Strong Start

Bad years can start with a bang but very few good construction years start with a bid market that limps out of the gate. So far, 2019 is not limping.

The K-12 market is very active. Franklin Regional School District advertised the $35 million new K-3 Elementary and $20.5 million Sloan Elementary Schools, which bid Feb. 5 and can be bid separately or combined. North Allegheny’s $22 million McKnight Elementary should go out to bid next week. The $31 million Franklin Elementary at NA is scheduled to bid Jan 23. The $15 million Mars Area Middle School is slated to bid in March.

The Allegheny County Airport Authority is reported to have selected the CM teams of Turner for the $250 million garage/ground transportation centers, and PJ Dick/Hunt AECOM for the $700 million landside/airside terminals portions of the Terminal Modernization Program. No contracts have been approved as yet.

(Ed. note: The CM team for the parking garage and ground transportation centers was previously listed as Turner/Parsons in error.)

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300-foot cranes tower over the construction at Shell’s Franklin Plant in Monaca.

Commercial real estate projects continue to fill the pipeline. The 230,000 square foot District 15 Beta Version spec office was announced by RDC, which expects to bid packages this spring and start construction mid-year. Oxford Development’s $13.5 million Stacks at 3 Crossings project was approved by city Planning Commission. Rycon is the contractor for The Stacks. TWG Construction held a prequalification meeting on its $40 million Connection at South Side Apartments on Thursday, Jan. 17. The project is to bid March 15. Read about the subcontracting opportunities. Chapman Properties is planning to start a new 75,000 flex building at Chapman Westport.

Pitt short-listed CMs for the RFP for its $90 million student rec center. Among the finalists are Mascaro/Barton Malow, Hunt/PJ Dick, Walsh and Turner.

 

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Happy Holidays & End-of-Year News

Hope you are reading this at your leisure while relaxing with loved ones. Happy holidays and thanks for your support of our little construction information business for another year.

The end of 2018 is not is still busy with RFPs and interviews that will carry over into a running start to 2019. CMU is taking proposals from PJ Dick, Massaro and Mosites on its next new dormitory, a $45 million residence hall to be built along Forbes Ave. near Beeler. Duquesne University selected PJ Dick for its renovation of the A. J. Palumbo Center. Volpatt Construction was awarded the $4.5 million 2 South Renovation project at Canonsburg General Hospital.  Walsh Construction was the low bidder on the Section 55-C2-1 of the Southern Beltway at $174,300,000. Trumbull Corp. and Beaver Excavating were second and third at just over $183 million (separated by 0.1%).

Happy New Year!

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Drew Parish (far left) from the Mario Lemieux Foundation accepts the $7,000 donation from the proceeds of MBA YC Holiday Party. Representing the YC are Sean Fischer from Massaro Corp., and the MBA’s Jack Ramage, Connie Churchel, and Mary Chuderewicz. Photo courtesy of Mario Lemieux Foundation.

Apartments Make a Rebound

Preliminary data on permits for new construction of apartments in 2018 from the Pittsburgh Homebuilding Report reveals a big drop. Some 50% fewer apartments were started in 2018, with permits for 1,164 units vs. 2,368 in 2017. The decline appears to be a pause rather than a trend, as some 1,200+ units of new multi-family are about to start work or are being budgeted at the moment. TWG Development is budgeting its 280-unit South Side apartment project. Continental Building Co. is looking at the Waterfront apartments in Homestead. Elford Construction is budgeting a new complex in Cranberry Township at Brandt Road.

In construction news, New-Belle Construction started work on the new 100,000 square foot facility for Apex International in Alta Vista Business Park. The contractor is also working on a 38,000 square foot facility in Alta Vista for Nine Energy Services. Mistick Construction was selected for the $10-20 million renovations to the Fairfax Apartments and Webster Hall in Oakland. DiMarco Construction has started work on its new 29,000 square foot headquarters in Elizabeth, PA.

