Road and bridge activity in the midsouth coupled with economic development projects currently under construction makes 2008 a year of steady growth for the Construction News territory.
A large part of the growth in the heavy highway market comes from bridge projects in full swing across south Louisiana and Mississippi. The average is higher than the projected national increase of 4 percent. Some hurricane recovery projects along US 90 have completed, but other large projects such as the $800-million I-10 Twin Spans replacement project along the North Shore of New Orleans, are ongoing for the next few years.
A number of other large bridge projects are under construction in south Louisiana, including a new cable stay bridge in St. Francisville, La., which will be completed in 2011, and a widening project for the Huey P. Long Bridge over the Mississippi River in Jefferson Parish, La. Rising material costs could still have a huge impact on these projects as they progress. The latest phase of the Huey P. Long let in August for $453 million, 51-percent higher than the Louisiana Department of Transportation and Development's (LADOTD) original estimation. Reasons for the high price included the large amount of steel necessary to complete that particular stage of the project. Another factor in the high bid was a shortage of competition during the bidding process, as many contractors in the area already have their plates full. These concerns may affect the bidding process in 2008 for projects such as the long-awaited Florida Avenue Bridge project that will expand the connection between the Ninth Ward and New Orleans, which was delayed after the 2005 hurricane season.
Construction labor shortages will still be felt across the midsouth. Education programs are working to turn out new skilled workers to meet the tremendous estimated shortage. The Gulf Coast Workforce Initiative has had great success over the last year, training thousands of new workers across the Gulf, with a high concentration of new labor in Louisiana and Mississippi.
Lower tax collections are expected to impact some locally funded projects relying on the revenue. The creation of a $100-million bridge fund by the Oklahoma Legislature made it possible to move up the replacement of weight-restricted bridges across the state. That work will continue, but additional projects may be in jeopardy. Funding is already short of the need for bridge repairs in this state. The Oklahoma Department of Transportation (ODOT) announced in its November Commission wrap up that the eight-year Construction Plan for the state would be delayed until the State Equalization Board meets to certify anticipated state revenues in February. Local funding for ODOT's projects is tied to a 3-percent increase in state revenue.
Economic Development trends across the territory have prompted many new manufacturing facility projects to get under way. Most notable of all is the $1.3-billion Toyota plant under way in Blue Springs, Miss., near Tupelo. Toyota has awarded two construction contracts for foundation and framing of its new Highlander vehicle assembly plant in Blue Springs, Mississippi.
Harrell Contracting Group, based in Ridgeland, Madison County, has formed a partnership with Homewood, Illinois-based Graycor Industrial Contractors Inc., for the foundation project for the plant's stamping and paint buildings. Midwest Steel, Inc. of Detroit, Michigan, has been selected for the structural steel project for the plant's stamping and paint buildings. Work will coincide with the foundation project.
Construction is expected to peak on the Toyota project in spring 2008. The plant has also mushroomed further manufacturing facility development with two nearby parts factories currently under construction.
In Columbia, Miss., a modular housing manufacturer is planning to open a facility that will build affordable energy-efficient factory homes for the Gulf Coast. Unity Homes will invest $6 million in the project, an 86,000-square-foot facility located in the Columbia, Miss., Marion County Industrial Park. The project will provide factory-built homes for the affordable housing market that cost less than conventional models, with the added benefit of energy efficiency and healthy building materials. The factory is designed to build 250 homes in its first year with the capacity to build up to 800 homes annually. It will serve an area within 175 miles of Columbia allowing the company to provide homes throughout the Gulf Coast and Delta regions.
Casino construction should continue. The Emerald Star Riverboat Casino in Natchez, Miss., has prompted a bluff stabilization project there to support new roadway, parking lots and a dock.
In Biloxi Harrah's Entertainment and Jimmy Buffett unveiled plans for a $704-million destination casino and resort. Margaritaville Casino & Resort will be developed on 46 acres of land south of U.S. Highway 90 in Biloxi on the site formerly occupied by Grand Casino and Casino Magic. The project will have over 400,000 square feet of casino, retail, hotel, and meeting space. Simon Property Group will develop retail space. Margaritaville is the single largest investment in Mississippi since Hurricane Katrina. Harrah's expects it to be the first phase in a development that may cost more than $1 billion. Work should begin this summer, with expected completion of spring 2010.
Pinnacle Entertainment, Inc. has received approval from the Louisiana Gaming Control Board for Riviere, a hotel and gaming entertainment project planned on more than 550 acres of land in Baton Rouge, La. The development requires various other approvals, including a local-option referendum in East Baton Rouge Parish, which the company will seek to put on the ballot in February 2008.
Riviere is designed in phases. Phase One, a single-deck riverboat casino, an adjoining hotel, restaurants and lounges, and an entertainment venue is expected to cost $250 million. Future planned phases include a residential community with more than 400 single-family and 240 multifamily units; a hotel expansion; and an extended-stay hotel. A pedestrian-oriented town center and village green will integrate retail shops, water features and live/work spaces.
New energy development is also coming to the midsouth. Dynamic Fuels LLC announced Geismar, La., as the site for a new refinery producing renewable diesel and jet fuel. The $126-million capital investment is a joint venture between Tyson Foods and Syntroleum Corporation, LLC. Tyson will supply animal fat and other agricultural by-products to produce renewable fuels, a cleaner technology than fossil-based fuels. Syntroleum will contribute proprietary technology and experience. Dynamic Fuels selected Lion Copolymer's Geismer plant as the site for their new facility. Production from the new facility is expected to begin in 2010.
A hot topic in 2008 will be reauthorization of the Highway Trust Fund, which is up in 2009. A 72-page report released by the American Road & Transportation Builders Association (ARTBA) examines current federal transportation law, policy and administration by a special ARTBA task force. ARTBA is calling for changes in the way Congress approaches funding transportation. The association thinks that a new approach is necessary to prevent the nation's infrastructure from falling into disrepair, and to grow a multi-modal infrastructure that will continue to promote economic growth.
The ARTBA report cites six transportation-related threats currently facing the nation that demand immediate attention including high fatalities, insurance and property costs; an estimated $78 billion a year in productivity and fuel lost to gridlock; a projected doubling of U.S. truck traffic in the next 25 years; a $19-billion shortfall in funding at the federal level to maintain current highway physical conditions and performance; and the expected insolvency of the federal Highway Trust Fund's highway account — the source of nearly half of all capital investments in each year — beginning in 2009.
In the report, ARTBA recommends that the existing federal surface transportation program be refocused and restructured, with two major components. One would be a "core program" largely dedicated to asset preservation and modernization, safety and environmental mitigation activities. A dramatic increase of federal investment in highway and public transportation improvements would be necessary.
The second, a "Critical Commerce Corridors," or "3C," program, would focus the federal department of transportation's energies on nearly 200 traffic choke points on the Interstate Highway System, coordinating development of a 25-year "Critical Commerce Corridors" strategic business plan, identifying projects for development on a regional basis, setting completion priorities, and establishing cost estimates.
Meeting "core program" needs will require adjustments in the existing federal motor fuel excise, ARTBA says. It suggests using new revenue streams, utilizing freight-related federal user fees, public/private investments, and bonding to finance the proposed commerce corridors initiative.
The 3C proposal has already been endorsed by the National Asphalt Pavement Association; American Concrete Pavement Association; National Stone, Sand and Gravel Association; and Portland Cement Association.
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