There are top project starts and there are non-starters, making ENRMidwest’s list of 2010’s Top Starts as notable for what’s absent as for what’s present.

Image Courtesy Of Perkins + Will

Old Man River A bridge linking St. Louis and St. Claire County, Ill., is the Midwest’s top project start.

Still among the missing is just about anything smacking of commercial construction, particularly in the office, retail and hospitality sectors. Ditto multi-family housing, a sector suffering from foreclosures and plummeting housing values. In some areas, values continue to decline.

The downturn is particularly acute in metropolitan Chicago, ground zero for the region’s economic meltdown, says Anirban Basu, economist with the Arlington, Va.-based Associated Builders & Contractors.

Nevertheless, the Midwest is poised for healthier growth than other U.S. regions due to its robust industrial base, the purported beneficiary of a growing global economy, according to Basu.

Although health care, continuing care and senior housing facilities also are buoying the region, “it’s largely the premier health-care providers that continue to raise funds for large hospital projects,” says Jeff Riemer, executive vice president with construction manager Bovis Lend Lease, Chicago, which has four projects listed among the region’s Top Starts. “We have some senior housing facilities we’re at work on, but they were conceived before the economic crisis. Those projects are harder to build now, because they were previously tied to letter-of-credit banks that are gone.”

At present, the Midwest leads some regions in construction activity and lags others. Although ABC reported an average backlog of 7.1 months for the fourth quarter of 2010—a figure consistent with the pace of recovery in overall non-residential activity—the average backlog for Midwest states, including Indiana, Michigan and Ohio, only recently surpassed six months. By comparison, the South, which includes Louisiana, Oklahoma and Texas, achieved an average backlog of 7.8 months for the same period. The West, the nation’s worst performer, posted an average backlog of 5.8 months.

Despite progress, a dearth of publicly funded projects—a popular antidote for anemic markets—could stall recovery in the Midwest. “As with other regions, the challenge is to offset steep declines in federal stimulus funding, now that the program has begun to wind down,” Basu says.

“Much of those funds have been paid out, and contractors are back out looking for work,” says Ken Simonson, chief economist with Arlington, Va.-based Associated General Contractors of America. “Although states such as Illinois have imposed hefty tax hikes, those funds don’t come close to matching the amount that states received in stimulus funds,” he says. “I think it’s going to be a very grim year for public construction in the Midwest and elsewhere”

The signs are everywhere.

In Illinois, some $31 billion in public works projects hang in limbo after an appellate court ruled that funding sources, including tax hikes on liquor, candy and video gambling, violated a “single subject” clause of the state constitution.

In Missouri, state legislators are seeking to fund the state’s second nuclear power plant by allowing utilities to pass on project costs to consumers, despite a 1976 law barring utilities from doing so before such plants are operating.

Along with state lawmakers, Indiana’s Commission for Higher Education for the first time recommended a two-year moratorium on university construction, including $700 million in proposed projects.

Throughout the region, dwindling funds also are curtailing lower-education projects. “Property taxes are very important for the K-12 sector, but that base is shrinking due to falling housing values and rising delinquencies,” says Simonson. “We’re seeing districts close schools rather than open them.”

Federally funded projects face obstacles of their own. Although the Obama administration has proposed $50 billion for highways, transit, rail and airports for fiscal 2012, it has yet to indicate how it plans to fund its six-year, $559.9-billion surface transportation plan, which includes $53 billion for high-speed rail.

Federally funded building projects also present a mixed bag. Among the big losers is the Veteran’s Administration, which would see construction spending plunge by 51% in 2012 as the Obama administration attempts to trim non-security-related construction.

The situation is a bit brighter for the U.S. General Services Administration, although many of its planned projects, including a $194-million headquarters for the Dept. of Homeland Security, will be built outside the Midwest.

Significantly, fourth-quarter data compiled by ABC denote a shift away from public construction, particularly infrastructure work.

Even so, some Midwest states and municipalities are turning to public/private partnerships to support planned projects. In 2006, Indiana sold operating and toll-collection rights for the Indiana Toll Road, a major interstate linking the Midwest and the East Coast, to Spanish-Australian consortium Cintra-Macquarie for $3.85 billion, money it used to help fund languishing infrastructure projects.

Indiana also has formed a tri-state commission with Kentucky and Ohio to investigate public/private methods of funding bridge projects.

Michigan is taking a similar tact to fund construction of a bridge linking Detroit and Canada. Under one scenario, Detroit International Bridge Co., owner of another bridge linking Detroit and Canada, would fund the project by seeking federal matching funds on toll credits it has accrued since 1992.

“The Indiana Toll Road deal is as good an example as any of what you can achieve with public/private partnerships,” according to Simonson. “But it really isn’t happening elsewhere, at least not to the extent we thought it would.”