It’s almost a new year, but so far the same old story when it comes to aquatics facility development. Stagnant credit markets combined with ongoing uncertainty means new construction is not yet seeing a rebound, especially when it comes to large private projects such as waterparks.
“Lenders are still extremely cautious,” said David
Sangree, president of Hotel & Leisure Advisors, LLC in Cleveland.
Randy Mendioroz agrees. The principal of Aquatic Design
Group in Carlsbad, Calif., said a number of the private
developers he knows have told him they simply can’t get
funding right now.
What’s more, because many state and local governments are
still facing huge deficits, few public projects are happening. As
work that was funded prior to the recession now has been mostly
completed, builders and designers such as Mendioroz are facing
tough competition for new jobs.
“It’s come to a screeching halt,” said Scott
Burton, president of Prestige Pools, a Las Vegas builder. “It
was pretty decent until just recently, but most of it has slowed
down. … ”
As a result, Burton and many builders are finding themselves
competing against firms from around the nation. “There was
one last year, a community indoor pool, and every builder and his
brother all across the country bid it,” he said.
For his part, Mendioroz said it’s been the school and
university work that’s kept his team busy.
In addition to fewer projects, there’s also stiff price
competition. “We’ve seen prices come down 30- to 35
percent in the commercial sector,” said Bill Rowley,
president of Rowley International Inc. in Palos Verdes Estates,
In the case of smaller-scale commercial jobs, many believe the
lower bids are coming from builders without much commercial
“They’re underpricing jobs terribly because they
don’t understand the differences between residential and
commercial construction,” said Kyle Chaikin, president of
Chaikin Pools in Farmingdale, N.Y. “I cut my margins in half,
but it’s still not anywhere near [the lower
Many commercial developers know the risk they take by hiring
inexperienced builders, but are willing to chance it because the
firms they’re working with have performance bonds, Chaikin
The good news is, many do see an upturn on the horizon.
Equipment manufacturers are predicting a slight increase in 2011,
with most of the work involving renovations and energy efficiency
“I think within the next year we’ll start seeing
lenders start offering loans,” Sangree said.
Until then, developers will have to continue to seek out
alternative means of financing. That was the case with Jay Peak
Resort in Jay, Vt. Operators financed a new waterpark via EB-5, a
unique foreign investor program.