Building booms in Alexandria; projects top $73 million so far this year

ALEXANDRIA — Despite rising interest rates, surging material costs, supply chain issues and labor shortages, construction in Alexandria has definitely been on the move in 2022, according to Alexandria Building Official Lynn Timm .

Through Aug. 23 of this year, seven permits for commercial projects valued at more than $1 million each have been issued, said Timm, noting, “We’re not done yet.”

She said that in addition to what has already been issued, the city has another $25 million in projects in various stages of the approval process waiting for permit issuance. The estimated valuation for the seven permits already issued, Timm said, totals more than $29.6 million.

She added that last year through Aug. 23, there were five permits with an estimated valuation of more than $11.9 million.

The commercial permits issued to date that are each more than $1 million, according to Timm, include the following:

• Minnesota District Council of the Assemblies of God, 605 Birch Avenue – $8.6 million for a 27,132 square-foot camper housing, office and assembly area. 
• Innovative Enterprises of Minnesota, LLC, 3800 Minnesota Street – $7.5 million for a 108,644 square-foot industrial addition.
• Northstar Christian Academy, 3744 Pioneer Road SE – $4.5 million for a 24,526 square-foot family dormitory.
• CTB Building, LLC, 504 Broadway – $3,654,200 for a 30,456 square-foot retail and office space.
• Farmers Union Oil Company, 1705 Broadway – $2,250,000 for a 6,370 square-foot convenience store.
• Dick Family Real Estate, LLC, 4017 Nevada Street – $2,147,000 for a 14,848 square-foot beverage distribution warehouse.
• UTAH Group, LLC, 3130 County Road 45 NW – $1 million for a 15,000 square-foot warehouse.

Through Aug. 23 of 2022, there were 881 total permits issued with an estimated valuation of more than $73.4 million dollars. For 2021, there were 742 permits issued through Aug. 23 that had an estimated valuation of more than $56.5 million.
In just the July 2022 building report alone, there were at least five commercial projects that were each valued at more than $500,000 and two new homes valued at more than $500,000 each.

A few notable commercial projects from the July report include an addition at Taco Bell with an estimated valuation of $750,000, a new King Tobacco with an estimated valuation of $877,440 and a new warehouse/office for Great River Energy with an estimated valuation of $1.5 million.

New residential construction has been good, as well, Timm said, adding it has already nearly matched the activity for the entire year in 2021.

Through Aug. 23 of this year, the building department has issued 47 permits for new dwelling construction with an estimated total valuation of more than $19.6 million. Timm said that 11 of these individual permits were valued at more than $500,000 with seven of those being valued at $700,000 or more.

The average valuation per dwelling was $418,841, she said, which is up more than $90,000 from 2021 per dwelling valuation.

Through Aug. 23 of 2021, there were 56 permits for new dwellings with five of those individual permits valued at more than $500,000 with only one being valued at $650,000. The 2021 average valuation per dwelling was $328,079, said Timm.

“An interesting trend that we have identified is the number of people coming from all over Minnesota and the United States to build their dream home in Alexandria,” she said, adding that the people came from such places as St. Charles, Illinois; Mesa, Arizona; Aberdeen, South Dakota; Arlington, Virginia and Stillwell, Kansas. Locations in Minnesota include St. Cloud, Moorhead, Ramsey, Henning, Hoffman, Melrose, Spicer, Rochester and Battle Lake.

She also said that it's likely there are others, not reflected in the city records, who have chosen Alexandria as their new home.

The city has had 139 more residential permits over what it had last year. Timm said the majority can be attributed to storm damage repair, primarily re-roofing projects.

“As for repair/reconstruction of the severely damaged structures, many of them are still working with insurance,” she said. “So permits have not yet been issued for the majority of these.”

Timm said that Alexandria is extremely fortunate, as not all cities experience the amount and quality of construction that the Greater Alexandria Area continues to see.

“When Alexandria is compared to other similarly sized cities for construction activity, it’s almost embarrassing,” she said. “Routinely, we have double, triple or even more the amount of new construction as similarly sized cities.”

As far as what’s “normal,” Timm said it is really hard to define anymore. She said there was strong construction throughout COVID-19, which was very unexpected, but that it continues.

“We continue to see strong construction in light of rising interest rates, surging material costs, supply chain issues and labor shortages. I’m not sure any of us expected this either,” said Timm. “Our contractors, tradespeople and suppliers are the ones that keep this ‘new normal’ going.”

It has not been easy, she said, adding that a lot of people don’t understand or appreciate the challenges those in the business deal with when it comes to managing product acquisition, project coordination, cost fluctuations and job delays, not to mention customer expectations. She called it quite the balancing act.

“There are a lot of interesting projects on the horizon for our community and it is very likely that permitted construction valuation for 2022 will exceed $100 million,” she said. “This would be the first time for that milestone.”