Photo: Scott Judy
Condos rise in busy Tampa, Fla.
A rapid proliferation of high-rise condominium projects has been one of the most notable recent changes to the greater Tampa Bay area, reshaping skylines from downtown to the white sandy shores of Pinellas County and keeping contractors busy.
Athough the multifamily and broader residential markets are slowing while current projects build out, no one’s worrying because there’s plenty of other work for the next few years in commercial construction and other categories. The “market continues to be strong, almost as strong as it was last year at this time,” says Steve Cona, president of the Gulf Coast chapter of Associated Builders and Contractors of Tampa.
Page McKee, senior vice president with Hardin Construction Co.’s Tampa office, also is optimistic. Hardin, in fact, is busy building the Ventana and Grand Central at Kennedy condo projects in Channelside, The Plaza on Harbour Island condo and the Bartels Middle School in New Tampa. The company is also just starting The Westin Airport Hotel Tampa Bay.
“We are looking at several large retail projects and additional residential, including high-rise rental apartments,” McKee says. “Also, the hospitality and office markets are gaining strength.”
Schools and healthcare markets also are busy. One of the biggest building projects in the Tampa area is the $96 million Trinity Hospital Replacement Facility that Bovis Lend Lease is constructing for Community Hospital of New Port Richey in Pasco County.
Dave Marshall of Batson-Cook Co. adds: “There's plenty of work here. We have plenty of backlog.” Batson-Cook is the general contractor for the biggest of the Channelside projects, the $85-million Towers at Channelside.
All contractors acknowledge the current downturn in multifamily project starts. That sector is weighed down by higher interest rates, an overall downturn in sales prices for residential properties and the continued escalation in materials costs. According to McGraw-Hill Construction, Florida residential construction was off 25% in August, 2006, compared to the same month last year, and was down 10% so far in 2006 compared to last year.
But while a lull in condo starts has definitely settled in, contractors and developers agree that the multifamily market would be back strong again.
“There is a lot more opportunity” in the multifamily market, says Kevin Bowen, senior vice president with Bovis Lend Lease in Tampa, the contractor for the Place at Channelside project.
“Construction will continue on (multifamily) projects currently under way, and as that product is completed and absorbed, demand will rise,” McKee adds. “The market is probably entering a 24-month period of slower growth, but the overall demand will be sustained and most of the planned projects that make financial sense will get built, just maybe over a longer period of time.”
Christine Burdick, president of the Tampa Downtown Partnership, says Tampa is not yet oversaturated with multifamily product. “We're lucky being in a market that has not been overbuilt,” she says. “I see a relaxing of the pressure (to build), but I don't see a drop in activity.
Tampa’s economy is blessed with a low-cost environment and a highly educated workforce. Its port is benefiting from New Orleans’ problems as more cargo moves through the metro area. The University of South Florida also adds to the metro’s strength with its research center.
Through the first five months of 2006, McGraw-Hill Construction reported that total building construction in the metropolitan statistical area of Tampa-St. Petersburg-Clearwater is approximately 4% ahead of last year.
Those nonresidential numbers should continue to show a decline through the rest of year, while residential activity will likely turn down by year’s end, according to McGraw-Hill Construction, which is the parent company of ENR.com.
For example, Tampa’s nonresidential market should deliver only about 14.7 million sq. ft. of new projects in 2006, down from 2005’s historic high of 18.6 million sq. ft. But this sector should grow significantly again in 2007 and remain at a steady level through 2010.
“Tampa's housing market will stay hot over the next few years thanks to healthy population in-migration,” says McGraw-Hill Construction. “The national slowdown in housing will barely be felt.”
Growing employment is spurring retail construction and Tampa contractors say the sector is gaining momentum. McGraw-Hill Construction predicts that the value of new retail starts as roughly $208 million in 2006 and ranging between $232 million and $255 million for the four following years.
Currently, there’s a healthy mix of projects overall with multifamily residential the most prominent. Transportation projects are prevalent, too. Granite Construction Co.’s $79-million reconstruction of the Interstate 4/I-275 downtown interchange – previously referred to as “Malfunction Junction” for being the center of traffic tie-ups – is finished. And while that should have eased traffic movement into and out of the downtown core, Gilbert Southern’s neighboring $158.2-million reconstruction and expansion of a 3-mi-long stretch of Interstate 4 should continue to slow travelers as that project moves forward to its scheduled 2008 completion target.
Meanwhile, commuters using the Lee Roy Selmon Crosstown Expressway may finally get a break with this summer’s opening of the $470 million Reversible-Lanes Bridge. The Tampa-Hillsborough County Expressway Authority project was delayed by more than a year after it experienced a structural collapse in early 2004. Construction, led by PCL Civil Constructors of Tampa, was halted while the project’s engineering was investigated.
Elsewhere, a joint venture between Flatiron Constructors of Longmont, Colo., and Tidewater Skanska of Virginia Beach, Va., is just starting work on its $192.7-million Tampa Airport Interchanges contract. The project will remake two State Route 60 interchanges, at Spruce Street and the Courtney Campbell Causeway, and will include a total of 30 phases. The project’s scheduled for completion in spring 2010.
Another major transportation project remained in limbo, however. Bids for the reconstruction of Interstate 275 from the Howard Frankland Bridge to Himes Avenue came in roughly $100 million above the Florida Department of Transportation's initial estimate. PCL Civil Constructors was the low bidder with an estimate of approximately $363.8 million.