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While not as slow as other places in the country, Houston and East Texas contractors are seeing a decline in new private projects.
“Construction activity in East Texas is
pretty much a refl ection of what’s happening
in the rest of the state,” says Raleigh
Roussell, president and CEO of TEXO in
Dallas, which represents East Texas. “This
area has been growing and had a nice
spurt with the oil resurgence, but I think it
has slowed like everything else.”
However, there are still projects to bid
on, says Jerry Nevlud, president CEO of the
Houston Chapter of the Associated General
Contractors. But “there are a lot of projects
on hold, waiting to be released,” he adds.
“It has to do with the credit market.”
Bill Scott, division president of Linbeck
in Houston, calls Houston an interesting
market.
“We now know we are not immune
from national developments, but Houston
is still significantly below national unemployment,”
says Scott, cautioning that it
will likely go up to 9%. “We are experiencing
a greater swing than we anticipated
earlier in the year. We are seeing fewer
opportunities, and the major institutional
entities that have put projects on hold are
a little surprising.”
Scott says that the University of Texas M. D. Anderson Cancer Center is completing its current projects but has canceled requests for proposals associated with its $5-billion building campaign. In addition, St. Luke’s Episcopal has put its Texas Medical Center projects on hold to concentrate on less capital-intensive jobs at its community hospitals. And Baylor College of Medicine decided to let Linbeck finish the exterior of its new hospital but not the interior build-out and core.
“We have not seen any of the larger hospital [projects] come out,” adds Kamal Ariss, vice president of JE Dunn Construction South Central in Houston. “I think a lot of them are on hold until the economy turns around.”
Randy Sahni, president of Llewelyn-Davies Sahni, a Houston architecture and urban design firm, adds that health systems also have cut their capital plans as money dried up. The American Hospital Association indicates 82% of hospitals it surveyed have put capital projects on hold. Forty five percent of respondents said they postponed a project planned to start within six months, and 13% said they stopped capital projects already in process.
A matter of perspective
Contractors’
perspectives seem to depend on their areas
of expertise. Pat Pinkerton, president
and CEO of PRP Construction Co. in Tyler
and a TEXO member, which focuses on school and church projects and selfperforms
much of its work, says, “The
East Texas area has not been hit by the economic
downturn at this point,” although
some private owners are waiting to start
new projects.
RPR is currently working on the $14-million,
87,000-sq-ft Clarkston Elementary
School in Tyler and recently completed
the $5.5-million, 45,000-sq-ft gymnasium
for the Eustace Independent School District
in Eustace. On the private side, RPR
is building a $3.5-million, 28,000-sq-ft
athletic center for the Brook Hill School
in Bullard. The company is constructing a
$4.9-million, 25,568-sq-ft, four-story building
for Christ Episcopal Church in Tyler.
TEXO member H.E. Wright & Co. of
Texarkana had focused on private work,
but as that market dried up, the company
pursued government jobs, such as remodeling
and upgrading facilities at the Red
River Army Depot.
“Government is about the only growth
industry in the United States,” says William
Wright, vice president of H.E.
Wright.
JE Dunn also is pursing government
contracts. The company recently broke
ground on the $58-million Fort Bend
County Courthouse, scheduled for completion
in April 2011. It expects to begin
construction this year on the City of Houston’s
$28-million fleet maintenance facility
and to break ground in January on a fire
station in Houston.
“Public work is progressing but is more
competitive,” Russell Hamley, president
of the Associated Builders & Contractors
Greater Houston Chapter, says in an e-mail. “The quantity of bidders on public projects
has drastically increased, and the list includes
a lot of out-of-state contractors.”
Health care
JE Dunn is working on
projects for St. Luke’s Episcopal Health
System and Memorial Hermann Health
System in Houston, including a $6.5-million
addition and exterior renovation at St.
Luke’s to house a linear accelerator.
More than $3.3 billion in construction projects are under way at the Texas Medical Center in Houston. McCarthy Building Cos. in Dallas is working on a $223-million,12-story vertical expansion at the University of Texas M. D. Anderson Cancer Center. Tellepsen Builders of Houston is building the Jan and Dan Duncan Neurological Research Institute at Texas Children’s Hospital, and W.S. Bellows Construction Corp. of Houston is constructing a maternity center at the pediatric facility.
Hensel Phelps Construction Co. of
Houston expects to complete the $237-million
Methodist Hospital System Outpatient
Center in 2010, and D.E. Harvey Builders
of Houston is building the $218-million
Methodist Hospital Research Institute.
Linbeck continues exterior work on the
$230-million Baylor Clinic and Hospital
for the Baylor College of Medicine.
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