Scottsdale building activity off

Scottsdale's growth machine is in a long, deep hibernation.

Construction activity as reflected in the city's sales collections has been off sharply for three straight years.

Construction-tax collections have been down year-over-year for every month since November 2007 with the exception of July 2008, which showed a negligible increase of 0.01 percent.

The construction decline is apparent just by looking around the city, but the tax-collection figures show just how far things have fallen in the three-year real-estate slump. Construction sales-tax collections have fallen to $13.4 million in the past fiscal year from $32 million in the 2008 fiscal year, a decline of 58 percent.

Scottsdale's construction category includes contracting sales attributable to commercial, residential, industrial and infrastructure work. It also includes speculative building for residential and commercial projects, said Phil Montalvo, city tax audit manager.

Construction-category tax collections for 2010 through November were $11 million, off 31 percent from a year earlier. That is on the heels of a 40 percent drop in construction-sales activity in 2009 from the previous year.

It's a far cry from the boom years when construction-sales-tax collections were $3.4 million in August 2005, up 66 percent from the previous year.

By comparison, the construction category brought in $797,965 last February, less than one-third of where it was at the market peak.

It all adds up to a huge decline in revenue for the city's budget.

And construction is not the only category that has fallen.

Automotive sales were down 41 percent in 2010 from 2008, and hotel sales dropped 27 percent during that time.

by Peter Corbett The Arizona Republic Jan. 22, 2011 12:00 AM




Scottsdale building activity off