For K-12, Now Is the ‘Right Time to Build’
Statewide bonds continue to drive school construction

Although slowing, the K-12 construction market remains active in Texas, and many say now is the ideal time to build.

By Debra Wood

Huckabee completed the prototype Butterfield Elementary School last year for the Sanger Independent School District.

While some new construction has come to a screeching halt, school districts in Texas continue to build and renovate to catch up with population growth.

“The opportunities have slowed down but are still out there,” says Steve McCleskey, vice president of operations for the central Texas region of Bartlett Cocke General Contractors in Austin. “There are still districts coming out with proposal packages.”

Bartlett Cocke’s Austin office picked up about $260 million in new school construction at the end of 2008 and the first quarter of 2009. The company has started building a new $70-million, 350,000-sq-ft University High School for the Waco Independent School District.

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It also received two contracts for the second of three phases for two high school addition and renovation projects for Round Rock ISD. Round Rock High School will receive a $29-million upgrade and Westwood High School a $33-million rehabilitation. The company is currently working on the first phases at those schools.

For the Austin ISD, Bartlett Cocke is building the $30-million, 169,200-sq-ft Southwest Austin middle school.

“With respect to the economy, everybody has been hit, including education,” says Charles E. Devoe III, president of Charter Builders, a division of Heery International, and regional manager for Heery in Dallas. “Texas remains an attractive state for industry and growth, so we probably haven’t seen it hit as hard as other parts of the country. But the growth has slowed.”

Charter Builders began construction last summer on a $117.5-million, 547,550-sq-ft high school for Burleson ISD in Burleson, scheduled for completion in 2010. The school features a wheel design, with two-story classroom wings extending out from the core, which contains a library, computer lab and large open areas for study.

The school features a full-size competition gymnasium, unusual in an elementary school. Nearby high-school athletes practice and hold tournaments at the new school.

In Marble Falls, voters approved a $62-million bond in 2006. Charter Builders received the contract to build a new elementary school, renovate other schools and construct a new athletic complex at the high school for the Marble Falls ISD.

John Risher, project executive with Gilbane Building Co. in Houston, says that while growth is starting to slow and fewer people are moving between school districts, Houston continues to attract new residents.

Gilbane serves as program manger for Lamar Consolidated ISD’s multiple-school construction project, part of a $147-billion bond program to rehabilitate its properties. The scope includes a mix of new construction and renovation work.

The company expected to finish the $72-million Tomball High School in Tomball this summer. It is half way through a $65-million high school project for Angleton ISD, which includes an $11-million stadium.

Joe Funk Construction Engineers recently converted an elementary school into the New Tech High School at Coppell.

But Mike Matula, a project executive at Gilbane, expects few new, large high schools, such as Tomball, will start in the near future. “It will probably be one to two years before we see them come back out,” he adds.

Chris Huckabee, CEO of the architecture, engineering and program manager firm Huckabee in Fort Worth, says many districts are undertaking assessments and talking about future work. Huckabee is working on a $300-million bond program in Longview, in east Texas.

The company’s volume was up 25% in 2007 and 35% in 2008, but Huckabee expects an increase of 5% to 6% this year, with about $1 billion in school construction.

“It’s not nearly the growth we have seen in the past, but it’s still tracking very well,” Huckabee says. “And we’re adding work as quickly as we are burning it off.”

Huckabee is about to oversee construction of a $90-million high school for the Mansfield ISD in Mansfield.

An exterior view of the new academy/choice high school campus.

Bond issues drive school construction“School construction is continuing,” says James P. Hicks, president of Wiley Hicks Jr. in Amarillo. “A lot of it is dependent upon bond issues.”

Wiley Hicks is working on approximately $23 million in school construction, including a $20-million, 110,000-sq-ft high school for the Dimmitt ISD in Dimmitt, which is scheduled for completion in August.

Meanwhile, Gilbane is working on projects that were approved by voters in 2008, 2007 or earlier. Risher says the last Houston ISD bond program included a 50-50 mix of new elementary schools and renovations. Many of the new schools are replacements of schools too expensive to renovate.

Joe Smith, owner of TexasISD.com, which tracks school district bond activity, says 37 districts held bond elections in May, down from about 80 elections in May 2007.

