am to 7 pm. It’s easy to find asyou travel on I-10 to Artcraft, turn west ontoArtcraft and head to Westside Drive. Makea right turn and stay on Westside until yousee the Parade site on your left. Tickets areonly $5 adults, kids 12 and under free.Active and retired military are freecompliments of First Light FCU. Schoolemployees, teachers, administrators,custodial and office staff also freecompliments of Inter National Bank. Police,fire, EMT’s and other Law enforcement aresponsored by Dominguez InsuranceAgency. All must show I.D. for the freeadmission. Additional information can be found by

logging on towww.elpasoparadeofhomes.com orwww.elpasobuilders.com

el paso development news

A Tex-Mex restaurant popular incentral and east Texas's metros willopen its first El Paso location inJune. Chuy's Mexican Restaurantwill have a location at the Fountainsat Farah on the East Side.According to a press release, the

restaurant will include an ElvisShrine, the La Chihuahua Bar withframed photos of dogs, a "school" ofhand-carved wooden fish, metalpalms trees, and a hubcap-coveredceiling.“We are thrilled to open our doors

in El Paso,” states Fabian Alba,

Area Supervisor for Chuy’s El Paso,in the press release. “We’re lookingforward to sharing the Chuy’sexperience with El Pasoans and I’mpositive this community willappreciate our passion for food andour fun and quirky style.”Its Fountains location will be along

the lifestyle Promenade section inthe lower part of the center. Chuy'swas founded in Austin in 1982 andhas more than 60 locations in 14states. The El Paso restaurant willbe the furthest west for thecompany.

north Hills Crossing to Open in June

The foothills of the FranklinMountains in Northeast El Pasocould see more residentialdevelopment in the coming yearsafter the City Plan Commissionapproved a land study for the area."Sierra del Puerte" includes about175 acres of land just west ofMagnetic Street.According to the land study, the

developer plans to construct 319residential units on 70 acres. The

site plan shows residential streetswinding through the development,with arroyos interspersedthroughout.Another 87.7 acres will be

dedicated to open space, whichincludes the arroyos.Access to the neighborhoods may

come from an extended HondoPass Drive which currently endsjust west of Magnetic. Theextension will turn south and

eventually connect to Edgar ParkDrive. Zircon Drive, which currentlycontains a sizable gap, will connectits two halves and continuewestward to the innerneighborhoods.The development will be built in

phases, with possible completion in2019.

LAnD StuDy: nE El Paso neighborhoods in Franklin Mountain Foothills possible

Dig In!'Fountains' Announces Chuy's Mexican Restaurant Location

Northeast El Paso's largest retaildevelopment in years is scheduled toopen in June. North Hills Crossing, atthe corner of Gateway South and MartinLuther King Jr Boulevard, has beenunder construction since August and willadd over 200,000 square feet of retailspace.The power center will include retailers

including Walmart Market, Ross,Marshall's, and Big Lots.River Oaks Properties, the developer

for the project, made the announcementin a press release highlighting an overall$200 million, five-year retail expansionplan within the Sun City.Phase I of the plan is expected to be

completed by the end of 2015 andincludes 500,000 square feet of space,which includes North Hills Crossing butmost of which is spread across four newshopping centers opening in East ElPaso.They include: Las Tiendas located at

Zaragoza and Edgemere; Shops atTierra Este, located at Tierra Este andMontana; Tierra Del Norte located atTierra Este and Zaragoza; and a HomeDepot anchored Shopping Centerlocated at Zaragoza and Montwood,according to the press release.No specific opening date in June was

disclosed for North Hills Crossing andmost likely depends on grand openingfor individual retailers.Rendering

Sample Location

The City of El Paso will consider aproposal this week to purchase a15.57 acre property on a hilloverlooking the Kern and MissionHills neighborhoods. A developer hadpreviously put forward controversialplans to construct housing on theplot of land.Kern View Estates includes 60

attached single family homes on theside of Crazy Cat Mountain, just eastof Piedmont Drive.The City Plan Commission

approved the site development planin July 2014, but it was neverconsidered by City Council despitemultiple appearances on the agendain the last few months, including aseparate item this week. The Cityreceived letters and a petitionopposed to the project.According to the agenda item, the

City is poised to pay the owner$405,000 for the property, which islower than the appraised value of$450,000. The City considers thedifference of $45,000 a "donation" bythe owner for tax purposes.Funds for the purchase come from

the 2012 Quality of Life bondsapproved by voters, ensuring theland will be used as open space. Italso provides connectivity to theadjacent Palisades open space areapreviously acquired by the City.

