Beating Skyrocketing Construction Costs

Developer forms construction company

July 5, 2006, Vernon, BC - The Rise, Okanagan’s premier golf and winery resort, announced today it has formed Vineyard Homes at The Rise, its own construction company, to safeguard against escalating construction costs and to ensure high-level, quality craftsmanship. The construction boom in Western Canada, including the Okanagan, is creating a labour shortage that threatens development completions and budget estimates. To mitigate double digit annual construction inflation which is expected to continue to the end of the decade, The Rise has formed Vineyard Homes at The Rise Ltd.

The labour shortage is affecting urban and rural areas across B.C. and Alberta. A new survey released June 22nd, sponsored by the B.C. Chamber of Commerce, found that small businesses across the province cannot find qualified staff and are turning down new business and growth opportunities as a result. On June 20th, the Conference Board of Canada released a report examining the critical situation in Alberta; a predicted shortage of one-third of a million workers by 2025.

“Competition for quality labour and skilled trades is fierce,” says Leona Snider , president and CEO of The Rise , “Vineyard Homes was formed on the basis of heightening the level of quality and maintaining that quality at The Rise.”

Steve Hale of Septra Projects, a project and construction management team with a 12-year reputation in the Okanagan Valley has been chosen as general manager of Vineyard Homes at The Rise. Septra Projects tenders all phases of the construction process including the supply of materials, and The Rise will be able to attract the best trades people and control construction costs through Vineyard Homes.

“We have a great relationship with the subtrades and they are keen to work with us,” says Hale, who is also owner and principal of Septra Projects.

As GM of Vineyard Homes, Hale’s role is that of project manager for the design and development of all venues at The Rise . He is joined by construction manager Doug Ashley, who is in charge of the on-site construction program. Before joining this project, Ashley spent the last 10 years as the construction manager of Gallagher’s Canyon in Kelowna.

Vineyard Homes is currently constructing several neighborhoods at The Rise . These include 20 villas within the Sagecroft community, two distinct show homes, and 10 model homes, which will serve as examples of the design portfolio available at The Rise.

Sagecroft Villas at The Rise includes Mediterranean style villas featuring The Rise ’s, unique View Architecture™. Three distinct floor plans make up the Sagecroft Villas Collection and prices range from the mid $500,000s to mid $700,000s. The signature features that set The Rise apart, are carried through on the Sagecroft Villas; clay tile roofs, wrought iron detailing, custom cultured stone, pergolas, courtyards, custom entry and garage doors.

The Rise is soon launching its next offering, Watermark. Tuscan-inspired estate homes and the best view sites The Rise has will be located in a small community built around a natural geographic feature. Watermark consists of 25 home sites, so unique that each has its own name. This exclusive community will be built around the hanging valley carved into the side of the hill. Watermark will also feature The Rise’s View Architecture™ and this offering represents the only private, gated community featuring such exclusive property, that will be available at The Rise.

Fast Facts:

• Most people in the construction industry say costs are rising anywhere from 1% to 1.5% per month so far this year.
  (Source: Financial Post - http://www.canada.com/nationalpost/financialpost/story.html)
• Double digit yearly construction inflation is expected to continue to the end of the decade, averaging 10% annually from 2006 to 2010.
  (Source: The BC Construction Monitor - http://www.icba.bc.ca/hot/monitor/spring_2006.pdf)
• RBC Financial Group forecasts suggest B.C.’s economic growth will continue, ranking third of all provinces this year, and second in 2007, after Alberta. The economic outlook released June 22nd, predicts economic growth for B.C. of 4.0% in 2006, and 3.7% in 2007.
  (Source: http://www.rbc.com/newsroom/20060622economicBC.html )
• The Conference Board of Canada forecasts that with current labour trends, Alberta will face an annual shortage of 332,000 workers in the province by 2025.
  (Source: www.conferenceboard.ca, June 2006)
• Beyond lumber, steel and cement, rising fuel costs have also contributed to increased construction costs. In B.C. the diesel fuel price index jumped to 161.0 in 2004 and to 193.0 in 2005.
  (Source: The BC Construction Monitor - http://www.icba.bc.ca/hot/monitor/spring_2006.pdf)