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Midwest Market Remains Strong

Despite reports that the economy is beginning to slow down, contractors in the Midwest can expect another robust year. According to a report by CIT Construction, a unit of CIT Group Inc., a majority of contractors in the Digest area think 2007 will play out pretty much like 2006. Construction activity continues to grow, with health care and educational segments of the marketplace showing strong...

January 08, 2007

Despite reports that the economy is beginning to slow down, contractors in the Midwest can expect another robust year. According to a report by CIT Construction, a unit of CIT Group Inc., a majority of contractors in the Digest area think 2007 will play out pretty much like 2006. Construction activity continues to grow, with health care and educational segments of the marketplace showing strong growth. Likewise, anticipate continued growth in the commercial building market.

Construction contract volume in the six-state Digest region (Illinois, Indiana, Kentucky, eastern Missouri, Ohio, and West Virginia) is pegged at $35.8 billion, a jump from $35.1 billion in 2006 and $28.2 billion in 2005. According to Jim Haughey, Ph.D., director of research and analytics for Reed Construction Data, 2007's total civil construction contract volume in the region will total $8.4 billion, including $1.1 billion for miscellaneous civil work, $3.7 billion for other civil work and $3.6 billion for roads/highways. Total civil construction is expected to be down from $10.3 billion in 2006, but ahead of the $7.6-billion mark in 2005.

Contract volume for building construction in the Digest area will increase to $27.4 billion in 2007, an increase from $24.8 billion in 2006 and $20.5 billion in 2005.

Highway/Bridge Construction

The highway/bridge market continues to post good numbers. Looking at a state-by-state breakdown for roads/highways during 2007, Illinois construction contracts are expected to total $1.2 billion, followed by Ohio — $879.5 million, Indiana — $659.6 million, Kentucky — $497.5 million, West Virginia — $229.8 million, and eastern Missouri — $184.4 million.

Key projects proceeding or upcoming in the region include the $600-million reconstruction of Interstate 94/90 (Dan Ryan Expressway) in Chicago; the Blennerhassett Bridge project near Parkersburg, W. Va.; the Interstate 80/Meander Reservoir project in Mahoning County, Ohio; the Ohio River Bridges Project in Louisville, Ky.-southern Indiana; construction of U.S. 30 in Ohio, a $98.8-million project to complete the upgrade of the highway to a four-lane route in northwest Ohio; the new $34-million Route 19 bridge (Senator Christopher S. Bond Bridge) near Hermann, Mo.; the Pomeroy-Mason bridge between Pomeroy, Ohio, and Mason, W. Va.; the U.S. 27/I-70 interchange project at Richmond, Ind.; the $50.3-million Corridor H project in Hardy County, W. Va.; construction of a hybrid cable stayed/suspension bridge over the Chicago River at North Avenue in Chicago; I-65 road work near Bowling Green, Ky.; I-480 road work in Cuyahoga County, Ohio; I-170 and Olive Blvd. interchange project in St. Louis County, Mo.; I-64/KY 180 interchange in Boyd County, Ky.; the U.S. 24 "Fort to Port" project, which begins at the Indiana state line near Fort Wayne and ends in Toledo, Ohio; Ohio State Route 161 widening in Franklin and Licking counties; Route 35 reconstruction in Montgomery County, Ohio; S.R. 641 bridge work in Vigo County, Ind.; Northeast Expressway Transformation project in northeast Columbus, Ohio; Kentucky 15 reconstruction in Breathitt County, Ky.; the Smithland Road Bridge (U.S. 60) over Tennessee River in McCracken County, Ky.; a $26.1-million bypass around Shelbyville, Ky.; the U.S. 62 bridge in Franklin County, Ohio; the U.S. 231 project in Spencer County, Ind.; I-275 widening in Hamilton County, Ohio; and I-80 construction in LakeCounty, Ind.

In November, the Missouri Highways & Transportation Commission awarded a contract for the largest highway project in Missouri history and the first design-build project for the Missouri Department of Transportation. The $535-million I-64 project in St. Louis from west of Spoede Road to east of Kingshighway will include rebuilding the pavement, bridges and all 12 interchanges. One lane will be added in each direction from west of Spoede Road to I-170. Construction will take place in three phases beginning this spring.

West Virginia recently awarded a $30.9-million contract to construct a bridge over the South Branch of the Potomac just north of Moorefield, and ODOT kicked off initial work on the $99-million Wilmington Bypass project to relocate State Route 73 north of Wilmington.

Concerning toll roads, construction is proceeding on various Illinois Tollway projects. Meanwhile, third-lane construction continues on a portion of the Ohio Turnpike.

In mid-2006, Indiana finalized the 75-year lease of the 157-mile Indiana Toll Road to a consortium of Spanish company Cintra and Australia's Macquarie Infrastructure Group. The consortium, which formed ITR Concession Co., plans to widen a 10-mile stretch of the toll road through Lake County to three lanes in each direction in the first major upgrade under private control. Meanwhile, Indiana is using the $3.8 billion it received from the consortium to support its Major Moves highway program.

Super 70, the largest construction project in Indiana's Major Moves plan, is expected to begin in Indianapolis in February. Crews will rebuild a 6-mile stretch of I-70 between downtown to I-465 on the east side in what will be the largest single-year road project ($175 million) in state history.

Building Construction

On the building side, Chicago, St. Louis and Indianapolis remain the region's hot beds for construction, particularly for major new residential and mixed-use developments.

