CT Construction Digest Friday July 23, 2021
O&G Industries has been selected as the construction manager for the new Torrington Middle/High School.
The City Council authorized a contract Monday for the city-based firm to construct the grade 7-12 school, which residents passed last November. The Board of Education and the project’s building committee had previously approved the contract.
The construction budget and maximum price of the school, which include space for district administrators, is $130.7 million.
O&G and SLAM Collaborative, a Glastonbury-based architectural firm, ran into issues last month with overestimated construction budget costs. After initial attempts to reduce the cost from $186.4 million, the estimated construction budget stands at $142.1 million.
About $18 million in the estimate is tied to contingency funds and escalation costs.
The original total cost of the project, which residents approved, was $159.5 million. The city school district received an 85% state reimbursement via school construction grants the General Assembly approved in early June.
DRVN Enterprises, the road salt business forced off of State Pier in New London ahead of a planned $235.5 million modernization project, continued its effort Wednesday to stop the project from moving forward.
During a hearing held before state Department of Energy and Environmental Protection Commissioner Katie Dykes, DRVN attorney Keith Anthony argued that DRVN, as opposed to commercial fishermen using State Pier, was overlooked in DEEP’s analysis of water-dependent users at State Pier.
Attorneys for DEEP and the Connecticut Port Authority said DRVN’s arguments are related to its lease at the pier and not an environmental permit.
The CPA awaits DEEP’s permit, which is critical to the completion of the overall plan for the deepwater port and its conversion into a facility to accommodate the offshore wind industry. While work commissioned by the Connecticut Port Authority is well underway at State Pier, permits from DEEP and the U.S. Army Corps of Engineers would allow work to start on dredging and fill to be placed between the two existing piers at the New London facility.
Plans call for the two piers to be joined to create a larger platform for ships delivering massive wind turbine parts for assembly. The CPA is nearing deadlines in an agreement with offshore wind partners Ørsted and Eversource that would put completion of the project, which has already started, in jeopardy.
Anthony argued that a notice of insufficiency issued by DEEP in June 2019 required the CPA to revise its permit application and provide information on current water-dependent users who would be displaced or allowed to work at the pier through construction. He claims DRVN was left out.
DRVN "was a current water-dependent user until February of 2021, when the CPA basically had him sign a memorandum of understanding that said you have two options: you can either leave in February of 2021 or we’re going to seize your salt pile and your equipment," Anthony said. "There was no accommodation for him.”
DRVN President and owner Steve Farrelly "was a small business operating in the eastern part of Connecticut employing Connecticut individuals,” Anthony said. “He was importing salt to the pier since 2014. He would still be doing that but for this application. The only place that salt can be imported via the ocean now in the state of Connecticut is New Haven Harbor. That’s it.”
Dykes, tasked with the final decision, questioned DRVN’s argument in calling for denial of an environmental permit.
“Clearly the Coastal Management Act requires us to prioritize water-dependent uses but it feels that you’re asking us to go further and prioritize or protect specific water-dependent users over other water-dependent users,” Dykes said.
She continued by saying, “the department is not extending a lease here. This is not our lease. It feels to me this is a contractual matter that you’re raising with respect to a different party. I’m struggling to see how if we were to find in your favor that we could provide the relief you’re seeking, which is continuation of a lease. We’re not in control of that.”
Anthony said he was not asking for DRVN to be prioritized, only recognized as an existing water-dependent user.
Attorneys for both DEEP and the Connecticut Port Authority said DRVN’s arguments against issuance of a permit strayed from any legal basis.
Assistant Attorney General Lori DiBella said that in June 2019, DRVN had already been notified by the port operator, Gateway, that its time was nearing an end at the pier. The company was told to vacate by December 2019 but given extensions until February 2020 to allow it to sell its salt.
DiBella said there is nothing in the permitting process that would protect one particular water-dependent user over another.
“There’s just nothing in the law that requires that,” she said. “State Pier will continue to be a water-dependent use.”
She said DRVN’s argument has nothing to do with the permit but has more to do with the business relationship with the port operator Gateway.
“That’s what the situation is about. It’s not about the proposed final decision. It’s about this business and its business relationships,” she said.
