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Page 20 Minnesota Real Estate Journal November 2008
<br /> Construction
<br /> From page 1
<br /> is project would have taken at
<br /> t an additional four months-and
<br /> ih
<br /> s only if everything went right-if
<br /> we had gone with an alternative design '•--r ,I." ,•.
<br /> method,said Arlen Kleinsorge,divi-
<br /> sion manager with McCownGordon
<br /> Construction.
<br /> Kleinsorge, along with other con- •
<br /> struction pros interviewed for this • +ti II us 0 •
<br /> story,agreed that build-to-suit projects
<br /> are becoming more popular among
<br /> municipalities, especially as these •
<br /> municipalities seek ways to keep their moo►:
<br /> budgets under control in tough eco- _ ■........-,....,,,�,.,,.�w�
<br /> nomic times.
<br /> More municipalities are looking for t
<br /> expedited delivery of their projects,
<br /> McCown said. Going with the
<br /> design/build method is one way for
<br /> municipalities to move projects along
<br /> quickly and save money.You get the
<br /> best team in place to execute a project.
<br /> You're not working with companies
<br /> who happened to be the low bidders
<br /> and are only responsible for one por- for this story said that 2009 may prove works and university-sponsored con- now the private-sector work is slow.
<br /> tion of the project. In design/build, to be a tough year for the industry.The struction projects are also providing a The public work is helping us maintain
<br /> you're working with a team dedicated commercial markets in the Midwest boost to the industry,he said. our construction volume.
<br /> to bringing the project in on time and tend to react to economic woes any- The universities and the public sec- The village has been schedule-con-
<br /> on budget. where from six to nine months after tor have money.They don't necessari- scious throughout the process, Seil
<br /> The growing popularity of the they hit.Because the nation's economy ly have to go out and acquire these said. That's why going with
<br /> design/build method of construction is is suffering now,it makes sense,then, more difficult-to-get loans and project- design/build,and the speed and flexi-
<br /> just one trend that commercial con- that the region will see a significant financing that a typical developer bility that it allows,was so important,
<br /> struction professionals cited when slowdown in commercial construction would have to get,Bellina said.That's he said.The goal now,he said,is to
<br /> looking at the state of their industry as next year. part of the reason that those markets complete the project by Jan.31.
<br /> 2008 nears its end.They also pointed Part of the challenge is that develop- are still active. It's a compressed timetable that
<br /> ontinued demand for new health- era will continue to find it difficult to never would have been possible with
<br /> facilities and Aikresearch-and-devel-iii
<br /> obtain financing for their projects,said Staying active more traditional construction methods,
<br /> ment centers as providing a boost to R.Hank Bellina,director of the divi- Woodridge, Ill.-based Mor- Seil said.
<br /> a commercial construction market that sion of major accounts for St.Louis- - gan/Harbour Construction is one of We don't necessarily have to do all
<br /> is in the midst of a slowdown. based ARCO Construction. those construction firms that is adapt- the drawings,put them out for pricing
<br /> Interviewees also had kind words for Banks and lending institutions are ing.The company,which specializes in and then wait for responses,Freehauf
<br /> municipal public works projects as one already requiring more equity on all design/build projects, is currently said.We can go out for pricing on those
<br /> other area of the commercial construe-
<br /> types of construction projects,Bellina developing a 120,000-square-foot two- items that do require a long lead time,
<br /> tion industry that continues to thrive. said.They are also looking for projects story public works facility for the vil- the pre-cast and the steel,say,and get
<br /> But other sectors-retail,certainly, that already have several tenants lage of Wheeling,Ill. those in order so we can rush the
<br /> and industrial and office in many mar- attached to them. The facility,which will sit on nearly schedule for both design and construc-
<br /> kets-are slowing down.This means There is no such thing as a slam 12 acres of land,is another example of tion.
<br /> that it's those general contractors and dunk for financing anymore for con- both the public-works projects and Under traditional construction meth-
<br /> developers who adapt to what is cer- struction projects,Bellina said.It does- design/build construction method that ods,the possibility of delays is high,
<br /> tainly a changing market are those who n't matter how great your credit rating is now fueling building activity. Freehauf said.In the standard way of
<br /> will survive the slump,developers said. is.There are no more slam dunks. As Warren Seil,vice president with building,the owner of a project hires
<br /> When things were on a roll,every- Speculative projects are drying up, Morgan/Harbour,says,the Wheeling an architect and then puts those draw-
<br /> one and their mothers were opening a and will continue to do so in 2009,he project is a true public-works project. ings out to bid.This very beginning
<br /> said.At the same time,the number of The village will house its police,pub- stage of the process is a lengthy one
<br /> construction company, said Bill
<br /> Plesich, director of marketing with new retail projects,industrial centers lie-works department, engineering itself,as it can take anywhere from a
<br /> Columbus, Ohio-based Renier Con- and warehouse distribution centers is staff,vehicles and equipment and road- month to two months for the architec-
<br /> struction. These more challenging steadily falling, Bellina said, some- salt dump in the facility. ture team to draw the plans and about
<br /> times will weed out a lot of the weaker thing that will only intensify in 2009. They have everything covered there, four more weeks for the bidding
<br /> contractors.The ones who are finan- A lot of those projects have been put Seil said. process to play out.
<br /> cially set who are able to adapt to cur-
<br /> on hold,he said.It doesn't look great Greg Freehauf,vice president with There could be early problems,too.
<br /> rent market conditions, are the ones for 2009.There are a lot of sectors that Morgan/Harbour,said he expects to see What if the bids all come in too high?
<br /> who are still going to be here when the are definitely slowing down. municipalities continue to rely on the The design process has to start over
<br /> Bellina does see some good news, design/build method even more fre- again,costing more precious time.
<br /> economy starts to improve again.It's
<br /> just like in the housing industry.The though.The demand for healthcare and quentiy in the coming months and
<br /> ones who weren't financially secure medical facilities continues to grow, years. This is avoided in the design/build
<br /> have gone out of business already. and should do so throughout 2009,he Design/build for the most part has method.
<br /> said.Midwest construction companies been popular in the private sector.But In design/build,we are working with
<br /> Preparing for a tough 2009 are being called upon to build more now we're seeing more of it in the pub- pricing much closer,Seil said.We can
<br /> Commercial construction work may biotech research laboratories and the lic sector,Freehauf said.It is attractive put together a budget much quicker.
<br /> developments that spring up around to both the builder and the public That's what we did on this particular
<br /> have slowed in 2008. But industry
<br /> iherrs worry that this year may only them. municipality because it gives you the project,and it is paying off in a com-
<br /> e beginning of a long stretch of Senior-living facilities are becoming advantage of fast-tracking a project and pressed construction schedule.
<br /> ggish building activity. a mainstay in the commercial construe- compressing its schedule.It gives you William Birck,president of Chica-
<br /> Commercial developers interviewed tion industry,Bellina said.And public- a better value for your dollar. Right
<br /> P Construction to next page
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