COVID-19 Halts Construction on $200M Anchor Project at Heartwood Preserve in Omaha
California -based Applied Underwriters, a national workers' compensation insurer, confirmed that it is suspending construction temporarily in part to "protect" workers and suppliers involved in building its new office complex on a 50-acre stretch southwest of 144th and Pacific Streets .
Bart Emanuel , Applied's director of development and construction, said the pause, expected to last 90 to 180 days, also will allow a reassessment of the original design, which featured wide open spaces without interior columns.
He said the footprint, or size, of the complex - about 260,000 square feet in just the first phase - is not expected to decrease.
Jeffrey Silver , a company attorney, noted that Applied is about $80 million into the project and dismissed any notion of long-term derailment.
"We're going to finish," he said.
In addition to building its new operations center, Applied Underwriters is the developer and owner of the broader Heartwood Preserve redevelopment area, which spans some 500 acres of prime real estate in west Omaha . Heartwood has become the home of new and emerging development that includes under-construction headquarters for the Carson Group and Valmont Industries .
Heartwood Preserve to add 'The Row' - a town center of assorted uses
So any pullback raises questions about potential ripples. The Applied Underwriters pause, the second time this year the project was temporarily halted, comes as other employers locally and nationally reevaluate space needs and consider heavier reliance on remote work situations.
Emanuel said he knows of no other disruptions at the Heartwood site. A spot check showed continued momentum at projects, including the latest to be announced, a future $500 million town center led by Lanoha Real Estate Co.
Jason Lanoha , whose company last month unveiled the town center for Heartwood, said his plan is "full speed ahead and making great progress."
At this point, Applied is about one-third into completion of its operations center, having already dug out an underground parking garage for 1,048 cars and started steel work with the help of reportedly the largest crane to ever assist a metro area construction project. The roughly 600-employee Applied workforce in the Omaha area was to move into the new digs in 2022, but that date could change now, Emanuel said.
Silver said Applied is in a unique position, as both property owner and workers' compensation insurer. Emanuel said the company has witnessed a new rise in claims related to COVID-19.
"Thus, we seek aggressively to ensure the safety of our own staff. We have recommended great caution, as well, to the many companies we insure, during this crisis."
There was no outbreak at the Omaha construction site, Emanuel told The World-Herald .
On any given day, he said, 100 or more are working at the Applied job site. He said there will be an orderly wind-down.
John Taylor is founder of Omaha -based Project Advocates, which helps businesses locally and elsewhere manage construction projects. Taylor said he's had clients put plans on hold because of the pandemic, but those have been clients who hadn't broken ground yet.
He called it extreme, in his experience, to halt a construction project in midstream, as it is a costly move to unwind supply chains and freeze other matters.
Taylor has no specific knowledge of the Applied situation. But in a typical scenario, he said, subcontractors plan workloads several months out. "Now they're going to have to scramble to keep everybody working."
He said that fortunately right now in Omaha , construction jobs are available and that may make it easier to find other work.
Another large construction project, the new global headquarters for Kiewit Corp. in north downtown, continues and is on schedule for completion early next year. Bob Kula , spokesman, said that Kiewit has implemented safety measures at local project sites and that operations continue. He said that, overall, Kiewit has had "limited disruptions" during the pandemic.
Applied Underwriters, meanwhile, called upon other businesses to review risks associated with their operations "in light of the recent resurgence" of COVID-related claims.