CT Construction Digest Wednesday August 4, 2021
New London — State Department of Energy and Environmental Protection Commissioner Katie Dykes on Tuesday issued a decision that clears one of the final hurdles for the $235.5 million redevelopment of State Pier.
Dykes, in the six-page decision, approved the application by the Connecticut Port Authority for permits that will allow dredging, use of dredge material to fill between State Pier and the Vermont Central Railroad Pier to create a “Central Wharf” and other “in-water” work such as bulkhead construction.
The project has yet to be awarded a federal permit from the U.S. Army Corps of Engineers, though port authority officials on Tuesday expressed confidence the permit was forthcoming.
When completed, the rebuilt State Pier initially will accommodate work by the offshore wind industry. Ørsted and Eversource, contributing $75 million toward the project, plan to use the site for staging and assembly of massive wind turbines to be floated to wind farms expected to be constructed off the East Coast. The city of New London stands to receive at a minimum $850,000 per year in new revenue from the property that has long been tax-exempt.
Tuesday’s approval affirms an earlier proposed decision by staff at DEEP and comes over objections of former State Pier tenant DRVN Enterprises. DRVN, an intervenor in the process, had attempted to block the permit, raising concerns over the eviction of a water-dependent user. Others in the community had voiced concerns about the pier being solely dedicated to the wind industry and sidelining traditional cargo while the Ørsted/Eversource lease from port operator Gateway is in place.
DRVN had used State Pier since 2014 to import and store road salt used by numerous municipalities across the region.
DRVN's "frustration with the cessation of its business activity at the State Pier is apparent but by itself does not support the findings it seeks,” Dykes wrote in her decision.
“...the Intervenor contends that its particular use of the pier enjoys a level of protection that supersedes the rights of the Applicant. This assertion is not supported by the applicable statutory and regulatory criteria. The Coastal Management Act (the “Act”) gives ‘highest priority and preference to water dependent uses, including but not limited to commercial and recreational fishing and boating uses’ when an existing pier is redeveloped.”
Connecticut Port Authority Executive Director John Henshaw said while 98% of the planned work has been awarded to contractors, certain work in the water cannot go forward without the federal permit in hand.
He expressed excitement at news of the permit.
“Once completed the facility will be the only deepwater port facility in the Northeast that meets the heavy-lift standards of the offshore wind industry, without air draft restrictions or other obstructions that could limit operations,” Henshaw said in a statement.
When the final permit is obtained, he said, “the attention will remain focused on finalizing the remaining construction work packages, maintaining the project’s cost, advancing construction and delivering the final project at the end of 2022, as scheduled.”
The State Bond Commission in July approved the final $50 million of the state’s $160.5 million contribution toward the project. Initial estimates of the cost have risen dramatically since it was first proposed as a $93 million project.
Attorney Keith Anthony, who represented DRVN Enterprises, said he had not yet discussed with DRVN owner Steve Farrelly the options that might be available to appeal DEEP’s decision.
Just months after the state Bond Commission approved $500,000 to help finance the demolition of the long-vacant Ames corporate office in Rocky Hill, a new grand vision to redevelop the site is coming into clearer focus.
Hamden-based developer the Belfonti Cos. LLC is proposing a $50-million mixed-use project that would include 180 apartment units and 20,000 square feet of retail and commercial office space.
The so-called “Village of Rocky Hill” would create a new town center destination with nine mixed-use residential buildings, according to Michael Belfonti, founder and CEO of Belfonti Cos.
“The vision and the goal is to revitalize downtown Rocky Hill,” Belfonti said. “It’ s mixed-use development intended to create a vibrant pedestrian and bike-friendly downtown area.”
Vacant since 2002, the 180,000-square-foot building on Main Street is an eyesore at the heart of the town and provides a sorry backdrop to civic parades and other events, town officials have said. Rehab proposals have come and gone over the years, but the remediation of the asbestos-tainted structure has been a key hang up.
The state stepped in to help push redevelopment efforts forward with its approval in April of the $500,000 grant to help fund demolition.
Rocky Hill Mayor Lisa J. Marotta said the proposed development project fits well with the town’s plan of conservation and development.
“I think his vision really coincides with what the town is looking for in that section of town,” she said. “That site has been a blighted eyesore for many years.”
