Construction Heating Up With the Weather

Work started recently on the foundations for the $21 million Carnegie Science Center expansion. Turner Construction is the CM. Allegheny Construction Group also started work on the first phase of the major renovation of the Rivewalk Corporate Center and Terminal Building that McKnight Realty is developing on South Side. According to the Builders Exchange Franjo was awarded the contract for a new 44,000 square foot flex building Oxford is developing at 250 Industry Drive in North Fayette Township.

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Indovina Associates Architects’ rendering of the expanded Carnegie Science Center.

Proposals are due this week for the $75-80 million St. Clair Hospital expansion. The parking garage piece of the program has been awarded to Carl Walker Construction. The U.S. Army Corps of Engineers has moved the first project of the $98 million C-17 Bed-down at the 911th Airlift to the active stage. The RFP should go out before Memorial Day for the $18 million program to modernize three hangars. A $36.6 million upgrade to the taxiways and ADAL fule system will follow and a new $44 million 2-bay hangar will be let after that. All three contracts should be inked by end of September.

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Two sophisticated men of the construction industry (Dan Delisio and Anthony Martini) enjoy live music at Six at NEXT, hosted be NEXT Architecture on May 11.

Unemployment Dips

According to Pittsburgh Today, unemployment fell in March from 5.6% to 5.1% over the past 12 months. The bad news was that there were more than 10,000 fewer people in the labor force compared to March 2016. That’s an indication of the power of the demographic challenge facing Pittsburgh over the next five years.

pgh unemployment rate

On the national scene, yesterday’s report on new unemployment claims found 238,000 new claims were filed in the last week, the lowest in 17 years. The national unemployment rate is now 4.5 %

In project news, UPMC selected Turner Construction as CM for the $111 million Hamot patient tower in Erie. Construction is expected next year. CM selection is expected in a few months for the $100 million-plus UPMC South and for the $150 million-ish UPMC Mercy Ophthalmology center.

University of Pittsburgh has been bidding flurry of projects recently. Allegheny Construction Group was low on two projects last week. Allegheny was low on the Frick Fine Arts at $309,000 (although an alternate could flip the job to Facility Support Services) and on the 7500 Thomas Blvd. print shop at $548,500, edging out Rycon at $552,000.

Construction Rescues the Economy

Friday’s report on first quarter GDP was well below economist’s forecasts but hardly a surprise or disappointment (not sure how those two things can be true but…). When you dig into the details you see that without construction spending, the economy would have actually contracted in the first quarter compared to the fourth quarter of 2016. The overall GDP growth number was 0.7 percent but big gains in residential construction (0.5 points) and non-residential investment (1.1 points) added 1.6 points to the growth. The rest of the economy dragged GDP down 0.9 points. Within the non-residential investment number, which includes all business investment, spending on non-residential construction was up 22.1 percent. That means that without construction, the non-residential investment number would have been flat or worse.

Today’s announcement on March construction showed that the first quarter of 2017 was up 4.9 percent over the first quarter of 2016. The $1.218 trillion in spending is the highest on record. The trends represented in the number were consistent with past months. Commercial construction was up 12.7 percent. Public construction was down 6.5 percent.

total us construction spending

St. Clair Hospital’s $75 million expansion and renovation project has gone out for CM proposals to PJ Dick, Mascaro, Massaro/Yates, MBM, Mosites, Rycon, and Volpatt. Pittsburgh Theological Seminary selected Jendoco Construction for precon services on its $10-12 million library project. Volpatt Construction landed the $2.35 million Victoria Hall SIM Lab for the University of Pittsburgh. Rycon Construction is about to start work on the first phase of the $2.8 million Assumption Hall renovation at Duquesne University. Bids are due May 4 for the 21,000-plus sq. ft. buildout for global diagnostics/life science company Perkin Elmer at 250 Industry Drive. Bids are being taken by Neyer, Rycon and Turner.
Pete Dozzi Memorial Service
The family of Peter C. Dozzi invites you to join them on Friday, May 5, 2017 at the Duquesne University Power Center (Charles J. Dougherty Ballroom) 600 Forbes Avenue, Pittsburgh, PA 15282 for a memorial celebration and luncheon beginning at 11:00 a.m. Brief remarks will be presented at 12:30 p.m. Please confirm your attendance by email tociaotp@comcast.net

Updating the Erie Update

The April 14 blog post (Confidence vs. Data) had an error in the project news section. The project for which E. E. Austin is the construction manager is not the $110 million St. Vincent Hospital expansion but rather a smaller, $32 million project at the hospital that had been on hold for half-dozen years. The construction manager for the main project has not been let.

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Interviews for CM services on Erie’s other major hospital project, the $111 million new UPMC Hamot patient tower, will be held Friday. The short list includes PJ Dick, Turner and Whiting-Turner.

