South Florida Report: Another Dry Season
A few public projects are keeping at least some South Florida contractors busy at a time when construction activity remains slow in an overbuilt condominium and office tower market.
“There’s much more activity than there was last year at this time,” says Tom Murphy Jr., chairman and CEO of Coastal Construction Group in Miami, who adds that Florida is one of the worst states for new starts. Coastal began only one project last year, necessitating layoffs through 2009.
However, the firm is now rehiring. “We’re starting back in positive territory as far as people,” Murphy says.
Coastal is building a $20-million-plus private home in Broward County and a $50-million residence in Monroe County. The company is building a $15-million housing project in Key West for people with AIDS and has several projects moving forward in Miami.
“We’re seeing [activity in] niche markets,” Murphy says. “Florida is growing again; that’s the good news.”
The U.S. Census estimates Fort Lauderdale, Hollywood, Miramar and Pembroke Pines, all in Broward County, increased population in 2009, while Cape Coral on the Gulf coast declined.
“We haven’t seen any changes now versus six months or a year ago,” says Fred Pezeshkan, chairman and CEO of Kraft Construction of Naples, part of the Manhattan Construction Group of companies. “There is some government work, schools and institutional work, but the private sector is nonexistent.”
Kraft is working on a $53-million, 222,926-sq-ft outpatient clinic for the Dept. of Veterans Affairs in Cape Coral and a new Boston Red Sox spring training facility in Fort Myers. The company reduced staffing as project volume went down.
“We’re holding our own,” Pezeshkan says. “We have confidence in Florida. We need a better economy. But I think we have seen the bottom.”
Clint C. Glass, senior vice president and South Florida business unit leader for Balfour Beatty Construction in Plantation, Fla., thinks the market has hit its lowest point. He says that Europeans are beginning to purchase some of the overbuilt condominiums.
“That’s a helpful element toward our recovery,” Glass says. “We’re bouncing along the bottom as far as recovering out of the recession.”
Rex Kirby, president of general manager at Suffolk Construction Co. in West Palm Beach, says his company is picking up new work, including some small jobs at Jupiter Medical Center. In addition, it was ranked the low bidder for a Health Care District of Palm Beach County project.
“We’re staying busy with some good-sized work,” Kirby says.
Jay Fraser, vice president and general manager of Turner Construction Co.’s Miami office, reports increased activity in special projects and interior work, including for hotels and industrial customers new to the market. Turner is working on smaller capital improvement projects at Florida Atlantic University in Boca Raton and at FAU’s Harbor Branch campus in Fort Pierce.
“Larger projects in the entire South Florida area are slow,” Fraser says.
Owners can maximize the value of their dollars, he adds. However, he expressed concern that some subcontractors are bidding so low that they may have trouble completing the work.
Russ Sheppard, senior vice president of Skanska USA Building in Dania Beach, says bidding is “competitive and aggressive. We still have more capacity to deliver than there are projects.”
Skanska continues working on a $14.7-million emergency department expansion and renovation at Coral Springs Medical Center for Broward Health. The 16,000-sq-ft addition and 13,000-renovation will provide 40 beds. Completion is scheduled for May.
“South Florida is doing OK,” says Scott Moss, senior vice president of Moss & Associates of Fort Lauderdale. “It’s probably the roughest economic time that the construction industry has gone through since the 1970s.”