Category Archives: Construction news

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.

9241205_G

 

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.

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.

morgan-data

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.

20170405_105158

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.

Hospitals and Jobs

Both the major Pittsburgh hospital systems have signaled an increase in spending in 2017 and the push has really begun throughout the market. Proposals are due Friday for CM services on the $111 million UPMC Hamot patient tower. RFP’s went to PJ Dick/E. E. Austin, Mascaro, Massaro/Gilbane, Turner and Whiting/Turner. RFP’s for the $75 million St. Clair Hospital project are due out by next week and RFP’s for the new 280,000 square foot, $180 million UPMC South Hills hospital at South Fayette’s Newbury Market should follow right behind. You can read more about the hospital construction market in the March/April BreakingGround digital edition.

In other project news, BRIDGES & Co. was awarded the $4.5 million expansion of Prominent Fluid Controls Building 2. Massaro Corp. was selected for a $5 million renovation project by UPMC at the Kaufman Medical Building in Oakland. Pittsburgh Theological Seminary is taking proposals from Facility Support Services, PJ Dick, Jendoco and Mosites for renovations to its library, a project in the $10-12 million range. Corcoran Jennison is taking bids April 15 for the 2nd phase of the Oak Hill neighborhood, the 140-unit Brackenridge Apartments. The contractors bidding the $24 million phase are Arcon Construction, Fairchance, Graziano, Jendoco, Mistick and PJ Dick/Waller.

pgh change in employment

Employment growth since 2013 has been well below February’s 10,000-job pace.

The Department of Labor released its estimates of metropolitan job growth in February and Pittsburgh came in below the benchmark average of two percent, with 10,000 more jobs than in February 2016. That’s a 0.9 percent bump; not great but four times the average annual gain for 2014-2016. The forecast is that the rejuvenation of the gas business will be a booster – rather than a drag – for the tech and finance job growth in Pittsburgh this year.

Campus Advantage Moves Ahead

After months of pricing the new $40 million Campus Advantage student apartments at 3407 Forbes Avenue have a contractor. Rycon Construction was selected this week to build the project, which includes 197 apartments and 489 beds.

dt.common.streams.StreamServer

In other project news, Mosites Construction was awarded a contract for $3 million in renovations to Blackington Hall, Buckhorn Lodge and Sunset Lodge at Pitt-Johnstown. A. Martini & Co. is building out Rocky Patel’s BURN Cigar Bar on the North Shore. Penn State awarded PJ Dick a contract for a $5 million parking garage expansion at its Erie campus.

33478069295_b4e96b1b62_z

A. Martini & Company’s Katie Stern (left) and Mike Larson-Edwards flank Katey Andaloro from Jendoco at the MBA YC Kickoff at Olive or Twist.

 

 

This Week’s News

On Tuesday, PA’s Commonwealth Court reversed an earlier decision by an Allegheny County court that found that the West Jefferson Hills  School District (along with others) had willfully violated the PA Separations Act by including the site plumbing for the new $73 million Thomas Jefferson High School in the site package instead of the plumbing. That appeal by the District, Nello Construction and the Laborers union aimed to reverse a decision in favor of the proejct’s mechanical contractor, Wheels Mechanical.

In reversing the Allegheny County decision, Commonwealth Court based its opinion on the doctrine of laches, which essentially meant that Wheels waited an unreasonable time before bringing its complaint. Because Wheels did not raise the issue during bidding or the first six months of construction, the Court decided its claim should not stand. What was left undecided was the issue of whether separating the plumbing beyond the perimeter of the building was a violation of the Separations Act. That battle will have to come another day.

In infrastructure news, the Southern Beltway Section 55c1-1 went out to bid, due in mid-April. These sections have run between $50-70 million each. Uber selected the design team of IKM and CJL Engineering for its next expansion, a $10 million buildout of 120,000 square feet in the Crucible Building in the Strip. Poerio Inc. landed a $33 million expansion of the FedEx Ground facility in Olive Branch, MS. Pitt selected Turner Construction as CM for its $4 million Scaife Hall Phase 1B project. McKnight Realty Advisors selected Allegheny Construction Group as contractor for the renovation of the Terminal Building (aka Riverwalk Corporate Center) in South Side, an 800,000 sq. ft. former warehouse. And the SEA awarded a contract to Massaro CM Services as its agent for the new 9th and Penn Garage. The 700- to 1,000-car garage will be one piece of the multi-phase, mixed-use redevelopment of two blocks in the Cultural District that is currently out for development proposals. The garage piece should run in the $20-25 million neighborhood.

Commercial Market Update

This morning’s NAIOP Pittsburgh chapter meeting featured a distinguished panel of commercial real estate veterans discussing the state of the market. Lou Oliva from Newmark Grubb Knight Frank, Jason Stewart from JLL, Herky Pollock from CBRE and IRR’s Paul Griffith had generally upbeat things to say about the market in 2017. Notably, the apartment market inspired caution and the growing appetite of investors outside the city was raised up as a big influence on the market. None of the four were particularly concerned about interest rates impacting values in 2017 but all expected the increases to continue.

The brightest segment of the market seems to be industrial. Oliva mentioned that some 800,000 sq. ft. of spec industrial space had been delivered into the market in 2016, with more than 500,000 sq. ft. already absorbed. Here again, the largest deals all involved out-of-town developers.

img_7765

(From left) Lou Oliva, Jason Stewart, Herky Pollock and Paul Griffith update the audience on the real estate market at NAIOP Pittsburgh’s meeting Feb. 16. Photo by James White Media Production

In addition to the industrial deals mentioned this morning several large projects in the pipeline. Buncher has increased its land stake at Findlay Industrial Park, with the ability to build another 100,000 sq. ft. beyond the 80,000 sq. ft. under construction. Al. Neyer will be building a 200,000 sq. ft. warehouse in Jackson Township near the PMF Trailer facility. Castlebrook Development and Wesex Construction are in the planning stages of the Turnpike Distribution Park in Beaver County. Site plans for that call for 3-5 buildings totaling more than 900,000 sq. ft., including two 400,000 + sq. ft. buildings.

In other news, Rycon Construction was selected for McGuire Woods’ $4 million TI at Tower Two-Sixty. East Liberty Presbyterian Church shortlisted Jendoco, Landau and A. Martini & Co. for its $5 million renovation.