Office Prospects Remain Strong

This morning’s Employment Situation Summary showed that the U.S. labor market remained unusually strong in November. While the headline of 155,000 jobs was off from what economists were expecting, the overall data on the employment situation was positive. Wages grew at a 3.1 percent rate, although workers saw a slight decrease in hours. Workforce participation and total unemployed was even with October’s data. Unemployment was steady at 3.7 percent. Taken in concert with the November Job Openings and Labor Turnover Survey, the number of open positions still exceeds those looking for work by one million.

Forecasts of job growth have been off by about 40,000 jobs each of the last four months – both overestimating and underestimating every other month – which highlights the difficulty of predicting monthly changes in the economy, especially late in the business cycle. Other indicators show the economy starting to slow, and the lack of available workers should bring the average monthly growth in jobs down to between 120,000 and 140,000 in 2019. In Pittsburgh, there are fewer signals of a slowing economy. The race to replace retiring Baby Boomers will hold back the total number of employed persons in Pittsburgh but the sources of job growth remain robust.

Construction projects continue to advance in anticipation of continued growth. Developers continue to be optimistic about the office market. Earlier this week Oxford Development brought forward its plans for the first building in 3 Crossings 2.0, the $13.5 million, 110,000 square foot Stacks at 3 Crossings. Rycon Construction is the general contractor. Innovation Center Associates broke ground on a 90,000 square foot Class A spec office at Innovation Ridge, which will be designed and built by Al. Neyer.

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The new spec office at RIDC Innovation Ridge. Rendering by Al. Neyer.

Massaro Corp. was selected for the $11.8 million Greater Pittsburgh Food Bank project. Allegheny Construction Group has started on the $7 million first phase of the grower/processor facility for Penn Health Group in Lemont Furnace. Sunrise Assisted Living has put a $7 million expansion of its McCandless facility out to bid. According to the PBX the bidders are Burchick, PJ Dick, Rycon, Sota and Sun Coast.

No Holiday Slowdown Yet

Apparently owners didn’t get the memo about the construction industry slowing down between the holidays. For all the publicity about the cracker, UPMC and AHN, and the airport modernization, it is the $10-$50 million projects that are really making this construction market boom. One experienced BD executive told me this week that their calendar had 6 RFPs and 3 interviews on it by the end of the first week in December.

Bids went in Wednesday for Buchanan Ingersoll’s TI at its new 120,000 square foot home in the Union Trust Building. A. Martini, Mascaro, Massaro,Shannon and Wyatt bid. Greater Pittsburgh Food Bank is interviewing Jendoco, Landau, A. Martini, MBM, PJ Dick, and Massaro on Nov. 27 for its $11.8 million project. The $45 million Palumbo Center renovation is out for competitive GMP proposals to Jendoco, Mascaro, Massaro, PJ Dick and Rycon. Conemaugh Hospital has its $35 expansion project out for proposals to Butz, Mascaro, Massaro, PJ Dick and Rycon. Conemaugh also broke ground on its $22 million outpatient center in Ebensburg. Massaro Corp. is the contractor.

Allegheny County Airport Authority has reached a short list for interviews on the three major contracts out for proposals. The second A/E services contract – covering the 3,500-car garage, ground transportation center (GTC) and rental facilities – was narrowed to Michael Baker Jr., TranSystems Corporation Consultants and WSP USA Inc. Two separate contracts for CM Agency services are being considered. The short list for the first – including the 632,000 sq. ft. new landside terminal and renovations of the existing airside terminal – includes PJ Dick/Hunt AECOM and Turner/Baker. The second contract covers the scope of work in the second AE services contract above. The teams short-listed are Hill/WSP/MEC, JMT/SAI Engineering/HNTB and Turner/Parsons. According to the RFP, the Airport Authority is not considering awarding CM contracts for both scopes to the same CM team.

Trade bidding on a number of the major projects is also active. Concrete bids are being taken by Yates Construction on the $150 million new Childrens Hospital at WVU Medicine. Mascaro awarded the MEP contracts on the $350 Vision and Rehabilitation Hospital at UPMC Mercy to Ruthrauff Sauer/SSM and Lighthouse Electric.

