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CT Construction Digest Wednesday March 8, 2023

Contractor sues over unpaid work at State Pier

Greg Smith

A Branford-based engineering and construction company contracted to perform work at State Pier in New London has filed a lawsuit claiming it is owed more than $800,000 for extra work it performed during the demolition stage of the massive rehab project.

Blakeslee Arpaia Chapman, Inc. filed the suit in November against Kiewitt Infrastructure Co., the project manager of the $255.5 million State Pier project being overseen by the Connecticut Port Authority.

Both the Connecticut Port Authority and Travelers Casualty and Surety Company of America, the company that held the bond that assures all entities involved with the project will be paid, are named in the suit.

Kiewit disputes the claims in legal filings related to the case, which is pending in New London Superior Court.

Kiewitt subcontracted Blakeslee in March, 2021 to perform work demolishing clusters of concrete mooring blocks atop piles, called dolphin moorings. The work is part of a re-imagining of State Pier into a staging and assembly area for offshore wind farms.

Kiewit agreed to pay $1.877 million to Blakeslee for the work but, the suit alleges, refused to pay Blakeslee another $838,422 it requested. The additional money includes $763,497 requested for extra work and $79,925 in retainage, a withheld portion of a final payment.

Blakeslee argues in the suit that an underwater inspection of the work to be performed revealed that the underwater piles that were to be removed had been spliced together, “not structurally sound because of improper design, poor construction, and/or extensive corrosion.” Blakeslee notified Kiewit, the suit claims, that it should expect increase costs for the removal.

“Thus, when Blakeslee began the work on the Connecticut State Pier, it encountered site conditions differing materially from those represented in the contract and bid documents, plans, specification, and drawings, and it was required to do unforeseen and unanticipated extra work directed by the defendant Kiewit that was necessary for the completion of the Subcontract,” the suit alleges.

Blakeslee said it had informed Kiewit of its modified plan, which involved removing concrete and pulling up piles from the water from a crane atop a barge. The pile splices repeatedly broke when being pulled and Blakeslee was forced to use divers, the suit claims. Of the 104 foundation mooring piles, 60 had one or more failed splices that required extra work, “including diver extraction,” the suit alleges.

“Throughout the Project, Kiewit never instructed Blakeslee not to perform the extra work and indeed instructed and directed Blakeslee to continue its work, including the extra work, while the change order was pending,” the suit claims.

By October of 2021, Kiewit informed Blakeslee that the Port Authority had authorized up to $385,000 for the extra work, which Blakeslee refused.

Among others allegations, Blakeslee alleges a breach of contract and breach of the “implied covenant of good faith and fair dealing,” a violation by Travelers of the Connecticut Unfair Trade Practices Act, and “unjust enrichment” on the part of the Connecticut Port Authority. The suit claims the port authority benefited from the extra work without having to pay for it.

Representatives from both Blakeslee and Kiewit declined comment, citing the pending litigation. A representative from the port authority did not return messages requesting comment.

The lawsuit was initially filed in November of 2022 and the two sides have each traded motions in New London Superior Court. Earlier this week, Kiewit filed a motion to move the case from the New London Superior Court to the state’s complex litigation docket.

“This matter involves a highly technical subject matter of underwater pile extraction, means and methods of extraction, as well as complex dispute resolution process with the owner, The Port Authority on a construction project in excess of $200 million,” the motion from Kiewit attorney Larry Grijalva reads.“ Kiewit anticipates that this matter will involve numerous experts, consultants, and a cumbersome discovery process.”

Connecticut Opens Bidding for New Offshore Wind Projects

Brendan Crowley

HARTFORD — Hoping for a sense of how supply chain issues, new tax credits and a redeveloped New London State Pier will have on offshore wind prices, the Lamont administration announced on Tuesday it plans to take new bids for offshore wind projects for the first time since 2019.

The Department of Energy and Environmental Protection announced plans to open two procurements for zero-carbon energy this year, including one specifically for offshore wind. The department has authority to procure about another 1,200 MW of offshore wind, but said it hasn’t determined how much, if any, it will procure this year. 

Speaking to state lawmakers during an Energy and Technology Committee hearing on Tuesday, DEEP Commissioner Katie Dykes didn’t commit her department to selecting any bids, saying they want to evaluate how the costs would stack up against forecasts of future energy prices and see if they’re in the “best interests” of electric customers. 

