Construction Forecast 2007

Story by Matthew Phair | September 28, 2010

Heavy contractors in the coming year will find some sectors that are running lean — if not out and out dry — while others have new infusions of funding. According to data supplied by Reed Construction Data (owner of Constructioneer), the mildly bad news is that spending in the New York/Pennsylvania/New Jersey/Delaware region on roads and highways will drop 4 percent from 2006.

The real swing, though, in 2007 on the upside is what is called miscellaneous civil work, which is up a whopping 28 percent. Major boosts in this category will include projects that include Excavating & Grading, Railroad & Subway, Tunnels, Flood Control, Military Non Building, Parks, Landscaping, Power Lines & Stations, Sidewalks, Curbs and Gutters, and Sitework.

Countering the raise is an astoundingly steep drop in Other Civil, which includes Airport Construction, Bridges & Culverts Dams, Canals, Marine Work, Water & Sewage Piping, and Water & Sewage Treatment. Those markets are forecasted to drop 21 percent.

And for building contractors, the 2007 workload will remain strong. RCD is forecasting that nonresidential building in 2007 will be up 8 percent. While it lags the rest of commercial construction, due to high vacancy rates in most major markets, a strong hiring trend in the finance and business services industries accounts for the rise.

New York

On nearly everyone's mind in 2007 will be construction of the Freedom Tower at Ground Zero. Now under way, construction of the 1,776-foot structure will include 2.6 million square feet of office space, plus tenant amenity spaces, observation decks, world-class restaurants, and broadcast and antennae facilities.

Workers are in the process of creating foundation footings for the Freedom Tower. Overseen by Tishman Construction, the contractor, Laquila Group Inc., is excavating rock prior to constructing the tower foundations, which will consist of concrete spread footings on rock, rock anchors and mini caissons. The first steel order for the 1,776-foot-tall tower was placed in July, and the first pieces of steel will be erected on the site in January 2007.

Also making its debut in 2007 will be the Navy's amphibious assault ship USS New York, built with 24 tons of scrap steel from the World Trade Center. Steel from the World Trade Center was melted down in a foundry in Amite, La., to cast the ship's bow section.

The World Trade Center Memorial Foundation and the Port Authority of New York and New Jersey announced August 4 the award of the first major construction contract for the World Trade Center Memorial, which will pay tribute to the nearly 3,000 people who lost their lives in the terrorist attacks of September 11, 2001, and February 26, 1993. The $17-million contract was awarded to E.E. Cruz of Holmdel, N.J., to build the memorial's foundations and footings. The memorial is currently on schedule for completion in September 2009.

Ground was broken October 17 on the $1.68-billion expansion of the Jacob K. Javits Center. The 1.1-million-square-foot expansion over the next four years will increase the center's exhibition space by 45 percent. Crews began tearing down two old buildings at 39th Street to make room for the expansion, which will extend the center north to 40th Street and will include a park. The plan is being subsidized in part through city and state contributions of $350 million each. A request for proposals was also sent out that same day to build a hotel that would be linked to the center on 11th Avenue between 35th and 36th streets. The hotel would have a minimum of 1,000 rooms and 50,000 square feet of meeting space.

The Moynihan Station project, a planned $900-million effort to convert Manhattan's main post office into a new rail gateway to New Jersey, has failed again to get approval. The state's Public Authorities Control Board did not take a scheduled vote October 13 and the board's approval is needed before the project can move forward. Governor Pataki backs the plan — Assembly Speaker Silver does not. The post office sits across from Madison Square Garden and covers two city blocks. It was to include 300,000 square feet of space for the train station, 850,000 square feet of retail space and 250,000 square feet for the post office. According to a statement from Empire State Development Corp. Chairman Charles A. Gargano issued on October 19, the future for the project as envisioned appears dead: "But now ... there is no longer a development plan and therefore there is no project and we have no choice but to terminate our current relationship with the developer."