John Casey, representing the CPA, agreed and said, “we’re really here on exceptions to one former user’s dissatisfaction with its business with the port operator.”
“What it's trying to do is confuse the matter in my mind,” Casey said. “He knew this project was coming years ago but waited until the very last minute to intervene in this matter.”
DRVN previously filed an objection to DEEP’s draft decision and, once that was denied, filed what is known as a “notice of exception,” which required all sides to file legal briefs.
Casey said the source of DRVN’s argument is “some sort of rights that need to be adjudicated in this matter.”
“That’s simply not the case,” Casey said. “Is DEEP supposed to protect individual users or water-dependent uses? If that was the case, everyone who ever rented a slip at a marina could be aggrieved when they didn’t get a new rental agreement the next year.”
Jeffrey Londregan, representing the city of New London, urged the commissioner to adopt DEEP’s proposed draft decision and issue a permit.
The Day Editorial Board
If you crave hard work, often undertaken in bad weather, and are willing to accept a job carrying inherent dangers even when all precautions are followed, a job in which a paycheck can’t be assured but will result from the size of the next “catch” — then the job of commercial fisherman may be for you.
Yet it is also a job that takes place on the beauty of the ocean, which lets you be your own boss in control of your own success or failure, and is about as far from an office cubicle as a person can get.
It’s not a job for everyone, but thankfully it is for some folks because the fruits of their labor provide fresh, healthy and delicious menu choices. Perhaps as importantly, fishermen and lobstermen like those who operate the Town Dock Fleet out of Stonington are part of our heritage. The region is richer for them.
Over the next few days, a series of Day articles, photos and videos will take a closer look at the industry and this way of life.
It is a way of life that always came with exceptional challenges. A new century has added more, even as technology improved.
Quotas on the size of fish catches for certain species — imposed by federal environmental regulators to avoid stock depletion — cut into profits and can force fishermen further asea and in search of different fish. Fishermen told Day Staff Writer Joe Wojtas, who has long covered the fleet, that they understand the need for quotas, though they often question the logic and practicality behind some of the details.
Now a new challenge is arriving, the planned development off our shores of large wind farms featuring towering turbines bolted into the ocean floor and connected to land-based power grids by buried cables.
Both during construction and once installed, fishermen are concerned about how the wind farms will affect fishing stocks and their ability to access them, interfere with fishing equipment, disturb marine life, and make navigation more difficult.
Failing to add offshore wind to the nation’s renewable energy portfolio is not a good option, as much as we suspect the Stonington fleet would prefer that outcome. It is sound policy to work to lower carbon emissions in an effort to mitigate climate change. Wind power can be a major contributor to that effort, as can solar if done wisely.
This editorial board also supports the continued use of nuclear power to support emission-free power. But practically speaking, the political backing to support a next generation of nuclear power is lacking, particularly here in the Northeast. This makes the contribution of offshore wind power that much more critically important to the region.
But the commercial fishing industry must have a prominent position in the planning and permitting process. Details of fishing activity should be considered in the positioning of turbines, keeping conflicts between the wind farms and the fisheries to a minimum.
In other jurisdictions, fishing fleets have called for substantial transit corridors for their boats, requests that have sometimes met with resistance from the wind-power industry because they reduce the area for turbine construction. Regulators should err on the side of assuring safe navigation and fishing.
Additionally, construction scheduling should align with fishing seasons.
Continuing research will be critical as wind power moves through the construction phase and into production of power. A six-year study around the 35 turbines that form the Westernmost Rough offshore wind farm — several miles off England’s Holderness coast in the North Sea — found no discernible impact on that area’s rich lobster fishing grounds.
That’s a different sea and a study focusing only on lobsters, so any extrapolation is limited, but the report offers encouraging evidence that the fishing and wind-power industries can co-exist.
Maintaining a commercial fishing industry is important, but so too is expansion of the renewable energy industry. Done right, both priorities can be met.
DANBURY — Planners unanimously approved an application by a cancer treatment group to open what could be Connecticut’s first proton therapy center on the city’s West Side, clearing the way for the state to approve the new technology as soon as August.
