Poor economy leads to layoffs at Kareway Homes

A local developer who laid off eight employees this fall says the territory's sagging construction and real estate markets have hit him, and other contractors, particularly hard.

A local developer who laid off eight employees this fall says the territory’s sagging construction and real estate markets have hit him, and other contractors, particularly hard.

Wayne Cunningham, who owns Kareway Homes, said he was forced to lay off some of his staff because there just isn’t enough work right now.

“It’s the slowdown. Every contractor is going through the same thing in town. Some guys have almost totally shut down. Others are cut back to very little. Some people still have units for sale up in Ingram that they built last year and haven’t sold yet,” Cunningham said.

Cunningham owns the Sternwheeler Village, which he’s upgrading from low-rent apartments to retrofitted condos. When the city changed the building code requirements for his units, he got caught in the crosshairs between two difficult forces, he said.

“It’s going ahead, it’s just been slow. There were new rules put in for the Sternwheeler, compared to anyplace else,” he said.

“The changes to the new bylaws, when you convert older units into condos, they have to be brought up to 2010 code. It changed just before we started.”

Cunningham said the code changes caught him by surprise, and he hadn’t planned for the extra costs. That, plus the slow sales and flat economy, put him in a position he couldn’t avoid and the employees had to go.

The slowdown in construction wasn’t helped by the postponing of the F.H. Collins project, Cunningham said. Even though he wouldn’t have been bidding on that project directly, having a project of that size would create trickle-down benefits for developers like him, he said.

“That F.H. Collins, that job was going to be right in Riverdale. All those subtrades would have been coming right to Riverdale, and would have chosen to either rent or buy something off of me, because we’re located so close to the site.

“It’s not totally cancelled. It’ll go ahead next year, but the delays don’t help. When things are in a building boom, they have to slow down some. They can’t continue the way they were. I don’t like slowdowns, but they’re necessary,” he said.

While he continues working to meet the new building codes, Cunningham hopes the upgrades will make his units more appealing.

“It increases the costs, but it’s also a better unit now. It’s a more saleable unit because it’s up to 2010 code and it’s a better building for residents,” he said.

“We’re about two-thirds done, and things are already on the market. We’ve sold about 20 of them,” he said.

But Pat Ross, the city’s manager of planning services, disputes Cunningham’s claim about the changed codes.

The new rules don’t require the whole building to be up to 2010 code, Ross said. Instead, the developer must make sure that the building meets critical life-safety standards. That can include anything from handrails on stairs to the type of insulation, heating and certain structural issues.

But Cunningham knew all of that when he made his application, Ross said.

“When he put forward his proposal, we asked if he would be developing condos. His application was approved conditional upon him completing the life-safety work,” Ross said.

Once the work is completed, Cunningham can apply for an inspection to verify that everything is up to the required standards. Without the completed inspection, Cunningham can’t sell the individual units outright, but he can pre-sell them.

Once the buildings pass inspection, the city will approve the condo licence and Cunningham can start selling the units outright.

“We’re sitting on that condo plan until we see those improvements,” Ross said.

Contact Jesse Winter at

jessew@yukon-news.com

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