Dykes told the lawmakers that it’s a “dynamic moment” in offshore wind, with factors in play that could push costs up, and others that could push costs down – leaving behind major uncertainty about where the price of new offshore wind projects will land.

She said supply chains are starting to re-establish themselves after disruptions from COVID that have driven higher costs for materials like steel, and interest rates and labor costs have increased since the last time Connecticut solicited offshore wind projects.

At the same time, Dykes said technologies have advanced, with companies developing larger turbines capable of producing more energy. And federal guidance on a host of tax credits included in the 2022 federal “Inflation Reduction Act,” is expected soon, she said. In a competitive bidding process, she said developers have an incentive to use those tax credits to lower their price and boost their chances of being selected.

Dykes also said she has heard anecdotally that developers have “a lot of interest” in using the New London State Pier, where the Connecticut Port Authority said last week that work has completed on the heavy-lift delivery platform that the offshore wind partnership of Eversource and Ørsted will start using this spring for staging in the construction of their South Fork Wind project.

“We’re eager to see what the pricing will be,” Dykes said. “I think that’s the reason we wanted to put our line in the water at this time.”

Energy and Technology Committee co-chair Sen. Norm Needleman, D-Essex, told Dykes he thought the timing was right to open bids for offshore wind projects, saying everyone is “hanging by our thumbnails” waiting to see the prices that come in for the 2,000 MW procurement New York opened last year.

The last time DEEP took bids for offshore wind in 2019, it selected Park City Wind to sell power at $79.83 per megawatt-hour to Connecticut electric customers from Avangrid’s 804 MW project proposed to be built off the coast of Martha’s Vineyard.

Last year, Avangrid announced it was planning to ask Connecticut to raise the price of that contract, saying the projects weren’t feasible at the contracted rate because of escalating costs and supply chain shortages.

State Rep. Holly Cheeseman, R-East Lyme, said she was concerned the unpredictability of supply chain and permitting issues for offshore wind projects would lead to more developers coming back and asking for higher rates after being selected, and asked what protections the state has from that.

Dykes said the department does not renegotiate prices of contracts unless a new revenue source – like a federal tax credit – would lower the cost of a project for Connecticut electric customers.

“We use competition for a reason, in order to be assured that we are getting the best projects at the best price for Connecticut ratepayers,” Dykes said. “It’s really not fair to other bidders, and undermines that process if we then renegotiate prices outside of a competitive process.”

Concerns about the environmental impacts of pile driving on the ocean floor to install turbines, and offshore wind-related jobs coming in below expectations have led some lawmakers to push for DEEP to weigh those factors more heavily in future offshore wind procurements. 

Dykes said there would be a period before DEEP actually opens bids to take input on how it should shape the proposal to include those considerations.

Norwich moves forward with plans for three new elementary schools

Norwich ―The City Council voted unanimously Monday night to endorse the plan to build the first three new elementary schools in the $385 million school construction project approved by voters in November.

The council voted on three separate resolutions Monday to allow the Board of Education to seek state reimbursement and to authorize architectural drawings and schematics for new schools on the grounds of the former Greeneville School, the John B. Stanton School and the Moriarty Environmental Sciences Magnet School.

A fourth new elementary school is planned at the current Uncas School, and the Teachers’ Memorial Global Studies Magnet Middle School will be renovated or replaced in a future project phase.

The former Greeneville School was closed and demolished several years ago. For the other two schools, plans call for building the new buildings on the grounds and then vacating the existing schools and demolishing them, making way for playgrounds and sports fields.

Ken Dixon

HARTFORD — Attorney General William Tong wants to expand state regulations that date back to the scandals that forced a governor from office nearly 20 years ago, and allow his office to respond to construction fraud in state projects, including schools and other public works.

Tong's office is currently limited to probing possible fraud in state contracts for health and human services, and he believes that taxpayers are losing out on the possible collection of millions of dollars in fraud that he cannot currently investigate.

