Construction in Pasadena Remains Strong

Despite the COVID-19 pandemic, local developers told Pasadena Now local construction projects continue to move forward. 

The city has issued approximately 3,393 building permits since the pandemic began, compared to about 5,000 permits issued at the same time last year.

“The development activity within any city varies depending on many variables, including the economy and ability to borrow money,” said city Planning Director David Reyes. 

“Overall, our numbers are very close to previous years,” Reyes said. “Development comes in waves and it is very difficult to say that COVID is directly impacting development.” 

The city remains busy with regard to development. Planning Department staff is currently processing more than 150 project applications, including 25 applications for new housing. 

There are nearly 1,500 active construction sites, including 16 mixed-use projects, 319 commercial projects, 959 residential projects, and 198 multifamily projects.  

“I think most of what was in the pipeline is continuing to move forward,” said real estate attorney Richard McDonald. “In other words, projects that were in the process of getting entitlements are continuing to work on getting their entitlements.”

But, McDonald conceded, there has been some slow-down in projects seeking financing that were not already in progress before the pandemic began.

Other developers at the front end and in the middle of the development process have also had to pivot if they were thinking of building hotels or retail projects. 

McDonald said he has seen some reductions in demand, which has lowered some overall costs in construction,

“In other words, if previously we were looking at $350 to $400 a square foot, maybe now you’re looking at $300 to $350. But it hasn’t dropped through the floor as you might see in an ordinary recession.”

McDonald currently has a six-story, 115-unit mixed-use project on Walnut Street in the pipeline.

“COVID has affected so many,” said Councilman John Kennedy. “You have to have appropriate distancing and you have to have approval by the Health Department in almost every field of endeavor, unless the state’s orders supersede what a locality like the city of Pasadena does, given that we all have our own independent Health Department. I see in my district that development is proceeding, and I suspect it’s following the rules.”

At the state level, Gov. Gavin Newsom appears determined to build the state out of the affordable housing crisis that it is currently in. The construction industry was deemed essential by Newsom at the beginning of the shutdown. The March 19 stay-at-home order included “construction workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects, including housing construction.”

Although the industry continues to move forward, some local residents have been hit hard as homeowner projects have dried up. In March, Pasadena activist Pablo Alvarado told Pasadena Now that day laborers were struggling to find work after many local homeowners, who account for half of the jobs, stopped doing small home remodeling projects.

According to Joel Bryant, director of construction at PKG Partners, the city has done well at moving projects forward after other parts of the economy were shut down.

“The city of Pasadena has adapted and quickly to holding public hearings and to submitting plans virtually,” Bryant said. “I think they’ve done a fine job transitioning. In that first month after COVID, from April to May, I think all of us were stunned. Every experience is different. Another guy may tell you something different. Our experience is the city has kept it open for us. Everything’s online or you drop it off at their window at their basket and then they’ll go outside, pick it up, process it, all of the applications and payments are online. They’ve kept it moving right along. The building inspection process has not changed at all.”

PGK has several hundred housing units that are in the pipeline in Pasadena, including 115 units currently being built on the northeast corner of Walnut Street and El Molino Avenue. Bryant said more workers are beginning to show up and developers have to keep them separate, post signage, and make sure they are wearing face coverings. This requires a good superintendent who can manage that process and keep things moving along. 

“We have continued to put our foot all the way down on the pedal and push,” said Bryant.