THE GAD Report
For December, 2016
By: Duncan L. McArthur, Governmental Affairs Director
The following is the status of the local, state and national issues.
Local Issues
Grand Junction’s Alley Improvement Program – Is Disclosure Needed?
The Grand Junction development code has for some time included a procedure for
improving previously unimproved alleys in Grand Junction. When the owner of a property that
borders an unimproved alley applies for a permit to alter, remodel or add an accessory building
to that property, they have the option to either improve that portion of the alley that abuts their
property or grant a non-retractable power of attorney (POA) to the city to vote for creation of an
improvement district for providing improvement to the alley along all the properties that abut the
alley on that block. When the city receives POAs from 51% or more of the property owners for
that segment of alley, an improvement district is created, subject to city council approval, and the
alley is improved (paved).
Originally, the city contributed 50% of the cost of that alley and the other 50% of the cost
is assessed to those properties along the alley whether they provided a POA or not. However, the
city has not budgeted for alley improvements in several years so the property owners along the
alley will bear the full cost of the improvements.
The question is should this process be disclosed to a buyer when purchasing any of these
properties along unimproved alley ways? The city records the POAs upon receipt so disclosure
of the potential assessment is disclosed for the properties that previously granted a POA as part
of the exceptions listed in the title commitment. However, the properties along the alley way that
have not granted a POA may still be subject to an assessment even if they do not plan
improvements to the property they are buying. And if the process and its potential liability is
disclosed, will it become a point of negotiation of the purchase price because of the potential
liability and potentially reduce the value of the property? Are title companies, realtors and/or the
sellers of properties that have not planned to participate in the program assuming liability for
non-disclosure?
City of Grand Junction Projects Summary
Downtown Events Center – The city council reviewed the feasibility studies prepared
discussing the potential events center during a workshop and agreed to proceed with placing the
financing of the issue on the April 4, 2017 ballot. Voters will be asked for an increase in the city
sales tax from 2.75% to 3.0%. It is estimated that Grand Junction residents pay approximately
22% of the sales taxes received and the increased cost per family per year will amount to
approximately $29.00. The tax rate would compare to the 3.0% rate in Montrose and 3.3% rate in
Delta.
Two Rivers Convention Center Operations – City staff investigated the possibility of leasing
or selling TRCC to a private entity attempting to eliminate the approximate $450,000 annual
shortfall in revenues over costs. As no responses to the RFP were received, the idea was
abandoned.
Professional Management for Two Rivers Convention Center & Avalon Theater Attempting to increase activity and revenues for the two downtown venues, staff decided to
recommend a Pinnacle Venue Service, a professional management company to operate the
TRCC and the Avalon Theater. City council approved the proposal and a contract has been
signed with Pinnacle starting January 1st. The employees at TRCC and the Avalon will become
employees of Pinnacle as the operations go forward. All previously scheduled events will not see
a change in their plans.
Las Colonius Amphitheater Construction Update – Concrete pouring for the trail is completed.
The new trail alignment will tentatively be open for use during January. Plumbing and
underground finish is in progress and is scheduled to be complete before the end of December.
Radon vents have been installed and inspected. Masonry work continues for the public restrooms
(east wing) and back wall of the stage. If the weather allows, steel fabrication will begin in
January.
Economic News
Miscellaneous Economic News
Elliot Eisenberg, Chief Economist for the National Association of Homebuilders, publishes
various comments on the economy that relate to the real estate industry. Below is a sampling of
these comments during the last month.
Parental Palace
In 2015, the percentage of those 18 to 34 living with their parents was 39.5%, the highest level
since 1940 when it was 40.9%. Of course, 1940 was one year removed from the end of the
Depression. The rate then fell to an all-time low of 24.1% in 1960 and has slowly risen since
with a recent big run-up. The rise is probably due to rising rents and limited credit.
Financial Fitness
For the health of your financial portfolio I recommend three things. Don't listen to expert
predictions; experts can't forecast the future any better than you. Next, fees paid to financial
advisors/managers reduce your return. Make sure you are getting value for the fees you pay.
Lastly, rebalance your portfolio based on the asset allocation that fits your current risk profile.
These steps should keep unforced investing errors to a minimum.
Confident Consumers
Since the conclusion of the presidential election, consumer confidence as measured by the
Conference Board has shot up an amazing 12.8% to 113.70, its highest reading since 8/01!