Officials August 9 marked the completion of excavation for Stage Two, the Manhattan leg, of City Water Tunnel No. 3. Started in October 2003, the Manhattan leg of Stage Two is a $1-billion, 8.5-mile water tunnel stretching from West 30th Street and radiating out in three directions:

Work on the Third Water Tunnel began in 1970, and is expected to be completed in its entirety by 2020 at an estimated total cost of $5.5 billion to $6 billion, financed through water bonds and the collection of water and sewer fees. The city has commissioned a permanent memorial to the 23 workers who have died while constructing this project. It will be installed in 2007 in Woodlawn near Van Cortlandt Park in the Bronx. When fully operational in 2012, City Tunnel No. 3 will nearly double the 1.2 billion gallons per day capacity of the city's water supply system.

Construction in the Bronx on the new $800-million Yankee Stadium will be going strong in 2007. The plan includes an open-air, five-level stadium with approximately 53,000 seats, standing room for 1,000 and 60 suites. Four new garages will be constructed to provide around 4,735 new parking spaces. Development of roughly 24.5 acres of new parks in the community is also included. The total project costs are estimated at $1.2 billion. Construction will be completed in 2009 for the New Stadium and 2011 for the entire project.

In late 2006 the New York City Economic Development Corporation has issued a Request for Proposals for the sale and redevelopment of the landmark Kingsbridge Armory, a 575,000-square-foot building in the Kingsbridge Heights section of the Bronx. The goal of the RFP is to transform the Kingsbridge Armory into a mixed-use facility that will anchor the local community and create a destination to attract visitors from throughout the city and the region. Built between 1912 and 1917, the Kingsbridge Armory was designed by the architecture firm of Pilcher and Tachau and is an example of military architecture featuring Romanesque arches, vaulted ceilings, decorative brick and terra cotta, and large battlement towers. It is thought to be the largest armory in the world, containing 575,000 square feet of space, the heart of which is a drill floor measuring 180,000 square feet, more than a full city block. Beneath the drill floor are large basement levels that formerly housed offices, a garage, rifle and pistol ranges, a dining room, a gymnasium, and an auditorium.

Under way in Queens is the new $444.4-million replacement for the Mets Shea Stadium, called Citi Stadium. Modeled after Ebbets Field, the former home of the Brooklyn Dodgers, it will be an open-air, seven-level stadium with 42,500 seats, and standing room for 1,600 fans, with approximately 50 to 60 suites; approximately 1.26 million square feet of space. The total project costs are estimated at $600 million. Construction will be completed by 2009.

Skanska USA Civil's Slattery Skanska and Gottlieb Skanska units have been awarded a $183-million contract to upgrade the Bowery Bay Water Pollution Control Plant in Queens. The project includes foundation and piling work, rehabilitation of concrete tanks, steel construction, and over 20 miles of piping. Work is slated to be completed in five years. The facility is one of New York's oldest plants and the purpose of the project is primarily to improve nitrogen removal. Skanska is currently carrying out large-scale retrofits at the following water pollution control plants: North River Water Pollution Control Plant for $46.6 million, 26th Ward Water Pollution Control Plant for $59 million, Newtown Creek, in which Skanska's share of the contract totals $222 million, and Peardegat Basin Water Quality Facility for $136 million.

In Brooklyn, the 85-acre, $130-million Brooklyn Bridge Park, stretching 1.3 miles along the East River, is beginning in 2007 with construction on the Brooklyn Bridge Plaza phase. It will be Brooklyn's first major new park since the creation of Prospect Park 135 years ago.

On Staten Island, International Speedway Corporation has lost their permit to bring soil into the Bloomfield properly for the time being. With the permit retracted, work has stopped. However, observers note that with NASCAR's well-publicized dip in popularity, building a track in New York City would likely give a much-needed boost to the sport. Track supporters are looking for major progress in 2007.

In the Hudson Valley, Yonkers once again will be the home of hundreds of millions of dollars of work. In 2007, once the former ATI tank farm property has been adequately remediated, construction of a new neighborhood of more than 100 waterfront homes will begin.

In Peekskill (former home of Governor Pataki) the state will be spending over $8 million to assist in the redevelopment of the city's Hudson River waterfront area, to transform the currently under utilized industrial area into a major public attraction.

