Kalispell had $54.75 million in construction activity in 2012, an uptick as the city continues its slow emergence from a long economic downturn.

That level of activity is far below the pre-recession boom years. But it is a $25 million jump from 2011 and the most activity since 2007, when Kalispell had $112.4 million in construction.

The findings are from the annual construction, subdivision and annexation report prepared by the Kalispell Planning Department.

“It’s hard to say we’re jumping on a bandwagon by any means, but there are some good indications,” Planning Director Tom Jentz said of the 64-page report.

Tax-exempt projects made up the lion’s share of activity, adding 160,855 square feet of space valued at $30.2 million.

The sector’s two main projects are the nursing and health center at Flathead Valley Community College and the surgical services addition at Kalispell Regional Medical Center. Both facilities are expected to open this spring.

“The hospital is our largest employer in the valley and they continue to be robust,” Jentz said of its $42 million expansion completed over several years.

Commercial, office and industrial construction for the year added almost 89,000 square feet of space valued at $9.5 million. That’s far below pre-recession levels between 2004 and 2007, but a sizable increase from $3.1 million in activity in 2011 and $1.3 million in 2010.

The category’s two biggest projects were a renovation and addition at the historic Loading Dock building downtown and the construction of a four-story Hilton Homewood Suites expected to open at Hutton Ranch Plaza this summer.

Kalispell issued building permits for 98 residential units valued at $11.9 million last year. The tally includes 56 single-family, townhouse or duplex units and 42 multifamily housing units. Most of the latter are for the 40-unit Depot Place senior apartment building taking shape on East Center Street.

After annexing hundreds of acres of vacant land for proposed housing projects that failed to take shape when the housing market collapsed in 2008, annexation and subdivision activity in Kalispell has ground to a near halt.

Kalispell has a glut of 861 vacant residential lots with final plat approval and city services ready to be developed. It has another 1,280 vacant residential lots with preliminary plat approval.

Large vacant subdivisions that Kalispell has annexed made up about 36 percent of all of the land in the city at the end of 2012.

As a result of all those empty lots, “the last three years represent the lowest numbers of new lots created in Kalispell since the city began tracking subdivision activity in 1973,” the report states.

Developing the lots is expected to take years. At the height of the real estate bubble, about 250 lots a year were being sold and built on in Kalispell. That rate is more likely to be 50 to 100 lots a year now, but discount lot pricing is spurring some residential development.

“We’re muddling in a good direction with residential housing and slowly biting into that surplus of lots out there,” Jentz said.

A NUMBER OF development projects have been announced for 2013.

Cabela’s plans to open a 42,000-square-foot retail store in the Spring Prairie shopping center. Sportsman & Ski Haus plans to build a 25,000-square-foot addition and Natural Grocers by Vitamin College plans to remodel the former Borders bookstore and open a 20,000-square-foot grocery there.

More recently, DePratu Ford and Volkswagen said it plans to open a new Volkswagen dealership in south Kalispell.

“There are things happening,” Jentz said. “It’s not like the boom. But for a community our size, those are significant things happening.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.