Despite fall in building permits, experts see underlying strength

July 12, 1994|By Timothy J. Mullaney | Timothy J. Mullaney,Sun Staff Writer

The value of building permits for new nonresidential construction in metropolitan Baltimore fell 85 percent in May, but the chief economist for the Baltimore Metropolitan Council said the figure was a statistical aberration in an industry that has been seeing a slow recovery.

The Baltimore Metropolitan Council said developers took out permits for $3.3 million on new construction in May, well below the $21 million of permits issued in May 1993.

But construction industry figures indicated conditions are better than that.

One fluke was that last year's numbers included a $10 million permit for the foundation and steel frame of the new U.S. Health Care Financing Administration building in Woodlawn, by far the area's biggest construction project under way, said Donna Hinton, a building permit statistician for the council.

Another reason for the overall stability is that permits for additions, alterations and repairs to commercial buildings jumped in May to $59 million from $42 million the previous May.

"It looked pretty much the same to me" with the renovation work included, council economist Josef Nathanson said.

Victor Cyran, executive director of the metropolitan Baltimore chapter of Associated Builders and Contractors, a national trade group, said the weak May figure also disguises a strengthening flow of projects in the pipeline that have yet to get to the permit stage. But he said conditions are still weak enough that construction contracts are being awarded with very narrow profit margins because of stiff competition for work.

Bertero L. Basignani, president of Baltimore-based Lawrence Construction Co., said his firm is beginning work on a $6 million jail project in Frederick County and recently won a deal to build the shell of a new Sears Homelife store in White Marsh.

"It seemed to dip a month or so ago, but I'm looking at the planning pages [in trade journals that show projects in early development] and they're getting fatter now," Mr. Basignani said.

The biggest permits for new commercial buildings in May were for a $500,000 restaurant in the Lower Park Heights section of Baltimore, a $900,000 warehouse in Lutherville, and $200,000 for a new post office in Clarksville.

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