The building teams of the largest 25 project starts in 2010 moved forward during the height of one of the worst recessions to hit the U.S. The Southwest was especially hard hit, as the total value of the largest starts makes clear. The value of projects on the list in 2008 was $14.8 billion; in 2010 it was only $2.9 billion.
Is there a light at the end of the tunnel? Some builders say yes. “We are definitely seeing an increase in commercial activity this year, in particular tenant improvements and renovations,” says Bob Hardison, president of Hardison/Downey Construction, Phoenix.
Hardison’s largest start of the past year was the $47-million University of New Mexico South Campus Student Apartments Phase 1, a mixed-used facility that includes student housing, a community center, maintenance building and parking on the Albuquerque campus. Despite this project, Hardison says “the educational sector seems to be lagging due, we assume, to the lack of funding options and budget uncertainty.”
Many contractors are becoming more efficient in improving their bottom line. On the $129-million Health Sciences Education Building on the Phoenix Biomedical Campus in downtown Phoenix, the joint venture of DPR Construction’s Phoenix office and Tempe-based Sundt Construction incorporated the use of building information modeling to plan piping and wiring far in advance of actual construction, says Kent Bosworth, project manager with Sundt Construction. “BIM also allowed for an aggressive approach to offsite fabrication and just-in-time deliveries,” he says.
More than half of the project teams on the list are utilizing BIM to improve communication and aid with site logistics and construction sequencing.
“Interest in BIM is expanding across our client base,” says Thomas J. Schoeman, president/CEO of Las Vegas-based JMA Architecture Studios, executive architect on the City of Las Vegas New City Hall, Nevada’s largest start. “Currently, JMA is delivering 100% of our projects using BIM.”
Several firms are extending the use of BIM well beyond the construction phase. The Phoenix office of general contractor Kitchell embeds O&M documents, warranties and as-built drawings into a proprietary facilities management tool after completion, says Scott Root, the firm’s virtual construction manager.
While 10 of the largest starts are targeting LEED certification, only one, Sundt’s $108.9-million Arizona State University Interdisciplinary Science Technology Building 4 in Tempe, is reaching for Platinum level. Hardison says a number of his clients have expressed interest in sustainable design, but not necessarily using the formal LEED certification process.
Renewable energy led all sectors with nearly $1.3 billion of project starts, including the 290-MW Caliente Solar Facility in Yuma County, Ariz. Developed by Tempe-based First Solar and sold to Princeton, N.J.-based NRG Energy, the 290-MW project received a $967-million loan guarantee from the U.S. Dept. of Energy. Completion is expected in 2014.
The majority of projects on this year’s list were publicly funded. “The public sector—mainly the federal government—is where we view the majority of our growth in 2011,” says Dick Rizzo, vice chairman of Las Vegas-based Perini Building Co. “Most of our pending projects are civil and infrastructure projects.” Parent company Tutor Perini Corp., Sylmar, Calif., saw a 25% drop in revenue in 2010, Rizzo says, but he expects to see revenues increase approximately 15% by the end of 2011, partially due to company acquisitions.
The outlook for private work is another story. “I don’t believe we’ll see much work in the private sector, especially with the ongoing cost increases in commodities such as oil and metals,” says Dan Bergstein, division manager for Ryan Companies US Inc. The Phoenix-based developer and general contractor has two office buildings on the Top Starts list: one for a private utility in Tucson and the other for a public-private partnership constructing the future home for Phoenix-based FBI personnel. “I believe the public sector will continue to be where we find our work,” Bergstein adds.
Another bright spot in the coming year could be health care, according to Dick Crowley, vice president at Kitchell.
“There is no question that the health-care construction market is starting to open up a bit after a sluggish few years,” Crowley says. “While there’s still a bit of uncertainty concerning health-care reform’s impact on construction, we are starting to see a loosening up of capital, especially in the private sector.”
