Hello Irrational Exuberance. We Haven’t Seen You In a While.
Every where we read, listen, or look in Park City we see big expectations of growth. A few examples:
- A Hyatt hotel has been started in Snyderville
- The Summit County Building Department says the upcoming 2015 construction year “looks to be good, if not a little better” than 2104.
- Summit County is hiring more building inspectors to prepare for this demand
- Mountain Accord wants to connect Park City with the Wasatch Front via underground rail.
- Park City Schools are probably going to issue a $20-$30 million dollar bond next year for a new Junior High.
- Vail is going to spend $50 million on Park City Mountain Resort
- Bonanza Park is going to be the next City Creek.
- Summit County is hiring 8 new employees
It’s as if no one remembers the Great Recession of 2007-2010 or perhaps they don’t think it can happen again. The problem is that the fundamentals that caused that event are still in play. Nothing has been fixed. Unfortunately, our community is going right along with it. Perhaps the best example is building inspectors. County Manager Bob Jasper has said repeatedly that the County needs these inspectors but that the builders are willing to pay for them via increased fees. That’s all fine and well… unless building declines..and with it the fees. Then who pays those salaries?
We heard this morning that the Mountain Accord people are counting on Federal and State funding to build underground rail. They may want to consider that federal funding may be a little hard to come by with a debt levels of $18 trillion.
The examples go on and on. What appears to be happening is that leaders have extrapolated the last couple of years where borrowing money has been cheap and the wealthy have done well via the stock market. We saw this through the number of cash sales for homes in Park City. Yet, things are slowing down. Economies like China are slowing down. Oil is cheap, which you may think is good, but it signals a world wide slow down. Credit (the ability to borrow) is tightening (become harder). There are a few large countries which are teetering on bankruptcy (Russia and Venezuela). In many ways it has the feel of 2006-2007.
Yet, Park City is plowing forward. Boom and Bust. Boom and Bust. It’s a little frightening. Couldn’t we have waited to get one minor recession under our belts to make sure that our underlying economy was solid before we started right off where we were in 2005? We guess not.
Instead we are building like the music will never stop. Except it always does. We just hope when it does, Park City can find a chair.
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