More about Kern Place EstatesPreviously posted uly 21, 2014

Will City Green-LightLatest Proposed ‘KernView Estates’ Design?

A date has been set for a CityCouncil decision regarding a hillsidedevelopment in West El Paso. Thedeveloper is seeking approval forchanges to the detailed sitedevelopment plan for the property, aproject which is slated for the slopesof Crazy Cat mountain overlookingthe historic Kern Place district.Kern View Estates Unit Two will

now contain 60 attached single-family residences, under the newplan, which will line a small loop,according to a site plan included inthe latest application. There will alsobe a clubhouse located at the site.The change comes years after City

Council approved a previousdevelopment plan, which contained aproposal for 17 single-familyresidential lots, with the smallest lotoccupying 16,357 square feet. Thesmallest lot in the new plan will be986 square feet in size.Setbacks in the new plan will be

reduced to zero, while the maximum

allowable structure height willincrease to 37 feet. Parking will beavailable via ground level garages atthe base of the residential buildings.Another change is the access point

to the neighborhood. The newestplan indicates that Metetuye Lanewill be the street used to access thedevelopment, off of Okeefe Drive.Previously, plans were to extendPiedmont Drive northward into thedevelopment.The City has received two letters

of opposition and a petition with 107signatures against the latestproposal by the developer, which

received similar opposition for theprevious development plan fouryears ago. City Plan Commissionmembers were split when they votedon the new plan in May, approvingthe plan on a 4-3 vote.City Council will consider the item

at its August 19, 2014 meeting. Theproperty is owned by PiedmontGroup of El Paso. There is nomention of a timeline within theapplication.

Builders Outlook Issue 4 • 2015

Content provided byEl Paso Development News visit: elpasodevnews.com

Developing Story:Will City of El Paso Buy Controversial Kern View Estates?

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Affordable Care Act Update

Expert Advice

Joe BernalEmployeesBenefits of El Paso

As this issue went to press, the SupremeCourt was hearing arguments in King v.Burwell, which could decide the fate of theAffordable Care Act (ACA). Meanwhile,other changes have affected administrationof the ACA. No More Skinny Plans: In past issues,

we’ve discussed so-called skinny plans, ormedical plans that large employers haveargued would fulfill their requirement toprovide affordable medical coverage toemployees. The ACA requires individualand small group health plans to covercertain preventive services and to cover alist of “essential health benefits.” Largeemployer plans don’t have this requirement.Instead, they must provide coverage that isaffordable and meets minimum valuestandards, which means covering at least60 percent of the total cost of medicalservices for a standard population. Skinny plans cover the required

preventive services, but do not providehospitalization benefits, which is one of themost costly “essential benefits.” Theseplans save money…and some meet theminimum value standard. In late February, the Department of

Health and Human Services (HHS)finalized a proposed rule that requiresemployer-sponsored health plans to coverhospitalization benefits. It said a plan thatdoes not offer hospital benefits “is not ahealth plan in any meaningful sense.” Thismeans large employers offering only askinny plan would be subject to the ACA’spenalties of up to $3,000 per employee. Employees covered by these plans now

officially lack qualifying coverage, whichwould make them subject to penalties.Many of these workers are in low-wageindustries, such as restaurants and retail.HHS is granting them relief, allowing themto receive subsidies to buy comprehensiveindividual coverage. HHS is allowing employers that signed

contracts before November 4, 2014 toretain these plans for this year. Health Reimbursement Arrangements