Millcraft selected the Yates/Massaro team as CM for the Esplanade, its $300 million mixed-use development on the North Side. Rycon Construction was awarded the $32 million Fifth/Clyde residence hall by CMU.

Pitt is It

With all the activity in Oakland surrounding Pitt (and involving Pitt as an occupant), it’s easy to forget that the university itself has been largely quiet as an owner of construction projects. With the exception of DGS-assigned work, Pitt has been less active than normal for more than a decade. That is about to change with its updated campus master plan, which matches more than $1 billion in capital investment to the university’s new priorities.

The first of these major projects, a $90 million student rec center on O’Hara Street, is out for construction management proposals. Pitt is taking proposals from AECOM, Barton Malow, Gilbane, Mascaro, Massaro, PJ Dick, Turner, Whiting-Turner, and Walsh on Nov. 28. The project includes a new parking garage and is being designed by Moody Nolan & Associates.

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Rendering of the student rec center from Pitt’s updated master plan.

A similar-sized project, the Human Performance Center, should be ready for RFP in the early part of 2019.  That project is part of a $400 million expansion and improvement to the athletic facilities north of campus, in what will be called Victory Heights.

Other major commercial projects continue to advance. Millcraft Investments has narrowed the field to Clark Construction and Massaro/Yates for its $300 million Esplanade mixed-use development on the North Side. Developer Northwood Investments LLC laid out its initial plans for the Sears outlet store property in Lawrenceville. Northwood has hired Perkins Eastman to design the 250,000 square foot tech research space it is calling Dock 51.

The PA Turnpike awarded Trumbull Corp. a $116.2 million contract for Section 55A-2 of the Southern Beltway. The final major section of the Beltway, the $100 million-plus 55C2-1 is bidding now, due December 19. Along with the interchange construction, these are the final pieces of the puzzle that will allow for limited access connection from I-79 at Southpointe to the airport and beyond.

Amazon Looks Elsewhere

Let’s start with a disclaimer: there has been no official announcement from Amazon about the results of its year-long HQ2 search. Yesterday, the New York Times ran an article that sourced several people “familiar with the search” and reported that the online giant was in final negotiations to locate in both Queens, NY and the Crystal City section of Arlington, VA. The assumption is that Amazon will split its second HQ into two equal parts in those cities. Speculation about Crystal City arose over the weekend, prompting even Mayor Bill Peduto to make a statement that Pittsburgh had not been contacted by Amazon.

Amazon's Seattle Campus 2017

Amazon’s Seattle HQ

I think David Ruppersberger, president of the Pittsburgh Regional Alliance, got it right when he said that Pittsburgh won by making the short list. The effort to respond to the proposal taught Pittsburgh’s civic leaders even more about how to position the region and the public relations that have followed the city since has been valuable. Now we don’t have to deal with the mess that would have followed actually winning the project.

Pittsburgh’s tech sector is blossoming in multiple directions. Healthcare research is entering a potentially rapid expansion period. The energy sector holds great promise. And the petrochemical and plastics industries have yet to reveal what will happen when several ethane crackers open by the middle of the next decade. The regional economy is a good bet to create 50,000 new jobs over the next decade without having all of our eggs in one basket. Anyone remember how that worked out the last time Pittsburgh was reliant on one industry above all others?

Lots of interesting little private projects out to bid as the year winds down. In case you missed the BreakingNews email last week, Volpatt Construction was awarded the $6 million UPMC/IRMC Cancer Center at Indiana Hospital and Pitt chose PJ Dick for its Peterson Sports Complex field house expansion. Mistick Construction is taking bids on the $12 million development in New Kensington that will be the 47-unit Pioneer Apartments and offices for Wesley Family Services. Al. Neyer Inc. has started construction on three new industrial buildings: the third and fourth buildings at Clinton Commerce Park (268,000 square feet total) and a 50,000 square foot build-to-suit for Don’s Appliances at 251 Bilmar Drive.