Top Starts 2013 List Reveals Stable Southwest Market
The combined value of the 25 largest projects to break ground in the Southwest in 2013 totaled $3.72 billion—a slight uptick from $3.7 billion in 2012. The Top Starts list, compiled from information provided in part by McGraw Hill Construction, shows that the region is on a growth trend once again, thanks to Nevada and Las Vegas.
On this year's list, three of the top seven projects are in Clark County, Nev.—Copper Mountain Solar in Boulder City and SLS Hotel & Casino and The Cromwell in Las Vegas—with a total value of $1.3 billion.
"In the last six months the amount of ground-up projects breaking ground has greatly increased across the Las Vegas Valley," says Kenneth J. Welden, principal, Civil Squared Engineering, Las Vegas. "This is occurring across numerous sectors of development."
Wind and energy generation held the top two spots on the list and three of the top six spots: Copper Mountain Solar in Nevada and two New Mexico projects, El Cabo Wind Power Farm in Torrance County and the Macho Springs Solar Power Plant in Deming. Their combined project value is $1.3 billion. According to recent statements from the developers of these projects, incentives continue to spur this market sector.
"Much of this success can be attributed to the ongoing support we have received at the federal, state and local level," says Kevin Sagara, vice president of renewables for Sempra, San Diego, which is operating Copper Mountain Solar.
Sempra says the tax incentives granted to Copper Mountain Solar 3 total $66 million over 20 years, and that the total amount Nevada stands to gain from the project during that time is $732 million, including $657 million in capital investment and $75 million combined from property taxes, school support taxes and employee payroll.
Educational project starts totaled $334 million and hold five of the top 19 spots on the 2013 list. Some of these projects are a first of their kind, such as the veterinary school in Arizona at Midwestern University in Glendale. Others are among a new age of university buildings that integrate with the surrounding community, such as the Arizona Cancer Center of the University of Arizona on the Phoenix Biomedical Campus in Phoenix and College Avenue Commons of Arizona State University in Tempe.
"College Avenue Commons is an urban, mixed-use building that will meld campus and community at the confluence of the core ASU Tempe campus, downtown Tempe and the ASU performance venues," says Morgan R. Olsen, executive vice president, treasurer and chief financial officer at Arizona State University.
Since the economy has leveled out, the Southwest construction market is chugging along once again, but escalating construction costs have forced some projects to return to the planning stage in order to become leaner and more developmentally viable prior to the start of construction.
"We went from a building that was going to be more than $130 million to a building that was going to be about $100 million," says Gary Bagnoche, who is overseeing the Phoenix Biomedical Campus for the University of Arizona.
Apartments and other multilevel residential projects were also strong in 2013, with six projects with a combined value of $336.7 million. TDI Apartments at One Scottsdale, Scottsdale, Ariz., was the largest of these residential projects at $65 million.