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.
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.
January brings many state-of-the-state addresses by governors, who announce their priorities and budget plans for the coming year. In Pennsylvania, however, many counties didn’t have to wait for 2020’s speech to know some money was coming their way for infrastructure and construction needs. On December 30, Governor Tom Wolf announced the approval of more than $5 million in funding through the Keystone Communities program for 42 revitalization projects that include construction and business development.
The following funds and projects were included in the governor’s announcement:
Bucks County
Delaware County
Philadelphia County
Wolf is also hoping his state legislature backs his Restore Pennsylvania multibillion-dollar capital plan that he proposed last year to help with the state’s infrastructure issues. Funding the plan requires a severance tax on natural gas and has met with resistance. Wolf recently tweeted that if the plan gets approved, some of that money can be used to help with the infrastructure issues in Philadelphia schools—including remediating contaminants such as asbestos.
Four Philadelphia schools had to close this school year because of asbestos. The superintendent recently outlined an Environmental Safety Improvement Plan, which will use $12 million in funds from its budget to speed up asbestos abatement in the impacted schools.
In the last two weeks, the Associated General Contractors of America (AGC) released two reports, which combine to show a mixed picture of construction industry employment and spending.
Last week, AGC released an analysis of federal employment data from October 2018 to October 2019 that showed construction employment increased in 65 percent of U.S. metro areas. Despite the overall positive numbers nationwide, the Northeast took a hit. New York City had the largest number of job losses over that time period, losing 6,200, or four percent, of its construction jobs, according to the report. (Fairbanks, AK, had the biggest decrease by percentage, dropping 13 percent which was a loss of 400 jobs.)
The report also showed hourly craftworker positions remain difficult to fill despite the overall job gains. In response to that, the AGC officials “urged the Trump administration and Congress to make it easier to bring in workers for specific jobs that cannot be filled domestically and to strengthen career and technical education opportunities for students seeking alternatives to college.”
A second analysis released this week showed construction spending declined .8 percent in October from September. The $1.291 trillion spent in October 2019 remained better than spending in October 2018 by 1.1 percent but, this year, decreases in private nonresidential, multifamily and public projects were too much to override an increase in construction of single-family homes, according to AGC’s analysis of federal spending data. The association blamed trade conflicts for the negative impact.
“Trade friction drags down U.S. economic growth,” AGC’s chief economist Ken Simonson said in a statement, adding, “Businesses that have been hurt by existing tariffs and retaliatory actions by U.S. trading partners or firms facing uncertainty over future trade policy are likely to hold off on construction projects.”
Appoquinimink School District in Middletown, DE, has a big vision for its future. With an expected rise in student population, the district just opened a new elementary school in the district for this school year and has plans for five new schools and an early childhood center over the next five years.
Included in that plan are a new middle school and high school that are already in progress and scheduled to open in 2020. The other three schools and the early learning center need the December 17 referendum to pass. A new elementary school–for which they identified a new 25-acre site this week–and a new early childhood center both are planned to open in 2022.
There is another new high school and new middle school with opening dates in 2025 on the master plan.
Leading into the referendum vote, the district has an RFQ for Construction Management Services, which would entail review of design, value engineering, developing a construction schedule for a project that includes HVAC improvements, a new elementary school, a new kindergarten center, roof replacement and turf field renovations at one high school, a middle school stadium and multiple fields.
It is also seeking RFQs for Architecture and Engineering Services and plans to make multiple awards.
Both bid requests have Nov. 14 deadlines.
The New Jersey School Development Authority (NJSDA) is in crisis, again. The agency in charge of funding and managing new construction, modernization and renovation in 31 of the state’s most impoverished school districts is spiraling after yet another scandal. There are now calls to dissolve the agency that was created after its predecessor was disbanded when it failed to meet its mission to use taxpayer dollars to give the most at-risk kids of this state an adequate learning environment.
This week the organization’s CEO Lizette Delgado-Polanco was forced to resign after an investigation showed she lied about her education and hired unqualified people with personal connections to her after firing others on staff. Amid these accusations of unfair hiring practices and lying about qualifications, the budget is dwindling and no one can say for sure what is going to happen to the districts and 25 active Capital Program projects it lists on its website.
According to NJ.com, the agency once had a budget of $12 billion and it is now down to $60 million, which is not enough for new construction—it is only enough for emergency repairs at existing schools. And the NJSDA is already operating with a debt that costs state taxpayers $1 billion a year, according to The Record. It is also under multiple internal investigations and an audit.
Lost again in all of this is the construction projects that now people in the state admit there are real questions about how projects can go forward, but board chairman Rob Nixon told The Record the authority would continue its work.
