With the start of the second half of 2010, it appears that experts were correct in predicting that recovery from the current recession would be a long, slow climb rather than a quick leap.
Declines in project starts, which started four years ago, have created a murky marketplace complete with bidding frenzies, razor-thin profit margins and an unemployment rate over 20%.
But, along with the bad, there is some good coming out of the current recession. The editors of Mountain States Construction magazine have compiled a list of 10 things that are getting better in 2010.
We Built This City: New Construction Technologies Boost the Bottom Line
The number of firms using building information modeling and other new construction technology has skyrocketed over the past few years, a welcome trend for the industry at a time when fewer people are doing more work.
Contractors, in particular, have discovered that using BIM is better for their bottom line. Many companies have found ways to shave schedules and save dollars. A 2008 McGraw-Hill Construction survey of AGC BIM Forum members found that among BIM users actively tracking returns on investment, one-third report a return on investment of greater than 100%.
In light of such results, the technology is gaining traction. According to an August 2009 McGraw-Hill Construction survey, 23% of contractors reported using BIM on at least 60% of their projects during the previous year. In 2009, 38% used it at that level, making contractors the fastest-growing user segment in the BIM world.
“Over the last few years, we’ve seen dramatic improvements in construction technology,” says Rick Khan, integrated construction manager at Denver’s Mortenson Construction. “Today’s buildings and structures are far more complicated than any other time in history, and they require the implementation of new technology and process improvements.”
Leading the long list of technologies are laser GPS systems, 3D and 4D virtual project simulations, increased use of prefabricated materials, digital scanners and jobsite notebooks and data-sharing systems that bring project teams more in sync than ever before.
These technologies enhance processes like integrated project delivery and change the way that various team members interact. Data sharing between different firms helps reap greater rewards with BIM, prompting expanded collaboration among team members who have traditionally preferred to hand off work. This means better communication with designers, subs and suppliers, and virtual planning of structures all the way through to their operation and maintenance, which some BIM advocates call 6D construction.
“There is no doubt that BIM has changed the way we do business. Over the last few years, the game has changed, and we see BIM gaining traction faster than ever before,” Khan says. “There is significant opportunity for firms that are committed to change and innovation, but it takes commitment and perseverance. It is not easy. “
Great Expectations: Staying in Step with Sustainability
It’s too easy to say that the industry-wide push for sustainability has been a good thing in recent years, but it is a movement that has transcended the recession and the recent low-bid mentality.
The green express was initially led by designers, who were keenly aware of how much energy is sapped by the built environment. But more recently, contractors have felt the need to adapt to green-building requirements, as more sustainable buildings have been constructed, and more owners are insisting upon some level of sustainability—from the GSA to school districts and universities.
The single biggest change in sustainable construction is collaboration, say designers and contractors. Contractors are no longer being left out of the design phase.
“They have to understand why something is being done and why it is important. They play a big part and they have to be on board for us to accomplish our goals,” says Beth Manguso, a green building consultant in Fair Hope, Ala.
More and more successful sustainable projects have demonstrated that if GCs and key subs are on board early in a project, they can make sure the specifications and drawings are clear. They also have a better idea of what their responsibilities are for the green documentation of a project.
The USGBC’s LEED version 3.0, put into place last year, has helped project teams with the burden of paperwork and documentation to meet LEED requirements. LEED v3.0 was “not a tear down and rebuild” of the existing systems, but an attempt by the USGBC to make them better, more cohesive and more in tune with advancements in the science behind green building and online technology. And most sustainability coordinators say that has worked.
The goal now is to gather data on how LEED buildings perform after completion, to help understand why some buildings continue to perform at a high level and others do not. Dangers include increased litigation when buildings fail to meet green criteria or do not perform according to their contractual promises of sustainability.
“People involved in sustainable projects today should keep in mind what construction attorneys are telling us, that ‘LEED is the new mold,’” says McGraw-Hill BIM guru Steve Jones. “Like the mold lawsuits of the past decade, sustainable building and performance is fast becoming one of the most litigated areas of the industry.”
In short, go green, but be sure to get there.
Love the One You’re With: A Changing Design Profession
It’s no secret that the design industry has been hit especially hard in this recession, with some design insiders estimating that 40% of architects and engineers are either working part time, are out of work or have changed firms, directions and even careers.
One Denver practitioner has dubbed it “the death of the historic architect.” But, he said, maybe some good is coming out of that: new relationships, creative alignments, fresh partnerships and a makeover of the profession as it has historically been defined.
