Diverse Projects Fill Out Regions Top Starts of 2013
Work has been plentiful in Louisiana and Texas over the past year, with a slew of massive projects starting up in each state, ranging from energy, transportation and infrastructure to mixed-use and retail. ENR Texas & Louisiana's Top Starts list shows the cost of the top 25 projects that broke ground in 2013 in the region totaled $12.49 billion, a decline of $710 million compared with last year. But more energy projects are on the way in both states, as work remains strong in the Gulf Coast region.
Mixed-Use Behemoth
At the top of this year's list is the $1.5-billion City Line project in Richardson, Texas, owned by KDC and being built by Austin Commercial. This is the largest mixed-use project now under development in Texas, and one of two mixed-use projects on this year's list. State Farm is leasing 1.5 million sq ft in three office towers, now under construction.
"We think it's a transformational occurrence right now, where forward-thinking companies are really trying to create the best environment possible for their employees, and they're trying to attract and retain," says Toby Grove, KDC president. "We thought this parcel was large enough to give us the scale to do a large mixed-use, integrated project. The infrastructure that's in place with the DART rail station being there as well as the intersection of two major freeways makes it one of the best locations in Texas for this type of development."
The office buildings, which are part of the $600-million, 2.3-million-sq-ft initial phase of the project, are expected to be completed in 2015.
"On a single-phase project, this is the largest project that we've been involved in," Grove adds. "It's impacting all of North Texas in an incredibly positive way."
Massive projects of this type used to be relatively rare, but that's changing. "Twenty years ago, a 300,000-sq-ft project was a really large project. Today, we're seeing several transactions or potential transactions that are in excess of a million square feet," Grove says.
"It's just a concentration, and I think that we continue to see corporate America looking for more integrated facilities with amenities tied into those developments, and we're going to continue to see a lot of that going into the future," he adds.
Roadways and Industrial Work
Expansive growth across Texas has spurred development of all kinds, including a need for more infrastructure to carry folks from one side of the state to the other. Three projects within the top 10 are owned by the Texas Dept. of Transportation, as the agency continues to mend the state's ailing transportation infrastructure.
The $1.4-billion IH-35 Express Managed Lanes Project, a 30-mile expansion of IH-35E between U.S. 380 in Denton and I-635 in Dallas, is ranked No. 2 on this year's list. Work includes reconstruction, rehabilitation or expansion of 75 bridges, addition of a reversible 18-mile-long managed lane system and the addition of 40 miles (includes north and southbound lanes) of new general-purpose lanes.
Ranked No. 3 and No. 6, respectively, were TxDOT's $1.04-billion SH 99 Grand Parkway Expansion, a 180-mile circumferential highway traversing seven counties in the Houston area, and the $798-million Horseshoe Project, which stretches five miles and replaces bridges that cross Trinity River on I-30 and I-35E as well as the connecting roadways where they converge near the Dallas Central Business District.
In Louisiana, highway work has taken a downturn, but the booming industrial sector continues to have a positive impact. "We do see some spin-off from the industrial sector from the industrial expansions with commercial building and even the plants are looking at funding privately some infrastructure improvement because the state cannot," says Ken Naquin, CEO, Louisiana AGC. "So we're excited about that. In the public sector, you're going to see some residual and added work just because of the increase in industrial work."
Three industrial projects in Louisiana show up on the Top Starts list. Benteler Automotive Corp.'s $975-million Hot Rolling Steel Tubular Mill in Shreveport is being built in two phases. The finished facility will have more than 1.35 million sq ft and produce up to 320,000 tons of steel tubes annually.
Dyno Nobel's $850-million Ammonia Production Facility in Waggaman will have an annual ammonia capacity of 800,000 metric tons once completed in 2016. Meanwhile, Dow Chemical has two projects in Plaquemine, the $500-million Next Generation Synthetic Rubber Plant and the $500-million High Performance Polyethylene Plant, both finishing in late 2016.
Water and Energy
Health care, retail and flood-control projects were among the region's largest this year as well. Construction of the $615-million Permanent Canal Closures and Pumps project in New Orleans to protect the city from future flooding will continue until 2017. Hospital work has been steady across the region and continues with the $648.9-million Fort Bliss Replacement Hospital in El Paso, Texas, and the $175.5-million Baylor Medical Center at Waxahachie, Texas. More health care-related projects are forthcoming too, such as the $358-million Dell Medical School at the University of Texas at Austin. Construction begins this summer.
A retail entry on the list, Nebraska Furniture Mart's $156.8-million megastore in The Colony, Texas, sits on a 100-acre site and includes 560,000 sq ft of retail space, plus 1.3 million sq ft of warehouse space. This is just the start of development. More than 400 acres are being developed at the same location as workers gear up to bring 3.9 million sq ft of mixed-use space to the site.
A Top Starts ranking covering Texas and Louisiana would not be complete without at least a few energy projects. For starters, the $400-million Houston Lateral pipeline and terminal—a portion of TransCanada's Keystone Gulf Coast Expansion—is now under way. Quanta Services Inc. is installing 48 miles of 36-in.-dia steel pipe to connect TransCanada's Gulf Coast Pipeline to refineries in Houston.
Also, ONEOK Hydrocarbon's $350-million LP NGL Fractionation Project in Mont Belvieu, Texas, is under way, as is Magellan Midstream Partners' $600-million BridgeTex Pipeline in Colorado City, Texas. On the renewables side, Enbridge's Keechi Creek Wind Farm, a $200-million project, is rising in Jacksboro, Texas.
The big impact of energy work on the Top Starts list will continue, as some other key projects will break ground this year in Louisiana, including Mitsui & Co. Ltd.'s $6-billion Sempra Liquefied Natural Gas Export Terminal in Hackberry and South Louisiana Methanol's new $1.3-billion methanol plant in St. James.
The regional trend toward more project diversity will continue into next year as well. KDC, for instance, is partnering with Karahan Cos. and Columbus Realty Partners on a project for JCPenney called Legacy West, sited on 240 acres in Plano, Texas, which Grove says will be similar to City Line.
"We're lucky to be in Texas. There seems to be more activity here than in a lot of other markets," Grove says. "We see a lot of potential continued growth in the Southeast and Southwest, and we think it bodes well for all of us."