Similarly, the University of Michigan consumer sentiment index is up 12.3% at 98, its secondbest level in over a decade. Lastly, small business sentiment as measured by the National
Federation of Independent Business is now at its third best reading since 2007.
Wind Wattage
At present, 5.6% of the nation's electricity comes from wind, up from 4.7% in 2015 and 2.3% in
2010. In 2015, Iowa had the largest wind generation share at 31.3%, followed by South Dakota
at 25.6%. Texas and New Mexico are on pace to become the 12th and 13th states to generate
10% or more of their electricity from wind. Texas produces 24% of all wind energy in the US.
Moody Multifamily
While housing starts fell 18.7% in November, it was due almost entirely to multifamily.
Multifamily starts declined an eye-watering 45.1% after jumping 76% in October as developers
probably rushed to lock in financing before the election and buyers signed purchase contracts
and locked in mortgage rates ahead of the Fed's rate hike last week. YTD, single-family starts are
up a solid if unspectacular 9.6%, and all starts are up 4.8%.
Frisky Fed
Despite correctly anticipating a quarter-point rise in the Fed Funds rate today, the stock market
fell 0.8%, the dollar soared by almost 1% and the 10-yr treasury skyrocketed a tenth-of-a-point
to 2.57%, its highest yield since 9/22/14. Why the big moves? The Fed anticipates three quarterpoint rate hikes in 2017; the markets were expecting two. Moreover, the tone of the post-meeting
statement suggests the outside possibility of a fourth hike.
Bogus Boost
When oil prices started declining dramatically in late 2014, it was hoped that economic growth
would quicken as households would suddenly have more discretionary income. While
households did boost spending, it was offset almost dollar-for-dollar by reduced corporate
investment. Now, oil prices are rising and while that will surely boost corporate investment,
the decline in household spending will ensure that the net stimulus to the economy will be near
zero.
Mega Mountains
The Friday File: The highest mountain in the US is Denali at 20,320 feet. The next 22 tallest US
mountains are also in Alaska. Outside Alaska, the tallest mountain is Mount Whitney in
California at 14,494 feet. Of the 96 US mountains over 14,000 feet (fourteeners) all are in
Alaska, California, Colorado, or Washington. The tallest mountain east of the Mississippi is
Mount Mitchell in North Carolina at 6,684 feet.
Slight Slack
Subtracting November's excellent unemployment rate of 4.6% (tops since 8/07) from the
November U6 rate of 9.3%, the most expansive measure of unemployment and
underemployment (and the best since 4/08), is a quick way to measure labor force slack. That
number is 4.7%. At the housing boom peak in 4/06 it was 3.4%. At 4.7%, there's tops another 1.5
million people who want to work more; not much more slack.
County Foreclosure Reports
The foreclosure activity through the fourth quarter of 2016 in the
four counties is shown below. The foreclosure activity in the
various counties showed an increase in the third quarter but
appears to be leveling in the fourth quarter while still well below
pre-recession levels and is not having the same protracted effect
on the economy as it was during the past recession but is still an
economic indicator of the area.