Others in the industry agree. JMA’s Schoeman says his firm is projecting a 10% increase in business for 2011, mostly in health care and public work. “We are thinking positively,” Schoeman adds, echoing the thoughts of many.
|Rank 2010||Project Location||Project Cost||Start Date/ End Date||Owner / Prime Contractor|
|1||Agua Caliente Solar Facility Dateland/Hyder, Ariz.||$967 million||Late 2010 2014||NRG Energy First Solar Electric LLC|
|2||Red Mesa Wind Farm Seboyeta, N.M.||$215 million||May 2010 2011||NextEra Energy Resources LLC Wanzek Construction|
|3||City of Las Vegas New City Hall Las Vegas||$146.2 million||Jan. 2010 Feb. 2012||Forest City Enterprises The Whiting-Turner Contracting Co.|
|4||Health Sciences Education Building on the Phoenix Biomedical Campus Phoenix||$129 million||May 2010 Aug. 2012||City of Phoenix/Ariz. Board of Regents JV: DPR Construction/Sundt Construction Inc.|
|5||Mariposa Land Port of Entry, Phases 2-4B Nogales, Ariz.||$119 million||Sept. 2010 Jan. 2014||General Services Administration Hensel Phelps Construction Co.|
|6||Arizona State University Interdisciplinary Science Technology Building 4 Tempe, Ariz.||$108.9 million||Mar. 2010 Mar. 2012||Arizona Board of Regents Sundt Construction|
|7||San Carlos Apache Medical Center San Carlos, Ariz.||$106 million||Jan. 2010 Feb. 2012||San Carlos Apache Tribe McCarthy Building Cos.|
|8||Santan Freeway (SR 202L), I-10 to Gilbert Rd. Chandler/Gilbert, Ariz.||$84.7 million||Aug. 2010 Oct. 2011||Ariz. Dept. of Transportation JV: Pulice Construction/Granite Construction|
|9||Salt River Project Coronado Emissions Control Project St. Johns, Ariz.||$80 million||Jan. 2010 April 2012||Salt River Project Sundt Construction|
|10||UNM Sandoval Regional Medical Center and UNM Medical Group Office Building Rio Rancho, N.M.||$73.5 million||June 2010 Feb. 2012||University of New Mexico Kitchell|
|11||Casino del Sol Hotel and Parking Structure Tucson, Ariz.||$71.2 million||April 2010 Oct. 2011||Casino del Sol McCarthy Building Cos.|
|12||Maravilla Scottsdale Lodge and Casitas Scottsdale, Ariz.||$70.1 million||Dec. 2010 April 2012||Senior Resource Group The Weitz Co.|
|13||Banner Good Samaritan Medical Center Operating Room Expansion & Renovation Phoenix||$70 million||June 2010 Aug. 2012||Banner Health DPR Construction|
|14||U.S. Route 95 Widening Las Vegas||$68.8 million||July 2010 Dec. 2011||Nevada Dept. of Transportation Capriati Construction Corp. Inc.|
|15||Val Vista WTP GAC Implementation Mesa, Ariz.||$68 million||April 2010 Jan. 2012||City of Phoenix Sundt Construction|
|16||GSA Phoenix Professional Office Building Phoenix||$65 million||Oct. 2010 Jan. 2012||Ryan Companies US Inc. Ryan Companies US Inc.|
|16||Unisource Energy Tower Tucson, Ariz.||$65 million||May 2010 Nov. 2011||Unisource Energy Ryan Companies US Inc.|
|18||Kayenta Health Center Kayenta, Ariz.||$61.3 million||Oct. 2010 Oct. 2012||Indian Health Services Flintco|
|19||Tuba City Judicial/Public Safety Facility Tuba City, Ariz.||$57.7 million||Nov. 20102012||Navajo Nation JV: Arviso/Okland Construction|
|20||The Salvation Army Ray & Joan Kroc Corps Community Ctr. Phoenix South Mountain Phoenix||$52 million||Mar. 2010 Feb. 2012||The Salvation Army USA Western Territory Haydon Building Corp.|
|21||University of N.M. South Campus Student Apartments Phase 1 Albuquerque, N.M.||$47 million||June 2010 Aug. 2011||American Campus Communities Hardison/Downey Construction|
|22||Fountainhead Office Plaza - Lot 7A Tempe, Ariz.||$40 million||Jan. 2010 May 2011||Metro Commercial Property Sundt Construction|
|22||Grand Canyon University Events Center Phoenix||$40 million||Aug. 2010 Oct. 2011||Grand Canyon University Perini Building Co.|
|22||Sonoran Blvd., 23rd Ave. to Cave Creek Rd. Phoenix||$40 million||Nov. 2010 2013||City of Phoenix Haydon Building Corp.|
|25||Naco Border Patrol Station Bisbee, Ariz.||$32.1 million||Oct. 2010 Q2, 2012||U.S. Army Corps of Engineers Summit Builders|