Local construction has its ups and downs

Posted: Sunday, July 20, 2003

The city has issued more building permits this year by June than it had in the same time frame in 2002 or 2001, but the total value of the construction is significantly less this year than in the last two years.

It's a statistical ambiguity that mirrors the differing opinions among contractors, union members and city officials on the strength of Juneau's construction season so far this year.

"Overall things have been picking up over the last couple of years," said Mark Jaqua, a city planner. "... I'd say we're a little bit busier, and I think part of it is there was some hesitation a couple of years ago about the capital move. Once that issue was decided, people felt a little more secure. And then the low interest rate helped."

"I would say it's a little slower than last summer," said Jim Williams, president of North Pacific Erectors, which is working on a number of local projects, including improvements to the Alaska Department of Fish and Game office in Douglas and an entrance to the State Office Building downtown.

"Things would be really busy if either NOAA or the hospital would have gone," he said.

The sole bid for an expansion and renovation project at Bartlett Regional Hospital project came in more than $11 million than the city had budgeted for. Bids for the construction of a new National Oceanic and Atmospheric Administration fisheries lab at Lena Point came in significantly higher than planned, as well. Construction of the projects has been put off.

Max Mielke, business manager for the Plumbers and Pipefitters Union Local 262, said the season is "going really good now."

"It started out fairly slow ... but now I've got pretty much all of my members working, and I'm probably going to need five or six more guys here shortly," he said.

But Mark Cady, the business representative for the Carpenters Union Local 2247, said: "It's kind of a slow season because of the hospital and the high school that we were hoping to do this summer."

Construction of a $60 million high school in the Mendenhall Valley - whose bonding was first approved by Juneau voters in 1999 and added to in June this year - will not begin until next summer at the earliest, according to city officials.

Though work on the hospital and on the NOAA facility has been postponed, most unions are reporting no unemployment among their nonretired members, and many construction companies said they are as busy as they would like to be.

"I'd say it's as busy as it normally is," said Spike Bicknell of Bicknell Inc., which is working on the bike path in the Mendenhall Valley and on a residential subdivision in the Montana Creek area. "I think all the contractors have plenty of work to do."

The city had issued 379 building permits, with a total construction value of more than $31 million, by June of this year. In 2002, by June the city had issued 353 permits, valued at about $37 million. Most city projects are included in those statistics, but state and federal projects, including highway projects and road improvements, are not reflected in those figures, said Jaqua.

The number of permits and the project values also do not reflect money being spent this year on projects that were granted permits in previous years.

The amount of money the city reserved for its own construction projects this year is $12 million to $13 million, said Rorie Watt, a city engineer.

"But that doesn't take into account schools or the $15 million bond we passed last year, or the $7 million in harbor money," he said. "Twenty million dollars might be a better number, but it's all a bit subjective."

The new high school and renovation of Juneau-Douglas High School, the hospital expansion project and other capital projects for the city have a combined value of about $175 million that will be paid out over the next couple of years, said city Finance Director Craig Duncan.

Those city projects, along with state, federal and private projects, equate to a construction boom that could continue for a few years, Watt said. The result of the boom could result in higher costs for construction.

"There's been a slight rise in the costs of projects, and that trend seems to be continuing," Watt said.

The residential-construction industry appears to be healthier than the commercial industry. The city had issued more permits with a higher total value by June 2003 than it had by June of the previous three years.

Two major subdivisions have helped increase that total, said Jaqua. In addition to the Bicknell subdivision near Montana Creek, the Tlingit-Haida Regional Housing Authority secured permits for 25 houses in the Mendenhall Valley.

Christine Schmid can be reached at cschmid@juneauempire.com.

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