Work is progressing on some high profile housing developments in Terre Haute, but one project is on hold and another has been delayed.
A shortage of skilled labor and rising lumber costs prompted Thompson Thrift to shelve a planned $28 million, 232-unit expansion of Sycamore Terrace apartments, off New Margaret Drive, according to Paul Thrift, company president.
And, after an initial start date set for earlier this year, Carmel-based Mainstreet Student Living is now looking to begin construction in April on a $20 million, 162-unit complex near Union Hospital with completion in August 2019.
Mainstreet’s project was pushed back “in an effort to ensure our partners could execute our plans and guarantee an on-time opening,” said Justin Farris, managing director.
A third project involving market rate apartments on Sidenbender Road near 25th Street and Margaret Avenue has been reduced in scope with construction scheduled to begin next spring on six units totaling 36 units, according to attorney Richard Shagley II, who represented developers in obtaining rezoning for the project. Initial plans called for 78 units. Shagley did not indicate the reason for the reduction.
Thrift explained his company’s decision as one based on rising construction costs. He cited a shortage of skilled labor. Thompson Thrift operates in 18 states in the South, Southwest and Midwest and said the situation is not unique to the Wabash Valley.
“What you have is a declining number of participants in that trade, an aging population that’s not being replaced by a younger generation,” Thrift said. “You had a departing immigrant workforce; a lot of them left in the recession and they haven’t returned in the same numbers. Those that have returned simply don’t have the same skills.” The cost of materials has also risen, with a “tremendous spike” in lumber prices due mainly to U.S. tariffs on Canadian softwood, he said.
Higher tariffs alone would have added $300,000 to $400,000 to the cost of the Sycamore Terrace expansion.
“Costs are increasing faster than our rents,” Thrift said. “We’ve seen stagnation of rent, and maybe even some retracing of rent, and so we have put that project on hold until we see conditions that are more conducive to being able to make it a profitable venture.”
There is demand in Terre Haute for more market-rate, multi-family housing and he regrets having to shelve the project, Thrift said. While Vigo County does not have the population growth that is fueling demand in other parts of the country, it does have obsolete buildings that need replaced.
Nearly two-thirds of all housing units in Terre Haute were constructed before 1960, with 45 percent of homes more than 70 years old, according to 2012 Census Bureau data.
It’s full speed ahead for Riverfront Lofts, a $23 million, 165-unit market-rate apartment building at One Sycamore Street, and Annex 41, a 408-bed, $25 million student housing venture on the former site of the Terre Haute Boys and Girls Club at 224 N. Third Street.
Riverfront Lofts, a project of Core Redevelopment, is scheduled to open next summer in a former factory building used by American Can, Pillsbury and Icon Transportation. Core previously renovated the former Deming Hotel at Sixth and Cherry streets as apartments.
Motorists on U.S. 41 might notice an elevator tower nearing completion and construction cranes being erected for Annex 41, two of several marks of progress on that project, noted Tom Tomaszewski, president of Annex Construction.
Site utilities are complete and footings and foundations, pre-building of framing walls and installation of underground plumbing are all underway, he added.
Completion of Riverfont Lofts is scheduled for summer 2018 and Annex 41 is expected to be ready for student occupancy by fall 2018.
Another apartment facility that does not specifically target students but is located adjacent to the Indiana State campus was completed just in time for this week’s start of fall semester classes. Highland Quarters is a five-story, $15 million development that features 60 units and 224 bedrooms.
Vermilion Development is moving ahead with plans for a 119-unit assisted living facility on Lafayette Avenue just north of Locust Street.
The company has applied for up to $18 million in city-sponsored multi-family housing revenue bonds to finance the project to be known as Silver Birch.
The City Council is scheduled to discuss the request at its Sept. 7 meeting and take action Sept. 14 following a public hearing and separate action by the Terre Haute Economic Development Commission.
The bonds are a financing tool only and do not involve any obligation, debt, or risk for the city.