Okay…for a Few More Months: Smallemployers with health reimbursementarrangements (HRAs) have gotten atemporary reprieve from the Obamaadministration. In late February, the InternalRevenue Service and Treasury Department announced that they will not levy

penalties against small businesses that usestandalone HRAs until July. This will givesmall employers more time to change theirplans. HRAs allow employers to reimburse

employees for qualified healthcare costswith before-tax dollars, benefitting bothemployer and employee. Since theimplementation of the Affordable Care Act(ACA), though, employers using standaloneHRAs are subject to fines. HRAs haveannual limits, which violates the ACA’sprohibition on health plans with annuallimits. The federal agencies overseeing the

ACA—the Departments of Health andHuman Services, Treasury and the IRS—determined that employers can offer anHRA to active employees if they are alsocovered by a group health plan thatcomplies with ACA rules. Under the newrules, an HRA can reimburse non-essentialhealth benefits, such as premium

expenses. Employers can offerstandalone HRAs to retirees. IRS Begins Working on Details of

“Cadillac Plan” Tax: To fund coveragesubsidies, the ACA includes a tax onso-called “Cadillac” health plans. Thesehigh-cost health plans insulateindividuals from the cost of their healthcare. The ACA specifies the 40 percent

excise tax will apply to plans that costmore than $10,200 for self-onlycoverage and $27,500 for familycoverage. In insured plans, the healthinsurer will pay the tax; in self-insuredplans, the plan sponsor, usually theemployer, will pay. The IRS must createrules implementing the tax, which goesinto effect in 2018, so many detailsremain unknown at this point. In a notice issued on February 23, the

IRS defined “applicable coverage” forpurposes of the tax. The notice clarified

that it does not matter whether theemployer pays all, or any premiums, forthe plan. Even if the employee pays forcoverage with after-tax dollars, if theemployer sponsors the plan, the tax willapply. Types of plans the Cadillac taxwill apply to include: • Health FSAs (flexible spendingarrangements) • Archer Medical Savings Accounts • Health Savings Accounts (notincluding certain contributions byindividuals) • Government group health planscovering civilian employees. (Thisexcludes military coverage.) • Coverage for on-site medical clinics,except for clinics that provide onlyde minimis medical care • Retiree coverage • Multiemployer plans • Indemnity plans, when payment forcoverage is excluded from gross

income or a deduction is allowed.This would include most criticalillness coverage, dread diseaseinsurance (such as cancerinsurance), and hospital indemnityplans or other health plans that paya specified amount per occurrenceor claim. The IRS also states that it expects

that executive physical programs andhealth reimbursement arrangements(HRAs) will likely be included in thedefinition of applicable coverage. The Department of the Treasury and

IRS are inviting comments on this initialnotice and will issue further notice onthe calculation and assessment of thetax. For more information on the

Affordable Care Act and how it affectsyour organization’s benefits programs,please contact us.


Builders utlook on the scene |Spring Golftournamentplayed inbeautifulweatherBy Ray Adauto, EPAB

The 2015 Spring golf tournamentpresented by Haskins Electric was aresounding success according to golfchairman Sam Shallenberger. “We wereable to enjoy a beautiful day that just gotbetter with all the friends who joined us atHorizon Golf Club,” Shallenberger told theOutlook. Over 20 four man teamscompeted in a par-is-your-friend round of18. “I had a wonderful time out heretoday with all the great members and newfolks I got to meet,” said Chuck Haskins,owner of Haskins Electric. “I can’t believehow nice the day turned out,” hecontinued. While golf was the excuse for getting

together a lot of on the course anticsprovided for some entertainment. “Thisformat is for fun, not the real seriousPGA-type guy who thinks nothing ofcoming in with a new course record eventhough they have a 30 handicap,” oneanonymous golfer said. The course is inreally good shape where just a year agothe course was challenged due to a longtime abuse. “I think the course will be toyour liking,” quipped Julio Hernandez,golf pro who took over the courserecently. Employee Benefits of El Pasosponsored the $10,000 hole in onecontest, which unfortunately no one hitthis year. “I hope that one day we’ll beable to award the money because this isa fun time with friends, not just a golftournament,” Joe Bernal said. There were a lot of first time

