Commercial Permits Crackle in Bentonville

Bentonville led the commercial building boom in Northwest Arkansas with a total of 68 building permits purchased through the first eleven months of 2003. The permits had a total value of $123,398,293.

Even before December is tallied, the value of the Bentonville permits is 35 percent more than 2002’s total of $80,027,240 million (with 40 permits).

With a permit value of $37.6 million, Northwest Regional Medical Center in Bentonville accounted for a large portion of commercial construction in 2002. That number was largely offset in 2003 by the $30 million Bentonville Plaza project. Other major projects in the city this year include the $15 million stadium and field house at Bentonville High School and the $6 million elementary school construction. If the medical center and new school construction were removed from the equation, Bentonville would have had a 40 percent increase in commercial construction this year.

“Nothing is sitting vacant,” Bill McClard, senior vice president of Lindsey & Associates Realtors, said of the region as a whole. “Landlords aren’t hurting. It’s amazing how much building is going on. The absorption is fast.”

McClard said location is everything, but location demand varies from tenant to tenant.

“The difficulty of traffic is influencing a lot of tenants to be closer to I-540 because of the difficulty in getting to the office,” McClard said. “I’ve got a number of vendors that want to be near Wal-Mart but don’t want to be in traffic.”

The Bentonville Building Inspection Department said that building permit fees are based on the type and value of the construction work and fees are determined based on the valuation of the structure. Bentonville determines valuation as “the term for the anticipated market value of the proposed construction project.”

Rogers had a total of 51 commercial building permits purchased as of Dec. 12 at a valuation of $21,978,600. That is a 47 percent decrease in permit valuation over 44 new commercial construction permits in 2002 for a total value of $42,170,007. Most of that difference is because of Embassy Suites in Rogers. Construction of the 248-room hotel began in 2002 and cost $22.5 million.

The city of Siloam Springs sold 16 new commercial building permits in 2002 valued at $4,172,534. As of the third quarter 2003, the city had sold 8 permits valued at $6,326,114.

The city of Springdale saw notable increases in commercial construction activity in 2003, but that number is largely due to the construction of a new Springdale High School, new middle school and new elementary school that are included in the commercial figure. If the school valuations were taken out, the increase would only be about 6.3 percent over 2002.

Springdale sold 158 new commercial construction permits, a number that includes three-plex buildings and up, at a valuation of $78,619,065. In 2002, Springdale had 98 commercial permits purchased at a valuation of $41,487,417.

As of November, the city of Fayetteville had sold 23 new commercial building permits with a valuation totaling $24,069,108. In 2002, 32 new commercial permits were sold totaling $25,381,157 making the numbers five percent ahead of 2003 so far.

In 2002, Benton County permit offices sold 126 commercial building permits that totaled $131,007,711 in value. Washington County permit offices sold 120, but at half the valuation of Benton County totaling $65,051,060. However, as of November tallies, Rogers and Bentonville are set to surpass countywide numbers from last year with combined valuations totaling $145,376,893. Fayetteville and Springdale commercial permits as of November will pass up 2002 at $104,000,222 in combined valuations.

Tab Chart:

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* Rogers based on totals as of Dec. 12, 2003. **Siloam Springs’ 2003 numbers based on totals at end of third quarter 2003. All other cities based on numbers at end of November 2003.

Source: Northwest Arkansas Regional Planning Commission and city inspection offices.