Cracker Progress Report

For all the talk about the impact of the ethane cracker Shell is building, there hasn’t been much of an update on the construction in the press. If you have driven by it this summer you may not notice much of a difference, at least to the naked eye, but there is significant progress nonetheless. A massive concrete pour is well underway. Champion Concrete’s batch plant up the Ohio is producing non-stop and there are more than 200 ironworkers on site to handle the rebar tying for what is the pad for the billion dollar process plant to be floated up river from the Gulf of Mexico.  The site will see mostly horizontal construction in 2017 but construction of related buildings will begin in about a year. Right now Great Arrow Builders has a package that includes and administration building and medical/fire station facility totaling about 84,000 square feet out-to-bid, due Aug. 18. A lab building was also just released to bid Sept. 14.

There was an interesting spotting of an autonomous research vehicle on McKnight Road last week that is not an Uber car. The Ford pictured below uses different Lidar/capture technology than Uber’s. Since Ford is a billion-dollar investor in Argo AI, I assume this is one of their vehicles. No announcement of where Argo intends to locate its 120,000 +/- first offices has been made yet.

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In other project news, BRIDGES & Co. was awarded the $12 million Northland Heights senior living facility, which is the conversion Hamister Development is undertaking of a former hotel on McKnight Road. PJ Dick’s special projects group started construction on the $3 million Keystone Shooting Center in Marshall Township. Massaro was awarded the $4 million Mercy Hopsital central sterile facility. Massaro was also selected as the CM for the $26 million AGH Cancer Institute project. IKM was chosen as the architect.

Condos Instead of Offices

Thursday the Parking Authority chose the Davis Companies’ team for the development of the 9th and Penn corner Downtown. The plan is for 185 condos and commercial/retail integrated into a 900-plus-car garage. The Authority chose Davis over competing proposals from Millcraft and Oxford Development. The proposal from the latter apparently involved an mid-rise office tower similar to the one Oxford had proposed for 350 Fifth Avenue and involved a 250,000 square foot tenant that needed construction to start immediately.

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Rendering by AE7 Architects

AHN short-listed the competitors for construction management of the $25 million cancer institute at AGH to Mascaro, Massaro, PJ Dick and Rycon. Mid-Atlantic Capital is taking final bids from P2 Contracting and Franjo Construction for the build-out of Stonehaven Brewing & Restaurant, a $4 million renovation of the former Spaghetti Warehouse. CDC is reporting that Dinsmore & Shohl picked A. Martini & Company for its $2 million tenant improvement at 6 PPG Place.

The Pipeline Continues

Earlier this week Burns & Scalo Real Estate announced its plans for a 150,000 square foot office – called The Riviera – in the Pittsburgh Technology Center. That office park is getting an interesting boost from the new Hotel Indigo that is under construction.

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Rendering of The Riviera by NEXT Architecture.

City Planning Director Ray Gastil believes that the hotel will bring a change in dynamics to the PTC and spark development of other types of properties. The city’s planning commission is looking at two other projects of interest this week. Walnut Capital submitted plans for a $6 million renovation to a former car dealership building at Craft Place and the Boulevard in Oakland. PJ Dick is the project’s contractor. And Matthews International revealed its plans to add 18,000 square feet and renovate its North Side headquarters. Turner Construction is the CM for Matthews.

In project news, Massaro Corp. was awarded the $3 million new entry at UPMC Presbyterian University Hospital and the Mercy Hospital ERC behavioral health projects. UPMC will have the economic impact report for its $180 million UPMC South presented to South Fayette Township supervisors tonight. Proposals for the CM services should go out after the township approves the project later this summer.

University of Pittsburgh is taking proposals from Mascaro, Turner, A Martini, PJ Dick, Volpatt, and Rycon on its new $26.5 million life sciences building at the Greensburg campus. St. Clair Hospital will release its $10 million-ish physical plant building for bids again by the end of the month.

 

PTT Steps to the Plate

The recent North American Petrochemical Construction Conference was held in Pittsburgh a couple weeks ago and there were plenty of pronouncements about the beginnings of the plastics and chemicals industries building out in Pittsburgh. The problem was there were few specifics to support the assertions. Maybe I’m still accustomed to the other shoe dropping but without some logical argument as to why the industries should locate strategic manufacturing assets here, I was unmoved by the PR coming out of the conference.

This morning came news that Thai-based PTT had exercised its option to buy the 168-acre site on the Ohio that has been proposed for construction of a second ethane cracker in the Marcellus/Utica region. The site was the Burger First Energy power plant and has been getting a demo and cleanup that JobsOhio has funded to the tune of $14 million. PTT had auditioned Fluor and Bechtel last year to provide preliminary engineering and budget estimates, with the intention of making a final investment decision in January 2017. Instead of pulling the trigger, PTT deferred the decision until late 2017. That was a cause for concern, although Shell delayed their FID several times and still moved ahead.

This morning’s news is another bit of affirmation that inertia for the petrochemicals industry is building in the Appalachia. Understand that a $13.8 million land buy won’t assure that PTT makes the FID soon or even goes ahead with the project, but it’s comforting news nonetheless. You can read the Pittsburgh Business Times story here.

