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Coronavirus Response Suspends Some Construction; NY and NJ Governors Cite Need for Building Medical Facilities

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As of 9 a.m. Tuesday March 17

For most companies in the construction industry, it remains business as usual with bid openings and construction continuing, states are stepping in to suspend some projects as part of the extraordinary measures being taken to stop the spread of the coronavirus.

The Pennsylvania Department of Transportation is suspending all construction projects through March 30, but PennDOT crews will be available for “critical functions and emergency maintenance.”

In Bergen County, NJ, county executive Jim Tedesco ordered all construction suspended and utility roadwork done only in emergency situations. It remains to be seen if this is enforceable or companies will follow Tedesco’s order or fight it.

But while non-emergency construction was being suspended in some places, the governors of New York and New Jersey are looking to turn college dorms, former nursing homes and other buildings into medical facilities to treat patients as hospitals are expected to be overwhelmed. Private developers, construction workers, and the National Guard are expected to be needed for these emergency projects. The plan is currently a backup in case the federal government does not meet his request to send the Army Corps of Engineers to build temporary hospitals.

Before state and local governments began enacting these more extreme measures to “flatten the curve” of the spread of the disease and its impact on hospitals, there have been reports of specific sites across the country shutting down after a worker tested positive and companies taking precautions to keep workers safe.

The Associated General Contractors has a webpage dedicated to the virus with information about symptoms and what constitutes a reportable workplace illness. “AGC will continue to monitor the situation and update the information on this page accordingly,” the site said.

Over the weekend, the Centers for Disease Control recommended no groups with more than 50 people for approximately eight weeks.

Coronavirus Impact on the Construction Industry

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The impact of the coronavirus will likely be felt in every industry, and while the extent of the impact is unknown as the situation evolves quickly around the world, construction was already taking a hit.

Before the public became aware of people testing positive in the United States, a slowdown in the production of supplies in China was already raising costs. U.S. construction companies import about 30 percent of their building products from China. It is the largest importer of construction materials to the U.S. As the Chinese government shut down factories, a manufacturing decline was already creating supply issues and driving up prices for American companies.

Now, the crisis has hit the U.S. and there is further uncertainty in an industry that was already getting mixed messages.

The U.S. Construction Outlook report for 2020 put out by commercial real estate and development firm Jones Lang LaSalle Inc. reported that industry volume and hiring would be flat this year. It also predicted growth for companies that work for the government on projects related to schools, healthcare, and transportation. That report was released last week.

At this point, there is no way to predict the construction man-hours that might be lost to illness or what the brewing economic crisis, caused in part by the global pandemic, might do to future projects. The situation seems to change by the hour and right now industry professionals can only have a plan for the possible effects and wait and see.

Governor Spotlights Portal Bridge, Affordable Housing in NJ Budget Address

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New Jersey governor Phil Murphy’s 2021 budget address last week was called “Building on Our Progress,” There wasn’t a lot of literal building highlighted in the speech outlining his administration’s priorities in the FY2021 budget, but he did mention a couple of construction related priorities.

First and foremost is the Portal Bridge. Of course, the Gateway Tunnel and Portal Bridge projects have been a huge source of conversation and controversy. The desperately needed repairs and new tunnel require federal funding that is being withheld by the Trump administration. But in February, the Federal Transit Administration raised the rating on the portal bridge replacement project to “medium-high,” making it eligible for federal funding. Of course, there are still hurdles to clear. A grant needs to be approved and a check written, but it looks like the rating will pave the way for that to happen. And that is definitely good news.

“With the federal government’s long-awaited green-lighting of the Portal Bridge replacement, we are finally moving forward in alleviating one of NJ TRANSIT’s commuters’ other headaches – wondering if a cranky, obsolete, century-old bridge is going to hold it together for another day,” Murphy said in his address.

He called it a “big victory” not only for commuters but “the building trades” and a “state whose economic lifeblood can only flow with modern infrastructure.”

Murphy, though, didn’t miss the opportunity to note the larger project that still needs to be approved.

“The Portal Bridge is just one part of a much larger project,” he said. “One new span doesn’t in any way eliminate the need for new tunnels under the Hudson and it in no way signals our retreat in the fight to get Gateway done.”

The other construction priority set by Murphy centered on affordable housing, as he noted the budget allocates at least $60 million from the Affordable Housing Trust Fund to support NJ municipalities in developing affordable housing in their area.

Medical Marijuana Sparks Facilities Construction

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Construction of medical marijuana facilities and distribution centers has become a consistent piece of industry business in New Jersey and Pennsylvania.  And as legalizing recreational marijuana is discussed in state legislatures throughout the country, there is growing possibility that more of these facilities will be needed.