Tong this week asked the legislature to expand the state's false claims law, in a proposal supported by state labor unions but opposed by construction co

Ed Hawthorne, the head of the state AFL-CIO, said that if the attorney general had the expanded power, Connecticut regulators would likely have spotted the corruption that led to the resignation of Gov. John G. Rowland well before the impeachment investigation that led first to his resignation in the summer of 2004, then his first federal felony conviction later that year.

Then-Gov. M. Jodi Rell, the lieutenant governor who succeeded Rowland, signed the current law in October of 2009, allowing whistle blowers to be rewarded for tips that lead to the prosecution of fraudulent contractors in the realms of health and human services contracts.

During a Monday news conference, Tong, the state's top civil lawyer, said that about $181 million in fraud has been recovered by state and federal authorities among the nine state agencies he is allowed to monitor. There are more than 100 such state departments, offices and quasi-public agencies, though, while attorneys general in neighboring states, have broader authority.

"Every public dollar is entitled to strong, robust protection from waste, fraud and abuse," Tong said.

"When they see families and people suffering from the opioid and addiction crisis, they expect and know that the office of the attorney general has the full range of consumer protection power and protection authority to go after the worst of the worst bad actors in the opioid and addiction industry," Tong said. "They also expect that when they hear about waste, fraud and abuse in the spending of public dollars, that the office of the Attorney General can also take action. They are often surprised, however, that our ability to do that is limited."

Tong pointed to the federal CARES Act pandemic relief fraud case in West Haven, which led to the resignation, arrest and guilty plea of a veteran state representative employed by the town council, as an example of a scandal in which his office had limited jurisdiction. "When questions were raised about school construction projects here in Connecticut and the conduct of contractors in school construction the office of attorney general could not take action under the false claims act," he said.

A referral from the state Auditors of Public Accounts, where whistle blower complaints are first filed, allowed Tong to look into the cost overruns at the State Pier in New London.

State Sen. Mae Flexer, D-Killingly, and state Rep. Matt Blumenthal, D-Stamford, who lead the Government Administration & Elections Committee, voiced support for the bill. "This is authority that our attorney general should have," Flexer said, adding that most state residents probably do not realize the limits on that office. 

"For far too long our state False Claims Act has had a loophole in it," Blumenthal said. "It is a loophole that has allowed fraud and waste and abuse to exist in the spending of our public dollars. No industry is immune from malfeasance or fraud or misconduct."

Hawthorne, the state's top union official, said that wage theft and other kinds of worker exploitation, could be pursued by Tong's office. "It provides a further level of trust from the public with our state government, so we know that our tax dollars are spent wisely. It will help us continue to distance ourselves from the corrupt days of Gov. Rowland." 

About a dozen pieces of testimony were filed in opposition to the proposal, including criticism from Don Shubert, president of the Connecticut Construction Industries Association, who called the proposal an administrative overreach.

"It will change the risk profile on every state contract," Shubert said in his written testimony to the committee. "It would pose real danger to even the most-scrupulous contractor. False claims acts have broad elements, low standards of proof, and high penalties and damages. The loose legal standards are remarkably problematical with the uncertain nature of construction disputes. There often is no clear meaning of “true” or “false” on a construction project.

Determining liability and calculating damages is never certain in construction disputes and often involve wide ranging opinions from accountants to engineers."

The Connecticut Business & Industry Association also opposes the proposal. 

The committee has until March 29 to act on legislation.

Karen Tensa

WILTON — The town is one step away from gaining the approvals needed to build a new police station after the Planning & Zoning Commission reviewed plans for the proposed $16.4 million project. 

Commission members debated the proposal to construct a 19,000-square-foot headquarters, which would be nearly twice the size of the town's current police station. 

The discussion came during a virtual public hearing at a P&Z meeting on Feb. 27. Ultimately, the commission voted unanimously to close the public hearing and move the project forward for a final vote at a future meeting.   

It recommended two conditions for the police station: that the north side of the building be brick and fencing be installed near the transformers. 

"The town is one step closer to a police station,"  Chair Rick Tomasetti said after the votes.  

The new police facility would be built on an 11.17-acre site at 238-240 Danbury Road.

If the final approval comes as expected, the town of Wilton could break ground on the project as soon as late May or early June, officials said. Construction is expected to take about 20 months.