Upstate near Albany, New York state and Advanced Micro Devices now have a multibillion-dollar deal to build the most advanced semiconductor manufacturing facility in the world at the Luther Forest Technology Park in Malta. The project is projected to create more than 1,200 new high-tech jobs, thousands of construction jobs and more than 3,000 indirect jobs. Under the terms of the agreement, AMD would be able to construct a new, $600-million, 1.2-million-square-foot facility, equipped with approximately $2.6 billion in state-of-the-art tools designed to produce 300-millimeter wafers using 32nm process technology. Expenditures at the facility are projected to total more than $2 billion during the first five years of operation, bringing the projected total investment to $5.2 billion. The agreement enables construction on the 1.2-million-square-foot plant to begin between July 2007 and July 2009 and be fully operational sometime between January 2012 and January 2014. AMD will construct a new, $600-million, 1.2-million square-foot-plant between July 2007 and July 2009.


In western Pennsylvania, I-79 again tops the list of high-dollar road projects. Ramp work totaling almost $70 million was let in the fall of 2006. Other major road projects nearby include roughly $65 million for the Mon/Fayette Expressway between Uniontown and Brownsville, which the Turnpike Commission says should be ready by 2009. Between Neville Island Bridge and I-279, reconstruction of roadway and rehabilitation of bridges including interchange improvements at a cost of $50 million are slated to begin in the spring of 2007, and completed in late fall 2007.

In the city of Pittsburgh, Allegheny County on route US 19, a new section of roadway to extend the West End Bypass to the West End Bridge, including the construction of a partial grade separated interchange and reconfiguring the existing West End Circle, will cost $51 million. Work will begin in early 2007, and be completed by early 2009.

On the turnpike in Chester and Montgomery counties, Allan A. Myers will be going strong after winning a massive $157-million contract to rebuild road and bridge sections. In Lawrence and Beaver counties, a Fay/Norwind joint venture will rebuild eight miles under a $100-million contract. For the entire turnpike, HMSHost Corp. will begin its 30-year, plaza-redevelopment contract worth roughly $100 million.

On a 6.3-mile section of Route 202 in Chester County, Urban Engineers will be construction manager for PennDOT's $165-million reconstructing project. The state's $330-million reconstruction of the 10-mile long 309 Expressway in Lower Gwynedd Township will continue through fall 2008.

Pennsylvania building projects include Children's Hospital of Philadelphia — which began a $400-million research building, and two new area high schools costing over $100 million. A new Cancer Institute in Hershey is also being built at a cost of $82 million.

Bridging Pennsylvania with New Jersey, the Delaware River Toll Bridge Commission's 10-year, $640-million capital improvement program awarded an $87-million contract for the Morrisville-Trenton bridge. Construction is expected to be completed by the end of 2009. At least five of the commission's 20 bridges are slated for work.

Key recommendations of Pennsylvania's Transportation Funding and Reform Commission were released November 13. For Highways and Bridges, they include: 1. Raise $900 million for state-owned highways and bridges by increasing oil franchise tax on the wholesale price of gasoline by 11.5 cents per gallon and increasing motor vehicle registration and license fees; 2. Raise $65 million for highways and bridges owned by counties and municipalities with 1-cent increase in oil franchise tax; and 3. Save $120 million through measures such as streamlined project planning, better maintenance and preservation, and linking land use and transportation.

For Mass Transit, the commission's recommendations include: 1. Raise $760 million for mass transit, with 75 percent from the state and 25 percent from counties and municipalities; 2. Increase realty transfer tax from 1 percent to 1.89 percent to raise state's share; 3. Enable counties and municipalities to raise their share through a 0.25-percent local sales tax, 0.20-percent earned-income tax or 0.5-percent realty transfer tax; 4. Replace $589 million in current mass-transit revenue sources with existing revenue from state sales or personal-income tax;5. Save $60 million through measures such as restructuring or eliminating routes with low ridership, reducing labor and management costs, and encouraging the use of private contractors, and revising fare policies; 6. Ease mass-transit tax burden by exploring public-private partnerships and finance capital projects through borrowing; 7. Distribute subsidies for operating costs based on formula using passengers and vehicle hours; and 8. Give state transportation officials authority to review transit-agency performance.

The Transportation Construction Industries coalition (TCI) welcomed the final report and pledged to work with the Rendell administration and the General Assembly to solve the state's highway and mass transit funding crisis.