Right now there are four projects either in planning or under construction in New Jersey and Pennsylvania. In October, a project was completed in Chester, PA.

There are specific considerations when building such a facility, according to the Cannabis Business Times, including designing for the proper air flow and humidity and availability of power and water. And of course, as with any construction, location is key.

In Green Township, NJ, discussions are underway about what to do with the Trinca Airport Redevelopment site. A medical marijuana facility is a possibility, although critics say it would violate the Drug Free School Zone laws. A solar farm is also an option there.

Meanwhile, a spring 2020 target date has been set for a 70,000-square-foot Agronomed Medical Marijuana Growing & Processing Facility on a nearly nine acre site in Chester, PA; the Harmony Foundation Medical Marijuana Facility at the Merck Site in Lafayette, NJ, has a target date in the third quarter of this year; and applications for a final site plan have been approved for a project in Rochelle Park, NJ.

The Harmony job consists of two-story, 282,000-square-foot facility with one existing building on the site renovated for administration, research and development space. Two lanes of roadway will also be added in an attempt to reduce any added traffic.

In Rochelle Park, the plan calls for a medical marijuana facility of more than 7,000 square feet in a space currently occupied by an antique store. In addition, there would be construction of a six-story self-storage facility with more than 120,000 square feet at the site of an existing retail center.

Industry Braces for Impact of Tax Abatement Changes in Philadelphia

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Philadelphia had a record-setting year for new construction in 2019, according to the number of permits issued by the city’s Department of Licenses and Inspections. The majority of the more than 2,100 permits issued were for single-family housing and most was in Center City’s surrounding neighborhoods. But developers fear a change in the 10-year tax abatement, which was passed at the end of last year, will slow the market and development.

Philadelphia has had a 10-year tax abatement of real estate taxes for new residential construction since the 1970s. It allowed developers to be tax-free for 10 years and was enacted to boost construction in the city. After a contentious debate, however, the legislation passed an amendment to the abatement. Now, the first year will provide developers with a 100 percent exemption on taxes, but there will be a 10 percent decrease per year after that. After 10 years, the tax exemption would end.

In a compromise to those opposed to the change, the new abatement won’t be implemented until December 31, 2020. There is some speculation this could produce a mini-boom of residential housing before the abatement ends in his current form, or boost new commercial real estate projects, according to Joseph Gibson, a researcher at commercial real estate services and investment firm CBRE.

One prominent building already under construction—the Arthaus condominiums from Dranoff Properties—will not escape the new tax law. The 108-unit, 47 story building at 309 South Broad Street is scheduled to be completed in 2021.

High Hopes for Mixed-Use, Transit-Oriented Project in East Brunswick

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Commuting is often a necessary evil for New Jersey residents, but plans for a new mixed-used, transit-oriented development in East Brunswick aim to make it a little more pleasant—at least at the start and end of each day.

The $500 million project along the Route 18 corridor will have a bus terminal and commuter parking structure at the core of a site with 800 residential units, as well as retail shops, restaurants, a hotel, tech center, medical office building, outdoor amphitheater, indoor/outdoor pet facility, public plaza, and pedestrian walkways.

For those already worried about traffic in and out of the development, the plan includes the creation of parallel side streets to allow for alternate routes. And the developer, River Development, hopes to work with the state’s Department of Transportation to add a left-turn only lane onto Route 18 off of Edgeboro Rd.

The project will also revitalize the township, and specifically the 44-acre site on Route 18 between Ruth Street and Lake Street.

“This commercial corridor, one that sits right at the center of New Jersey, that still sees over 100,000 cars each day, that connects New Brunswick and Rutgers to the Shore, that sits at the cross-section of almost every major highway in New Jersey, that is equidistant between New York City and Philadelphia, is in desperate need of revitalization, and that is exactly what we’ve spent the last two years doing,” East Brunswick mayor Brad Cohen said earlier this month when the East Brunswick Redevelopment Agency released renderings for the project.

The project is expected to be three phases over the next five to seven years and, when it’s done, Cohen wants it to have something for everyone.

“We have aimed to create a true transit-oriented development which meets the needs of residents and consumers of the 21st century,” Cohen said. “We want to create a community that appeals to all age groups, including those starting out and those looking to downsize.”

Property acquisition continues and work will include the demolition of existing structures on the property, which is expected to begin this summer.

Plans Continue To Turn Open Space into Parks in NJ and PA

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The beginning of 2020 has seen a commitment from local government to turn open space into parks throughout the area.

