Pittsburgh’s Other Big Project Isn’t in Pittsburgh

As the Shell Franklin project in Monaca gets underway in earnest, with the expectation of having 1,000 workers on site at year’s end, another major manufacturing project has already passed that milestone. In Berkeley County, WV, Fluor Corp. is building the new Tabler Station plant for Proctor & Gamble. The plant will be 1 million square feet under roof and involves a $500 million investment for its first phase. Workforce is going to peak at 1,500 this summer, according to P & G. Because of conditions in the DC/Baltimore market, the Tabler Station project is having a bigger impact on Pittsburgh-area contractors than the aforementioned Shell cracker.

That’s in part due to the fact that Bechtel and Great Arrow Builders are inclined to self-perform much more of the project than originally hoped. But DC-area contractors have also thus far been too busy in their own backyard to show as much interest in the P & G plant, which is located less than 3 hours southeast of Pittsburgh off I-81. Thus far, trade packages have been awarded to Pittsburgh-area contractors Mascaro Construction, Mosites Construction, McKamish Inc., Lighthouse Electric and Yates Construction, which has been working within the region at WVUH Ruby Hospital (and teaming with Pittsburgh contractors). Kinsley Construction from York has also landed a building. None of the packages have been large to date but expectations are that as the contracting continues throughout this year and next that multiple regional contractors could end up with $25-50 million in volume. For some of Pittsburgh’s contractors working on the project, that kind of volume could affect how they respond to projects in their own backyard.

In other project news, St. Clair Hospital short-listed PJ Dick, Mascaro and Yates for interviews this week for its $80 million expansion. The team of NEXT Architecture and Franjo Construction are working on Uber’s expansion into an additional 90,000 square feet in the Crucible Building in The Strip. The City of Pittsburgh Planning Commission OK’d 3 major office projects this week: Murland’s 90,000 square foot office on Forbes Avenue (to be built by Mascaro); RDC’s 105,000 square foot office on Smallman at 12th Street; and the $9 million repurposing of the former Art Institute’s building on the Boulevard of Allies, which M & K Wilkow is developing.

The PA Dept. of Labor released April employment data that showed Pittsburgh’s employment rose by 5,900 jobs from March and unemployment rose from 5.1% to 5.3%. Unemployment was down significantly when compared to April 2016, when the percentage of unemployment was 5.8%. Some of the decline is, unfortunately, a result of a shrinking workforce but there is also an upward trend that is positive. CBRE released an analysis of employment growth last week that showed that job growth has reached 0.45% since October 2016 and 0.71% since January. CBRE cited gains in restaurant/hospitality, financial services and especially in technology. The chart below shows that job growth in scientific research and development in Pittsburgh has far outpaced the rest of the U.S. over the past three years. Let’s hope this trend holds.

Fig_2_Pgh_flash

The Midstream Booms

After a quiet first quarter the gas midstream investment is roaring again. The industry is building capacity to process natural gas in the western Washington County and eastern Belmont County areas to create hub of sorts. MarkWest is building the Harmon Creek Gas Processing Plant in Smith Township near Burgettstown. The plant will process 200 million cubic feet per day in a cryogenic operation and 20,000 barrels per day in its fractionation process. Based on similar projects, the construction should run $250-275 million. Bids for early packages are due May 31.

The plant will be close by the 400 MCF Revolution plant being constructed by Energy Transfer Partners, as well as a handful of compressor stations. Among those are ETP’s Joffrey compressor, the Gibraltar Compressing Station being built by TEK Construction for Columbia Gas, MarkWest’s Down Home, Imperial and Cibus stations. EQT is in the approval process for a large 21,400 HP compressor in Union Township, called the McIntosh Compressing Station. The cost of that project should run $85 million or more.

Millcraft Investments announced this morning that the new construction at 350 Oliver – the former Saks site – would be a 70-unit condo called The Lumiere, rather than the Moxie Hotel that was previously proposed. Millcraft and its co-developer, McKnight Realty, selected Mosites Construction to build the $35 million project.

Oxford Realty services announced that it is leasing spaces in a 28,000 square foot retail building – called The Junction – to be built adjacent to the Hyatt House at the Liberty and Baum intersection in Shadyside. The building is being developed by the Voelker Family and Sierra Associates. Construction is scheduled for fall.

West Allegheny School District awarded contracts on its $5 million high school pool addition and renovation. Yarborough Development will be the general contractor.

 

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.

Scienceexpansion0921.jpg

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.

20170511_191854

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.

Unemployment Dips

According to Pittsburgh Today, unemployment fell in March from 5.6% to 5.1% over the past 12 months. The bad news was that there were more than 10,000 fewer people in the labor force compared to March 2016. That’s an indication of the power of the demographic challenge facing Pittsburgh over the next five years.

pgh unemployment rate

On the national scene, yesterday’s report on new unemployment claims found 238,000 new claims were filed in the last week, the lowest in 17 years. The national unemployment rate is now 4.5 %

In project news, UPMC selected Turner Construction as CM for the $111 million Hamot patient tower in Erie. Construction is expected next year. CM selection is expected in a few months for the $100 million-plus UPMC South and for the $150 million-ish UPMC Mercy Ophthalmology center.

University of Pittsburgh has been bidding flurry of projects recently. Allegheny Construction Group was low on two projects last week. Allegheny was low on the Frick Fine Arts at $309,000 (although an alternate could flip the job to Facility Support Services) and on the 7500 Thomas Blvd. print shop at $548,500, edging out Rycon at $552,000.

Construction Rescues the Economy

Friday’s report on first quarter GDP was well below economist’s forecasts but hardly a surprise or disappointment (not sure how those two things can be true but…). When you dig into the details you see that without construction spending, the economy would have actually contracted in the first quarter compared to the fourth quarter of 2016. The overall GDP growth number was 0.7 percent but big gains in residential construction (0.5 points) and non-residential investment (1.1 points) added 1.6 points to the growth. The rest of the economy dragged GDP down 0.9 points. Within the non-residential investment number, which includes all business investment, spending on non-residential construction was up 22.1 percent. That means that without construction, the non-residential investment number would have been flat or worse.

Today’s announcement on March construction showed that the first quarter of 2017 was up 4.9 percent over the first quarter of 2016. The $1.218 trillion in spending is the highest on record. The trends represented in the number were consistent with past months. Commercial construction was up 12.7 percent. Public construction was down 6.5 percent.

total us construction spending

St. Clair Hospital’s $75 million expansion and renovation project has gone out for CM proposals to PJ Dick, Mascaro, Massaro/Yates, MBM, Mosites, Rycon, and Volpatt. Pittsburgh Theological Seminary selected Jendoco Construction for precon services on its $10-12 million library project. Volpatt Construction landed the $2.35 million Victoria Hall SIM Lab for the University of Pittsburgh. Rycon Construction is about to start work on the first phase of the $2.8 million Assumption Hall renovation at Duquesne University. Bids are due May 4 for the 21,000-plus sq. ft. buildout for global diagnostics/life science company Perkin Elmer at 250 Industry Drive. Bids are being taken by Neyer, Rycon and Turner.
Pete Dozzi Memorial Service
The family of Peter C. Dozzi invites you to join them on Friday, May 5, 2017 at the Duquesne University Power Center (Charles J. Dougherty Ballroom) 600 Forbes Avenue, Pittsburgh, PA 15282 for a memorial celebration and luncheon beginning at 11:00 a.m. Brief remarks will be presented at 12:30 p.m. Please confirm your attendance by email tociaotp@comcast.net

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.

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.

1963 Picture Pete Eugenio low

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.