At the meeting, the floor plans, site improvements and architectural drawings were presented by Rebecca Hopkins of Tecton Architects. Joe Lenahan of Fuss and O’Neill, the project's engineers, explained how use of the new building would be phased in, with police occupying the new building before the old building was razed.

During the public hearing, First Selectwoman Lynne Vanderslice noted that the project was more than six years in the making. It was approved by voters last May in a townwide referendum, with 77 percent of the vote in favor in its first attempt, showing the broad public support, she said.

Jack Suchy, a Wilton resident who serves on the Police Building Committee, said the new building would function much better than the existing one. 

"Don't add more money to this project," Suchy, a retired Norwalk police officer, told the P&Z Commission. 

Christopher Burney, director of planning, design & construction for Wilton, said he was impressed with Tecton's work on the plans.

"The design team has worked closely with the Wilton Police Department to put a project together that we believe meets the needs of the department for generations to come," Burney said previously. 

After the project gains P&Z approval, the town will finalize the bid documents and put the project out to bid, Burney said.

The current two-story station was built in 1974 for a 25-member all-male force. 

"Since the station was built, the size of the department has almost doubled, leading to overcrowding and a loss of operational and functional space," according to the 236-page special permit application submitted to the P&Z.

Police Chief Thomas Conlan said the department now has 48 employees — 45 officers and three civilian staff — including eight women.

The new building "will bring the department up to current policing and building code standards," he said previously. "A new police facility will have a tremendous benefit to the department, as well as the town."

Greenwich's new Central Middle School plans lack space for stairs and bathrooms, architects say

Andy Blye

GREENWICH — The architecture firm hired to design a new Central Middle School called the Board of Education’s current plan “unachievable” on Tuesday, saying it was impossible to fit the approved amount of classroom space into a 115,000 square foot building.

The BOE’s building requirements — also known as the educational specifications or “ed specs” —  do not give enough space to non-classroom spaces like stairs, bathrooms, mechanical closets or elevators, according to the architects.

The building plan was discussed on Tuesday morning at a regular meeting of the Central Middle School Building Committee.

The ed specs were approved in August 2022 and call for 88,300 square feet of learning space in a 115,311 square feet building. 

The SLAM Collaborative, the architects on the project, said that a school with 88,000 square feet of learning space would need to be at least 135,000 square feet when factoring in space for heating and cooling equipment, electrical closets, wall thickness and other required infrastructure.

This ratio between usable building space and total square footage is called the net-to-gross ratio, and SLAM Collaborative said modern school buildings have a ratio between 62 and 65 percent. The BOE’s ed specs have a ratio of 76.6 percent.

“They (the Board of Education) expect a 76.6 percent net-to-gross ratio, but that is not something that we've ever seen achievable in a school design,” SLAM project manager Amy Samuelson said Tuesday.

Kemp Morhardt, head of SLAM’s public education work in Connecticut, agreed: “It's unachievable in our experience.”

Board of Education Chair Joe Kelly said the board is not willing to reconsider the ed specs as of Tuesday morning given the information it has.

“If we can't bridge that gap between the 115,000 expected square feet, versus the 130 (thousand square feet) being shown to us, we've got to reevaluate,” Kelly said. “I'll speak to my board members… I don't have five votes to reopen the discussions on the ed specs and I don't know if I will be able to get there.”

Kelly said he wants to bring the project to fruition and that he will bring any new data back to members in an effort to change their minds about adjusting the ed specs.

Laura Kostin, a member of the BOE that sits on the CMS building committee, said the committee needs to give specific revisions to get the building down to a workable size.

“‘Reexamining your ed specs’ is not an actual motion, it has to be targeted to the area of the building that you want us to evaluate,” she said. “Any feedback from the committee about what the board should do regarding the ed specs has to be very targeted and specific.”

SLAM is making adjustments to its proposed building designs and it will present a new design at 130,000 to 135,000 square feet to the CMS Design Review Committee at 4 p.m. March 8 during a virtual meeting.

Additionally, the entire CMS Building Committee is holding a public forum at 7:30 p.m. March 8 to gather community feedback and answer questions about the project. The forum will be held at the CMS auditorium and will also be broadcast on Zoom. Click here for more information.

The other factor in the CMS planning process is the budget. First Selectman Fred Camillo proposed $75.2 million for the new school in the coming fiscal year, but the town’s finance committee questioned this figure last week in light of the space information from the architectural firm.