In Mercer County, NJ, the county park commission approved a plan for the Miry Run Ponds Passive Park at Dam Site 21. The proposal covers the cleanup and conversion of 279 acres of county-owned space spanning Hamilton, Robbinsville and West Windsor. It will be turned into a passive recreation park with trail, walkways, playgrounds, a kayak launch and plantings to buffer nearby homes from the park.

In northern NJ, the Hoboken major reiterated the city’s commitment to coming to terms on a deal that would allow the conversion of the 3.15 acres of Union Dry Dock property into a waterfront park.

And in Eastern Delaware County, PA, the county council has declared that 30 acres of open space is OK for park use. The county released the Rosa Tree Park at Little Flower Manor Open Space Master Site Development Plan in Darby Borough. The master plan includes picnic groves, a walking trail connection to the Darby Creek Trail at the Woodburne Mansion property, as well as a community garden and an education center. An engineering study on the restoration of the historic 49,000 square foot Woodburne Mansion located on the property has not yet been completed

Hoboken Plans Water Main, Park and Light Rail Projects

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It’ll be a busy year of growth and upgrades in Hoboken if mayor Ravi Bhalla can put his plans into action.
On Wednesday, Bhalla outlined his 2020 priorities for the Hudson County city. Among them, working with developers and stakeholders on a new light rail station at 15th Street to meet the needs of a growing North End.
In more immediate construction, the city plans to replace more than 2.7 miles of water mains this year. It is part of a larger overhaul of the water infrastructure and the city will use independent funding, including proceeds from the SUEZ agreement that provides $33 million in water main upgrades over the next 15 years.
Bhalla also prioritized the city’s parks. There will be renovations at Legion Park in North Hoboken, including modern playground equipment for children with special needs, as well as at Jefferson Park in South Hoboken, which will also get new playground equipment. But kids aren’t the only ones who can look forward to a better play place this year. The dog parks at Church Square Park and Stevens Park will get “modern canine turf” with the new runs modeled after the ones at 2nd and Hudson streets.
He also talked about the Union Dry Dock plans, which many may have thought had died.

“I would be remiss if I didn’t reiterate my administration’s unwavering commitment to securing Union Dry Dock to create a waterfront park,” he said. “While you may not have heard many updates recently, rest assured that we are making real progress behind the scenes with both New York Waterway and the Governor’s office. I’m optimistic that we will finally see a positive ending this year that preserves Union Dry Dock for public, open space.”

His emphasis on keeping park and waterfront space means a promise to prevent development in parts of the city.

“Defending our precious waterfront from massive overdevelopment also includes preventing the two Monarch towers in Northern Hoboken,” he said. “This year, a central priority of mine is to work with the Council to finalize an agreement that would prevent, once and for all, large scale development along our northern waterfront.”

College Square Is a Delaware Redevelopment Project To Watch in 2020

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There are many large development projects underway in Delaware this year. Among them is the redevelopment of a 325,000 square-foot shopping center into the College Square Williams Crossing Retail and Apartments in New Castle. The 46.10-acre property will now be the site for a mixed-use plaza with 305 residential units in two four-story apartment buildings.

Plans to renovate to the outdated retail center have been in the works for years, but the final plans were approved last March and demolition began in August. The residential units are expected to be primarily one and two bedrooms, with some three-bedroom units. The complex will also include a business center, fitness center, media room, and outdoor pool.

There will be some retail as well, with some stores, along with a coffee shop and restaurants expected. No tenants have been announced. New Castle-based developer Fusco Enterprises also plans to build a road through the center and offer some green space with a community plaza with tables and benches.

Previous renovation on the north side of the square will remain part of the new property. No timeline has been set, but Fusco attorneys have said the developer hopes to have it completed within two years.

Murphy Puts Focus on Fixing Water Infrastructure, Lead Issues

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New Jersey governor Phil Murphy presented his state-of-the-state address this week and cited addressing water infrastructure issues and lead exposure as one of his priorities for the coming year.

Murphy spoke about the Newark water crisis last year and pledged to attack the lead issues—in pipes and paint—across the state in a way that would translate into a lot of jobs in the industry.

“We will need to mobilize a veritable army of union workers – plumbers and pipefitters, remediation experts, carpenters and laborers, among so many other tradespeople,” Murphy said.

But that work might not come this year despite the urgency. The governor admitted that the funding is not secured, and the amount needed is unknown at this point. He says it will require “a significant investment” and hopes to let the public decide on election day.

“Let’s work together, now, to come to an agreement on what this investment needs to be — so we can put it before the voters this November, and can invest in our communities that much faster,” he said.

As this is one of Murphy’s major initiatives for 2020, NJ residents can expect more details on his plan to tackle these issues and the possible number of jobs and projects that will be part of the solution in his budget address later in the year.