Massive Projects Lead Southwest Building Revival
The 25 construction projects included in the Southwest Top Starts ranking add up to roughly $5 billion, down from the approximately $6 billion that was reported a year ago.
The list includes projects with construction costs of $50 million or more that were started in Arizona, Nevada and New Mexico during calendar year 2017.
A pair of billion-dollar projects sit at the top of the list. Work has started on Intel’s semiconductor plant in Chandler, Ariz., while a major football stadium is being built in Las Vegas.
The Intel Fab 42 Semiconductor Facility, with an estimated construction cost of approximately $1.5 billion, is being built by Hensel Phelps Construction; completion is expected in 2021.
Jim McGregor, principal analyst at TIRIAS Research, says Intel’s expansion is not only a powerful jolt for the construction industry but also encourages future high-tech projects.
He says past tech investments in the Southwest—including those by Google, Apple, Facebook, eBay and many others—have established the region’s reputation as a tech center, which is necessary for further growth.
“Arizona and the Southwest are known for tech, and that is really important,” McGregor says. “If you lose the moniker, you lose being a part of the biggest growth sector for the next 50 to 100 years.”
Outside of tech, varied project types are scattered among the top 10. In Nevada, the stadium for the National Football League’s Raiders franchise is being built on a parcel of land off the Las Vegas Strip at a cost of $1.3 billion.
When completed in 2020, the facility—being built by a joint venture between general contractors Mortenson and McCarthy Building Cos.—will seat 65,000.
For New Mexico, the biggest project is a $400-million, 345-kilovolt transmission line near the town of Hobbs. Excel Energy is working to finish the line this year. The transmission line is planned to connect to a substation in Abernathy, Texas, officials say.
Although the cumulative project value on the Top Starts list may be down, the industry as a whole is thriving. According to recent data released by the U.S. Bureau of Labor Statistics, since 2011 construction jobs have nearly doubled to more than 20,000 in Nevada. New Mexico saw 7% growth in 2017, and Arizona ranks No. 12 nationally in construction jobs.
Dan Spitza, vice president of Achen-Gardner Construction, says now that the economy has improved, many of the public- and private-sector projects that are beginning development are “we-need-it-yesterday” projects.
He adds that fast-track pressures have spurred and encouraged the use of alternative delivery methods.
“There is an administrative delivery or contract type for any owner. Then the owner can be involved as much as they want to be,” Spitza says.
He says the construction management at-risk method especially fits fast-track projects. On smaller projects, cities and other municipalities have steered more work toward job order contracting out of necessity during the economic downturn, and they will likely continue to use the method extensively in the future, he says.