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VOL. 121 | NO. 200 | Wednesday, October 11, 2006

Total Building Permits Down

Third quarter shows 13 percent drop overall, but not much discouragement among builders

By Amy O. Williams

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CROUCHED TO SPRING: Bluff City Jaguar-Land Rover on Getwell Road will be moving to a new facility by early next year. -- Photo By Amy O. Williams

The Bill Morris Parkway corridor soon will be home to a new luxury car dealership.

The Bluff City Jaguar-Land Rover on Quince Road should be open by the first of 2007, said Harrell Schaeffer, who owns it.

The facility is under construction at 6475 Quince Road in East Memphis and is about 75 percent completed, Schaeffer said. He's moving his facility from the current location at Getwell Road and Interstate 240.

"We are trying to get moved by the end of December or the end of January at the latest," he said.

The building permit for Bluff City Jaguar-Land Rover was one of 2,660 filed with the Memphis-Shelby County Department of Construction Code Enforcement (DCCE) in third quarter 2006, from July 1 to Sept. 30, according to The Daily News Online, www.memphisdailynews.com

A little goes a long way

Compared to the totals from the two previous years, the number of permits filed in the third quarter was down nearly 13 percent from the 3,046 permits filed during the same period last year.

But that decline does not necessarily mean bad news for builders, said Jerry Gillis, president of FaxonGillis Homes Inc.

FaxonGillis, a Memphis-based residential building company, filed 13 permits in third quarter 2006, among permits for which a contractor/owner was listed, and 14 during the same period last year.

Any declines are not a big issue in his industry, Gillis said, because it operates according to simple economics.

"If we've got slow sales, we're probably not going to be pulling a lot of permits," Gillis said. "If we've got brisk sales, the next quarter or the next month we're going to be pulling a lot of permits."

Ups and downs

The permits pulled in the county break down among Memphis, Arlington, Germantown, Lakeland and parts of unincorporated Shelby County.

The DCCE does not issue permits for some incorporated areas, including Bartlett, Collierville and Millington. The totals for Memphis include Cordova, which has been annexed by the city.

Memphis led the pack with 1,923 permits filed during the quarter, or 72 percent of the permits filed with the DCCE from July through September of this year. Of the 1,923 permits filed for Memphis, 216 were for Cordova.

Unincorporated areas of the county accounted for 207 of the permits filed, coming in second. That number was down sharply from the 461 permits filed during third quarter 2005.

Arlington was next with 198 permits filed, but still was up 16 percent from 171 during the same period the previous year.

For the second quarter in a row, Matthews Brothers Homebuilders topped the list for the most permits with 69 building permits filed in the third quarter, among permits for which an owner was listed.

The number of permits filed in Memphis was down 18 percent from 2,082 filed in third quarter 2005.

But Gillis is not deterred by the numbers, and is looking to have a bigger year in 2007.

"We expect our business is going to be up this year," Gillis said. "We are in more communities this year than we were in last year, and we should sell more houses simply because we're in more communities. It doesn't have to do too much with the market."

Spreading out

FaxonGillis opened four new projects this year, from the 72-unit Carolina Lofts in Downtown Memphis to the Asbury Park subdivision in DeSoto County and Sterling Ridge subdivision in Tipton County.

And with the building market looking up for FaxonGillis, the market for luxury cars also is better than ever, Schaeffer said.

Construction on his Bluff City Jaguar-Land Rover started in the summer and will add about 11,000 square feet to the dealership's current workspace on Getwell. The dealership now occupies 24,000 square feet, which includes nearly 8,000 square feet that Schaeffer is renting from his father, Milton.

The accessibility to Bill Morris Parkway played a big part in Schaeffer's decision to move, because he estimates that about 25 percent to 30 percent of the dealership's customers are not from the Memphis area.

They come from the boot heel of Missouri, West Tennessee, and Mississippi towns such as Greenwood, Tupelo and Oxford.

Schaeffer also will use the relocation as an opportunity to expand.

"We've grown to the point where Land Rover and Jaguar have been splitting service departments in half just to make room, which is terribly inefficient," he said. "So, over the years, we've just outgrown the facility."

PROPERTY SALES 79 321 2,586
MORTGAGES 90 426 3,033
BUILDING PERMITS 153 796 6,864
BANKRUPTCIES 37 213 2,000