Category: Uncategorized

K-12 Making a Comeback

Plunging tax receipts, state budget disasters, PlanCon moratoriums and attempts at PlanCon reform have all been wet blankets on what was once a staple of the construction industry: the K-12 school market. What was once regularly a $300-$500 million/year opportunity fell to $100 million or less after the recession. The market is still very thin by historic standards but the return of big projects has made K-12 one of the growth sectors of 2016 thus far.

Throught the first three months of 2016, K-12 contracting volume is way up over 2015. At $146 million, contracting is more than ten times what it was in the first quarter of 2015.

benchmarks 2016-5Most of the volume in K-12 has come from just a few projects: the $67 million Thomas Jefferson High, $25 million South Fayette High and $34 million Ringgold Middle School jobs. The $25 million Chartiers Vally Middle School project is awaiting award of contracts and nnother $49 million Chartiers Valley High project is out-to-bid. Also bidding now is the $10 million Bentworth High and the new $22 million Rogers Elementary in Shaler is about to be released to bid.That’s $230 million from a half-dozen or so projects.

The problem for K-12 is those projects more or less make up the market in 2016. There will be other work but the total for 2016 will probably not top $300 million. With PlanCon effectively shut down the past year, there will be fewer projects on the street in 2017. That’s why prices have been dirty low, even in a K-12 bubble.

In project news, Mascaro was the low general on the re-bid of the $42.7 million Brush Creek Water Pollution Control Plant in Cranberry Township. Mascaro was also low on the first round and their bid of $35.9 million is expected to be awarded at the May 5 supervisors meeting. Franjo Construction was identified as the successful bidder on the 116-room Homewood Suites at the Village of Cranberry Woods. TBI Contracting is preparing to start work on n 80,000 sq. ft. and 45,000 sq. ft. two-building expansion of Callery Industrial Park.

Late last week there was word that Shell had put the Monaca cracker on hold until February 2017. The project was one of several affected by a corporate capital budget cut that will result in a slowdown of the construction of the project in Monaca. Contracts will go ahead for work that was bid but the schedule will slow to reduce the cash flow impact in 2016.

In Praise of Collaboration

Last night the AIA-MBA Joint Committee held a launch event for its Project Collaboration Best Practices Guide at the MBA’s Training Center. The presentation was the culmination of several years of roundtables with owners from around the region and represents the suggested practices of companies that have been using collaborative delivery models, up to the use of IPD agreements. If you’re interested, there’s a short survey you can take to add your opinion about these collaborative practices.

Javaneh Jabbari and Jeremy Tong from CMU (center) are among the guests at the AIA_MBA Joint Committee presentation March 30.

One of the participants in the roundtable discussions, the University of Pittsburgh, approved its capital spending yesterday. The $34.7 million in projects was indicative of Pitt’s reduced construction spending, although the Gallagher Administration seems to be building momentum for some very significant projects within the next few years. The headline project for 2016 is actually the $5.7 million renovation of a building in downtown Bradford PA to make the Marilyn Horne Museum. Carl E. Swanson & Sons is the low bidder on that project. Among the other major projects planned is a $7.2 million upgrade to the Starzl BST and a $6.5 million renovation to a dorm at Pitt-Johnstown.

In other project news, Rycon Construction was awarded the Classrooms 232 & 332 renovation at the Cathedral of Learning. Uhl Construction was selected for the $8 million expansion of Sisson Motors in Washington, PA. PJ Dick was awarded the $4.5 million Ft. Ligonier renovations. PJ will also be building the 55,000 square-foot new office building at McCandless Crossing that Kevin Dougherty from AdVenture Development announced earlier this week. Sports & Exhibition Authority selected Massaro CM Services as construction manager for its 798-car, $14 million North Shore Parking Garage.

A Couple Decisions on High Tech

Over the past week, two projects with ties to Pittsburgh’s new tech economy moved a step closer to construction. Carnegie Mellon selected Mascaro Construction as construction manager for the new Tata Consulting Services building on Forbes Ave. The $15 million, 40,000 sq. ft. new building will be at the site of CMU’s electric vehicle charging station, across from Panther Hollow.

In Lawrenceville, Franjo Construction was selected to build the $12 million, 65,000 sq. ft. new robotics research building at the RIDC’s Lawrenceville Technology Center.

Last week’s results from the bidding of the new middle school at Ringgold School District show that the public market is still very competitive. Like earlier projects at Thomas Jefferson and South Fayette, the Ringgold Middle School came in under budget at $33.8 million, with Hudson Construction from Sharon as the low general contractor. Two of the three low generals were from outside Pittsburgh. That’s a sign that the competitiveness won’t end soon. Those that remember the bidding market after the crash in 2009 may want to re-think the public market. Bid lists were measured in the dozens and a number of the projects went to Ohio or eastern PA contractors. Few ended well. Until Harrisburg comes to its senses and the K-12 market gets back on its feet – at least a year away – it might be best to tread lightly in the public market. Thank goodness the private development sector is still strong in Pittsburgh.