The Board of Estimate and Taxation is in the process of finalizing the budget for the coming fiscal year. Turner Construction, the company selected to manage construction on the new CMS project, is expected to provide a cost estimate for a new school by April 4, when the BET votes on approving the town’s budget.

How women are finding rewarding careers in the construction industry

As multiple industries still face workplace shortages, one solution is emerging, especially in traditionally male-dominated fields like construction: recruit more women. According to recent data from the Bureau of Labor Statistics, nationwide, the number of women in construction has hit an all-time high, with women now making up 11% of the construction industry. Although that’s historically a record high, business owners like 84 Lumber’s Owner and President Maggie Hardy aim to do better.

"Building a culture that nurtures the talents of younger workers and seasoned associates, to put them on the track of success, is one of the most important things to retain talent," explained Hardy. "If you’re seeking a career transition, whether from the hospitality industry, the military, or something else, our company doesn't require any prior experience. We can train you on everything you need to know, and our 'promote from within' culture provides growth opportunities that can’t be found elsewhere."

Building on a legacy

After taking on leadership from her father at age 26, Hardy focused on the professional market, helping 84 Lumber top $1 billion in sales for the first time in 1993, and now over $8.7 billion in 2022. She balances the company’s traditional approach to doing business with adapting to ever-changing customer needs. Today, the company is a certified National Women’s Business Enterprise and the largest privately owned building materials supplier in the U.S., with 310 facilities, including component manufacturing plants, custom door shops, and millwork shops plus engineered wood product centers in over 35 states — also offering turnkey installation services for a variety of products including framing, insulation, siding, windows, roofing, decking and drywall.

Under Hardy’s leadership, 84 Lumber was named one of America’s largest companies by Forbes and made the Inc. 5000 list of America’s Fastest Growing Companies of 2022. That growth has required active recruiting and training of employees from all walks of life to fill a variety of roles.

"We have an on-site training center dedicated to training and development of associates," said Hardy. "We teach associates the construction and building materials industry and store operations. We have online, self-paced learning tools to help with product knowledge and learning the roles. It’s an important piece of the puzzle for attracting and retaining top-tier associates."

Growing business by nurturing talent

Many women in the field didn't consider construction as a vehicle for career success but have since changed their minds, like store co-manager Shannon LaMonte. "I come from a family of contractors," explained LaMonte. "But I never thought to pursue a career in construction, mostly because it was intimidating. 84 Lumber has given me all the tools to be successful in something I've always wanted to be part of."

Others started in one aspect of the business, only to learn there were more opportunities outside traditional roles. "At 18, I began working for a lumber yard as a cashier. I found the atmosphere energetic and exciting," recalled Niki Flynn, now in outside sales. "I started at 84 Lumber 17 years ago as a coordinator and drove myself to learn all aspects of the company."

Women in the industry encourage others to try something new — because you may be surprised at your own abilities. "84 Lumber allowed me to expand my knowledge with multiple positions," said Plant Manager Polly Jean (PJ) Miller. "Don’t be intimidated by work in the construction field. If it's something that truly interests you, don’t be scared to step up and learn."

A uniquely satisfying career

Kristi Allen, owner of WoodCastle Homes and one of the trailblazers behind The House That She Built, cites the skills women bring to construction, and how rewarding the field can be.

"We tend to be detail-oriented and organized, which are extremely important skills in building a home," Allen explained. "Many women, including myself, have been able to carve out a niche for themselves in construction that allows them to succeed professionally and personally. My job as a general contractor allows me to do the thing I love, which is building homes for families."

To keep up with growth, 84 Lumber is hiring new associates in stores and manufacturing facilities nationwide. Visit 84Lumber.com/careers to apply, and learn more about the company on Facebook, Instagram or LinkedIn.

Wallingford high school merger plan draws concern from residents, councilors

Kate Ramunn

WALLINGFORD — Reaction was swift to the Board of Education's vote last week to recommend to the Town Council to consolidate the town's two high schools, building a new high school on the Lyman Hall High School campus and closing Mark T. Sheehan High School.

Opponents quickly organized on Facebook, creating a page, "Wallingford Citizens Opposed to One High School."  By Tuesday, it had more than 1,000 members and a slogan — "Wallingford Says No to One High School.

