|
Malls,
convention centers, hospitals among state’s top
building projects
Related
link:
Virginia's top construction
projects
by
Brett Lieberman
For
Virginia Business
October 2003
Contractors
stayed busy in Virginia over the past year with several
new projects coming online. The construction industry
delivered a new convention center in Richmond, two new
outdoor regional shopping malls — again in metropolitan
Richmond — and a Target distribution center in
Suffolk the size of 26 football fields. Also in the
mix: continuing work on multimillion-dollar hospital
expansions and massive road-building projects.
For
sheer glitz, last month’s openings of the $360
million Short Pump Town Center mall in Henrico County
and the $115 million Stony Point Fashion Park mall in
Richmond were hard to beat, with festivities including
valet parking, champagne, television personalities and
even a welcome mat for Fido — dogs accompanied
by owners are allowed in some areas of Stony Point.
Despite
the hoopla, Virginia’s construction industry isn’t
breaking out the bubbly. While historically low interest
rates enabled homeowners to buy or build bigger homes
or refinance mortgages, commercial builders looked on
wistfully. Many of Virginia’s large construction
projects, in the pipeline for years, are nearing completion
or were wrapped up last year, leaving contractors to
wonder, what now? “Right now the trend is slow,”
says Dan Niccolucci, regional vice president in the
Richmond office of general contractor Whiting-Turner.
“There’s not a tremendous amount that’s
out there on the horizon.” Still, Whiting-Turner,
one of the country’s largest general contractors,
managed to snag the job for a new hospital in Chesterfield
County.
Statewide, the market is tight. “You don’t
see a whole lot of change in it,” says Steve Vermillion,
executive director of the Associated General Contractors
of Virginia. But Vermillion’s an optimist. “I
think it’s ready to move. It ’s just going
to take a few things to get people motivated.”
Cities
certainly seem motivated when it comes to new convention
centers. They’re in demand by localities, with
both Virginia Beach and Hampton breaking ground recently
on new facilities. They’ll replace aging centers
with spacious and technologically updated spaces designed
to attract more tourism much like the new $165 million
convention center Richmond opened in February. Covering
five city blocks, the Greater Richmond Convention Center
can accommodate gatherings of up to 10,000 people. Last
month, Virginia Beach city leaders decided to add more
bells and whistles to its 210,000-square-foot center,
bumping the project’s total from $193 million to
$202 million to cover such items as additional landscaping
and a video wall. Despite the higher price, low interest
rates helped provide a financing cushion as did higher
than projected revenues from increased taxes. “It’s
like buying a house. Now you can get more for your money,”
says Pam Lingle, communications manager for the Virginia
Beach Convention and Visitors Bureau.
Not
to be outdone, Hampton is building a 344,000-square-foot
convention center on 90 acres. It will be located close
to the Power Plant, a retail/entertainment complex that
will be home to one of the area’s more interesting
construction projects: Bass Pro Shops Outdoor World.
Set to open in November, the country’s largest
retailer of outdoors gear is building a $23 million
store — with help from the city and developers
— with interior motifs that include waterfalls,
huge aquariums and true-to-life wildlife exhibits.
One
area of solid growth in Virginia has been among hospitals,
either building new facilities or renovating older ones.
The projects will accommodate new technology and, in
some cases, population. One of the largest projects
is at Riverside Regional Medical Center in Newport News,
which turned a $114 million renovation into a $246 million
expansion. A surgery center with four new operating
rooms has already been built; the new plan will add
320,000 square feet by 2007.
Bon
Secours Richmond Health System is building a new hospital,
St. Francis Medical Center, in Chesterfield. The $75
million, 130-bed facility in the western part of the
county is expected to serve residents along the fast-growing
Route 360 and 60 corridors. Sometimes a project’s
price tag can be misleading. At St. Francis, for example,
new construction is expected to cost only about $40
million, far short of the $75 million total. Much of
the rest will go for buying new technology, equipment
and supplies needed to outfit the new hospital.
Work
continues on massive public infrastructure projects,
such as replacement of the Woodrow Wilson Bridge on
the Potomac River, which will cost Virginia taxpayers
more than $1 billion at last count. Strapped state and
local governments, not to mention tighter federal spending
except in areas of defense and homeland security, have
reduced the number and scope of major infrastructure
projects.
Contractors who earn a living building roads and bridges
had hoped Congress would reauthorize the major transportation-funding
legislation set to expire this year. Republicans and
Democrats say that’s doubtful in large part because
President Bush wants to spend much less than lawmakers
do over the next six years. Yet, the development picture
isn’t entirely bleak. “The market is different
but it is not bad,” says Mike Hourigan, president
of Hourigan Construction Corp. in Richmond. The scarcity
of large new projects has created what some contractors
acknowledge is a buyers’ market. Developers with
cash or businesses capable of building or expanding
now are able to pay less and might be able to get more
concessions from builders and contractors competing
more fiercely for work.
While
some companies are holding off on expansions until business
improves, there are opportunities for contractors seeking
small- to mid-size projects. Renovating the old warehouses
that have sat dormant for years in downtowns such as
Richmond, Norfolk or Suffolk traditionally has not been
financially worthwhile. But federal tax credits and
lower interest rates now make renovating these older
properties doable, says Hourigan.
While
contractors wait for major proposals to move further
along, such as the huge new urban center development
proposed by Maryland-based Lerner Enterprises at Tysons
Corner, there is a silver lining. Stiff competition
among contractors means businesses and government can
strike a bargain at a time when penny pinching is a
must.
Return
to Virginia Business - October 2003
|
|
