Designers, Builders Capitalize on Region’s Steady Growth
Construction activity in New England appears to have reached such a volume that regional design firms and contractors are much more able to keep busy closer to home than in the past. That’s the sentiment of some firms participating in this year’s regional market surveys.
The last two to three years, Cambridge Seven Associates Inc. has performed 75% of its work in the “red hot” New England market, says Gary Johnson, president and CEO. The Cambridge, Mass., midsize firm previously split work evenly between inside and outside the region. “It’s a happy trend in my mind,” Johnson says. “Not that we are not looking outside the region, but we are finding that there’s lots of good projects right here closer to home.”
The trend is evident in both ENR New England’s inaugural Top Design Firms survey as well as its second-annual Top Contractors survey. The 52 participating design firms reported a total $1.8 billion in regional revenue in 2016, while 30 contractors reported $8.8 billion in revenue. Last year, the 19 participating contractors had total revenue of $6.28 billion.
The Top three firms in last year’s contractors ranking remain at the top of the chart this year, with Suffolk reporting $1.4 billion in revenue, Consigli Construction Co. Inc. tallying $1 billion and Shawmut amassing $699.1 million. Suffolk and Consigli are both working on the new General Electric headquarters on Boston’s Fort Point Channel.
The No. 11-ranked design firm, Gensler, with $47.12 million in revenue, is designing the $200-million, 400,000-sq-ft project.
New England’s healthy economy is spurring growth, most noticeably in the hospitality sector. This year’s participating contractors and design firms combined for a total of $176.5 million of revenue in the sector.
One of Boston’s largest hospitality projects, One Dalton, is being built by Suffolk and designed by Cambridge Seven, which is the No. 24-ranked design firm. Cambridge Seven is collaborating with architect Pei Cobb Freed & Partners on the 61-floor luxury condo tower that will include Boston’s second Four Seasons Hotel. “We are one of a handful of cities around the world the Four Seasons wants two hotels in,” Johnson says. “There’s no question that hotels in the Boston region and even in New England are being built at an incredibly fast pace.”
Meanwhile, state officials recently announced plans to build Boston’s largest new hotel near the city’s convention center. The $550-million Omni Boston Hotel is being designed by No. 7-ranked Elkus Manfredi Architects, which also was named ENR New England’s first-ever Design Firm of the Year. Design firms Stull & Lee and Moody Nolan are collaborating on the project.
State Budget Woes
While hospitality work has done well, state budgetary woes are dragging down other sectors, such as infrastructure. For example, Connecticut’s budget deficit was projected at one point to reach $5 billion over a two-year period.
“One of the first places they look to cut is infrastructure, so we are a little nervous about that,” says Dave Skerrett, senior vice president for The Middlesex Corp. which has a significant infrastructure portfolio in Connecticut.
The No. 18-ranked firm with $130.76 million in revenue, however, isn’t concerned for its existing projects in Connecticut, including the I-95 West River Bridge rehabilitation expected to be completed in November. The firm also recently inked a $236-million joint venture with No. 10-ranked Cianbro ($278.52 million in revenue) to rehabilitate the Walk Railroad Bridge in Norwalk. The 121-year-old movable-span bridge carries train traffic into New York City.
Rhode Island, Maine and Massachusetts also started their fiscal years without budgets. Skerrett says the Massachusetts Dept. of Transportation, after tackling several mega-infrastructure projects in recent years, is now focused on repairing the Massachusetts Bay Transportation Authority’s dilapidated infrastructure.
One such MassDOT megaproject is the rehabilitation of the historic Longfellow Bridge that connects Boston to Cambridge. The joint venture of Consigli, No. 6-ranked Skanska and J.F. White is constructing one of five major projects of the commonwealth’s $3-billion Accelerated Bridge program. Maintaining the 2,135-ft-long bridge’s historic character includes Cianbro’s work to assemble members with old-school rivets from hot-rolled steel for the exposed areas.
Back of the Class
Faced with its own fiscal constraints, Massachusetts’ system of public colleges and universities recently announced a mandate to repair buildings constructed four or more decades ago rather than replacing them.
Cambridge Seven performs 25% to 35% of its business in the education sector, but the mandate doesn’t trouble Johnson because, he says, gut rehabs can have higher fees than designing new facilities since “you have to assess what’s there.”
Nevertheless, Johnson is watching the region’s real estate bubble, noting that such bubbles tend to burst every seven to 10 years. “We just passed that seven-year mark from the last recession, and architectural firms are notorious for being the canary in the coal mine,” he says. “But so far, fingers crossed, knock on wood, things are looking good.”