I stand on my step in the twilight watching the sky change, light pink and orange glows on the horizon like an early morning Hawaiian sky. The clear fresh blue above is a welcomed backdrop to the crisp Alberta morning. The long white hoar frost clings to the trees in the foreground. Darrel comes around the corner to pick me up for a meeting we have in Calgary (and yes, my fifth trip in seven days). His truck bounces across the ruts in the ice covered street. Darrel is one of the four partners of Swerve Living and we are meeting with a cost consultant and our mortgage broker. I’m pleased that he has asked me to come along on for this meeting. It gives us a chance to catch up on the project and renew our energy about the project.
Swerve Living has been about four years in the planning, design, redesign, and sales phases. We have weathered so many factors and issues. When Terry and I started this project we thought naively “how hard can this be?” Like everything else we did we forged ahead anyway. Wrote funding applications, purchased land, hired architects, and began marketing. Then… the housing bubble. Prices for housing skyrocketed, which meant construction costs skyrocketed. Our project which started out as a three million dollar project quickly escalated to over 14 million.
Vacancy rates were below zero in Red Deer when we started. People were moving from across the country to find work in Alberta. Some living in tents on the outskirts of the city. Everyone thought that there was gold in Alberta. Construction companies raised prices, partly to attract and pay the best workforce and partly to reap (rape) additional profits in a hot economy. Workers moved around like honey bees, flitting from one company to the next looking for the highest pay. Government project, both civic and provincial had deep pockets and were prepared to meet the increase in costs to see projects through. This left a shortage of labour for the private sector and what could be found came at prices escalated by marketplace demand.
Boom! As always happens, the costs began to exceed the prices that people were willing to pay for the finished product. Houses and condos could no longer be built and sold for a profit. Government projects finished and future ones were put on hold until the economy cooled. The construction market began its correction. Workers began to leave Alberta for home. Some had done well, some had come too late, and some had spent with reckless abandon and had nothing to show for it.
Financial institutions quit lending to capital projects. The federal government trumpeted the success of Canadian banks and hearing the praise the banks tightened lending even further. Where did all of this chaos leave us and our Swerve Living project? Well, it left us actually in a quite fortunate position. We were too early in our design phase to be ready to build before the escalation of costs occurred. We were troubled by the labour shortage and climbing prices but the situation caused us to hold the project until the pricing could correct itself. The corrections to the market have been happening. Construction costs have been coming down, but then with the exodus of people from Alberta and unemployment rising, the housing market has taken severe drop. Our project could be built at reasonable costs but the housing market prices needed to recover to make it profitable.
Here we are at the beginning of 2010. All of the conditions are favourable. Construction costs are in line with housing prices. The housing market is beginning to grow at a reasonable and steady rate. Lenders, especially private lenders, are starting to be interested in finding projects to fund. We are now receiving steady calls on the project and purchase interest as picked up.
Darrel and Adele joined us in this project about 18 months ago and have weathered most of the storm. As I travel to Calgary today with Darrel all of this goes through my head. I think about how much I would have learned about real estate development in a steadily rising market, but I also think about how much more I have learned in a market that has been so wild for the past three years. I’ve learned who I can trust and who I can’t. I’ve learned how this process could be better and what pitfalls could be avoided. I’ve also learned the importance and power of business relationships during the hard times. I’m reminded of how my creativity and tenacity has served me. Without one another’s support, and that of friends this project could have died an early death.
Swerve Living is one of my dreams. It will be built and we will start construction in March or April of this year. The cost consultant and the mortgage broker are pleased with the plans, the budget, and the vision that we have brought to this project. Swerve Living will change the face of downtown Red Deer. It is community friendly featuring a wonderful street presence, it is people friendly featuring beautiful designed light-filled spaces, and its design is light on the earth.
Our meeting goes very well and we have a clear checklist… and you know how I love lists… to meet our goal to begin construction soon. I’m feeling quite confident in our team as we leave the meeting. Darrel and I talk about details and the activities that we need to do in the next couple of days. We make a pit stop at Ikea on the way home for yet one more shelf unit for my office. As if my fingers aren’t numb enough from yesterday, wielding that odd-shaped Ikea screw bit.
The journey home goes quickly and before you know it I’m back at my office assembling the last of my new shelves. Leslie M is busy painting the second floor of Sunworks. It’s looking great. Matt shows up and offers some advice about the changes. I leave his thoughts to rattle around in my brain with the ideas from Glynis and her friend, the Sunworks staff, and Alan. It’s going to be hot.
Terry comes to take me home. I bamboozle him into helping me move furniture around in the store. I’m happy to see changes and realize that painting of my office may be way sooner than I was thinking. It feels so great and it’s giving me new energy to work. Tomorrow will be cleaning and serious desk work. Painting on the weekend? Hmmm.
At home, we eat dinner and then watch Obama deliver the US State of the Union address. He talks about weathering the storm and that change and uncertainty is not easy. He speaks of faith in the future. I think about how much more hopeful I am in the world since Bush left office and what a disaster he was. I think about how anti-American I became when he was in power. Now, I feel hopeful for the future of the United States. I may someday be proud to have them as neighbours again.
It’s only two years ago this April that Alan and I attended a week long course on Inspired Leadership in Totnes at Schmacher College, England. The lead facilitator, Meg Wheatley, opened her comments by saying “America is Dead.” Not the most inspiring thing to say but it certainly reflected Bush era and the results of US involvement in two wars.
Climate change was barely a credible topic, yet we were trying to create an environmental friendly building. At that time the price escalation troubles of the Swerve project were fully known. The world seemed to be quaking under with despair coming from every direction. I worried about how my own projects would do. I wondered about how I could be an inspired leader.
Today the recession storm mostly passed, another undoubtedly is brewing. This morning the sun rose creating with beautiful colours against the cold morning. Tomorrow I will work hard and enjoy the light that is in my life now. I will have faith and hope in the future. I will sing happy songs. I will wash my office floor!