I got an interesting call yesterday from the local Federal Reserve Bank office asking about the impact of Hurricane Florence on the construction industry. They are trying to figure out the economic effect of the storm. The short answer is that it’s too early, of course, but history gives a little insight into the aftermath. Ike, Katrina and Harvey were similar storms in that they brought massive amounts of water damage. That means much of the damage is uninsured and more difficult to quantify. That also means that the rebuilding will likely stretch out over several years (or longer).
What is different now from 2017 or 2005 is the lack of capacity to rebuild. For building materials, supply is already limited for what will be in highest demand, like lumber, plywood, drywall, and construction equipment. That means there will be price increases, but, with little slack capacity, the availability will be a bigger factor. The same is true for labor. It will take tens of billions to rebuild and repair the flood damage but there will only be so much that can be rebuilt without skilled workers. The winter slowdown in northern cities might provide some labor force, but there is enough construction that there may not be many layoffs this winter. That will certainly be true of Pittsburgh’s construction workforce.
The guess here is that – like with Katrina – the reconstruction in the Carolinas will be stretched out over a number of years.
In project news the Builders Exchange reported on a project that the Turnpike Commission is requesting prequalification to bid. The Southern Beltway maintenance shops are budgeted in the $25 million range and based upon history should go out to bid in the month following the Oct. 24 prequalification due date.
Pittsburgh’s construction industry lost a great guy on Monday. Brian McKay passed away after battling ALS for the past year or so. Brian owned AMB Plumbing & Excavating and was incredibly involved in the industry, serving the Mechanical Contractors Association and the Builders Exchange for many years. He was past president of the MCA and the current president of the PBX board. Brian was a man who quietly helped a lot of people out over the years. He will be missed. Visitation will be held today and tomorrow at Schellhaas in Franklin Park. The details are in Brian’s obituary.
Pittsburgh-based general contractor PJ Dick-Trumbull-Lindy Paving has announced a leadership succession plan on September 7. The board of directors has approved the transition of Chief Executive Officer Clifford R. Rowe Jr. into the role of Chairman of the Board, effective January 1, 2019. At that time, Jake Ploeger and Tim O’Brien will be promoted to Co-Chief Executive Officers.
(From left) Tim O’Brien, Cliff Rowe and Jake Ploeger.
In project news, Massaro Corp. is taking sub and supplier bids on its $4 million First Tee project at the Schenley Park Golf Course on Sept. 21. DGS awarded contracts for the $16.4 million new PA State Police headquarters in Greensburg. Leonard S. Fiore Inc. was the successful general construction contractor.
The construction industry lost one of its quiet leaders December 7. Dwight Kuhn passed away at home yesterday. Dwight was a fixture in the industry and one of the rare people who was willing to stay in the background. He was also one of the classic American success stories. Dwight married his high school sweetheart, Kathy. He joined Jendoco Construction right out of school, at age 18, and worked for them for 44 years, retiring as president in 2013. Dwight was a big part of the successes Pete Dozzi had building Jendoco and served Tom Murphy and Dom Dozzi well until he retired.
I was fortunate to have a weekly conversation with Dwight when I owned the Pittsburgh Construction News. We shared information about what was on the streets and I was always happy (and surprised) when I could tell Dwight something he didn’t know. I was also lucky to be around the process when Jendoco was working through getting Scott Hall at CMU. I think it was the last project Dwight worked on at Jendoco and it was kind of a classic Dwight Kuhn job. Even though he was president of the company at the time, Dwight oversaw the many estimates and his knowledge of what was on the campus and underground at CMU, and his ability to put a building together in his head, was invaluable to getting the project out of the ground. Ralph Horgan and his team at CMU still tell stories of how Dwight sketched out solutions to problems they didn’t know existed while the building was being designed.
The way the industry changed over the past 30 years drove Dwight as crazy as the rest of us but I never saw him take a bad day out on anyone. He was a nice guy and I think that mattered to him. My day always got better when Dwight called and I’m going to miss him. I got to see him last at the GBA’s annual gala, where his son Michael received an award for service to the industry. He knew that his illness wasn’t going to give him a lot more time on this Earth – and he wasn’t happy about that – but he accepted what was going to come and was grateful for what he had – a great family and great friends. My option that night was to work the room like a good networker or sit down and have a drink with my friend Dwight. That was an easy call to make.
You can read Dwight’s obituary from the Post-Gazette here.
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.
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.
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.
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.
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.
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.
Tuesday’s NAIOP Pittsburgh chapter meeting was a luncheon that hosted executives from Uber, who explained the company’s Pittsburgh growth strategy. Started in 2009, Uber has grown to more than $20 billion in revenue, with 11,000 employees worldwide. The company’s VP of Strategic Initiatives, David Richter, presented a dizzying set of facts about Uber’s astonishing growth. And while the ride sharing business represents its major revenue stream, it’s clear its future is elsewhere, like autonomous vehicles.
Richter spoke glowingly of Pittsburgh, claiming that Uber was beginning to see cases of San Francisco employees choosing to relocate to the Steel City because of quality of life and the opportunity to work on the next big thing. He also made it clear that it was CMU’s engineering research and grads that were the reason Uber was here.
“There are only four or five cities in the world with that kind of talent in robotics and Pittsburgh is one of them,” he said.
Uber’s David Richter addresses the crowd at NAIOP Pittsburgh.
Uber also did a slideshow of its incredible new offices in Lawrenceville, which were designed by Strada and built by Continental Building Co. The $32 million project is modern and clean, with many spaces designed for collaboration. During the course of the presentation Richter also mentioned the payoff for the region: after starting at zero employees in January 2105, Uber now has 550 in Pittsburgh, with roughly 100 new positions open now.
He also noted that the company anticipated needing more space in the near future. After building its new Advanced Technology Center and fitting out about 100,000 sq. ft. in Schreiber Real Estate’s building on 30th Street, Uber has invested nearly $50 million in new testing facilities and track at Almono.