Category Archives: Construction news

The Wave is Building

This morning’s announcement from Allegheny Health Network is but the latest in a string of major construction project announcements over the past few months. Unlike some of the other, however, the AHN projects should be moving quickly. For contractors trying to maintain capacity (and build backlog) ahead of the growing wave of construction coming in 2018 and beyond, that’s welcome news.

The details: a new 160-bed hospital will be built in Pine Township next to the Highmark Wellness Pavilion in Wexford. That project, which should run $300 million, is slated to start in mid-2018. AHN expects to put out RFP’s for design and construction management within a few weeks. AHN also announced a partnership with Emerus, a Dallas-based developer/operator of “micro-hospitals” to build community hospitals throughout the AHN footprint. There will be four such micro-hospitals initially, one each in the north, south, east, and west suburbs. In other similar markets, Emerus facilities have been in the 40,000 square foot range.

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Rendering of the new 160-bed hospital in Pine Twp. by Allegheny Health Network.

The AHN program amounts to a $700 million expansion of its facilities. Some of that expansion includes projects already awarded, including the new cancer center in Butler, which was awarded to the design/build team of Mascaro and Stantec.

Another wave that is building is the follow on to Shell’s cracker, under construction in Beaver County. Multiple plastics companies have been in the market looking for sites for new manufacturing plants of between 60,000 sq. ft. and 150,000 sq. ft. At Starpointe, near Burgettstown, Scannell Properties has begun work on a 507,000 sq. ft. distribution center, which is rumored to be for Shell. ARCO/Murray National Construction is building that facility. In other logistics news, Al. Neyer has begun construction of a 220,000 sq. ft. Class A distribution center in Jackson Township near Zelienople and a major retailer is reported to be looking for a site for a million sq. ft. distribution center in Western PA.

In other project news, Carnegie Library of Pittsburgh awarded a contract to Massaro Corporation for its $3 million Carrick Branch. Landau Building Co. was selected by WVUH for the $3 million Ruby Hospital OR. PennDOT awarded Beaver Excavating an $87 million contract for the next phase of the Southern Beltway.

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HB 409: A Bad Compromise

After putting forth two dawdling bills to update Pennsylvania’s building code adoption process, the legislature moved like lightning yesterday to unexpectedly pass House Bill 409 (read the bill here.) The bill had only one “nay” vote but that shouldn’t be viewed as an indication of its quality.

Neither proponents nor opponents of the bill were thrilled about it. HB409 was necessary because PA continues to use the 2009 code, a version which would no longer be supported by the International Code Council (ICC), and because its adoption process was terribly broken. PA’s Uniform Construction Code (UCC) is adopted by a review committee that is politically-appointed and has rules that make revising and adopting the updated ICC provisions onerous. HB409 sets rules about adoption of the 2015 and some of the 2012 standards, and helps to fix the rules for adopting future revisions. There are problems. The legislation extends the mandatory review of the UCC from every three years to 4.5 years. The ICC updates building codes every three years, meaning PA can ignore ICC updates until the succeeding update is halfway completed. In two cycles, PA will be three versions behind again. HB409 also continues the mandate that no municipality (except Philadelphia) may opt to adopt higher standards in lieu of the UCC.

It’s important to remember that the UCC is not a best practices document. Building codes are minimum standards. In the case of life safety, you would hope that those minimum standards are more rigorous than, say, the standards that UCC has for energy; but the code is something less than cutting edge. Because of PA’s ponderous process, the current UCC – 2009 standards – includes processes and technologies that were in place when the review for 2009 began in 2006. That means technology entering the market in the past decade doesn’t meet PA codes. HB409 will help with that but the next mandated review will be in 2022 so technology developed since the 2015 review process began in 2012 won’t be included until it is a decade old.

For Pittsburgh, the worst part of the legislation is that it denies municipalities the option to adopt newer codes. Because of Philadelphia’s overwhelming lobbying and political clout, that city won exemption; but Pittsburgh did not. Many of Pittsburgh’s commercial buildings are already being built and renovated to standards that far exceed PA’s UCC but the city misses out on the opportunity to codify higher standards for energy, water and life safety. Reaching a middle ground gets legislation passed (and there’s very little of that going on) but it doesn’t move the Commonwealth forward.

Very little project news: Penn State selected Clayco as design/builder for its $35 million West Campus Parking Garage at the Hershey Medical Center campus. Allegheny Health Network selected the Mascaro/Stantec team to design and build its $15 million, 30,000 square foot cancer center in Butler.