Design professionals are exploring new niches for their talents or adding to them by getting real estate licenses and extending their commercial sales savvy, exploring “design development” opportunities and applying their skills to community improvement in nontraditional ways.
“Some of us are hanging out our shingles in new neighborhoods,” a Denver sole practitioner says. He is now designing “grow” facilities for the medical marijuana industry and teaming up with bigger firms on small projects that require more local connections. “I’m also perfecting my Spanish. That’s already helped on one church rehab project. I wouldn’t have gotten it otherwise,” he says.
Another positive is the creative partnering that has emerged on bigger projects. Teams no longer are made up of only two big studios pooling their talent, but can include four or five different design firms of all sizes to round out the creative needs of the client.
None of this means that traditional designers are dead and gone—the report of their death would be an exaggeration, as Mark Twain said—but the profession is evolving in many interesting ways.
Changes in Latitudes, Changes in Attitudes: Social Media
Have you tweeted your customers today?
Technologically speaking, how businesses communicate with clients and competitors has changed a lot in the last five years. In 2005, smart phones were in their infancy – and the cell phones professionals carried were used primarily for making quick phone calls. In 2005, having a website was the necessary equivalent of a Yellow Pages listing. And—enter your preferred social networking site here—was for teens and young adults, with no real professional application.
Today, smart phones are as standard a professional tool as computers and are getting better with each technological generation. The advance of Web 2.0 has evolved websites into tools for harvesting information along with disseminating information to a broad, and growing, audience.
And networking social media, no longer just another way for teens to avoid their parents, have infiltrated the business world, creating new tools to build or maintain a reputation with a potential to reach more customers and create professional growth.
In their current form social media are an infant technology, which has left many professionals unsure of a clear business use. However, its uses are becoming clearer, and before the end of 2010, they will become an integral part of everyday life – both professional and personal.
“Social media have changed the way we communicate and that, in turn, has changed the way we do business,” says Lisa Glass, communications manager at Denver’s RNL. “[Social media have] increased the flow of information in the construction and design industries, fostering a network of connections between professionals that were not as possible before the advent of social media.
“It is easier to keep up with colleagues, community and industry leaders, and learn what they are excited about or where their concerns lie,” Glass says.
Give a Little Bit: Volunteering Is Up in a Down Economy
The number of people getting involved in their communities went up by 1.6 million to 63.4 million last year, the biggest single-year increase in volunteers since 2003, according to a report released in June by the government-run Corporation for National and Community Service.
The report states that Americans spent 100 million more hours between September 2008 and September 2009 helping their communities, despite a national recession and high unemployment. And, it would seem, the upward trend in volunteerism has not missed the construction and design industries—both of which have been hit with unemployment rates above 20%.
“During this economic slowdown marked by reduced hours and layoffs, many in our architectural and engineering community (in Denver) have spent their spare time reaching out to other groups and individuals in a way that shares their experience and expertise,” says Kathy Ford, SEM Architects and Women in Design member. Women in Design, or WiD, is a volunteer, nonprofit group of architects, engineers, designers and contractors that help other nonprofits such as ACE Mentor and Feed Denver.
“Even though there isn’t a lot of construction work above ground to be had, we can still invest in our field in ways that stimulate future growth and feed our communities and artistic souls,” she says.
The top four activities for service across the country last year were fundraising, collecting or distributing food, providing general labor or transportation and tutoring or teaching. With more time on their hands, construction industry professionals almost doubled the number of firms who participated in the Denver ACE Mentor Program.
“We had 51 firms participate in ACE in 2010 and only 37 in 2009,” says Christi Longsdorf, ACE Mentor Denver program director. “Despite the economy, and everyone desperately trying to win projects, I think people still want to give back and remember why they love this industry.”
It is no secret that the future of the construction industry is currently in flux. And it is unknown how the industry will look once full economic recovery takes hold. But what is sure is that the lessons learned in this recession will include a commitment to volunteerism and a drive to give back to the community as well as the industry.
Riding the Rails: FasTracks Program Achieves Major Milestones
Denver’s light rail system, already a hit with local commuters and topping its ridership projections, gained more momentum this summer. Several key pieces of the FasTracks project came together recently, starting with the signing this month by officials from the Regional Transportation District and the Union Pacific Railroad for RTD’s purchase of railroad property and the construction and relocation of UP facilities for the FasTracks transit expansion.