The city’s Planning Commission, which heard congestion concerns from West Side residents about the $80 million Danbury Proton project during a public hearing earlier this month, attached an unusually long list of conditions in its approval this week.
The conditions include a donation of land to the city by the cancer treatment center “for future roadway improvements along Wooster Heights Road, including the Lee Farm Drive intersection.”
Danbury Proton agreed not to plant trees on the property and to grant the city a “tree-trimming easement” to ensure that trees don’t grow into the approach zone of nearby Danbury Municipal Airport.
Jennifer Emminger, Danbury’s deputy planning director, read the conditions into the record before the Planning Commission vote Wednesday night.
“It looks like it is all there, Jen — a lot of stuff — but you got it all in,” said Planning Commission Chairman Arnold Finaldi. “Well done.”
“All seven pages,” Emminger said. “It was a long one.”
“That’s how we judge the seriousness of an application, by the number of pages in the resolution,” Finaldi said. “It’s very comprehensive, Jen.”
Danbury Proton is the second West Side medical building the city has approved in three months. In April, Danbury gave the green light for a $36 million rehabilitation hospital on 13 acres in The Reserve residential development.
Danbury Proton is one of two proton-therapy, cancer-treatment centers vying for approval from the state Office of Health Strategy, which must approve medical technology that is “new to the state.”
The novel technology, which is available in New York City and Boston, aims to kill tumors with a minimum of damage to healthy tissue.
The second application, Connecticut Proton Therapy Center, is a partnership between Yale New Haven Health Services Corp. and Hartford HealthCare Corp., which has proposed a cancer treatment center in Wallingford.
Danbury Proton plans a 16,000-square-foot building on three acres at 85 Wooster Heights Road, where a group of construction-weary West Side residents complained about the prospect of more construction and congestion.
Danbury Proton insisted it would draw far less traffic than a traditional medical office building because of the specialized nature of the treatments.
Finaldi during last week’s public hearing agreed, saying, “While I empathize with a lot of the neighbors and what they have been through … I am fairly comfortable that the scale of this project is much smaller, and will be much less impactful.”
On Wednesday, Danbury Proton attorney Thomas Beecher thanked planners for their support.
Mary E. O'Leary
NEW HAVEN — The owner of multiple deteriorating warehouses on Grand Avenue is proposing to convert them to residences, although there is pushback on some of the design elements and how it fits into larger planning for the area.
“It is ... a transformation of a really transient area,” architect Ken Boroson said, referring to the commercial properties located at the beginning of the major corridor as it approaches downtown. “It is a really exciting project in my mind.”
The longtime New Haven company, Ungers Flooring America, would continue to have a space on the ground floor at 897 Grand Ave., which together with 873 Grand Ave. would support 34 rental apartments that back up to Lyon Street.
Boroson said they all would be larger units — two- and three-bedrooms, some with dens, although there would be some one-bedroom apartments.
There would be a roof deck and shared amenity space with a new facade on the Ungers building. The name of the project is Ungers Living Spirits, not to be confused with alcohol, Boroson said.
He said the project is combined with more housing across the street at 880 Grand Ave.
A business zone runs along the line of the property as it comes up to the residential zone.
Trachten said the proposal would require some zoning relief. He said the existing conditions commonly are granted variances as they don’t pose a threat to neighbors.
There were several questions this week at the Downtown Wooster Square Community Management Team from Lyon Street residents who abut the Ungers building. Boroson said no additional construction is planned in the back where a garage presently exists. He said a driveway would remain.
Resident Rahul Shah said he was concerned with the number of market-rate and luxury housing units being constructed in the city.
Trachten said these apartments would be developed as market-rate units. “It is just not possible for a private developer to construct affordable housing currently without subsidies,” he said.
But Trachten also said the apartments will not carry the same rents as downtown.
“For the area this will be kind of a pioneering build. I think the rents will be consistent with what the rents are across the street at 850 Grand Ave. They are significantly below what you would see in parts of Wooster Square and the new construction buildings along State Street and Olive,” Trachten said.
In answer to concerns about gentrification, Trachten said this is an adaptive re-use “of three blighted structures,” not the kind of housing that displaces people.