Marotta said the town is trying to pursue further state investment in the form of brownfield remediation funds of up to $1 million to help clean up the site.
She also said the town would be interested in providing further incentives for the project in the form of a tax abatement.
Belfonti said the project still needs town site plan approvals and he envisions a groundbreaking, if all goes well, sometime next year.
The project would be financed through equity and a bank loan, he said, adding that 10% of the residential units will be set aside for affordable/workforce housing.
In addition the property would contain several garage buildings and a clubhouse/leasing office.
The development would be pedestrian friendly and offer green space, including a park.
Belfonti isn’t new to development projects in Greater Hartford. He and his team are putting finishing touches on a 160-unit luxury apartment development in Cromwell, known as The Landon of Cromwell.
At a time of hype and headlines about trillions the president wants to invest in infrastructure, a railroad man with a long memory oversees the Department of Transportation in Connecticut, a state that’s been an unreliable steward of rail since the neglected New Haven Line was left to its care half a century ago.
Joseph J. Giulietti, recruited as DOT commissioner immediately after Gov. Ned Lamont’s election in 2018, started on the New Haven Line in 1971 as a 19-year-old conductor for Penn Central, then a dying railroad about to cede ownership of the line to a state unready for the responsibility.
He was there when Penn Central gasped its last and yielded management of commuter rail to Conrail in 1976, and when Metro-North was born as a subsidiary of New York’s Metropolitan Transportation Authority and took over in 1983. Giulietti left in 1998 for a rail job in Florida, returning in 2014 as Metro-North’s president.
Giulietti is 69 now, and the DOT is the last stop in a 50-year career that neatly coincides with passenger rail’s transition to a wholly governmental responsibility. The buzz in Washington is that Congress is poised to make its biggest investment in rail since it created Amtrak from the ruins of 20 private railroads in 1971.
Joe Biden became a regular Amtrak passenger two years later, a senator who would commute from Delaware to Washington for 36 years. The new House Appropriations chair is Rosa L. DeLauro of New Haven, an Amtrak regular since taking office 30 years ago. And Amtrak Joe is in the White House now.
“If there was ever a time that the stars are starting to align, we’re seeing it,” Giulietti said.
Behind the headlines are hard realities. The political coalition behind the infrastructure bill is fragile, and the $66 billion it offers for rail over five years is both historic and inadequate. A little more than half would go to the northeast corridor between Boston and Washington, the one region where Amtrak runs trains at a profit.
The Northeast Corridor Commission, whose members represent Amtrak, the U.S. Department of Transportation and the eight states and nine transit agencies on the corridor, recently released Connect NEC 2035, its vision for speeding rail. Dubbed C35, it is a $117 billion, 15-year plan.
Giulietti says he needs at least $8 billion for the portion in Connecticut, much of it for long-overdue work on the New Haven Line. His priorities, outlined in Time for CT, a plan released in June, align with C35’s priorities, not surprising given that Giulietti is a voting member of the commission. C35, which breaks up the corridor into regions, calls for $9 billion for work on the section in Connecticut and Westchester County, N.Y.
“The problem is we have so badly underinvested in the northeast rail corridor that there is $40 billion, at least, of what we call state-of-good-repair projects that we just need to do in order to make sure that the rail doesn’t fall apart, projects we need to do just to maintain existing service,” said U.S. Sen. Chris Murphy, D-Conn. “And so, the bipartisan proposal doesn’t even fund the state-of-good-repair projects. Now, that’s devastating for us in Connecticut.”
The story of the New Haven Line is the story of passenger rail.
It reflects tectonic changes in postwar American life and commerce, including the shift from rail to highways for the movement of freight and passengers. And it exposes a shared failing of capitalists and politicians — the tendency to sacrifice the future for immediate gains, on balance sheets or at the polls.
Metro-North is a case in point.
After building a reputation for good service, it began in 2013 to experience a string of accidents attributed to a mix of factors, including insufficient maintenance and a culture that came to value on-time performance over safety. Giulietti, who then was the executive director of the Tri-Rail system in South Florida, was asked to come back and trouble-shoot a railroad under a microscope from the Federal Rail Administration and the National Transportation Safety Board.
“Nobody wanted to touch Metro-North, nobody who had a career ahead of them,” Giulietti said. “Because the FRA had 75 officers on the property, and there were five NTSB investigations going on.”
