May 2007         

Commercial growth holds steady in Volusia County

Construction at the West Volusia Town Center on Harley Strickland Boulevard in Orange City.

While housing starts continue to lag, commercial projects are surging, according to first quarter building permit data collected by the Volusia County Department of Economic Development from the county and city building permit offices.

During the first three months of the year, the total value of commercial permits issued was $173 million, a 70 percent increase in comparison with the first three months of last year. However, the $148 million in residential permits issued is off 35 percent from the first quarter of 2006.

Commercial permit activity was up in several jurisdictions during the first quarter, but none more impressive than the commercial permits issued in Daytona Beach. The city logged $147 million in commercial projects. This compares to the $6 million in commercial permits issued in the city during the first three months of last year.

“Our commercial permits are up because Daytona Beach has more available commercial land than surrounding cities,” said city spokesperson Susan Cerbone, “We have several areas of growth, with a lot of permitting and commercial interest.”
Cerbone cited the Mason Avenue extension (just west of Williamson Boulevard) as one such area. Center Point Business Park, at the Mason extension, is an 85,350-square-foot project comprised of two buildings that will be used for flexible space in the multi-tenant business park.

The first building is under construction and targeted for completion in mid-August. Costa del Mar Sunglasses has signed on for 36,600 square feet of this building, and the second building should be completed by fall of 2007.

Mike Cotton, owner of Cotton Enterprises, is the developer of this project. In his opinion, the Daytona Beach area has great potential. “I’ve been developing these commercial projects for 20 years, and I’ve researched these areas,” he said. “There is
such an opportunity for business growth in Daytona Beach.”

Orange City showed a decline in commercial permit activity in the first quarter of 2007 – from $24 million in the first quarter of 2006 to $4 million this year. However, this is not representative of Orange City’s commercial acceleration of the past few years, according to Jim Kerr, city planner. “We are the commercial hub of southwest Volusia County,” he said. ‘This is where commercial developers are locating. We have a Kohl’s here, which is significant, and it is doing well.”

Chester Murray, development services director for Orange City, agreed the slowdown in the first quarter is not an indicator of current commercial development.

The second phase of West Volusia Town Center is under construction with some stores opening in May and all by June. Additionally, the third phase of the center is under review. “We have projects in the pipeline, and in May we are expecting 300,000 feet of commercial applications,” Murray said. “In addition, we will have eight or nine buildings in Enterprise and 270 units at Integra Landing at Ivy Lake. I do not see a slowdown in commercial activity.”

Murray added that Orange City is at the core of growth in southwest Volusia County. “All roads in our area come through Orange City,” he said. “We have a population of about 10,000, but during the day we have a population of about 35,000 people working and coming here to stay. Then, we have about 80-85,000 people making trips through our city. We are strategically located. We are where people in our area come to shop. We have about a 70 percent nonresidential tax base.”

Morgan Gilreath, Volusia County property appraiser, said that prices have not decreased in the commercial markets, as they have in some areas of the residential market. “Commercial is faring much better than residential.”

Gilreath said the commercial market is not as price-volatile as the residential market. “What is happening in residential is interesting, because traditionally, we have had the higher priced residential on the east side of the county. Now, with the rise of the cities of Deltona and DeBary and growth coming out of Orlando, that has been changing.”

The West Volusia market is more price stable than East Volusia, and has been through January 1 of this year, Gilreath said. “The growth out of Orlando and the Orlando commuting crowd is still coming to this area, and there is price differential when you cross that river,” he said. “That brings us a lot of new purchases, although the number of sales is still down.”