Trachten said it is a corridor that he passes through almost on a daily basis. He described it as a “mixture of homeless people, neighborhood people and it certainly could use some life.”
He said some residential units with ground-floor commercial would be appropriate rather than just being a corridor between downtown and Fair Haven.
One resident said it looks like 873 Grand Ave. has the apartment doors opening onto the sidewalk and into the pedestrian pathway.
Trachten said they will look for a special permit from the City Plan Commission to have residents on the first floor, something usually granted without much difficulty. There would be two opportunities for public hearings.
“There has been a long and difficult zoning history for these buildings,” the attorney said.
He said they are advancing a project “that actually has the ability to be built and to bring housing choice and some commercial use to this area rather than see Ungers shut down and the property just sit vacant for many years.”
They plan to submit plans for the September hearing of the Board of Zoning Appeals.
Mona Berman, a resident, said Grand Avenue was one of three streets designated as gateway corridors in the city for special planning attention.
She said the proposal was rejected by the neighborhood and there was extensive consultation with City Plan staff on the issue.
Berman said Grand is different from Dixwell and Whalley avenues as corridors given how narrow it is. Also, the lot sizes for the commercial buildings are extremely small, and the street is completely enveloped by residential zoning.
She said they had a petition with more than 100 signatures against defining it as a gateway corridor as originally proposed. She said the neighbors got together with City Plan staff to discuss guidelines for future zoning for the street.
Berman said it was rude not to be advised about the proposed residential housing.
She said the neighbors have come up with a long list of items for future discussion. One is the lack of a loading zone for the current commercial use.
Berman also said doors need to be recessed to a lobby to make sure it is not dangerous for people coming in and out. Access to the back apartments is narrow, she said.
Boroson said he welcomed questions and thoughts on the project and wasn’t aware of some of the elements mentioned.
Ian Dunn, chairman of the Downtown Wooster Square Community Management Team, suggested holding a special meeting of the group devoted to the Grand Avenue proposals and another on the long-term vision for the area.
The proposed development of 880 Grand Ave. across the street is simpler, Boroson said.
The architect said it adds two stories to a one-story building. He said a retail space would be created in the front and there is sufficient parking.
Boroson said there would be four 2-story apartments for a total of five units. He said they are 3-bedroom units they view as family apartments.
Boroson said the plans are preliminary at this point.
He said civil engineers would determine what will have to be done to tie into the sewers and storm systems. The architect said he did not know yet how much green space there would be.
Trachten said he is not involved in the 880 Grand Ave. plan but knows it will be subject to full site plan review by the City Plan Commission.
Anstress Farwell, head of the New Haven Urban Design League, wondered where the entrance to the apartments are at 880 Grand Ave. Boroson confirmed that it is Grand Avenue for three units with a rear entrance for the two others.
Farwell said the current zoning is not appropriate for this area and there are no design standards in place. She said the narrow sidewalks don’t even accommodate trees.
She said this leaves “a hot, burned-out feeling.”
Farwell said the historic buildings that still exist and those razed once featured a continuous canopy of awnings. She said special design considerations like this are needed.
She said it is an intensely busy street with traffic that needs buildings “that look like they can stand up to all this activity.” Farwell said the proposal looks like it would be more at home in a small town, not the first part of a major artery.
Farwell said the current regulations don’t fit anything anymore, which is why it has become a “no man’s land.”
“It is an extremely intense environment and it needs a lot closer attention for just basic street planning and interaction with the buildings and the street and really making the pedestrian experience a sympathetic and enjoyable one,” Farwell said.
BRIDGEPORT — Zoning officials are no strangers to contentious meetings when controversial real estate proposals — say a large housing development, a new business or a storage facility — draw out dozens of neighbors in opposition.
And then there are the zoning rules that can make it difficult for property owners or tenants to make welcome changes that help the community grow.
City Hall is nearing the end of a rare comprehensive overhaul of its zoning regulations and associated map and will explain the draft proposals in a 6 p.m. teleconference Thursday.
And if you think you have better ways to spend a summer evening, community and business leaders suggest you reconsider.