Giulietti stayed three years, winning good reviews for changing the culture of the railroad by resisting demands for quick improvements to service in favor of a longer-term push for first re-establishing safety and reliability. He retired in 2017.
Giulietti was a semi-retired consultant when Lamont’s transition team targeted him as a priority hire. His predecessor, James P. Redeker, also had a background in transit, but Lamont wanted a fresh start.
“I love the guy because he was the president of Metro-North,” Lamont said. “We didn’t have a great relationship with New York. And I just figured two and a half years ago, if I’m going to speed up rail from New Haven to New York, who better to take the lead on that than the guy who used to run Metro-North? He’s a great rail guy. He’s surrounded with really good guys.”
Paul Mounds, the governor’s chief of staff, said the attraction to Giulietti was twofold: Giulietti had a reputation for fixing things and telling bosses and customers unpleasant truths; and his resume gave the new administration a certain gravitas on transportation.
A career rail guy
Giulietti was a student at Southern Connecticut State University in New Haven, his hometown, when he went to work on the railroad.
The college gig turned into a career pushing trains as a locomotive engineer, then rising through the ranks, mastering the arcane skills of scheduling trains, appreciating the limits imposed by track geometry, learning a little politics and recognizing why a simple mud puddle can foretell trouble.
Career rail guys inevitably are rail historians, students of disappointment and decay. To Giulietti, there is no mystery why the trip from New Haven to Grand Central Terminal takes longer today than in 1970, when Penn Central filed for bankruptcy protection. It is the consequence of disinvestment.
“That was very deliberate,” Giulietti said. “Penn Central sucked out every dollar.”
His assessment of Connecticut’s stewardship of its rail lines is less quotable but nonetheless damning.
Connecticut has been slow to put those dollars back, moving at glacial speeds to modernize signalization, among other things. (Don’t get him going about mud spots.) The culture and DNA of the DOT is dominated by men and women who design, build and maintain highways and roads, not public transit. And, unlike most other states, no significant transportation improvements come without borrowing.
“I always felt bad for the people that were in the position I’m in right now, because they didn’t have the support to get the money to go into the maintenance that was necessary,” Giulietti said.
Connecticut owns trains capable of reaching 100 mph, and the maximum authorized speed limit where the New Haven Line is in good repair is 90 mph. But the average authorized speed is 66 mph — with some spots restricted to 37 mph and, at least one, just 30 mph. In other words, for many commuters, it’s faster to drive.
“When I came back as the president of Metro-North, I couldn’t believe how many speed restrictions existed on this rail system,” Giulietti said.
His Time for CT plan drew a scathing review from one prominent transportation writer, Alon Levy. Like C35, the improvements in the Time for CT, a plan would shorten the ride between New Haven and Grand Central by 25 minutes over the next 15 years. With new express service, some trips could be 10 minutes quicker next year.
Levy called it “shelf art,” a plan whose costs are “high enough and the benefits low enough that it’s unlikely the report will lead to any actionable improvement.” More than anything, Levy wrote, the needs outlined amount to indictment of DOT’s poor maintenance practices.
Giulietti doesn’t dispute the indictment of the DOT’s maintenance history. But he is adamant that Time for CT, and the needs assessment on which it is based, are grounded in reality.
“There’s no bullshit in that report,” Giulietti said. “It’s very, very factual, detailed and laid out.”
The B.S. reference may reflect sensitivity to criticism that the DOT and Northeast Corridor Commission set their sights too low. A non-governmental organization, North Atlantic Rail, seemed to emerge from nowhere after the New Year to goad transit planners to be more ambitious.
North Atlantic floated a $105 billion concept for 200-mph bullet trains from Boston to New York, high-speed service between Hartford and Providence and Springfield and Boston, and a tunnel under Long Island Sound. There is no rail right-of-way between Hartford and Providence, and the only rail between Springfield and Boston are owned by freight lines, not Amtrak.
Unlike the Northeast Corridor Commission, no one connected to North Atlantic owns or operates rail.
North Atlantic succeeded in getting language into a House infrastructure bill that could be useful in establishing it as a multi-state compact, but it was scaled back from a version that U.S. Rep. Joe Courtney, D-2nd District, said would have given it a federal charter with powers to override state transportation agencies.