The agreements total $78 million and provide property needed to build the East Corridor (from Denver Union Station to Airport Boulevard), the Gold Line (from Pecos Junction to Ralston Road), and the West Corridor (relocation of UP’s Burnham Yard Lead to the south).
This is the second property transaction between RTD and UP for FasTracks. The first transaction, which totaled $118 million to purchase the right-of-way to build the North Metro Corridor, occurred in 2009.
In June, RTD selected the Denver Transit Partners to build and operate the commuter rail lines to Denver International Airport, Arvada-Wheat Ridge and south Westminster.
Denver Transit Partners’ proposal came in at $2.085 billion—$300 million lower than RTD’s budget estimate of $2.385 billion.
The proposal also included opening the central line between Denver and DIA by January 2016, 11 months ahead of RTD’s deadline.
The first stages of construction, which include relocation of utilities and freight tracks along the DIA route, are slated to begin soon.
In July, world-renowned architect Santiago Calatrava unveiled his designs for a 500-room Westin Hotel, a commuter train station, and a rail bridge at Denver International Airport. The bridge, which will be located about a mile and a half from the airport, is a 720-ft-long, steel-and-concrete suspension bridge with a 620-ft span. All components of the project total $650 million and will, in Calatrava’s words, “create a kind of link between the city and the airport. We are almost exporting the urban quality of Denver into the airport.”
In all, FasTracks will build 122 miles of commuter rail and light rail, 18 miles of bus rapid transit service, add 21,000 new parking spaces, redevelop Denver Union Station and redirect bus service to better connect the eight-county District. The FasTracks investment initiative is projected to create more than 10,000 construction-related jobs during the height of construction and will pump billions of dollars into the regional economy.
Water Music: New Group Seeks Better Infrastructure Funding
In February a number of statewide businesses, professional, civic and environmental associations sounded an alarm that Colorado’s water/wastewater infrastructure is facing a crisis, but the state now has a win-win scenario to begin tackling the problem.
“Like the rest of the world, the United States installed underground water infrastructure in three main time periods because of population growth in the 1800s, 1900-1945 and post-1945,” says Gregory M. Baird, Aurora Water CFO and a board member of the new Water Infrastructure Network Colorado, or WIN-Colorado. “Pipes constructed in each of these three eras will all start to fail over the next couple of decades for a number of reasons—ranging from age to inadequate design to poor installation.”
To solidify their findings, the associations—which include the American Council of Engineering Cos. of Colorado, the Associated General Contractors of Colorado and the Colorado Contractors Association—formed WIN-Colorado. It was created to raise public awareness about aging and deteriorating drinking water and wastewater systems in communities throughout the state.
“Colorado’s water infrastructure has entered a crisis of perception,” says Kevin Bommer, legislative and policy advocate for the Colorado Municipal League. “We, as a society, don’t truly understand the value of our infrastructure until it doesn’t work right. And keeping those systems working right is getting more difficult with each passing year.”
The problem arises from a growing backlog of water infrastructure projects, totaling approximately $4.3 billion for Colorado alone. In 2008 the Colorado Municipal League identified 40 wastewater projects in smaller Colorado municipalities as public health hazards. They need of $70 million in funding, with 163 projects in significant noncompliance that need $310 million.
In the months since WIN-Colorado’s inception, the advocacy group has worked to identify all entities that should be part of the funding solution and delivered its message to government offices as well as other associations nationwide.
“There is a significant disconnect between the needs of Colorado’s infrastructure and the user fees funding them. Our mission with this group is to connect this by looking at outside sources for funding,” says Bommer. He says that raising rates for users by itself isn’t going to fix an aging water infrastructure.
Here’s to Your Health: Fitzsimons Medical Campus
The current economy and commercial construction market have seemingly had no effect on new construction at the Fitzsimons Life Center and Anschutz Medical Campus, located on the former Fitzsimons Army Medical Center in Aurora.
When the historic army post fell under U.S. Base Realignment and Closure in 1995, it was estimated that it accounted for $328 million in local economic activity and 2,904 jobs, according to Wendy Mitchell, president of Aurora Economic Development Council.
Today, activities at the site are pumping approximately $3.5 billion into the state’s economy, according to an Aurora EDC report. And, not counting construction workers, there are more than 15,000 employees on the campus.
Since construction started in the late 1990s, more than 6 million sq ft of corporate and research space has been developed, including the University of Colorado Hospital, the Barbara Davis Center for Childhood Diabetes and the School of Dental Medicine.