“Zoning really affects the quality of life of where you live,” said Deborah Sims, an East End activist. She noted how in that neighborhood, for example, one might find an auto body shop or other business that “popped up” in the middle of a residential street “and shouldn’t be there.”
She also recalled “Mt. Trashmore,” the infamous 35-foot-high, 30,000-ton pile of construction debris that plagued East End residents for years.
“That’s why zoning matters,” Sims said.
Meanwhile Dan Onofrio, president of the Bridgeport Regional Business Council, believes the new rules will promote economic development by eliminating some current ambiguity “so people looking to invest in or purchase a property have a very clear sense of what a building should look like, feel like, be used for.”
“You don’t have to jump through hoops to understand what you can and cannot do,” Onofrio said, which can help grow the tax base and create jobs, he said.
The zoning overhaul, dubbed Zone Bridgeport, is the result of a new 10-year master plan the city finalized in 2019.
According to the Office of Planning and Economic Development (OPED), which is spearheading the effort with the help of a consulting team, the biggest change is moving to a “form-based” system.
“So the (new) zones are based upon building types, then the uses in those buildings,” said OPED in a statement. This is the opposite of the current use-based zones.
“While it may take a bit to get used to, this approach retains the rich architecture Bridgeport prides itself in by codifying design elements,” OPED said.
OPED said the new regulations also aim to: Maintain the scale of neighborhoods; allow “a greater mix of uses” in commercial corridors; bring artisans and small manufacturing to non-industrial areas; encourage more housing and more retain diversity downtown; promote other types of housing by expanding accessory dwelling units — often affordable apartments added to existing single-family homes; and improve the city’s public spaces/streetscapes and public waterfront access.
Anyone wishing to listen in on Thursday’s teleconference can first view the proposed changes at https://zonebridgeport.com/, then connect via that website or by phoning toll free 888-475-4499 or 877-853-5257.
“A resident or business may see something that impacts their property or development in their neighborhood further down the line,” OPED said of Thursday’s meeting. “Involvement now is key to what happens in the future.”
ANSONIA - Drivers heading north on East Main Street are soon going to have to look for another route past Kingston Drive toward the intersection with Main Street and State Street, where the new police station is currently under construction.
That’s because that section of the street will become one-way only. The city has contracted Colonna Concrete and Asphalt Paving, based out of Woodbridge, to begin work on East Main Street in two weeks. The job is expected to take about 90 days.
John Marini, the city’s corporate counsel said that the city’s push to change the layout of the street is to accommodate an expected influx of new apartments and businesses.
“It's really about parking, it's about increasing the parking downtown because of everything going on all the activity, the apartments coming online, police station, restaurants, we really need to up the parking downtown,” Marini said.
The city first announced the change in an October public hearing, according to Sheila O’Malley, the economic development director. The street itself will not be closed during construction. The plan calls for East Main Street to be turned into a one-way heading south for about 1,200 feet starting from the new police station and ending at Kingston Drive. From there the road will continue to be a two way street.
O’Malley said that while the street is wide, not as many cars pass through compared to nearby roads and that part of the street could be put to better use.
“It doesn't get the traffic volume that people think it does, but it doesn't,” O’Malley said.
The new street layout will allow for 120 new parking spaces, O’Malley said. The new spaces will be of particular importance to new residents moving into nearly 300 renovated apartments that will occupy former industrial buildings on the street. Currently, that section of the road has no on-street parking.
Josh Eannotti is the project manager for East Main Street and works for VHB, a consulting company. He said the project will do more than just paint new parking spots and get rid of the double yellow line.
“Although this is a relatively small streetscape project lengthwise, there's really a lot to it,” he said. “The contractor will have quite a bit of clearing and excavation to do.”
The contractor will also build retaining walls, install sidewalks and drainage facilities, and install decorative lighting, according to Eannotti. The project is expected to cost about $385,000, according to the state’s Department of Transportation, which is funding the project through a grant.
In two public hearings, O’Malley said the city had not heard any concerns from local businesses.
“I would suspect that they're going to get more traffic in their area, and that's probably going to be a really good thing for them,” she said.
Stonington — The town has reached a tax break agreement with the developer planning to construct an 82-unit apartment building on the site of the former Campbell Grain Building in downtown Pawcatuck.