 

UPMC South & Other Hospital News

The story that started leaking out Thursday afternoon – that UPMC was abandoning its plan to locate a $220 million hospital at Newbury in South Fayette – should not be misconstrued as a negative sign about the healthcare construction market. UPMC is re-thinking its five-year capital plan but still expects to invest $900 million over the next five years.  Thus far, the decision to scrap the South Fayette facility has not altered plans to build the Vision Institute on the Mercy campus, expand Children’s Hospital or build some sort of new facilities in the South Hills. And construction to meet pent-up demand is booming in other healthcare facilities

UPMC is still continuing its investment at the former Jameson Hospital in New Castle and building the $111 million tower at UPMC Hamot in Erie. The Allegheny Health Network is taking design/build proposals for a new 30,000 square foot cancer center in Butler from Jendoco, Graziano, Mosites, Mascaro, Allegheny Construction and A. Martini & Co. AHN is also bidding a 30,000 square foot, $16 million cancer center at the St. Vincent campus in Erie. PJ Dick, Turner and Austin are known to be bidding that project.

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Representatives from the city, county, Oxford Development and Argo AI (among others) were present for Tuesday’s announcement that Oxford’s Riverfront West building would become Argo’s headquarters. Rycon Construction has started work on the building.

Massaro CM Services put three State College Area School District elementary school projects out to bid, due October 10. The budget for the projects is $55 million and the district is taking bids on each or all three combined. The bids should be a good early barometer for how competitive it will be in the K-12 market as contractors build backlog for 2018.

News for the Long Weekend

Most years, the Labor Day weekend brings the realization that the building year is starting to wind down and there follows a flurry of activity. This year that realization either came early or else just the flurry. From amongst the RFP’s for CM services that have been bouncing around, Pitt selected PJ Dick to build its $26.5 million life sciences building at UP-Greensburg campus. PJ was also successful on the $16 million Vincentian Sisters’ independent living facility in McCandless. In Erie, AHN awarded a contract to Massaro Corp. for a fast-track renovation to its 40,000 square foot birthing suites.

This morning, the Census Bureau released two of its monthly economic indicators, both of which showed the economy to be helathy and steady. Construction spending in July hit $1.2 trillion, an increase of 1.8 percent over July 2016. Government data on employment growth was announced this morning also. Non-farm payrolls grew by 156,000 jobs in August. That was below the expected 170,000 jobs forecasted by economists but still a healthy increase given the tight labor supply. Since January 2017, job creation has averaged 177,000 monthly. That’s a sign of employer health and optimism, especially in light of how late in the business cycle the U.S. economy is.

Don’t Count Out Multi-Family Yet

To be clear from the outset, multi-family construction in Pittsburgh pales in comparison to most major cities (or even Columbus). Our boom of 3,227 units started in 2013 would be an average month in Houston or LA. But, compared to an average of 731 units annually for the previous 15 years, 2013 (and the last three years) have seen a surge in apartment construction.

Like in the rest of the country, lending and investing appetite for multi-family has cooled in Pittsburgh. Rents have stopped growing. Vacancies are rising. This is very normal following a time of increased construction and, in fact, the occupancy levels have been ticking up again in recent months. What is interesting is that senior living is picking up where apartment development dropped off. Since the start of 2016, almost $300 million in new senior living projects (representing about 900 units) are under construction.

Graziano has started construction on the 128-unit Residence at Whitehall project (pictured below) and Lecesse Construction is building the $30 million expansion of the Friendship Village campus in Upper St. Clair. Work is well underway on Continental’s project, The Waters in Marshall (plans are moving for one in Peters as well). Approvals have been received to start the $23 million Stonecrest of Pittsburgh in McCandless, which will be built by BRIDGES & Co.

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Rendering by Graziano Development & Construction

In project news, CORE Realty is taking bids from subcontractors on the 174-unit apartment, The Chatham Center, a $20 million-plus conversion of eight floors of One Chatham Center. DGS selected Mascaro Construction, Renick Brothers, Shipley Plumbing and Westmoreland Electric as the best-value team for the $43.8 million Tippin Gym project at Clarion University. A. Martini & Co. landed the $3 million Fogo de Chao restaurant in the Oliver Building. Turner was selected for the $5 million Bio-Tech Vivarium renovation at Pitt’s Second Avenue research facility. UPMC is in talks with CMs for its major projects at South Fayette, Jefferson Hills and UPMC Mercy and Children’s campuses. Construction manager J. E. Dunn is in the process of qualifying contractors for the trade packages on Trinity Hospital’s $60 million new bed tower in Steubenville.

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.