Smith attributes much of the drop-off in bond referendums to the state’s temporary closure in March of the Permanent School Fund Bond Guarantee Program because the value of the fund dropped to the point that outstanding guarantees exceeded capacity under federal regulations. Smith says that without the guarantee, borrowing money costs more.

The suspension includes preliminary approvals and refunding bonds.

“Everything is on hold,” Smith says. “When you have to talk to voters about spending money, it’s not a positive environment.”

Marty Massey, vice president of operations for Skanska USA Building in Harlingen, Texas, adds that some districts have pushed back bond referendums until 2010 because population growth has slowed.

“Across the state, we are definitelyseeing boards sitting back that never [gave a] thought about putting a bond on the street and having it supported,” Massey says. “You didn’t hear a lot of discussion in a lot of districts because of the growth and the support they had. But there is a lot of concern out there now.”

Skanska recently completed the $58-million, 340,000-sq-ft Palmview High School in Mission for the La Joya ISD.

A mix of new and renovation work Mitch Meyers, vice president of Joe Funk Construction Engineers in Dallas, says voters approved bond programs totaling more than $1 billion in 2008. He adds that much of the work entails renovations.

JFCE will begin the third phase of $23 million in renovations for Coppell ISD this summer. Last year, the firm converted an elementary school into the New Tech High School at Coppell.

Meyers says the company is expanding a middle and elementary school for the Carrollton-Farmers Branch ISD as part of a $15 million contract.

Huckabee’s firm is still working on several new construction projects, but he expects much of the future work will focus on renovations and additions.

SpawGlass Contractors of Austin recently received an $11-million contract to expand and renovate Anderson High School in Austin. The project includes the addition of 12 new classrooms and four science classrooms, fine arts improvements and repairs to the air-conditioning system. Work is scheduled to wrap up in January 2011.

Page & Associates Contractors of Amarillo broke ground on a $15-million intermediate school for Dumas ISD in April. It continues to work on $3.8 million in additional expansion and renovation projects for the district in Dumas.

Green building While many of the renovations focus on making schools more operationally efficient, Meyers says school districts are not seeking certification for their sustainability initiatives.

Other contractors report similar interest among districts for energy efficient and sustainable buildings, but they also are not seeking LEED certification.

“It’s difficult for many of them to see the [value] of spending an extra 10% or 15% in 2009 and in six or eight years start reaping the benefits of that investment,” Heery’s Devoe says.

The exception is Houston ISD, which now requires LEED certification on all of its new construction.

“That is the only district I am aware of that has made that kind of commitment,” Risher says. “I think the districts are interested in sustainability, where it makes economical sense. Many of the sustainability issues have some economic value on a long-term basis and many of those items are incorporated into the design.”

Charter schools Linbeck of Houston continues its work with two charter school firms: KIPP Houston and YES Prep Public Schools of Houston. Both programs have plans to aggressively grow and add more students and schools, says Bill Bailey, senior team manager for Linbeck.

He adds that YES plans to increase enrollment from 700 students to 10,000 during the next 10 years, which will require adding 13 new schools. It has 4,000 youngsters on a waiting list to begin its college-prep focused curriculum.

“The charter programs use prototype buildings, with pre-engineered and manufactured components,” Bailey says. He says the programs do not receive funding from the state or taxes.

The right time to build Devoe calls it the right time for schools to build because material prices have dropped, and the market has become more competitive.

“You have a lot of traditional, noneducation builders getting into the marketplace,” Devoe says. “By the sheer volume of competition, the price is being driven down.”

Costs have dropped 10% to 15% in the last 12 months, he adds.

Huckabee now may see about 50 bids submitted, whereas in the past there might have been seven or eight. A recent project came in $1 million, or 25% under budget.

“Everybody sees there’s work in K-12, and other areas have slowed down,” Huckabee says. “So that has become a focus.”

Construction trends Skanska’s Massey says districts are pursuing grant money that enable the schools to add amenities that they might otherwise not be able to afford. For instance, at Palmview, the La Joya ISD received a $4.3-million grant from the Texas Education Agency’s Science Laboratory Grant Program.

Massey says Skanska also expects federal stimulus funding may allow school districts to pursue green initiatives.

Overall, K-12 remains a bright spot for the construction industry.

“We’re optimistic about the future,” Bartlett Cocke’s McCleskey says. “We’re a little concerned about the economy, but there seems to be a pretty steady flow of school projects on the horizon.”