Contractors seem to be comforted by Pittsburgh’s market conditions since the first quarter. The Master Builder’s Association’s C3 Index – a reading on commercial contractors’ sentiment about the market – showed big improvement in the second quarter. The MBA’s Eric Starkowitz released the C3 Index on July 1 and reported that a significant increase in backlogs had raised expectations about the future.

765ae82b-beeb-4a43-a990-42ea54c67cfd-largeOne significant project that has made news in the plastics industry is Ensinger Plastics’ expansion. After South Strabane Township officials hamstrung Chapman Properties’s development of Southport, where Ensinger was to locate, the manufacturer shifted plans and will add 214,000 square feet at its existing North Strabane location. The construction cost should still be in the $20 million-plus range. Ensinger is taking bids from Franjo, Bear Construction and Fairchance Construction in mid-July.

Opportunities in a Quiet Market

The bidding market has slowed noticeably as July 4th approaches but there are still opportunities, especially for the subs and suppliers.

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Rendering by Desmone Architects of the Doughboy Square II expansion.

Last week the city gave Desmone Architects approval for a $7 million expansion of its Doughboy Square offices. Jendoco Construction will be the contractor and is awaiting final drawings to price. A little further up Butler Street, the Capuchin Friars gave the nod to Rycon Construction for a new $11 million, 55,000 square foot residence and assembly building.

Burchick Construction was awarded the $28 million 135 Jamison Lane expansion for Bechtel Plant Machinery in Monroeville. AIM Construction was awarded an $8 million renovation to the 6th floor operating rooms at Butler Memorial Hospital. Franjo Construction was awarded the $7 million, 100,000 square foot Robinson Township CubeSmart Self-Storage by Johnson Development Associates. Zamagias Properties selected PJ Dick to build the $6 million, 26-unit Sewickley Lofts.

Artech Group is the owner’s rep taking proposals from A. Martini & Co., Enfield  Builders, Rycon Construction, Volpatt Construction and Wohlsen Construction for the $20 million Laurel Valley Treatment Center in New Florence, PA. In the public market, DGS is taking bids on the $20 million Miller Auditorium at Slippery Rock University. Massaro CM Services put the $12 million Acmetonia Elementary School out for separate prime bids. The Builders Exchange has more details.

Healthcare Project Updates

Yesterday’s announcement by Highmark and Allegheny Health Network about the expansion of its cancer treatment added another significant project to the list of major hospital projects. In addition to the expanded partnership with Johns Hopkins, AHN reported that it would be building a new academic cancer institute at the Allegheny General Hospital campus, as well as suburban cancer treatment centers.

The AGH facility is to be a 59,500 square foot expansion with significant related renovations to the hospital. Costs for the project could top $50 million. The development of suburban centers are part of the overall healthcare trend to move treatment into the communities where patients live. AHN explained that these centers will be removed from the AHN system hospitals themselves, which will also receive renovations to upgrade cancer treatment facilities. Estimates of the capital spending for this cancer initiative are $150 million. Work is scheduled to start on the AGH facility by end of year. The target for completion of the overall cancer institute expansion is the 2019 expiration of the AHN/UPMC Hillman Cancer Institute agreement. No architects or contractors have been engaged for the specific projects, although IKM Inc. has been involved with AGH’s institutional master planning.

In other hospital construction news, PJ Dick was chosen as construction manager for St. Clair Hospital’s $80 million expansion. The agreement covers preconstruction services that will be done during the next year.

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Members of CREW Pittsburgh gather at Local on East Carson Street after the chapter’s Escape the Room teambuilding events on June 13.

Tight Bids and Pension Reform

Although there is a little bit of a seasonal lull in bidding as June begins, there is plenty of activity in the Pittsburgh construction market. The brighter prospects, however, haven’t materialized in the public hard-bid market yet. Two projects that bid this week illustrate the market well. First, in the heavy/highway sector, Golden Triangle was low on the Airport Authority’s bid to replace Deicing Pad C at the airport. At $21,934,890, the low bidder was 0.5% under the next bidder. Canon-Mac took bids on its high school that saw Lobar Inc. (from Dillsburg/Mechanicsburg area) get low at $9.3 million, a little more than 1% below the third bidder. Both projects were well under the published budget. Public spending shows no signs of significant increase through 2018, meaning the market should stay tight. How that changes in a tightening labor market remains to be seen.

A public pension reform law went to the governor for signing today. It’s gratifying to see both sides of the aisle collaborating on this critical issue, but the finished product trims only $1.4 billion from the pension outlay over the next 20 years. It does shift more of the risk of pension shortfall to pensioners instead of taxpayers but leaves unanswered the question of how to manage the $60 to $70 billion unfunded pension balance that exists. That means that school districts and the Commonwealth will continue to have pension costs drag against capital investment.

In project news from Harrisburg, the General Services Administration is taking RFP’s on the $150 million federal courthouse now. Closer to home, the Pittsburgh Parking Authority has apparently short-listed three development teams – Oxford/PJ Dick, Millcraft/Mosites and Davis/Mascaro – for its 1,000-car 9th & Penn garage replacement/mixed-use development. Shannon Construction is working as general contractor for the announced $7 million renovation of the Arts Institute building on Boulevard of Allies.