Category Archives: Construction news

Miscellaneous…

Pittsburgh Homebuilding Report issued its research on the housing market in the six-county metro area this week. The report was unsurprising in that year-over-year growth in single-family detached homes was muted by lot inventory to 4.4%. There was a steep decline in multi-family starts but that is more a matter of timing than a change in direction of the market. With what is in the pipeline, it is expected that permits for apartments/condos will reach the 2,000 units mark again in 2018. The surprise was the 36.1% drop in attached single-family permits. This segment of the market has grown steadily over the past decade, as demographics and topography made townhouses and quads more desirable. This category has produced roughly 900-1,000 units during recent years. It’s unlikely that there will be a two-fold jump in townhouse construction during the last six months. Overall, the market was off by almost 800 units, or more than 30%.

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One of the major projects in the apartment pipeline, the second phase of the Riverfront development being built by NRP, is out to bid for subcontractors, due July 27. According to the description at the NRP Construction website this phase will include 442 apartments in two buildings, plus a 544-space garage. In today’s market, that should be in the $55 million range.

Turner Construction was selected as construction manager for the $240 million UPMC Hillman/Shadyside Hospital expansion. That wraps up the CM selections for the major UPMC capitol program. To recap: PJ Dick/Whiting Turner will build the Transplant and Heart Hospital at Presbyterian. Mascaro/Barton Malow is CM for the Vision and Rehabilitation Hospital at Mercy. Rycon/Skanska will build the UPMC South Hills Hospital.

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The Cracker is Booming

If you haven’t driven by the Shell Franklin site in Monaca lately, you should. The beehive of activity is impressive. Maybe more impressive is the fact that 1,700 workers are on site at the moment but that will more than triple by this time next year.

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Count the cranes from the Ohio River.

In project news, Allegheny County Airport Authority selected Jacobs as program manager for the $1.5 billion Terminal Modernization Program. The A/E team is expected to be selected at the July board meeting. University of Pittsburgh selected PJ Dick for its $80 million addition and renovation to Scaife Hall. UPMC short-listed Turner Construction and the Mascaro/Barton Malow team for the $280 million Hillman/Shadyside expansion. PJ Dick’s Special Projects Group was awarded the $9 million CM-at-risk contract for the Botanical Gardens in North Fayette. St. Clair Hospital awarded Mascaro the contract for the new $16 million central utility building. Phipps Conservatory is taking proposals from Jendoco, Massaro, PJ Dick, Rycon and Sota on its $10 million garden center project.

PA Budget Passes: Not So Great for Construction

As expected, the Commonwealth’s legislature passed a 2018-2019 budget yesterday, sending to the governor a spending bill that creates a surplus for the Rainy Day Fund without raising taxes. The budget also increases funding for education and, specifically, props up the ailing PASSHE system schools. In a gubernatorial election year such cooperation was expected, but the healthy bump in revenues through five months (that is expected to continue into 2019) made the budgeting process smoother.

For the construction industry, however, the budget is a continuation of the under-investment that has marked the Corbett and Wolf administrations, which saw Republican majorities in the state houses. The new budget does nothing to fix PlanCon, contrary to promises made by members of the advisory committee for the reform of the K-12 reimbursement mechanism. There is also less funding for capital projects statewide. And nothing was done to address the looting of the funds generated by the gas tax increase in Act 89 of 2013. That highway bill was designed to add $3.5 billion to annual bridge and highway funding by 2019 but more than $700 million has been “appropriated” to make up a gap in state police funding. The gap is due to PA State Police patrols of communities that cannot afford local police forces.

The PlanCon situation is particularly troublesome for the industry, because the system has been under a moratorium since mid-2015. Projects not already well along with the design process at that point have been stuck in PlanCon purgatory since. Some districts have found ways to deliver projects without the additional funding that PA would provide by reimbursement, but some unknown number of capital programs will remain stuck through at least mid-2019.

New Castle School 005Funding for projects already in the process has been allocated, which is some good news. Firms involved in public construction hoping for improvement in the coming year got little other good news yesterday.

The Work Keeps Coming

Breaking news of project awards in the past 24 hours highlights the breadth and depth of the Pittsburgh market in 2018.

Imperial Land Corp. closed on a land sale June 14 that was a big win for Western PA. Niagara Bottling LLC purchased 42.6 acres in Findlay Inustrial Park to build a 454,000 square foot bottling plant. Choate Construction from Charlotte, NC will build the plant.

In higher education, Carlow University selected Franjo Construction to build its $8 million St. Joseph Hall project. Thomas Construction from Grove City was awarded the $2 million second phase of the Hoyt Science Resource Center at Westminster College.

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The Arrott Building will become an Autograph hotel.

