Industrial, Roadway Projects Lead Top Starts Ranking
As expected, the energy sector continues to dominate regional starts, representing many of the highest-valued projects across Arkansas, Louisiana, Mississippi, Oklahoma and Texas. The top 25 projects to break ground in 2018 totaled nearly $23 billion in work, compared with approximately $13.5 billion in 2017.
All but eight of the 55 projects included on this year’s Top Starts ranking are in Texas, with three projects in Louisiana, five in Oklahoma and none in Arkansas or Mississippi.
“The majority of the megaprojects [in Texas] are coming with industrial and transportation,” notes Meloni McDaniel, president and CEO of TEXO. “I’ve seen quite a few in the $400-million to $500-million range. And I don’t see those stopping.”
Texas contractors aren’t seeing signs of things slowing down either, McDaniel adds. “A few of them have had a few projects shift, but they haven’t been canceled,” she adds.
The top nine projects on this year’s ranking top $1 billion each, and all but one are pipelines or refinery projects.
Fifth on the list is Bois d’Arc Lake, a $1.6-billion, 16,641-acre reservoir under construction for the North Texas Municipal Water District northeast of Dallas. It will be the first major reservoir to be permitted and built in Texas in nearly 30 years, according to program manager Freese and Nichols Inc.
Wrapping up the top 10 projects is the $962-million Twin Ship Channel Bridge, a pair of bridges that will span 4.1 miles across the Houston Ship Channel. The southbound bridge is expected to open to traffic in fall 2021, while the northbound bridge will open by fall 2024.
Infrastructure projects are plentiful because that’s a sector in which Texas is deficient, McDaniel says. Fourteen of the 55 project starts belong to the Texas Dept. of Transportation. The largest is the $855-million Grand Parkway Segments H and I-1, one of the final pieces of the third and outermost highway loop that stretches 180 miles around the greater Houston area.
“I haven’t had one member express concern to me for 2019. The biggest issue is people, and that is the bottleneck right now,” McDaniel says. “Economists at the beginning of the year said Q3 and Q4 we may see more of a dip, but I think their dip was bringing us back to normal.”
“Texas is fortunate to have a pro-business government and a thriving economy,” adds Russell Hamley, president of Associated Builders & Contractors of Greater Houston. "Both the commercial and industrial construction industries have seen a marked economic improvement year over year from 2018 to 2019, and we are happy to say that the forecast is also looking bright for 2020."
In Oklahoma, where a megaproject is one that totals more than $100 million, contractors’ opinions are mixed on the future of these jobs, according to John Smaligo, president and CEO of ABC Oklahoma.
“Some thought that megaprojects were maybe contracting slightly over what we’ve had in recent years, and then others said, it looks like it’s probably going to maintain,” he says. “It’s been a really good year. We hear from our contractors regularly that they are just slammed with business. Most people seem pretty bullish looking into the future.”
Among the largest Oklahoma projects to break ground last year were the $360-million Sofidel America Paper Factory and the $288-million Oklahoma City MAPS 3 Convention Center.
“The Oklahoma Turnpike Authority has a program called Driving Forward, which is a $935-million expansion of the turnpike system. It includes a big widening project from Tulsa to Bristow, which is about $300 million,” Smaligo says. “Then the Eastern Oklahoma County Loop, which is a $449-million project,” broke ground in January 2018, he adds.
The largest Louisiana projects to break ground in 2018 were Entergy’s Lake Charles Power Station, an $872-million natural gas-fired, combined-cycle unit, and the $750-million Bayou Bridge Crude Oil Pipeline.
“If there is a region for industrial growth in this country, the Gulf Coast fits the mold. The pipeline of talent in our area is growing more robust each year, and the location and local resources are unmatched,” says David Helveston, president and CEO of ABC Pelican Chapter.
“We also see promising industry investment, in terms of quality and quantity, going in to the state of Louisiana,” he says.
While no major projects in Mississippi made this year’s ranking, many others are drawing closer to completion or are on the horizon. The $1.4-billion Continental Tire Plant that broke ground in November 2016 will be complete later this year, notes Bob Wilson, executive director at the Associated General Contractors of Mississippi chapter in Jackson.
A recently announced project is the $260-million casino and resort development called Foxwoods Resort Casino at Biloxi Pointe. “They have to get their gambling license before they can start construction, but no opposition is expected. That project is in the middle of a mixed-use development in progress in the $100-million range,” Wilson says. “And on the Mississippi Gulf Coast, other casino projects, all in the $100-million range, are expected. In total, they will easily top the $1-billion mark.”
With reporting by David M. Brown