Local housing projects in limbo

Bloomstone, a promising 80-acre housing development near the Kidsports complex in northwest Kalispell, has closed down.

City Planning Director Tom Jentz calls it “shuttered.”

Developers had a solid plan and sound financing as they moved through the city’s preliminary plat process. The first phase alone was going to add 89 homes, 32 townhouses and a 64-unit apartment complex to Kalispell’s housing stock.

But then the economy turned sour.

Layoffs spread across the Flathead Valley. Financing dried up with the banking and credit crisis. Median home prices started to drop. There were fewer home buyers and a disproportionately large inventory on the market. Foreclosure numbers started climbing.

Bloomstone’s market was all but gone.

Earlier this fall, the developers told Jentz they closed their sales office and suspended plans to build.

Today the vacant land sits forlorn, the beginning of a street punched into the perimeter of the property with other streets roughed into the soil.

Bloomstone is not alone. This story repeats itself throughout Kalispell.

The 640-acre Starling development just across Stillwater Road to the west is on hold, awaiting economic recovery. One hundred thirty-one homes, 98 townhouses and 64 apartment units were planned just in the first phase.

West View Estates, with some homes already built behind a long masonry wall at the edge of 57 acres to the north of West Reserve Drive, is in suspended animation on another 77 homes and an apartment complex.

The high-end Silverbrook Estates north of town, at Church Drive and U.S. 93, pulled foundation permits for 10 spec homes but is moving at a snail’s pace.

Vacant lots remain at the once-vigorous Mountain Vista Estates on Three Mile Drive.

The 140-acre Willow Creek development on Foy’s Lake Road is on hold.

Of the city’s residential subdivisions, only Ashley Heights on Sunnyside Drive near Lone Pine State Park is progressing through the planning process with its 26 homes on 8.5 acres. It could come to the Planning Board in December for final plat.

Excluding Ashley Heights, the above is a partial listing of the 1,645 building lots marking time somewhere in the preliminary plat process as of the end of 2008.

These are the lots where the developer’s dreams have cost only the price of the land and engineering and design fees.

They have not yet incurred the expense of putting in sewer, water, streets, sidewalks, street lights, drainage features and parks — all required for final plat approval. Developers can’t justify it.

“That’s a significant cost, and you need to be fairly sure of your market before you take that next step,” Jentz said. “There’s no market out there right now. For people to rush out there and do those things, financially it doesn’t make sense.”

A month ago Kalispell had 840 final-platted lots, with a third of them in Silverbrook where developers went into the project expecting a slower sell-off. Remove Silverbook from the equation, Jentz said, and the remaining 500 or so lots represent a five-year supply in today’s market.

Another 1,300 lots were in the preliminary plat process at the end of October, a 10-year supply in today’s market.

Some, Jentz said, will drop out of the process. Some developers will come back with modified plats, targeting a different market by carving out smaller or larger lots that suit the emerging market of home buyers.

“The cost of land in the Flathead will continue to drive single-lot prices,” he said. “Density will slowly increase. There’s some consumer preference for smaller, more efficient units, so that fits” into the density trend.

Jentz has predicted the picture will remain bleak through February or March but pick up next spring. His office already had been talking with builders interested in moving forward.

With the glut of platted lots, the abundance of existing housing and the developments working their way through a three-year preliminary plat process, he said the market will follow a slow process that will play out over the next year and a half.

“This is a national recession we’re in,” he said. Distant markets dramatically affect home sales and developments here.

“But when you look at the life of the Flathead, we have had a cyclical wave every 10 years. This is not new. It’s just been a while and now we’re feeling the slump,” he said.

“We’re definitely going to come out of it. It’s just going to be a little longer.”

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com