“I’ve got a responsibility to now work with the board to get a CEO in there that’s going to be focused on taking this program into its next stage,” he said. “We really haven’t missed a beat. But I think that now that we’re hopefully no longer going to be distracted, we can look ahead to finishing up the projects we have and look into re-authorization and learning from this like we’ve done in the past.”
The Capital Program active projects are:
Camden High School, Camden
George Washington Carver Elementary School, East Orange
New ES at Halloran PS 22 Site, Elizabeth – substantially complete and occupied.
James Madison Elementary School, Garfield – substantially complete and occupied.
Gloucester City Middle School, Gloucester City – substantially complete and occupied.
New Elementary School, Harrison
Thomas G. Connors Elementary School, Hoboken – not yet out to bid.
Madison Avenue Elementary School, Irvington
Patricia M. Noonan Elementary School, Jersey City – substantially complete and occupied.
Port Monmouth Road School, Keansburg
Senior High School, Millville
Paul Robeson Community Theme School for the Arts, New Brunswick
South Street Elementary School, Newark
Cleveland Street Elementary School, Orange
Orange High School, Orange
Dayton Avenue Elementary School Campus, Passaic City – design phase ongoing.
New Elementary School at Leonard Place, Passaic City
Union Avenue Middle School, Paterson
Alexander Denbo Elementary School, Pemberton
Seaman Avenue Elementary School, Perth Amboy
High School, Perth Amboy
Woodland Elementary School, Plainfield
Trenton Central High School, Trenton
Lincoln Avenue Middle School, Vineland – substantially complete and occupied.
Harry L. Bain Elementary School, West New York – substantially complete and occupied.
Like its larger Northeast neighbors Pennsylvania and New Jersey, Delaware is also in need of vital infrastructure and transportation improvements and Governor John Carney addressed those issues in his proposed budget for 2020. Carney’s plan for the next fiscal year includes a Transportation Infrastructure Investment Fund that has $10 million allocated “to improve public infrastructure to support job-creating economic development projects” and a Capital Transportation Plan that designates $3.2 billion through 2025 to “modernize Delaware’s transportation system.”
Delaware took a step toward getting some of that needed construction funded last month when Carney and NJ governor Phil Murphy announced new toll rates at the Delaware Memorial Bridge (DMB) that will fund safety and infrastructure projects by the Delaware River and Bay Authority (DRBA). With the additional revenue, the DRBA now has the resources to fund capital projects planned at Delaware Memorial Bridge including the Cape May-Lewes Ferry Bridge Paint Removal and Recoating ($48.2 million); Suspension Rope Replacement ($24.5 million); Bridge Steelwork Repairs ($40.5 million); Pin and Link Rehabilitation on Both Structures of DMB ($19.7 million); Ship Collision Protection System ($45.2 million); Bridge Deck Repair ($21.5 million); Transfer Bridge Repairs at the Cape May–Lewes Ferry ($4.3 million); and Ferry Repowering Program ($9.5 million).
This week New York Senator Chuck Schumer said he will propose legislation to push construction to start on the multi-billion dollar Gateway Tunnel and Portal Bridge Project. Speaking at an event of the Association for a Better New York, Schumer said his bill would allow New York and New Jersey to advance money to get shovel-ready construction projects started and be guaranteed reimbursement from the federal government when the U.S. Department of Transportation gives its final approval.
Schumer said “if DOT continues to withhold the new starts grants from Portal and the ROD [record of decision] for the Hudson tunnels” he and fellow members of Congress from New York and New Jersey would push this legislation and attach it to an appropriations bill or some other “must-pass legislation,” according to The Bond Buyer.
Right now, Schumer said, even if the states had the money to fund the projects ready to begin the $12.7 billion plan to upgrade the rail tunnel under the Hudson River, the local government won’t spend that money for fear of not getting back what they would be owed from the federal government.
Acknowledging that this legislation is not the “magic solution” to solving the problems plaguing the Gateway Project overnight, Schumer said “the time for waiting is over.”
A new partnership hopes to combine academic research with real-world industry knowledge to better engineering design and construction in the future.
New York University Tandon School of Engineering recently announced the creation of the Institute of Design and Construction (IDC) Innovations Hub. The “industry supported and membership-based center will promote innovation in construction, engineering design, and management” with a commitment to maximize safety, efficiency and sustainability within the construction sector, according to the university’s announcement.
It will be run by Michael Horodniceanu, an internationally prominent transportation and construction executive, who is a professor within the department of urban and civil engineering. NYU hopes the center serves as a model of a partnership between industry and research and solve problems that often cause projects to have schedule delays and run over budget.
Some of the center’s stated goals include:
CIS Construction Connection 