Jess McDiarmid
Northern News Services
Published Friday, January 18, 2008

YELLOWKNIFE - Last year saw a boom in construction in the order of nearly $94 million, compared to roughly $35 million in 2006.

"Last year was an exceptional year," said Jeff Humble, director of planning and lands for the city. "Non-inflation adjusted, probably our strongest year ever."

More than 150 permits were issued for commercial construction with an estimated construction value of roughly $73.6 million, while 340 permits for residential buildings were expected to cost about $20.3 million to put up.

The RTL tank farm west of the airport accounted for about 40 per cent of the commercial construction value last year, said building inspections manager Bill Fandrick.

Several other medium to large scale projects, including Staples, the office complex on 52nd Street behind the Greenstone Building, Bailey House and the new Shoppers Drug Mart, were also approved last year, contributing to the surge in construction value.

"As you can see for the previous few years, there was a bit of a lull. It kind of goes in cycles like that," said Fandrick. "It seems that there develops a sort of a need for either commercial space or higher density residential space and then it gets caught up and everybody cools off for a while."

There was $75.6 million and $84.5 million in construction value in 2002 and 2003, respectively but just $30.8 million in 2005, and $35 million in 2006. While more than 600 permits for residential development were issued in 2003 and 2004, that number hasn't been more than 340 in the past two years.

Construction cost comparisons to previous years are deceiving, not only because of inflation but also due to rising prices of building in Western Canada, said Fandrick.

"In Western Canada with the cost of building, it's running faster than the rate of inflation because of supply and demand," he said. "It's an overheated industry right now and so contractors, builders, are basically naming their price."

Nonetheless development is a positive thing for city coffers, said Humble. The fees collected by the city are "significant," though not enough that they bolster the general fund enough to take on extra projects, he said.

"But it certainly helps," said Humble. "And the other thing you don't see right away is the generated tax base that will come out of all this development."

The city relies on property taxes to generate most of its general fund.