participants, especially some of thenewest members including Henry Bankey,President of Summerlin Energy out of LasVegas and now El Paso. “What awonderful experience today with gettingto know some of our fellow members andfinding out that the truth is we areamongst good people,” Bankey told theOutlook. Summerlin provided somedazzling optic yellow t-shirts to everyonewho signed in. Also new to the eventwas Montez Love from Love Engineering.He said he was amazed at the turnoutand the comradery everyone showed.“This is a fun event and I for one amhappy to be out here with everyone.Great time and awesome weather,” Lovetold the Outlook. This was a fun time as so many have

found out through the years. “I enjoybeing able to visit with my builder friendsand customers who are out here. I had agreat time and was able to enjoy the timewith them,” Henry Tinajero from WestStarBank said. In the end the scores were turned in,

the tally made then the prizes wereawarded. Long drives sponsored byPioneer Bank; Target on the fairwaysponsored by HUB International; and ofcourse the hole in one which once againwas sponsored by Employee Benefits ofEl Paso, which again went unclaimed.Plans are already in motion for nextspring. If you missed this one make sureto make plans to join us then.

The April general meetingfeatured the owner andeditors of the El Paso Inc., theonly independent businessnewspaper in the El Pasoarea. Representing the paperwas Publisher Tom Fenton,Editor Wendy White Polk, andthe Associate PublisherSecret Wherrett. All threegave a rousing description ofthe demise of newspapersexcept in very specialcircumstances like those

presented by specialty newspapers likethe El Paso Inc... Mr. Fenton showed theaudience how the circulation for the onlydaily English language newspaper, the ElPaso Times, has steadily declined whilecosts have increased and revenuedecreased. Subscriptions, he said, lead toadvertising which is the lifeblood of anynewspaper. Ms. Polk talked about heryears in broadcasting including stints withNBC on the east coast where she workedand managed personalities that you wouldrecognize even today. Her trip to being ElPaso Inc.’s editor has been interesting shesaid, something of learning curve to makesure the stories are accurate and timely.She pointed out how the El Paso Inc.’sreporters often break news that isrepeated and sometimes “borrowed” byother media outlets without crediting theInc... Overall the presentation was wellreceived as Secret told some facts abouthow the Inc. is evolving and growing,making sure not to lose its audience.Transitions in names, copy and style isabout surviving in the print news businessshe told the group. Over 65 members andguests were in attendance at the El PasoClub for the meeting.


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Membership News

132015 Issue 4 Builders Outlook

www.elpasobuilders.com www.epbuilders.org

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The golf tournament at Horizon Golfcourse went off like we’d hope for. Itwas a beautiful day with just enoughbreezes to make the heat go away, thegreens a little friendlier and the foodtaste that much better at the end. Iwant to say thanks to the ProfessionalWomen’s Council and Margaret forsigning us in. Gina Avila and KathyRose and Terry Martin were so ablyassisted by Patrick Tuttle, who by theway, came out and helped in spite of hisbanged up right hand. Our friends atSummerlin and so many others gave us

a really cool little goody bag. And thecourse was in real good shape. Thebeer flowed, and I hear so did thejungle juice, that by the midafternoonwe were all happy happy and ready forprizes. We changed things up a littleand did drawings for the prizes, thatway everyone had a good time andeveryone had a chance to winsomething nice. To the tee boxsponsors thank you. Thanks to JoeBernal for the hole in one; to LuisRosas for the Target fairway; and toKathy Carrillo for the long drives. My

buddies at WestStar Bank did thedriving and putting range. To our BigSponsor Chuck Haskins, HaskinsElectric, man you out did yourselves.Thanks for the support. To everyonewho played thank you. Get ready forthe fall tournament; we’ve gotsomething special for that one. By theway, if you don’t know already, Ray hada spill and is still working his waythrough a broken knee cap. Good thinghe couldn’t play. Come to think of it thatwas good for us. Just kidding.