On Feb. 27, the Board of Education voted 8-1 to recommend to the council that a new, 300,000 square foot facility be built on the Lyman Hall site that is estimated to cost $216 million, of which $122 million the town would be responsible for after the state's 43% reimbursement rate. 

The school board's argument for the one high school is that enrollment is dropping, with only 59% of the Sheehan building currently being used. By consolidating the schools into one facility, students will have more options academically as programs offered at one school would then be open to all high school students, the board argued. 

It's also the cheaper option, they said. Renovating both high schools "as new" would cost about $20 million more and would likely get less state reimbursement.

While the Board of Education voted in favor of the one high school proposal, the majority of teachers who responded to a Wallingford Education Association survey feel otherwise. Of the 243 teachers who responded to the survey, 49% favored renovating both buildings "as new," 21% were in favor of making "basic repairs" to the buildings, and 29% supported consolidation of the schools, according to union president Anne Varrone-Lederle.

"We are not in favor of consolidating," Varrone-Lederle said, noting that when the issue arose in 2018, the union's sentiment was the same.

Fifty-six percent of teachers responded to the most recent survey. 

Parent Athena Riveria said her daughter has a rare allergy and because of that has a 504 plan, which ensures a student has equitable access to a learning environment. 

"Even with the two middle schools, the 504 many times has not been followed," she said. Her daughter will be a freshman next year, Riveria said, and as it is now, it's been difficult to get an appointment with the administration to review the 504 plan.

"I was given one date, and I was told if I can't do the 504 on that date then I almost didn't have any other option because they had so many to do that they can only give everybody one certain date," she said. "If they can't do these 504s and IEPs now with two high schools, how on earth are they going to do them with the one high school? How are we going to know that our children are getting the services they need? That's a point I haven't seen brought up and it's a really pivotal point."

The Town Council is expected to discuss the proposal at either its meeting March 14 or, more likely, on March 28. The agenda for the March 14 meeting had not been set as of Tuesday afternoon.

‘Major decision’

Council members are weighing the options and said they need to hear more before taking a stand.

"This is a major decision for our community. I am weighing all the benefits and the drawbacks of the proposed consolidation," Councilor Sam Carmody said. "I think it is essential that we hear from the members of our community, particularly those who this impacts the most. There will need to be opportunities for everyone to ask questions of the Board of Education and to express their opinions on this matter before the Town Council votes on how to proceed. 

"This is a big price tag — we will also need to carefully review the financial implications that this will have on our town," he said.

Town Councilor Joseph Marrone said he is more concerned for the quality of education students are getting, calling the proposal a "distraction."

"I am interested in what makes the most sense for the students, academically," Marrone said. "I have not heard much from the BOE to support how the consolidation will benefit students, other than a vague indication of 'equity.'  Districts like Milford have two high schools, fewer students and a lower budget. The one high school debate is a distraction from what we should focus on, which is poor test scores."

Councilor Vincent Testa, a teacher, said he's heard from residents who are both for and against the proposed consolidation.

"As to the input I’m receiving, a lot is from those opposed to the one high school proposal, which is understandable given there is an organized effort underway to prevent that," he said. "I’ve engaged online with the Facebook group opposed to the idea and everyone has been very respectful and open with me, which I appreciate. 

But, I have spoken with people in favor of the idea, as well," he said, "many of whom are educators and coaches, as I am. So, there’s no question the population is split on this. I am keeping an open mind on it."

Should the town go forward with the proposal, it will impact the town for years to come, Testa said.

"This is clearly a major decision with long-term educational and financial implications for the town. I’m trying to remain objective and consider everything," Testa said. "It’s important to remember that the BOE has the responsibility to make educational decisions and the Town Council has the financial responsibility to fund or not fund what they propose. This is a lot bigger than an annual budget, however, so it demands a more intensive review." 

"I believe that a precursor to the Town Council considering the project would be a recommendation by the mayor to the Town Council, and his request to fund," Councilor Craig Fishbein said. "To date, I have not heard from the mayor in this regard. However, if and when we get to that bridge, I look forward to discussing with the members of the Board of Education, and of course the mayor about their decision and his recommendation and request." 