That agreement, which fixes the assessment on the $32 million property at $2,054,915 over 10 years, will be sent to voters to approve at a Town Meeting set for Aug. 9 at 7 p.m. at the high school.
The town has said the proposed fixed assessment would save Winn Development $690,748 in taxes over 10 years. During that time Winn would pay $695,000 in taxes to the town. If the parcel remains vacant and undeveloped, it would generate less than $30,000 in taxes over the same period.
The agreement states that it is in the best interest of the town and taxpayers that Winn acquire and improve the property, but the project is economically feasible only if a fixed amount of reduced taxes is agreed upon over the next 10 years.
Town officials see the site as crucial for the redevelopment of the downtown but there had been little interest in the site before Winn's proposal.
The project will consist of a mix of studio, one-, two- and three-bedroom units that will be rented at prices affordable to people who earn 30%, 50% and 80% of the area median income. The project also will contain market-rate units. Plans also call for extending the public Pawcatuck Riverwalk to the property.
Winn is seeking $20 million in funding from the Connecticut Housing Finance Authority and the Connecticut Department of Housing through a competitive grant process. A contribution from the town improves Winn's chances of obtaining the needed funding.
"In summary, the project requires a fixed assessment to be financially viable and competitive for state funding resources. Without the Town contribution, in the form of the fixed assessment agreement, the project will not go forward, and there is a high risk that this vacant, unproductive lot will remain so indefinitely," the town meeting announcement states.
The state Bond Commission will consider Friday whether to shift funding for a $5.5 million loan from a stalled mixed-use development in Hartford’s Upper Albany neighborhood to a prospective commercial space in the same general area.
The proposal would reallocate previously approved aid funneled through the Capital Region Development Authority to a 40,000-square-foot retail space focused on health and wellness, and expand the use of funds for complementary economic development along Albany Avenue. The Bond Commission’s agenda does not list the project’s developer.
The general obligation bonds supporting the loan had been committed, through the CRDA, to a $21 million mixed-use development set to be built at the corner of Woodland Street and Albany Avenue. Plans for that site included 75 affordable housing units and 20,000 square feet of retail space.
The commission’s agenda notes that the developer for the project, Seven Summits, has been facing concerns from the community over the density of the housing.
The Hartford Business Journal reported in April that Development Services Interim Director I. Charles Matthews had recommended that the city postpone signing a lease with Seven Summits for the property.
With his application for a zoning change and a site plan now approved, a developer plans to start the conversion of the former Marriott hotel in Farmington into a mixed-used apartment complex later this summer.
“We’re excited to meet a growing need in Farmington and throughout the area and develop a new multifamily community with robust amenities, convenience and luxury,” said Jason Schlesinger, owner of CLP Farmington LLC. “We look forward to creating a vibrant live, work, play community and becoming one of the premier multi-family communities in the Greater Hartford area.”
Schlesinger is working to redevelop the 381-room Hartford Marriott Farmington — which shut down earlier this year — into 225 studio, one-, two- and three-bedroom luxury apartments. The units would include stainless steel appliances, stone countertops and washing and drying machines.
The hotel’s pools, fitness center, courtyard and event spaces are being targeted for renovations and improvements, and the entire site will undergo architectural and landscaping enhancements. Aside from housing, the complex will also include a new coffee shop and restaurant.
CLP Farmington acquired the hotel in June for $10.5 million, and Farmington’s Planning and Zoning Commission approved the company’s plans for the site last week.
Construction is expected to be completed by the spring of 2022. Leasing will begin in January.
Labor Secretary Marty Walsh made a case to boost OSHA staffing during a Senate subcommittee hearing last week, in a request that would increase both the number of safety inspectors and wage-hour investigators who scrutinize employer payroll records by 2024.
The department's protection agencies lost 14% of their personnel over the last four years, while the DOL has lost around 3,000 employees overall during that span, according to Walsh.
The department is requesting $2.1 billion in its budget request to Congress for fiscal year 2022 for worker protection agencies, including $73 million for OSHA, a 17% increase from last year. The proposal, which would bring overall Labor Department funding to $14.2 billion, must be approved by Congress.