Continental Building Co. will start work soon on the conversion of the Arrott Building at 401 Woods Street into a 120-room Autograph boutique hotel. The $19 million project invloves a complete gut and rebuild of the 78,000 square foot historic Frederic Osterling building.

Construction Employment Tops 2008

Digging into the weeds of the April employment reports, AGC reported on the metropolitan-level construction employment levels compared to the previous April peak and trough. Pittsburgh had 57,100 workers employed in construction in April 2018, 400 more than the peak in April 2008. Pittsburgh was one of only two PA metros (Altoona was the other) that had exceeded its previous peak employment level.

There was an interesting comparison of data that illustrated just how much better Pittsburgh fared in the last recession than other PA cities. In April, the new Pittsburgh level was 16% above the trough, the low point of 49,700 in April 2011. Compare that to Philadelphia’s suburban metro, which saw construction employment plunge to 38,900 in April 2011. Today, suburban Philadelphia employment still lags its 2008 peak and has but 1,000 more workers employed than Pittsburgh.

In construction news, Burns & Scalo Real Estate is excavating the site for its $35 million, 160,000 square foot Riviera office building (see below). The Riviera is being built 100% spec, although rumors of an anchor tenant swirl. Burns & Scalo is banking on the burgeoning tech industries and the proximity of Pittsburgh Technology Center to attract tenants as construction proceeds.

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The University of Pittsburgh is seeking Predetermination of Responsibility responses on June 20 for its Salk Hall Phase 2 renovation. This is the prequalification for contractors interested in bidding the four prime contracts for the $40 million project. The bidding will go through DGS but will be limited to the contractors Pitt approves through the PDR process. Read more about the PDR here.

Now, To Build It

With Memorial Day passed, the construction industry is moving into its busiest season. Colleges have graduated and schools are about to let out for summer. Construction in Western PA is ramping up and the pool of labor has already “ramped” up. Hiring in the Pittsburgh MSA was reported last week as up 14,000 jobs April-over-April, an indication that the 1.5% employment growth is sustainable; and construction hiring helped lead the way.

Peters Township School District meets tonight to vote on contracts for the $89 million new high school. Low bidders for the electrical and HVAC withdrew their bids, making for more alternate decisions than expected. The Builders Exchange reported that Franjo Construction was awarded the $6 million expansion at Rose Plastics in California. UPMC is taking proposals from PJ Dick/Rycon, Mascaro/Barton Malow, Turner Construction and Massaro/AECOM Tishman on it $280 million expansion of Hillman Cancer/Shadyside Hospital. The Allegheny County Airport Authority has short-listed teams for A/E services and program management on its $1.1 billion Terminal Modernization Program. Finalists for A/E services are AECOM, Corgan/Michael Baker, Gensler/HDR and luis vidal + architects/CannonDesign. The program management finalists are AECOM, Jacobs and Parsons Transportation. Walnut Capital is bringing its final plans to the city for approval this week for Bakery Square 3.0, the rumored future site of Phillips. PJ Dick and Strada Architecture are the team working on the 328,000 square foot office building and 794-car garage.

Combined-Cycle Disruption

Even as construction on Tenaska Westmoreland winds down and work is underway on three other combined-cycle plants in Southwestern PA, market forces are disrupting the power generation industry again. Headlines suggest that coal-fired generation is dead but a number of coal-fired plants that had invested in becoming EPA-compliant still operate. Moreover, the cost basis of most of these plants have been amortized, which means they can be cheap bidders on the energy grid supply auctions. With costs rising for construction of new gas-fired plants, this cheap supply dynamic is beginning to stress the pro forma for future combined-cycle plants. Projects like the $350 million, 550MW Invenergy plant in Elizabeth or Ray Bologna’s $420 million, 651MW project near Burgettstown will be harder to pencil out. The results of the 2021/2022 PJM capacity market auction, which closes May 16, will be an indicator of how tight the market will be, and how feasible the additional plant capacity is.

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Tenaska Westmoreland plant in South Huntingdon Township.

Another of Downtown Pittsburgh’s large adaptive re-use projects is out to bid. Arbor Construction – the construction management arm of Stark Enterprises – is taking bids on renovations to the former 441 Smithfield Street office building, now branded as Icon on Smithfield. The 220,000 square foot building was originally a department store that Stark Enterprises is proposing to adapt to apartments on the upper floors with about 60,000 square feet of retail/dining on the first two floors.

Mascaro Construction was selected as CM for the Health and Fitness Center at Carnegie Mellon, a $45 million renovation of Skibo Hall. RIDC awarded the second phase of Mill 19 to Jendoco Construction. The $12.4 million, 90,000 square foot building should start later this year. Carlow University has its $7 million St. Joseph Hall project out to bid to FSS, Franjo, Massaro, Mosites, Rycon and Volpatt. St. Clair Hospital has short-listed Mascaro, Massaro and Volpatt on its $15 million central plant project.