"The commission has taken an important first step in putting the funding crisis in terms upon which everyone can agree," said Robert Latham, executive vice president of the Associated Pennsylvania Constructors, a TCI member. "Clearly, it will take hard work and a large measure of courage on the part of all concerned to solve the funding challenges. We will do everything in our power to help build consensus."

Latham said construction industry members were pleased that the commission's recommendations included several recommendations identified in a recent Pennsylvania Economy League study, including the need for dedicated, predictable and inflation-sensitive funding sources, the exploration of public/private partnerships and regional participation in funding mass transit. Latham noted that the commission's recommendations address much-needed maintenance of highways and bridges as a first step, while leaving the door open for capacity enhancements as well.

Freight rail in the commonwealth is also getting a boost. PennDOT's Bureau of Rail Freight, Ports & Waterways announced October 24 the investment of $20 million to help 11 railroads and 10 businesses undergo rail-freight improvement projects. Several of the grants are for projects that will provide businesses with connections to rail lines, including the Greater Erie Industrial Development Corporation's redevelopment of the former International Paper brownfield site with new track to connect a biodiesel company with the CSX mainline. Other key investments in rail infrastructure include a track rehabilitation grant to the Allegheny Valley Railroad in Allegheny and Washington counties to support traffic generated by the New Bruceton Connection. It will link the Allegheny Valley Railroad with CSX, Wheeling & Lake Erie and B&P railroads, and provide shippers in western Pennsylvania with access to markets in the Midwest. Pennsylvania leads the nation with 65 operating railroads and ranks fifth in the nation with over 5,000 track miles.

One of the biggest, if not the biggest building project in Pennsylvania going in 2007 is the Children's Hospital of Philadelphia. It broke ground in June for a 558,000-square-foot research building on an eight-acre portion of the 19-acre site that once housed the Philadelphia Civic Center. The hospital and the University of Pennsylvania acquired the land from Philadelphia Industrial Development Corp. in 2005.

Initially, the structure will have eight stories above ground and four below. They include four stories of lab space, two for administration offices and meeting rooms, and a two-story ground-level space with a lobby and cafeteria. The below-grade floors contain infrastructure and laboratory support space. This phase is expected to reach completion in 2009. The building is designed to accommodate up to 22 stories above ground.

The projected construction cost for the eight-story building is $400 million. The total facility development is projected to cost $845 million, which includes the addition of 14 floors above the new research center, a utility plant, underground parking, and an ambulatory care building. The timeline for expansion has not been determined.

The site is now called the South Campus Research Complex. The South Campus complex is part of a 10-year, $1.5-billion expansion plan begun in 2001. A 332,000-square-foot South Tower and 122,000-square-foot Pediatric Research Center on the main campus have been completed. Exterior renovation of the children's hospital is 95-percent complete. A 300,000-square-foot West Tower is currently under way, and occupancy will be phased in between now and 2009.

New Jersey

A record total of $29.2 billion in public and private construction over the next two years was reported at the annual Construction Forecast Seminar sponsored by the New Jersey Alliance for Action in Trenton. The figures represented the highest amount in the 22 years that the alliance has held the forecast seminars. The two-year figure projected at last year's seminar was $28.3 billion. Alliance for Action President Philip K. Beachem said the message to state leaders is that construction is essential to grow jobs and tax revenues. He declared that the construction industry is a leading barometer in finding ways to help solve the state's budget deficit problems.

Leading the way in the private sector for planned construction was New Jersey's pharmaceutical and medical technology companies with planned construction of nearly $4.6 billion over 2007 and 2008.

On the public side, the leading construction estimate was $1.425 billion from the state Department of Transportation, reflecting the impacts of renewal of the Transportation Trust Fund and voter approval of a ballot question dedicating all monies from the state gasoline tax to transportation. The projections of spending for two years by New Jersey Transit of $949 million also showed the impact of transportation projects for the construction industry. Major two-year construction estimates from the private sector were:

  • New Jersey Chapter of the National Association of Industrial & Office Properties, $3.2 billion, with the majority of the projects scheduled for Middlesex, Hudson, Burlington, and Mercer counties.
  • Atlantic City Casinos, $3 billion
  • New Jersey Utilities, $2.29 billion

Among the major two-year construction estimates delivered by public sector representatives were:

  • The Port Authority of New York and New Jersey, $1.35 billion
  • New Jersey Environmental Infrastructure Trust, $1.4 billion
  • U.S. Army Corps of Engineers, $1.16 billion
  • New Jersey Association of County Engineers, $850 million
  • State Schools Construction Corporation, $837 million

The combined total of planned construction for New Jersey county, state and independent colleges and universities was $1.5 billion for the next two years.