And, just this year – during a depressed economy and seemingly stalled commercial construction market – the campus has announced or started construction on a number of large-scale projects, including:
• The Dept. of Veteran Affairs is expect to break ground on a new, stand-alone veteran’s hospital on the southeast corner of the Fitzsimons campus, and announced last month that it expects the building to open in spring 2014. A contractor has not been announced yet.
• In May, the University of Colorado Hospital unveiled expansion plans that include construction of a new $400-million, 12-story patient tower. The hospital will also spend $20 million to expand the CU Cancer Center to meet a substantial increase in demand for hospital services. The new building is slated to open in 2013.
• Construction recently began on the second phase of an interchange improvement project at Interstate 225, Colfax Avenue and 17th Place, at the southeast corner of the campus. The interchange project is designed to improve traffic flow, safety and access to the campus. The project is expected to take two years to complete.
• Construction recently started on a new $80-million, office-and-hotel project south of the campus.
• In June, construction began on a new $150-million, 10-story addition to the Children’s Hospital, east of the UCH.
“This continued building of a health-care city is not only a great boon for our economy and our state, but our opportunity to accelerate the hospital’s work in improving the health of all our communities,” said Peter H. Coors, UCH Foundation chairman.
Come Fly With Me:
Denver International Airport
Last month, Denver International Airport announced an estimated $900-million expansion to its main terminal. The first phase of this expansion, estimated at $650 million, includes a 500-room Westin Hotel, an RTD FasTracks commuter rail station and signature bridge and plaza designed by Santiago Calatrava.
The South Terminal Redevelopment program is the first upgrade to the airport since it opened in 1995 and will complete the original airport plans, which included an onsite hotel and a train station for a link to downtown Denver. The bridge and hotel are expected to complete in 2013, with the train station completing two years later and commuter-rail service beginning in 2016.
Calatrava is collaborating with Parsons Transportation Group’s Denver office; Gensler, the hotel architect; Mortenson Construction; and Kiewit.
A second phase of the redevelopment, which includes a new parking structure and renovations to the Jeppesen Terminal Great Hall, has been planned but not yet approved by the airport. It will add $250 million to the cost of the redevelopment, bringing the entire project to an estimated $900 million.
“We are committed to fiscal responsibility for this project,” says Kim Day, Denver manager of aviation. “We will keep a close eye on costs and we will not move forward with any project that does not make good financial sense.”
The program will be primarily financed by General Airport Revenue Bonds, which will be repaid from airport revenues. “In addition, no taxpayer or General Fund dollars will be used to complete any of the projects in the [program],” adds Day.
Additional construction at the airport includes the addition of a 1.6 MW solar photovoltaic array that will power the airport’s fuel storage and distribution facilities. It is expected to help DIA offset the environmental and monetary costs of these facilities, generating approximately 2.5-million kw hours of clean electricity in the first year of operation and approximately 46-million kw hours during the system’s lifetime.
MP2 Capital, which helped finance the project through a private-public partnership, says it is the largest solar power plant completed to date under the Obama administration’s grant initiative, the American Recovery & Reinvestment Act 1603.
Green River: Firms Invest in Sustainable Research and Processes
As firms have been forced to get leaner during this recession, many of them have also found ways to get smarter, including investments in new industry research and processes.
One of those that has gotten some national attention lately is biomimicry. The simple, core principle of biomimicry is that in order to be more sustainable, designers should mimic nature.
But don’t expect to drive to a nearby city to see construction of a completely biomimetic building any time in the near future. Such a structure would be completely made of locally available materials and energy sources. There would be no toxins in the building or any of the building materials, and the structure would be inspired by the local biology.
No such buildings exist—yet. But biomimicry is being embraced by some as a challenge to push toward a new way of viewing construction.
The closest thing in Denver to that goal is the country’s first net-zero-energy building, the Research Support Facilities campus in Golden, which showcases a live example of its research, with many of its technologies in practice. It also will have a model for future sustainable office buildings.
At approximately 220,000 sq ft, NREL’s new three-story building, which opens this month, includes two long wings, connected at the middle by a lobby and conference area, and will eventually have more than 700 employees working in it.
Requirements for the building include LEED-Platinum certification leading to net-zero operation; a demonstration of active alternative energy technologies; and serving as a model for competitive, high-performance commercial buildings for the nation’s design, construction, operation and financing communities.
It is, in short, a living laboratory for net-zero-energy projects.
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