Notable construction projects planned or proceeding in the Chicago area include 600 North Lake Shore Drive, a two-building condominium complex on Chicago's lakefront; the 72-story Legacy at Millennium Park condominium structure; 600 North Fairbanks, a 41-story luxury condominium tower; the Clare at Water Tower high-rise in Chicago's Gold Coast; Trump International Hotel & Tower downtown; the 40-story, 360,000-square-foot Ritz-Carlton residential tower; the University of Chicago's new residence hall and dining facility; Aqua, an 82-story, mixed-use tower in Chicago's Lakeshore East development; 680 North Rush, a 69-story condominium project; the $66-million Hansberrry Square at Legends South mixed-income residential development; the 60-story Elysian Hotel and Private Residences; 50 East Chestnut, a 39-story condominium development; the Fairbanks & Lofts condominium project at CityFront Plaza; the University of Chicago's Center for Biomedical Discovery; Art Institute of Chicago's expansion; and The Chicago Spire, a 2,000-foot residential skyscraper at 400 North Lake Shore Drive. In July, Jenner & Block and Mesirow Financial announced that they signed leases to co-anchor a 45-story, 1.1-million-square-foot office tower to be built on North Clark St.

In West Virginia., plans have been announced for the development of an $87-million indoor water park and family resort on a 25-site along the Monongahela River near Interstate 79 in Marion County.

Among the other notable building projects in the region are the $675-million Lucas Oil Stadium in downtown Indianapolis; Saint Louis University's new $80.5-million arena in St. Louis; Honda Motor Co.'s new, $550-million assembly plant in Greensburg, Ind.; Community Mercy Health Partners' health care campus in Springfield, Ohio; IUPUI's new campus center in Indianapolis; The Cleveland Museum of Art's $258-million expansion and renovation; Champaign, Ill.'s new public library; the new Mississippi River Overlook project in East St. Louis, Ill.; the $186.9-million Camp Porter Barracks and Infrastructure project for the United States Navy at the Recruit Training Command in Great Lakes, Ill.; Farmington Crossing, an $83-million retail development in Farmington, Mo.; the $60-million-plus Business Instructional Facility at the University of Illinois' Urbana campus; a $60-million medical research building at Saint Louis University in St. Louis; additions and renovations to Provena Saint Joseph Hospital in Elgin, Ill.; a $27-million teaching facility at Barnes-Jewish College of Nursing in St. Louis; the $79.4-million expansion at Memorial Hospital of South Bend, Ind.; a 22,000-seat arena in downtown Louisville to house both the University of Louisville men's and women's basketball teams; the $42-million expansion and renovation at St. Francis Hospital-Mooresville, Ind.; St. Anthony's Medical Center's $90-million hospital re-design in south Saint Louis County, Mo.; Indiana University Cancer Center in Indianapolis; the $450-million expansion at University of Kentucky's patient-care facility in Lexington; and a $65-million senior housing campus in Carmel called The Stratford at WestClay.

In Michigan City, Ind., owners of Blue Chip casino plan to build a $130-million hotel and entertainment center, and BP PLC's U.S. division plans to spend $3 billion to upgrade its Whiting, Ind., oil refinery. Other major building projects include the Human Resources Center of Excellence complex at Fort Knox, Ky.; the Pinnacle casino, hotel and spa project in downtown St. Louis; expansion of Ameristar Casino St. Charles in St. Charles, Mo.; Central Library renovation/expansion in Indianapolis; the new Social Sciences and Law Building at Washington University in St. Louis; Belleville Crossing, a $90-million retail/commercial development in Belleville, Ill.; and The Roberts Luxury Residences in downtown St. Louis.

Biodiesel/Ethanol Plants

Many new biodiesel/ethanol plants are being built in the region, such as the massive biodiesel plant being built near Claypool, Ind. Ethanol plants have been announced in Clymers, Mount Vernon, and Portland, Ind. Construction of a $93-million ethanol plant in Sauget, Ill., began in October, and work is proceeding on a 110-million-gallon ethanol plant in Greenville, Ohio. Also, construction of a 100-million-gallon-per-year plant is scheduled to begin in February between Winchester and Union City, Ind., and construction of a $145-million ethanol plant in Cayuga, Ind., is planned.

In October 2006, Illinois officials celebrated the beginning of construction for the Prairie State Energy Campus, a 1,500-plus-megawatt generating plant and coal mine in Lively Grove, Ill., that will provide clean, low-cost electricity using state-of-the-art technologies.

Other Notable Projects

Other construction projects of note include the Euclid Corridor Transportation Project in Cleveland; a $60.4-million Marysville wastewater treatment plant in Union County, Ohio; Columbus, Ohio's Big Walnut sanitary sewer project; and Phase 3 of Waterfront Park along Louisville's riverfront. A public/private partnership of Indianapolis leaders has unveiled plans for the Indianapolis Cultural Trail, a $50-million, 7.5-mile urban bike and pedestrian path that will connect all six Indianapolis cultural districts. And Indiana University's trustees recently approved a $55-million project to build or upgrade four athletic department facilities in Bloomington.

The aviation marketplace remains strong with continuation of Chicago O'Hare International Airport's modernization program. In Indianapolis International Airport, steel is now in place for the new midfield passenger terminal.

On the waterways, work continues on three major Army Corps of Engineers projects — McAlpine Locks & Dam Replacement project near Louisville; Olmsted Locks & Dam Project in Ballard County, Ky.; and Marmet Locks and Dam Replacement Project in Belle, W. Va.

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