“Believe it or not, it actually would explicitly exclude the participation of state departments of transportation, just completely override all the existing checks and balances,” Courtney said. The offending language was stripped, but the attempt was jarring.
Hartford Mayor Luke Bronin is North Atlantic’s biggest backer in Connecticut, and he notes that its early priorities closely align with C35. But he is unapologetic about the scope of the group’s ambition, even if aspects prompt eye rolls.
“Of course, during the Trump era, ‘Infrastructure Week’ became a joke, but after Biden’s election, it became clear that we might have a historic, once-in-a-generation opportunity to make transformative infrastructure investments,” Bronin said.
U.S. Sen. Richard Blumenthal, D-Conn., said the delegation speaks with one voice about rail money: Giulietti’s priority list is their list.
Murphy was blunter.
“Listen, we’re not going to build a tunnel under Long Island Sound. I mean, I wish we could think that big, but I do not think that that’s worth our time and energy,” Murphy said. “It’s not feasible to build a tunnel under Long Island Sound or build a whole new rail line through eastern Connecticut.”
Murphy called North Atlantic a distraction that the northeast cannot afford, an assessment Giulietti and senior staff find reassuring.
The importance of getting Amtrak and the eight states on the corridor to speak, more or less, with one voice to Congress cannot be understated in Giulietti’s view. The point was underscored when he interrupted an interview to take a call from a counterpart in New Jersey, then ended it to keep an appointment with Connecticut’s senior senator, Blumenthal.
Lamont’s goal for the system when he took office was 30-30-30 — 30 minutes from Hartford to New Haven, 30 from New Haven to Stamford, and 30 from Stamford to Grand Central.
After 15 years of improvements, Time for CT would take 25 minutes off a New Haven-to-Grand Central ride that now takes nearly two hours on average. With new express service, some trips could be 10 minutes quicker next summer.
The mud spots
There is no backlog of shovel-ready projects, should the federal spigot start flowing, nor is the state necessarily ready to contribute whatever matching funds are required.
The first project in Time for CT would improve drainage and lessen curves, allowing higher speeds in the Bridgeport to Stratford area. Drainage is not as sexy as new cars, stations or bridges, but mud spots are the bane of railroads.
Mud spots are a misnomer, a railroad’s bland name for something dangerous. The recipe for temporarily transforming solid ground into an unstable slurry is simple: Add water, then vigorously vibrate — say, by running a heavy train over it 50 times a day.
The New Haven Line has 95 mud spots and 5,700 compromised concrete ties.
“That first project is $250 million,” said Richard W. Andreski, the chief of the state Bureau of Public Transportation. “We have the funding to do the preliminary design. We don’t have funding for the final design and construction.”
So, Connecticut waits for news from Washington.
Giulietti knows that the governor, who spent his first year on a failed effort to return highway tolls to Connecticut, is eager to see improvement.
“He’s always frustrated, because he wants it to go faster, and he wants it to go faster tomorrow, all right?” Giulietti said.
Giulietti has his own frustrations. It takes him a year to hire an engineer under Connecticut’s sclerotic hiring rules and the fondness of the Office of Policy and Management to keep jobs open and save money.
Connecticut’s reliance on plain-vanilla financing — going to the bond market — limits what it can borrow. Wall Street demands a 2-1 ratio of revenue to debt service costs, a protection for bond buyers.
Nothing about rail is simple.
Any major improvements require coordination in design, financing and construction. In Connecticut, the New Haven Line is owned by the state and used by Metro-North and Amtrak. CTrail, which is part of DOT, offers passenger rail on tracks owned by Amtrak between New Haven and Springfield on the Hartford Line and between New London and New Haven on Shoreline East.
Who pays for it all
Using a formula set by federal law, Connecticut pays Amtrak for a share of the upkeep on the tracks used by CTrail, and Amtrak pays Connecticut for the use of the New Haven Line. When the accounting is done, the net is $4 million paid to Connecticut.
Europe and Japan have built and maintained modern rail systems, helped by consistent funding that eludes rail and other infrastructure in Connecticut and much of the U.S.
The state raised the wholesale fuel tax in 2005, but less than half the $1.84 billion revenues raised from that tax would be used for transportation through 2011, when Gov. Dannel P. Malloy took office and confronted a deficit equal to nearly 20% of general fund spending. He eventually increased capital funding for transportation, and Lamont took office in 2019 promising to build on that progress.