Arrividerci, Pete Dozzi

On Tuesday, Pete Dozzi passed away. His death is the latest of the giants of the Renaissance II era in the construction industry. Over the past two years Ish McLaughlin, Don Mosites and Joe Massaro, among others, have also passed on. That’s a lot of pure story-telling gone and some business wisdom too.

Pete’s story is one that wouldn’t happen today. He founded Jendoco at age 27, after the owner of Branna Construction wavered on promises of selling the company to Pete (his description of the events was more colorful). Prior to that confrontation, Branna’s owner had relied on Pete, going so far as to ship him drawings at the military base in Texas where Pete was stationed so that he could bid projects for Branna. It’s inconceivable that an owner would trust a kid just out of civil engineering school with managing a bid today, even if the estimator was in the office next door.

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I had the chance to get to know Pete only in the last ten years. The man had a lot of stories but a few things really stood out to me. He was unbelievably generous and passed that down to his kids and his company. The people who worked for Jendoco stayed. Laborers and executives (including presidents of the company) commonly worked their whole careers at Jendoco. Pete laughed a lot. I’m sure he had a lot of money but he seemed to really appreciate small gestures.

I did business with Jendoco when I owned the Pittsburgh Construction News but we started just as Pete was transitioning into retirement. Jendoco called out of the blue one day to ask how much it would cost to subscribe for one month. We didn’t have one month pricing but came up with something. I remember grousing about it at the time, thinking how cheap Jendoco must be that they couldn’t come up with $200 to try it for 90 days like others had. It was years later that I found out the opposite was true. One of Pete’s long-time friends, Dwight Kuhn, told me that Pete expected Jendoco’s vendors to make money so rather than ask for a month free – like almost everyone else did – Jendoco expected to pay us while they decided whether to use us. Jendoco subscribed after that month and never left us. That was a humbling story to hear some ten years later.

Another delightfully humbling moment with Pete came at a lunch we shared a few years ago. He had invited me to meet with him and his son Dom to discuss an idea for an article Pete thought I should write. I am capable of rattling on and enjoying the sound of my own voice a bit. Rather than interrupt or offend me, Pete waited until I took a breath and said, “I apologize. I haven’t been letting you eat your lunch.” Those are some people skills.

 

Confidence vs. Data

One of the concepts that the Federal Reserve’s FOMC dicussed in its March meeting was that of “soft data” compared to “hard data” in assessing the economy. With inflation rising again and the labor markets tight, the Fed will raise rates slightly at least three time this year, but the Committee made interesting observations about the actual state of the economy versus the perception.

Soft data is the more frequently-updated economic information that is the result of surveys, like consumer and business confidence or business hiring plans. The surveys of this kind – like the University of Michigan’s Consumer Confidence Index – have soared since the election on the expectation that a Trump Administration would lower taxes and regulatory burdens. Thus far, the administration has struggled but consumers and business owners have reflected little of this in their responses.

At the same time, hard data – like government employment or GDP estimates – is showing that the economy is performing pretty much like it has since the Obama Administration and Congress figured out how to play nicely after the 2013 government shutdown debacle. A look at the figure below shows how this spread between data and emotion looks.

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Bidding/contracting news is limited. One K-12 project of note is out to bid, the $14 million Todd Lane Elementary School addition/renovation in Center Valley School District. Massaro has the $2.6 million Johnstown Flood Museum project out to bid, due April 26. Mistick Construction is taking bids on the $30 million Eighth & Penn apartments and Elford Inc. has started construction on the $40 million, 274-unit Village at Cranberry Woods apartments. In Erie, E. E. Austin has been selected as CM for the $110 million Allegheny Health Network renovation of St. Vincent Hospital.

A Lull in the Action (We Hope)

Bidding activity, at least measured by the construction reports, has slowed somewhat since February/March. This is something akin to what happened last spring (and last fall), which took a lot of wind out of the sails for the construction market. It’s possible that the instability of the new administration has made owners cautious, after the optimism from the election faded; however, the more likely explanation is simply that architects haven’t been able to produce bidding documents after the flurry a couple months ago. That’s a more optimistic theory anyway.

Start activity hasn’t seen the same lull. Mosites Construction was awarded the $30.3 million Liberty Tunnel Phase 5. Burchick Construction was awarded a contract for $2.4 million in exterior renovations to UPMC Heritage Place. East Liberty Presbyterian Church selected Landau Building Co. for its $5 million renovation. In the bid market, Bechtel is taking design/build proposals for the railroad buildings at the Shell site from Mascaro/Trumbull Energy, Fay, Turner and a couple of out-of-town contractors. Burchick, Al. Neyer and Franjo are putting in design/build proposals for Oxford Development’s second building at 250 Industry Drive, a 44,000 square foot flex building.

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Jared Pohl, project architect for Pfaffmann, talks about the extensive millwork and finish detail at the Benter Foundation offices in the Benedum Trees Building at a tour on April 5. Jendoco Construction’s CEO, Dom Dozzi, looks on at right.