Since the COVID-19 pandemic began limiting the amount of in-person inspections that the agency can perform, OSHA has not been providing the level of oversight needed to keep workers safe, according to a report from the department's inspector general. A boost in the budget would allow it to "conduct the enforcement and regulatory work needed to ensure workers' wages, benefits, and rights are protected, address the misclassification of workers as independent contractors and improve workplace safety and health," Walsh said during the hearing.
The loss of staff during former President Donald Trump's administration has compromised the ability of the department's worker protection agencies to do their job, Walsh noted.
"A lack of enforcement makes workers more vulnerable to workplace violations," he said.
Walsh also touched on President Joe Biden's infrastructure proposal, the American Jobs Plan, one of several being debated on Capitol Hill right now.
He noted that the American Jobs Plan would provide funding for training programs focused on growing, high-demand sectors, such as clean energy, manufacturing and caregiving. It also includes many labor-focused initiatives.
"The plan provides critical funding to strengthen the capacity of our labor enforcement agencies to prevent discrimination, protect wages and benefits, enforce health and safety rules and strengthen health care and pension plans," said Walsh. "In addition to these investments, the president is calling for increased penalties when employers violate workplace safety and health rules, which have proven inadequate to address serious violations."
Despite the COVID-19 pandemic, high materials prices and a skilled labor shortage, the construction industry is coming back with a vengeance, according to a noted construction economist.
"I find it remarkable that so much normalcy has returned to the construction industry," said Anirban Basu, chief economist for Associated Builders and Contractors.
Basu's remarks came during the ABC's Q2 Construction Economic Update and Forecast webinar last week, where he delved into factors surrounding the money flowing in and out of the construction industry, along with the broader economy as a whole. While the pandemic still rages globally, and cases surge in unvaccinated areas of the United States, the broader construction industry is on the path to normalcy, according to Basu.
Basu told attendees that although he expects high raw material prices to last for a bit longer, prices would eventually come down. Overall, Basu had a sunny outlook for the construction industry. He predicted that the second half of 2021 would be "spectacular" for economic growth in the country and that demand for construction would get a boost from stimulus spending by the federal government.
"The economy is set to bounce back handsomely," Basu said.
Not enough workers
Skilled labor shortages and supply chain issues are the two biggest issues plaguing construction businesses. When attendees of the webinar were polled, 52% said that skills and worker shortages were the leading challenges for their companies at present, followed by another 37% who said that supply chain delays were their biggest issue.
Skilled labor shortages aren't new in construction, but Basu said that the demand for labor will only increase as time goes on. Construction companies will soon be busier than ever as evidenced by the Architecture Billings Index, which tracks how busy architecture firms are. The majority of attendees, when asked about their backlog, said that it has risen within the past three months, and when asked about their projections for their next year's profits, the majority said they expected it to rise slightly higher or remain about the same.
Basu said that with older members of the workforce retiring, roles formerly filled by those with decades of experience will become vacant, further shrinking the number of employed workers.
However, there are some signs of life in pockets around the United States. The top four geographic areas of employment growth from February 2020 are centered in the Midwest, in metropolitan areas such as Minneapolis, Detroit, St. Louis and Chicago, according to the U.S. Bureau of Labor Statistics Current Employment Statistics survey for May 2021. Basu said that it was "very surprising" that the markets were in the Midwest, and not elsewhere like the South or the West.
Overall, from February 2020 to April 2021, there has been a 2.9% decline in construction employment, but Basu said it is rebounding quickly.
High prices sticking around
As the construction industry rebounds, the prices of many building materials are reaching historically high levels.
In June, softwood lumber increased 125% year over year, according to the BLS, while overall price peaked in early May at more than $1,700 per thousand board feet. However, the price has dropped considerably in the past two months.
Basu predicted that much of the inflation that raised these prices isn't permanent, but he also said that he didn't expect the prices to come down anytime soon. Nevertheless, Basu concluded that the price was trending downward.
Basu said that eventually the market would even out, and with the high demand and prices for these materials, suppliers would up their productivity and capacity, which would in turn create more materials, driving down the cost.
"The cure for high prices is high prices," Basu said.