Developers scale down Berlin Steele Center mixed-use apartment project; gastropub eyes April opening

Hanna Snyder Gambini

Developers of the new Steele Center project in Berlin have scaled down some of their plans.

They’ve revamped one of their buildings, going from four stories to three. They will also build fewer two-bedroom units and remove the ground-level parking area.  

The building at 55 Steele Blvd. will be all market-rate apartments, with the original inventory reduced from 60 units to 50 units.

Originally designed with 42 one-bedroom apartments and 18 two bedrooms, the plans now call for 34 one-bedroom, five studios and 11 two-bedroom units.

“The market is definitely talking to us, and it wants to see more one-bedrooms and studios,” said developer Tony Valenti of Newport Realty and Lovely Development, the Southington-based firm that is building Steele Boulevard. “There is definite demand for two bedrooms, but nowhere near one-bedroom and studio.”

The Steele Center complex is a $17-million, 75,000-square-foot commercial and residential development with 70 market-rate apartments planned throughout multiple buildings in the Kensington Village area of Berlin. 

Steele Boulevard is a new road built off Farmington Avenue to connect Steele Center buildings to the new Berlin train station on the Hartford Line.

The mixed-use building at 9 Steele Blvd. has 16 market-rate apartments that are now fully leased, Valenti said.

The lower level has commercial tenants, including 4,100 square feet occupied by a Hop Haus gastropub/craft eatery that is on track to open in April. 

Developers have signed lease space with Trio Home Care, which relocated from Main Street, Berlin, and two attorneys, Brewer and Sargis, who are relocating from Hartford. Developers are working to secure a lease for the last commercial space, Valenti said. 

A building at 10 Steele Blvd. will have four residential units and 8,000 square feet of commercial space, which should be under construction in less than 90 days, Valenti said.

“We continue to be as bullish today as the day we signed the purchase agreement with the town of Berlin to get this project launched and realized,” Valenti said.

Sebastian Obando
Strong job openings, wage growth and robust investment into equipment, IT and overall plant construction indicate the U.S. economy should avoid a recession this year, said Ken Simonson, chief economist for Associated General Contractors of America, during an AGC webinar on the construction outlook.  

Manufacturing and infrastructure projects, boosted by the Infrastructure Investment and Jobs Act and the CHIPS Act, remain the bright spot in terms of construction activity, said Simonson.
“I remain optimistic that we’re not going to have one,” said Simonson, referring to a recession.

 “There’s just a lot of spending power on the consumer side and business side. State and local governments at all levels also have a lot of money to spend. Tax revenues have held up in a way that you don’t see during a recessionary period.”

Simonson expects “huge growth” in the next few months in the manufacturing sector, especially carbon capture and EV battery plants, he said.

Manufacturing spending increased about 5.9% in January and remains up about 53.6% since January 2022, according to an Associated Builders and Contractors analysis.

Major projects in the sector include a $4 billion Panasonic EV battery plant in De Soto, Kansas, and a $3.5 billion Ford EV battery plant in Marshall, Michigan, to name two.

“Manufacturing has been on a real tear. [There are] immense fabs going up outside of Phoenix, Austin and more recently Columbus, Ohio,” said Simonson. “We’re also seeing announcements practically every week about similarly large auto assembly or electric vehicle battery plants.”

Similar to Simonson, other economists last month pushed back their forecast for the start date of a U.S. recession, according to a survey from the National Association for Business Economics. Previously, about half of economists had forecast a downturn would start during the first quarter of 2023.

Rents slipping
Nevertheless, Simonson said rising materials, labor and financing costs still could put a dent in the overall economic recovery. 

“We’ve already been hearing about rent starting to slip in some really hot markets recently like Boise, Phoenix and Denver,” said Simonson. “When current projects finish up, many developers are going to say, ‘wait a minute, my construction costs are going up, my financing costs are going up — and I can’t cover that with higher rents.’”

That could lead to a slowdown in not just apartment construction, but also to overall commercial categories such as warehouse, retail, office and lodging, said Simonson.

“[There are] a bunch of vulnerable categories because of those rising construction and financing costs that are no longer being matched by rising rents,” said Simonson.

 “There is quite a risk of recession, but my expectation is that the economic recovery will continue.”