Commercial Real Estate News

After a recent story about softening at Southpointe, there have been two notes this week that suggest that the region’s largest office park is bouncing back quickly. Southpointe added millions of square feet since the start of Southpointe II back in 2006. The rise of the natural gas business filled the park up with names like Range Resources, MarkWest and Noble Energy. The downturn in commodity prices has meant that some of these businesses have pard back and Southpointe has seen vacancy rise to 10%. That’s going to be a fact of life in Washington County as long as the gas business is driving the economy.

Earlier this week, Mylan announced that it was going to build a 1,407-car, $14 million garage adjacent to its Southpointe HQ (Carl Walker Construction is the project’s general contractor). Today, it was reported that MedExpress was interested in leasing one of the two empty buildings that make up the bulk of Southpointe’s vacancy.

Further up the road, Burns & Scalo Real Estate Services announced plans for two new 80,000 square foot buildings at Abele Business Park in South Fayette Township. Jim Scalo said that the buildings would be spec and that there was already a significant lease in the works. Burns & Scalo also has a couple of new 120,000 squar foot buildings on the boards at the RIDC Park West, although land acquisition hasn’t been completed.

Changes at AHN Slow Construction

The new administration at Allegheny Health Network has put a number of projects that had been out for proposal on hold at least temporarily. As many as a dozen projects at AHN facilities, including Forbes Regional, Allegheny General, West Penn, Allegheny Valley and Jefferson Hospital, as well as some medical office buildings, were being priced but most have not proceeded. Interviews for the $20 million NICU project at West Penn – which received a $9.1 RACP grant – have not occurred, although the project is reported to be going ahead. With new CEO Cynthia Hundorfean taking the reins in February, it’s not surprising that capital spending would be evaluated. It’s unfortunate for the construction market that the evaluation comes when there was a meaningful flurry of activity.

The Benter Foundation selected Jendoco Construction as contractor for the $3 million renovation of its offices in the Benedum Tree Building. The design/build team of Mascaro/R3A was selected to do the second pahse of the work at The Program for Offendors. The project is the expansion of into another roughly 60,000 sq. ft. of the former Keystone Plumbing Building in Homestead to accomodate about 230 beds for female offendors. MBM Contracting was awarded the $1 million Canonsburg Hospital nursing unit renovation. CMU is taking CM proposals on the Tata Consulting Services Building (TCS) from MAscaro, Mosites, PJ Dick, Rycon and Turner; aand architectural proposals from Skidmore Owings Merrill, SHoP and Bohlin Cywinski Jackson. RIDC is interviewing Volpatt, Franjo and A. Martini & Co. for the 65,000 sq. ft. new Lawrenceville Technology Center. That’s the $12 million new center for robotics research that will further accelerate the research on robotics and automated vehicles that is going on in conjunction with CMU and private companies like Uber, Google, Ford and Tesla.

Corrections for a Bad Day

In the BreakingNews email blast yesterday there were several glaring errors or confusions that should be corrected. Sometimes the desire to get news out means having less details than you’d like but that was pretty sloppy. My apologies.

There are actually six contractors competing for the CM role at RIDC’s 65,000 sq. ft. robotics research facility in Lawrenceville. In addition to Volpatt, A. Martini and Franjo, proposals will be taken by Landau, Continental and TBI Contracting tomorrow. West Penn’s $20 million NICU project has not moved past the proposal submissions from Jan. 27. Some half-dozen contractors submitted proposals, including A. Martini, PJ Dick, Mascaro, Massaro and Turner. No word on the next step. The Tata Consulting Services building proposals were just going out to CM’s; the wording in the email sounded like CMU was taking proposals yesterday.


Wrapping Up the Week

There was news this week about the new UPMC South hospital being proposed. The new 300,000 square foot, $100 million+ hospital will be located off Route 51 on Lindsay-Snyder Drive in Pleasant Hills. UPMC is going through the process of getting zoning approvals and having CannonDesign begin drawings. The process of getting a CM on board will take place after the approval process is finalized.

Burchick Construction was chosen for the $3 million buildout for Oculus at Schenley Place. Winco Development hired Massaro Design Build for its new Route 28 North Business Park, which will have 3 buildings totaling 141,100 sq. ft. in phase 1. The $26 million Chartiers Valley Middle School went out to bid, due February 24. Allegheny Health Network has a number of projects out for CM proposals, including the $9 million NICU at West Penn Hospital. RIDC has asked A. Martini & Co., Franjo and Volpatt to submit proposals for the new 65,000 sq. ft. building at the Lawrenceville Technology Center. The Betner Foundation is taking final proposals and interviewing Jendoco and A. Martini next week for its $3 million buildout at the Benedum Trees Building.