Sam ShallenbergerMorrison Supply

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FAYETTEVILLE, GA — AtriumHomes of El Paso, and member of theEl Paso Association of Builders haswon an award for outstandingcraftsmanship in an internationalcompetition sponsored by the NationalOrnamental & Miscellaneous MetalsAssociation (NOMMA). The event wasopen to over 500 member firmsthroughout the U.S. and in 7 foreigncountries.Atrium Homes received the GOLD

for forged gates and doors. The presentation was made at a

special banquet in Valley Forge, PA,March 14, during NOMMA's 57thannual conference. The Ernest

Wiemann Top Job Awards Competitionis an annual contest that recognizesoutstanding work in the ornamentaland miscellaneous metals industry.To win an award, entrants must

submit photos and a description oftheir work. This material is thenpublicly displayed in a gallery whereNOMMA member firms then vote.Winning a Top Job award has specialmeaning, since it represents a "voiceof approval" from industry peers.Atrium Homes can be reached at

915-490-0839. Congratulations toAtrium Homes.

Atrium Homes wins InternationalMetalcraft Competition

� execuTive oFFicerS

edgar montiel, President

Palo Verde Homes

carlos villalobos, vice President

Pointe Homes

Don rassette, Secretary/Treasurer

Rassette Homes

Sam Shallenberger, Associates chair

Morrison Supply

Frank Torres, immediate Past President

GMf Homes

ray Adauto, executive vice President

Executive Vice President

Jay Kerr -Attorney of record

Firth, Johnston, Bunn & Kerr

� couNciL/commiTTee cHAirS

Associates council

Sam Shallenberger

Build Pac

Randy Bowling

Land use council

Linda Troncoso

Young Designer Award

John Chaney

remodelers council

Rudy Guel

membership retentiion

Patrick Tuttle

Finance committee

Kathy Carrillo

Henry Tinajero

� ADviSorY To THe BoArD

Jay Kerr, Firth, Johnston, Bunn & Kerr

James Martinez, Law Office of James Martinez

� BoArD oF DirecTorS

Antonio Cervantes, BIC Homes

Beverly Clevenger, Automated Div. 6 Builders

Bret Thompson, foxworth Galbraith Lumber

Bud foster, Southwest Land Development Servises

Dan Ruth, Millienium Homes

Henry Tinajero, West Star Bank

Joe Bernal, Employee Benefits Of El Paso

John Chaney, Passage Supply

John Dorney, Dorney Security

Kathy Carrillo, Pioneer Bank

Kathy Parry, Hunt Companies

Leti Navarette, Custom Dream Homes

Linda Troncoso, TRE & Associates

Robert Najera, Joseph Homes

Ruben Orquiz, MTI Ready Mix

Walter Lujan, Dawco Builders

2014 Builder member of The Year

Frank Torres

GMf Homes

2014 Pat cox Award

Bret Thompson

foxworth Galbraith Lumber

2014 Associated of The Year

Joe Bernal

Employee Benefits Of El Paso

2014 John Shatzman Award

Cindy Bilbe, Stewart Title

Honorary Life members

Mark Dyer

Wayne Grinnell

Don Henderson

Chester Lovelady

Cliff C. Anthes

Anna Gill

Brad Roe

Rudy Guel

E H Baeza

Past Presidents

committed to Serve

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.

© 2015 Builder’s Outlook is published and distributed for the El Paso Association of Builders

by Ted Escobedo, Snappy Publishing [email protected]

El Paso • Texas • 915-820-2800

6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038

Greg Bowling

Kelly Sorenson

Mark Dyer

Mike Santamaria

John Cullers

Randy Bowling

Doug Schwartz

Robert Baeza

Bobby Bowling, IV

Rudy Guel

Anna Gil

Bradley Roe

Bob Bowling, III

Edmundo Dena

Hershel Stringfield

Pat Woods

� TAB STATe DirecTorS

Randy Bowling

Greg Bowling

Sam Shallenberger

� NATioNAL DirecTorS

Bobby Bowling IV.

Demetrio Jimenez

NATioNAL ASSociATioN oF

Home BuiLDerS

(800) 368-5242

TexAS ASSociATioN oF

BuiLDerS

(800)252-3625

www.elpasobuilders.com www.epbuilders.org

Builders utlook

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152015 Issue 4 Builders Outlook

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Builders Outlook 2015 Issue 4