Delta County:
1st Qtr
2nd Qtr
3 Qtr
4th Qtr
Totals
Year Filing Sales Filing Sale Filing Sale Filing Sale Filing Sale
2012
54
40
60
43
74
33
56
38
244 254
2013
33
40
34
32
39
33
30
22
136 127
2014
32
21
36
15
22
21
33
17
123
77
2015
24
20
23
23
32
22
21
17
100
82
2016
33
14
18
20
26
14
24
16
101
64
80
70
60
50
40
Filings
30
Sales
20
10
1st Qtr 2011
2nd Qtr 2011
3rd Qtr 2011
4th Qtr 2011
1st Qtr 2012
2nd Qtr 2012
3rd Qtr 2012
4th Qtr 2012
1st Qtr 2013
2nd Qtr 2013
3rd Qtr 2013
4th Qtr 2013
1st Qtr 2014
2nd Qtr 2014
3rd Qtr 2014
4th Qtr 2014
1st Qtr 2015
2nd Qtr 2015
3rd Qtr 2015
4th Qtr 2015
1st Qtr 2016
2nd Qtr 2016
3rd Qtr 2016
4th Qtr 2016
0
1st Qtr 2011
2nd Qtr 2011
3rd Qtr 2011
4th Qtr 2011
1st Qtr 2012
2nd Qtr 2012
3rd Qtr 2012
4th Qtr 2012
1st Qtr 2013
2nd Qtr 2013
3rd Qtr 2013
4th Qtr 2013
1st Qtr 2014
2nd Qtr 2014
3rd Qtr 2014
4th Qtr 2014
1st Qtr 2015
2nd Qtr 2015
3rd Atr 2015
4th Qtr 2015
1st Qtr 2016
2nd Qtr 2016
3rd Qtr 2016
4th Qtr 2016
Garfield County:
1st Qtr
2nd Qtr
3 Qtr
4th Qtr
Totals
Year Filing Sales Filing Sale Filing Sale Filing Sale Filing Sale
2012
148
100
176 102
144
80
96
84
564 266
2013
94
67
80
55
57
43
64
43
295 208
2014
47
43
38
23
31
19
16
6
132
91
2015
20
23
20
21
18
22
23
11
81
77
2016
25
11
22
10
22
18
18
9
87
48
250
200
150
100
Filings
Sales
50
0
1st Qtr 2011
2nd Qtr 2011
3rd Qtr 2011
4th Qtr 2011
1st Qtr 2012
2nd Qtr 2012
3rd Qtr 2012
4th Qtr 2012
1st Qtr 2013
2nd Qtr 2013
3rd Qtr 2013
4th Qtr 2013
1st Qtr 2014
2nd Qtr 2014
3rd Qtr 2014
4th Qtr 2014
1st Qtr 2015
2nd Qtr 2015
3rd Qtr 2015
4th Qtr 2015
1st Qtr 2016
2nd Qtr 2016
3rd Qtr 2016
4th Qtr 2016
Gunnison County:
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Totals
Year Filing Sale Filing Sale Filing Sale Filing Sale Filing Sale
2012
52
23
28
24
22
25
34
15
136
87
2013
17
12
17
19
18
7
19
14
71
52
2014
11
14
7
6
9
6
5
3
32
29
2015
3
6
7
2
10
14
3
4
23
26
2016
4
4
6
2
3
4
4
3
17
13
60
50
40
30
20
Filings
Sales
10
0
Mesa County:
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Totals
Year Filing Sale Filing Sale Filing Sale Filing Sale Filing Sale
2012
344
233
342
188
314
224
272
202
1272
847
2013
182
161
198
168
207
104
194
131
781
564
2014
147
143
143
92
116
98
133
70
539
403
2015
108
64
117
77
131
89
123
74
479
304
2016
145
89
138
96
139
86
127
80
549
351
400
350
300
250
200
Filings
150
Sales
100
50
1st Qtr 2011
2nd Qtr 2011
3rd Qtr 2011
4th Qtr 2011
1st Qtr 2012
2nd Qtr 2012
3rd Qtr 2012
4th Qtr 2012
1st Qtr 2013
2nd Qtr 2013
3rd Qtr 2013
4th Qtr 2013
1st Qtr 2014
2nd Qtr 2014
3rd Qtr 2014
4th Qtr 2014
1st Qtr 2015
2nd Qtr 2015
3rd Qtr 2015
4th Qtr 2015
1st Qtr 2016
2nd Qtr 2016
3rd Qtr 2016
4th Qtr 2016
0
1st Qtr 2011
2nd Qtr 2011
3rd Qtr 2011
4th Qtr 2011
1st Qtr 2012
2nd Qtr 2012
3rd Qtr 2012
4th Qtr 2012
1st Qtr 2013
2nd Qtr 2013
3rd Qtr 2013
4th Qtr 2013
1st Qtr 2014
2nd Qtr 2014
3rd Qtr 2014
4th Qtr 2014
1st Qtr 2015
2nd Qtr 2015
3rd Qtr 2015
4th Qtr 2015
1st Qtr 2016
2nd Qtr 2016
3rd Qtr 2016
4th Qtr 2016
Montrose County:
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Totals
Year Filing Sale Filing Sale Filing Sale Filing Sale Filing Sale
2012
91
36
76
47
56
66
43
24
256
173
2013
51
39
49
30
42
24
44
24
186
117
2014
30
35
33
24
22
16
26
16
111
91
2015
23
17
24
15
11
9
22
13
80
54
2016
28
15
17
21
20
14
20
8
85
58
100
90
80
70
60
50
40
Filings
30
Sales
20
10
0