One of the highest priorities for the Port Authority is the Trans-Hudson Express Tunnel. The authority authorized October 19 up to $75 million available for property acquisition as part of the Port Authority's overall commitment to the THE Tunnel project. The is the second allocation from the up to $2 billion the Port Authority has committed to the project. The Port Authority allocated $10 million in July for preliminary planning and engineering activities. The THE Tunnel will be an additional passenger rail tunnel connecting New York City to New Jersey and to Rockland and Orange counties in New York. The project includes the expansion of New York's Penn Station beneath 34th Street in Manhattan. The bistate agency's 10-year strategic plan, adopted in December 2005, recognized THE Tunnel as crucial to regional prosperity.

The announcement of formation of the Friends of the Tunnel and Corzine's endorsement came during the fourth annual Governor's Transportation Conference hosted by the New Jersey Alliance for Action. Some 700 transportation officials, professionals and advocates attended the conference.

Governor Jon Corzine said he is "absolutely committed" to the tunnel project and asserted that "it will happen." The governor said he expects a shovel in the ground for the project by 2009.

Alliance for Action President Philip K. Beachem stressed that the unified support for the tunnel overcomes partisan and bi-state differences that have hindered transportation projects in the past. He said the Friends of the Tunnel will be broadly based and will work for public and media support to encourage action, including funding, for the tunnel in Washington, Trenton and Albany.

The new rail tunnel would be an integral component of the overall transportation program known as Access to the Region's Core (ARC). Principal components are two new tracks under the Hudson River, a six-track passenger station under 34th Street in Manhattan, and improvements in New Jersey to provide a one-seat ride to NJ Transit riders on the Raritan Valley, Main/Bergen and Pascack Valley Lines.


Key work for Delaware in 2007 includes the Stockley Medical Center in Georgetown, a $35-million project announced in late September, as well as numerous water and sewer projects serving the explosive growth of the state.

Casino Association of NJ $1500M $1500M $3000M
Casino Reinvestment Development Authority $200M $201.5M $401.5M
Colleges & Universities
County 180M 180M 360M
State 324M 314M 638M
Independent 284M 227M 511M
Construction Roundtable of NJ 321M 337M 658M
NJ Utilities 1160M 1136M 2296M
Delaware River Port Authority 45M 90M 135M
Delaware River Joint Toll Bridge Commission 143.7M 136M 279.7M
National Assoc. of Industrial & Office Properties 1600M 1600M 3200M
NJ Department of Environmental Protection 100M 190M 290M
NJ Department of Transportation 725M 700M 1425M
NJ Department of Treasury (Buildings) 86M 15M 101M
NJ Economic Development Authority 484M 408M 892M
NJ Environmental Infrastructure Trust 700M 700M 1400M
NJ Health Care Facilities Financing Authority 583M 836M 1419M
NJ Pharmaceutical & Medical Tech Companies 2220M 2370M 4590M
NJ Schools Construction Corporation 582.6M 251M 833.6M
NJ Society of Municipal Engineers 360M 360M 720M
NJ State Association of County Engineers 460M 390M 850M
NJ TRANSIT 385M 564M 949M
NJ Turnpike Authority 386M 228.5M 614.5M
NJ Water Supply Authority 3M 3M 6M
Port Authority of NY/NJ 720M 630M 1350M
South Jersey Transportation Authority 136M 63M 199M
US Army Corps of Engineers (NY District) 608M 608M 1216M
US Army Corps of Engineers (Phila. District) 124M 121.5M 245.5M
Verizon 652M 0M 652M
Miscellaneous 0M 0M 0M
TOTAL $15072.3M $14159.5M $29231.8M