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Building Up Industry One Tower, One Bridge at a Time

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Some call it an indication of an all-out recovery while others describe it as just a gradual upswing, but most agree that the dramatic increase in the number of construction cranes in and around metro New York last year is, indeed, a good sign. While many of the megaprojects, especially in transportation, have been a long time in the making, they started up along with numerous high-end residential and mixed-use towers—helping to bolster the region's construction activity and make industry executives more optimistic than they have been in the last few years.

Rendering Courtesy of GHWA
Living High: The Atelier II apartment building at 605 West 42nd St. is scheduled for completion by the third quarter of 2015.
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"We are stable," says Jay Badame, regional president and COO of Tishman Construction. "We are continuously optimistic of the future." The executive, who heads up the firm's New York, New Jersey and Pennsylvania region, sees key market strength in areas around the city and in northern New Jersey, in particular.

ENR New York's ranking of top projects to break ground last year is a reflection of that activity. For the first time since the downturn began, the aggregate total construction value of the region's top 25 projects broke the $10-billion mark, reaching $12.7 billion in 2013. That is a 61% increase over 2012, although still well below the 2009 total of $18.6 billion.

As was the case in 2012, the region's tall towers, mostly in New York City, dominate the ranking. They account for 11 projects, including the $550-million luxury residential and hotel redevelopment conversion at 70 Pine St., which is No. 5 in the ranking.

In the commercial sector, Prudential Financial's $440-million office building in Newark is the largest on the list at No. 8.

"While commercial has lagged, it will pick up," Badame says.

The average cost of building a residential tower in New York City or in northern New Jersey ranges from $200 million to $500 million, which is why a slew of such projects can offset losses in other sectors, according to Badame. Tishman has several projects in the ranking, including the $400-million 30 Park Place/Four Seasons Hotel and the $295-million Atellier II building. "The dollar volume speaks for itself," he says.

The strong residential showing is in line with the McGraw Hill Construction forecast for 2014, published last November. For the entire Northeast, the forecast called for a 13% year-over-year increase in both residential and nonresidential building. ENR New York is part of McGraw Hill Construction.

"The list of the nation's top metros for multifamily construction reflects the concentration of largest projects in the New York metro area," according to the report. It adds that the upward trend will continue this year but will likely "be more tempered as the recovery in multifamily housing matures."

Even so, it is transportation infrastructure work that claims three of the top five spots in the ranking. Leading the list is the $3.9-billion Tappan Zee Bridge replacement project, with New Jersey's $900-million Direct Connection interchange near Philadelphia at No. 2 and the $743-million raising of the Bayonne Bridge roadway at No. 4. An energy sector project is in the third spot—a 700-MW, $845-million natural gas powerplant being developed in Woodbridge, N.J., by Competitive Power Ventures.

Even with more than $10 billion worth of mega-bridge projects under way or about to start in the metro area, there are also many more smaller bridges and roadways in the region that are not getting attention, industry executives say (ENR 12/16/13 p. 20). The outlook for the smaller, "less glamorous" projects is far from rosy, as little money is being allocated for new construction or upgrades, they add.

"Unfortunately, the big projects have taken money away from the small and medium-size projects that various agencies would have done in the past," says Craig Johnson, executive vice president at engineering firm Dewberry. He is project manager on Direct Connection, the largest project that the New Jersey Dept. of Transportation has ever undertaken and the largest one for which the company is lead designer.

"The need in the tristate area far exceeds the funding that's available," says Gary Neuwerth, president of Dewberry's Northeast division. He cites an urgent need for the region's transportation agencies to undertake more than $20 million to $30 million in bridge and highway repairs and construction tasks.

Neuwerth adds that while some states are raising funding by issuing bonds, adding toll facilities and, in New York state, enacting design-build project delivery legislation, more needs to be done. Even so, having three or four megaprojects in the ranking starting simultaneously "is a bit of an anomaly, but a fortunate one for our market sector," he says.

Crews working on the design-build replacement of the Tappan Zee, now called the New NY Bridge, began installing massive steel pipe piles this month, according to Brian Conybeare, special adviser on the project to New York Gov. Andrew Cuomo. "These piles will serve as the foundation for the new bridge and are driven deep into the riverbed before being filled with reinforced concrete," he says. The pile driving will continue for the next year.

Crews also will continue to install trestles on the Rockland and Westchester county approaches for work platforms that will support construction operations adjacent to the new bridge, Conybeare says. Once completed, the trestles will extend 1,000 ft into the Hudson River from each shoreline.

By June, the New York Thruway Authority expects to start work on the main span substructure. In late 2015, the westbound bridge is targeted for completion, and in February 2017, demolition of the existing bridge is expected to start. Both spans are expected to be complete in late 2017, and the entire project is set for completion in April 2018.

In the public sector, there is further work to be done on several major projects such as the Moynihan Station redevelopment in Manhattan, Badame says. But such projects depend on public agency budgets. "We are optimistic" that the public sector market will pick up, he adds.

Public sector projects in the ranking include MTA Capital Construction's $258-million 72nd Street subway station, which is part of the Second Avenue Subway project. It ranks at No. 16. Also listed, at No. 17, is the agency's $201-million Manhattan South Structures, which is part of the East Side Access project.

The wild card for metro New York projects, in particular, is the work force situation and whether contractors who work with organized labor are able to keep costs in check, according to executives at building companies. Employers now are awaiting the next round of labor negotiations with the Operating Engineers' union Locals 14 and 15, which are set to start in a few months.

As for industry growth in the metro region during the next few years, "there is plenty of money out there … as long as demand is there and investors can get a good return," Bedame points out. "Right now, developers are seeing that it is attractive to build, and we are hoping that we will be going along with them for the ride."

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