Grand Forks enjoys a construction boom

North Dakota State Roundup

Published July 1, 1992  | July 1992 issue

Grand Forks may well see its largest construction boom in history this summer, likely surpassing the prior record of $44 million worth of construction completed in 1988.

In addition to more than $25 million in construction contracts signed this spring for building additions at the University of North Dakota, a strip mall, several new retail businesses and restaurants, and a large Sam's Wholesale Club are scheduled. Government buildings under construction in Grand Forks include a post office and a new city hall.

According to Bob Bushfield, city planner, several circumstances account for this considerable building activity: low interest rates, a steady stream of Canadian visitors, a continued increase in sales revenue and population growth.

In addition, the city promotes economic development through the implementation of a growth fund. "This is a special fund where a percentage of the sales tax is dedicated to assist existing businesses or new businesses by providing low interest rate loans or through grants," says Bob Gustafson, president, Grand Forks Chamber of Commerce. Recently, a $1 million grant was awarded to the university for the Energy and Environmental Research Center.

Cross-border shopping has increased each year and accounts for about 20 percent of sales revenue in the city. Sales tax receipts were up 12 percent from last year. "Canadian shoppers probably had an impact on that figure," Bushfield says.

Also, the Red River Valley never experienced a severe drought like other regions in 1991; therefore, the agricultural economy remained steady. "While the rest of the country may have lost entire crops, we talked in terms of bushels," Bushfield says. "And, the ag sector drives the economy in this area."

As a result, the Red River Valley area did not experience a retail recession. While there was a small downturn in the fourth quarter of 1991, sales tax receipts continued to rise. In 1991, Grand Forks had the largest percentage of increase in taxable sales compared to other major cities in North Dakota, according to Gustafson.

As small towns in the area have declined in population, many of their former residents have taken jobs in Grand Forks, triggering a slow but steady population growth, Gustafson says. The unemployment rate is low, about 3 percent; the state's rate is 4.4 percent.

While it is too early to tell about single-family housing construction, Bushfield says, the area is seeing the first increase in multiple dwelling construction in a long time. Following the 1986 changes in the tax laws, multiple dwelling construction froze in Grand Forks, and the area experienced a 14 percent vacancy rate. Now that rate is dropping and construction has started again.

In addition to the summer construction boom, Grand Forks will build a new $14 million to $16 million National Guard facility starting late this fall and a new convention center is under consideration.

While all contracts may not be awarded locally, the construction boom will provide jobs for a number of people, including summer employment for a large number of students, Bushfield says. Although he sees no shortage of construction workers yet, builders may have to look outside the area when school starts in the fall.

Barbara Halvorson