Category Archives: News About People

Construction Heating Up With the Weather

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.

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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.

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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.

Arrividerci, Pete Dozzi

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.

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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.

 

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.

Uber On

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.

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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.

A Truly Bizarre Decision

On Monday, Judge Timoth Patrick O’Reilly rendered a head-scratching injunction in Allegheny County Court of Common Please, one that will cost Jefferson Hills taxpayers a bunch of money.

The prime plumbing contractor on the project, Wheels Mechanical, filed to have the sanitary and storm sewer portions of the site contract removed from the general contractor’s scope of work and assigned to the plumbing contract. Wheels claimed including the site utilities in the site package was a violation of the PA Separations Act. In assigning the scopes of work, Turner Construction decided to include the site utilities in the site work because of the extensive work (roughly 160 acres) and the advantage to the overall scheduling of sequencing the installation of the utilities at the time the cut and fill was done.

During three days of testimony, little evidence was brought that clearly showed how this kind of separation of scopes is done. There is ample precedent for both approaches. What wasn’t shown was any evidence that the inclusion of the site utilities with site work was in any way intended to circumvent the Separations Act, especially since the delivery method included nine separate contracts.

Finding for Wheels Mechanical, Judge O’Reilly rendered the opinion that the school district and CM had “willfully” violated the Separations Act. This language makes it more difficult for appeals and stays of the judgement prior to the appeal. That counts because O’Reilly gave Turner 10 days to get prices from Nello Construction on a credit for removing the site utilities and a bid from Wheels for the addition to its scope.

I am a proponent for abolishing the Separations Act. But in this case, the problems with the decision go well beyond the Separations Act. First, there was a Project Labor Agreement in place, which means that jurisdictional disputes were to be decided by the method agreed to in the PLA. That means the judge should not have heard the case.

More glaring is the timing of this claim. Wheels was a bidder on the project, meaning that it attended pre-bid meetings, reviewed the bidding and contract documents for months prior to bidding and signing contracts. A reasonable judge should have asked why the claim wasn’t brought forward then or during any of the months before this phase of construction reached a critical point. Wheels is an experienced K-12 contractor. The scopes of work weren’t too confusing, nor is this the first time Wheels has had the plumbing contract on a project where the general construction contractor had the site work assigned to its scope. It is likely the first $73 million project that this occurred on, I’m sure, which may have added motivation.

There was time to redress the “violation” during bidding and contract evaluation. The time lost and additional money that will be spent (if the work is priced the same as was carried in the bid, this will be the first project in recorded history) by Jefferson Hills will be punitive to the taxpayers and the students. Observers noted that Judge O’Reilly asked a number of questions during the proceedings that betrayed a lack of understanding about construction. His decision confirmed that.

A Moment for Joe Massaro

Joe Massaro’s funeral was Monday morning. The mass at St. Paul’s Cathedral gave anyone attending a good idea of what was important to Joe during his life. His highest priority was family.

A beautiful funeral mass isn’t exactly the setting for story telling, however, and that’s a bit of a shame when it comes to Joe Massaro. His life and career are a treasure trove of stories. I had the privilege of spending a lot of time with Joe just before the onset of his Alzheimer’s disease. His sons had asked me to help document his life story for Joe’s many grandchildren. Over the course of a year, I heard hundreds of stories, many of which have been told repeatedly through the years by Joe or his sons. The one story that hasn’t been told nearly enough was how Joe’s business nearly failed and recovered. Those four or five years scarred Joe and he was understandably happy to have put the period in the past, but the experience also galvanized his already close family.

Joe was remarkably candid in talking about the bad decisions and bad luck that led to his company’s troubles. The battle to save the business brought two of his sons into the business. Joe talked with great respect about how hard those two, Joe III and Steve, fought to help right the ship. His other son, David, later joined the business as well.

When Joe told me the story of that period, it was also pretty clear that he leaned even more heavily on his wife Carol to endure the battle. He spoke of not wanting to get out of bed in the morning – comparing it to going to war every day – and said it was Carol and their daughter Linda who pushed him each day. He said Carol reminded him that no one was going to fix the problems for him.

Joe gets credit for his determination in turning his company around. He didn’t take such credit in retelling the story of that time in his life. He sincerely believed that it was his family that made the difference and it’s probably true that without that combined effort Massaro Corp. would not have survived.

It made Joe unhappy that his mistakes changed the plans his children had made but the crisis galvanized the family in a way that none of his successes had. Creating a business that would be a family legacy was a driving motivation for Joe Massaro. He may have been uncomfortable with how that legacy was created but there is little doubt that it’s a legacy that has endured.

The Gas Tax

Gov. Wolf surprised no one on Feb. 11 when he announced plans to create a severance tax of five percent on the natural gas extracted in Pennsylvania. Wolf campaigned on this tax – this exact level of levy — and has wasted no time following through. Unlike his predecessor, who was hamstrung by his ‘no tax’ pledge to Grover Nordquist – Gov. Wolf can make good on his promise without having to put it into effect. The severance tax will have to become legislation, meaning that something specific will have to get through the Republican-controlled legislature. As of the announcement, there were few specifics of the proposed law released.

The lack of specificity tempered the remarks of anyone who responded. The shale gas industry responded negatively. There were implied threats of further slowdown in drilling and development of the resource in Pennsylvania. Comparisons to the extraction taxes of other states brought reminders that places with higher taxes – like Texas – have virtually no corporate taxes. The comparison to West Virginia prompted the reminder that drilling and processing in West Virginia lagged the activity in PA by quite a bit. But again, it was hard to lodge too much of a complaint against the proposal without knowing what was in the proposal.

One tidbit that the governor did mention was that local government would still participate in the impact fees, which will still be charge to some degree. My belief is that the loss of impact fees to local government is the biggest negative in Gov. Wolf’s proposal. The gas industry will figure a way to profitably get at the largest gas deposit in North America. Local municipalities and counties bear the brunt of whatever impact drilling has. The use of those impact fees has brought new roads and infrastructure to places that the state has barely invested in over the years.

Washington County Chamber of Commerce President Jeff Kotula may have spoken for all local government yesterday when he expressed concern about the share of impact fees that would find their way from Southwestern PA to Southeastern PA, where there is no drilling but a lot of votes.