Oxford Makes More News

Oxford Development closed today on the sales of its 1.1 million square foot flagship office, One Oxford Centre in downtown Pittsburgh. San Francisco-based Shorenstein Properties is the new owner of One Oxford, which should expect to see some significant renovations during the next year or so.

One Oxford Centre - 01The sale brings back the memory of one of the biggest gambles taken on commercial real estate in Pittsburgh. When Eddie Lewis pushed ahead with construction of One Oxford in 1980, the project was 100% speculative. The building opened at the end of a deep national recession and the beginning of the collapse of steel manufacturing in Western PA. It was a tribute to Lewis’ optimism and tenacity that the project succeeded. Many developers in other cities met with disaster on similar projects at that time.

Oxford is in the midst of a flood of development activity in Pittsburgh as 2016 begins. Construction on the Hub at 3 Crossings is about to begin as work is well underway on the 2555 Smallman Street office building.

The developer selected A. Martini & Co. this week as contractor for its 99-unit Craft Place Apartments in Oakland.

What I Saw in Monaca

One of the disappointments of 2015 for the construction and development business was Shell’s further deferral of a decision to proceed with the investment in an ethane cracker in Monaca. The final decision was long rumored to have been made in December, pending final approval from board or shareholders or someone. It now looks as though no announcement will come before April (and several involved with the job don’t expect anything prior to June); however, if all jobs on hold were as active as this, construction would be a very lucrative business.


This is what I saw from Route 18 on a gloomy January 13 trip past the site. A photo can’t begin to represent just how much that half-mile stretch of riverfront and hill side has changed over the past year. For those unfamiliar with Frankfort Road, the area to the right of the road pictured above rose steeply until the Mascaro/Trumbull Energy Services team began moving 7 million yards of dirt. You can get some idea of the change by focusing on the small area of existing hillside that remains to the right of the car in the photo. What isn’t shown is the massive site to the north (left) of Route 18 where the plant will be built. The other important piece of information not captured is the beginning of the site work at the I-376 interchange just a few hundred yards ahead. Or the 200-plus cars parked in the workers’ lot.

As I’ve been tipped off about the project, the relocation of Route 18 has been the key milepost for which I was told to watch. That I-376 interchange work is a sign that the highway work is imminent. Corporate realities may be keeping Shell from announcing or deciding to green light the project but the activity suggests very strongly that it will. In Potter Township, officials say that Shell and its EPC’s are still coming in with new work and they speculate that April is when they will hear for sure. I’m getting numb to the speculation by this time but I can say that a trip to Monaca will renew your optimism about the prospects of the project.

Low Bids on Thomas Jefferson

Continuing the trend seen at South Fayette and several other public projects over the past few months, bids on the new Thomas Jefferson High School came in substantially under the published budget last week. Nello Construction was the low bidder on the largest contract, the $42 million general construction. According to the PA Builders Exchange, the other low bids were:

HVAC:  Ruthrauff/Sauer – $8,600,000

Plumbing:  A. J. Demor & Sons – $3,259,000

Electrical:  Kirby Electric – $8,380,000

Fire protection:  Preferred Fire Protection – $915,000

Food Service Equipment:  Commercial Appliance – $769,862

The $63.9 million total was more than $12 million under the budget that was approved at West Jefferson Hills School District’s Act 34 hearing. That gives the district room to put alternates in place that might add more value to the project. The competitive price also allays the fears of those concerned that the school district’s Project Labor Agreement would limit competition. While the PLA clearly kept some non-union K-12 bidders from competing, the market conditions more than made up for any limited bidding. School districts and government agencies that can get projects to the street over the next 60 days are likely to find similar bidding conditions. With labor trending tighter as 2016 proceeds, market conditions are likely to shift significantly as the spring unfolds.

In private sector news, Carnegie Mellon made a quick decision, choosing Rycon Construction on Friday as construction mgr. for its $13 million Hamerschlag Hall Maker project. The finished space will allow innovative ideas to be fabricated within a few hundred yards from where the innovators are doing their research and development, using 3-D printing to fabricate new products. CMU will be putting the new 40,000 square foot Tata Consulting Services Building out for CM proposals later this week. Excavation for the $107 million Tepper Quad has been ongoing for about a month. PJ Dick should be ready to take bids on the main packages for Tepper later this spring.

Turner started work before the year ended on the new 54,000 sq. ft. space for JLL in the Tower Two-Sixty office tower that Millcraft Investments is completing. Massaro has started construction on the $20 million, 144-room Residence Inn in Oakland. PJ Dick is taking bids on the first phase of the Mill at Second Avenue apartments that Walnut Capital is developing.