Eau Claire's 2022 construction year shatters previous records

Feb. 8—EAU CLAIRE — The $452.1 million worth of new construction projects that took out building permits during 2022 in Eau Claire shattered the city's previous record.

Last year shot 53% above the previous peak set in 2017 of $295.6 million in new construction value, according to an annual development report completed this week by city staff.

Ryan Petrie, the associate city planner who worked on the report, compared Eau Claire's numbers with those from other mid-sized Wisconsin cities, including La Crosse, Wausau, Appleton, Green Bay, Racine, Kenosha and Waukesha.

From that survey, he found that Eau Claire's new construction last year topped that list.

"That is very impressive for Eau Claire," he said of 2022's tally. "Not only are we building in all sectors, but also the Sonnentag project pushed us over the top."

A major contributor to last year's record was permits for $100 million in work on the County Materials Complex, a project funded largely by donations from UW-Eau Claire alumni John and Carolyn Sonnentag.

"It will be the biggest project we've ever been involved with and worked on," said Kimera Way, CEO of the UW-Eau Claire Foundation and executive director of its development arm, Blugold Real Estate.

The foundation has been developing new facilities in service to the university for about a decade. That track record includes converting a former convent into an outdoor learning academy and child care center, building two off-campus dormitories, leading the creation of a downtown arts center and erecting a welcome center at UW-Eau Claire.

The County Materials Complex started construction last spring along Menomonie Street and includes an event center, turf fieldhouse, university athletics offices and a fitness center. Construction is slated to be done in time for the event center to host UW-Eau Claire's spring commencement ceremony in May 2024. The complex also will include a Mayo Clinic sports medicine clinic and a hotel will be built on a neighboring lot as well.

Two local government projects took second- and third-place spots for high-value construction work that started in 2022. Eau Claire County's new Highway Department maintenance building had an estimated $32.8 million cost on the permit it took out. And the city's new Transit Center — a ground-floor bus transfer depot with two levels of parking above it — took out a permit for $16 million worth of work.

Rounding out the top five projects for 2022 were two apartment buildings. Those are the $14 million second building for the Cannery Trail Residences and an $8.3 million apartment building included in the Galloway Flats housing development.

Another big housing year

Last year turned out to be a banner year for apartment construction in Eau Claire. There were permits issued for 469 new units spread across 45 buildings. That's down just slightly from the 489 new apartments permitted in 2021. But both of the past two years are more than double the city's annual average of 207 new units.

Likewise, 2022 was similar to 2021 for other categories of home construction.

There were 75 new single-family homes that got permits last year, which is right on the city's annual average and just up from the 72 in 2021's tally.

Construction of twin homes and duplexes, which benefit from a cost savings from two dwellings on a single lot, also continued to grow in popularity. There were 52 of these permitted last year, yielding 104 new housing units. That's about twice as much as the annual average for that category and up from the 43 twin homes/duplexes (86 units) that got building permits in 2021.

All told, permits were taken out for 650 new housing units in each of the past two years.

"Those are really good years," Petrie said.

They are the best yearly growth to Eau Claire's housing stock in recent history, he added, based on a look at records going back through the 1990s.

The pace of residential construction is keeping local builders busy with plenty of work in the pipeline, according to Christina Thrun, executive officer of the Chippewa Valley Home Builders Association.

"They are staying very busy," she said. "Everybody I talk to is building as fast as they can build."

Inflation plays role

While last year's record construction is due largely to the sheer volume of new buildings throughout Eau Claire, Petrie notes that inflation in building materials and labor also did play a part in it.

The city's report shows the cost of new housing continued to climb in 2022.

Last year the average cost to build a single-family home was just under $342,000, based on values that builders estimated when taking out permits. That's a $53,000 increase from the average of $289,000 seen in the prior year.

Higher prices have led generally to a shift away from making average-size spec homes and builders instead focusing more on custom ones for specific buyers, Thrun noted.

But that's not quite the case for twin homes, which have been growing in popularity in part because they're more affordable than single-family houses.

"They're usually sold before they're finished," Thrun said.

But they're seeing similar inflation as well. The city's report stated that construction of a duplex or twin home went from nearly $360,000 in 2021 to just over $420,000 last year.

For multi-family housing, the city calculated the average cost per new apartment built in the city. That figure reached about $137,000 in 2022, up from the previous year's $115,000.

The city's development report ends with a prediction that 2023 will be very close to a record year based on building projects already in the pipeline. These include new housing subdivisions and developments that had plans approved in recent years with indications they'd likely start building in 2023.

That includes a large apartment complex planned to replace the defunct Shopko store, new subdivisions on Jeffers Road and upcoming phases of the housing development that S.C. Swiderski is building on Eau Claire's northwest side.

A Costco store, Chili's restaurant and Valvoline Instant Oil Change are among the businesses who got plans approved last year, setting them up to build in 2023.

Eau Claire's industrial sector, which didn't see much construction in 2022, may help build 2023's construction figures. Manufacturers Nestlé and Perrigo both made announcements in recent months of making multimillion-dollar investments in their factories located in the city.

"Pretty much all sectors will be high valuation for 2023," Petrie said.