Lamont failed to win approval of highway tolls to stabilize the state’s shaky Special Transportation Fund, which uses fuel taxes and share of sales taxes to pay DOT’s budget and debt service on transportation projects. An initial plan would have raised $740 million annually; a downsized revision, $320 million. He settled this year for a stopgap, a $90 million highway user fee on large trucks.
“I’m always amused that the Republicans in Washington claim they want to pay for the infrastructure bill with a user fee, and the Republicans in Connecticut said, ‘Over my dead body.’ Essentially, the president and I have the same issue,” Lamont said. “Everybody supports infrastructure. Nobody really wants to pay for it.”
In Connecticut, the state may own parking lots around Metro-North stations, but they often are controlled by the municipality through leases.
“It’s unlike the rest of the country, where you have that cooperation and multiple forms of revenue supporting a system,” said Garrett Eucalitto, the deputy commissioner since January 2020. “So, that’s one way we’re not set up for success.”
His expertise is transit-oriented development and infrastructure finance, and he was brought to the DOT to make changes.
“We’ve posted for a job or two that are going to bring in a different type of financing mindset,” Eucalitto said. “We’re looking for a firm to come in and help us develop new policies and procedures, to evaluate projects for alternative financing and delivery, as well, to build that in-house expertise.”
Giulietti said the governor and legislators would like to see the projects outlined in Time for CT finished long before 2035.
“Can we go faster than what’s in that plan?” Giulietti said. “If we had the money, we can do a hell of a lot faster.”
He knows where to find the mud spots.
June construction employment in 39 states remained below the pre-pandemic peak of February 2020, according to an analysis of federal government data by the Associated General Contractors of America.
Although not back to pre-pandemic levels, construction employment has experienced improvement over the past year, according to a report from Associated Builders and Contractors.
Both the AGC and ABC note supply chain constraints and rising materials prices undermine demand for new projects and put a dent in firms' plans to hire new workers.
Although national construction employment increased by 233,000 from June 2020, seasonally adjusted construction employment remained below its February 2020 peak by 238,000, or 3.1%, according to the ABC report. Construction employment is unlikely to grow in many parts of the country until supply chain challenges facing the industry improve, according to the AGC report.
A number of owners are postponing projects because rising costs and delivery delays have made projects infeasible or they want to wait until conditions improve, said AGC Chief Economist Ken Simonson.
"We're seeing some recovery, not back to where we were, but we are moving forward," said Bernie Markstein, president and chief economist of Markstein Advisors, an economic consulting company. "One big question is will there be an infrastructure bill out of Washington? If we get that, that obviously will help construction. I'm pretty optimistic overall in terms of construction going forward."
The Senate voted Wednesday to advance a bill which includes $550 billion in new federal funding for infrastructure. AGC officials said President Joe Biden could further help the industry by "removing tariffs on key construction materials," according to the report, and "ending unemployment supplements." That would add to the pool of workers available to hire.
"First of all there's been a long term problem with having enough skilled workers in particular [and] the pandemic just exacerbated that problem," said Markstein. "The rate at which people are retiring and the skill gap that is there is pretty significant. That is going to continue to be a problem for the industry for at least a couple of years and maybe as many as five years or longer."
The national construction unemployment rate went from 5.5% in February 2020 to 7.5% in June 2021, according to the ABC report.
From May to June, construction employment decreased in 25 states, increased in 24 states and Washington, D.C., and remained the same in Maine, according to the AGC report. The largest decline over the month occurred in New York, which lost 6,900 construction jobs, or 1.9%, followed by Pennsylvania, which lost 4,100 jobs, or 1.6%. The steepest percentage declines since May occurred in Vermont, which lost 3.5%. New York, Alabama and North Dakota each lost 1.9% of previous construction jobs, according to the AGC report.
Georgia added the most construction jobs over the same span, adding around 5,700 jobs, an increase of 2.9%. Kentucky and Florida followed, adding 2,700 jobs, or 3.4%, and 2,500 jobs, or 0.4%, respectively. Kentucky had the largest percentage gain for the May to June period, followed by Alaska and Georgia, which both grew by 3.0%.