How did Construction Dive’s “mini-mega-cities” evolve during the pandemic?
In February of last year, Construction Dive reported five “mini-mega-cities” experiencing commercial construction booms. These cities, mostly in the Midwest, were benefiting from an influx of construction work, driven by booming labor markets and low cost of living.
Then the COVID-19 pandemic struck, shutting down entire industries like hospitality and aviation and forcing people to stay at home in order to help slow the spread of the novel coronavirus. Fortunately, most states and local jurisdictions have declared construction an essential service, so many contractors were able to work under the strictest of lockdowns, but some homeowners and developers halted their building plans. or canceled them completely.
Now that the United States is more than a year after the start of the COVID-19 epidemic, what has happened to construction activity in mini-megacities? Are they still booming?
The good news is that it looks like COVID-19 can’t dampen enthusiasm for these cities or what made them booming cities in the first place. Here’s where they stand today:
Cedar Rapids, Iowa
Cedar Rapids and its surrounding communities are used to facing – and overcoming – challenges. Floods that damage property have always been a problem there. In fact, according to the city of Cedar Rapids, the historic floods and tornadoes in 2008 cost the Federal Emergency Management Agency $ 848 million, the sixth largest statement ever made by the agency. The total property damage was estimated at $ 6 billion.
“As a community, we believe that if we can recover from the 2008 floods, we can meet any challenge,” said Ron Corbett, Retention and Business Expansion Strategist at Cedar Rapids Metro. Economic Alliance. “And this is the spirit that reigns in the community and, of course, in the business community and the citizens.”
Cedar Rapids’ recovery from the COVID-19 pandemic, he said, was made easier because the state was not as restrictive as others during the pandemic when it came to shutting down some sectors, so it took relatively less time to rebound.
And companies have occupied the construction industry there as they continue to invest their dollars in capital projects – $ 539 million in 2020. That includes the “home run,” said Corbett, of the BAE Systems’ $ 139 million aerospace research, development and manufacturing facility.
“We feel like we are almost back to where we were,” he said.
The construction industry in the Ohio capital has seen its share of ups and downs since the pandemic struck, said Barton Hacker, president and CEO of the Associated Builders and Contractors Central Ohio Chapter.
From March to about August of last year, contractors, who are part of an industry declared essential in Ohio, were busy “burning” the region’s considerable backlog, he said. In August, however, homeowners and developers began to put some projects on hold, leading to a slowdown in construction activity and concerns about the future for many contractors.
Ironically, the high level of activity for most of 2020 made many entrepreneurs, who believed they would need financial assistance to get through 2021, ineligible for the second round of Payroll Protection Program loans. which required proof of a 25% drop in income.
However, fast forward to March, Hacker said, and many projects that were on hold have restarted, and contractors are once again as busy as ever, except for some slowdowns in certain industries such as school projects. and publicly funded hotels.
The big question, he said, is how the office building will go. Columbus is home to large companies like Chase Mortgage who have decided to keep some employees working remotely, which has reduced their need for construction space.
But the constant flow of new residents to Columbus, which the pandemic hasn’t stopped, has created major demand on the residential side, including high-rise condominiums.
“Things are going pretty well in Columbus,” Hacker said.
Nashville is another city with a thriving construction industry despite the pandemic. The city issued $ 4.4 billion in building permits between March 21, 2020 and March 20, 2021, according to records from the Nashville Department of Building Codes and Safety. This is an increase of over $ 400 million from the same period between 2019 and 2020.
While residential construction accounted for almost half of those numbers, the rest represented a wide variety of new commercial projects, whether new construction or renovations.
Plus, tourism hasn’t slowed down in Music City, said Clay Crownover, president and CEO of the Greater Tennessee Builders and Associate Contractors Section, and new residents are moving en masse to Nashville, in part in due to relatively low taxes and corporate jobs. .
“There were a few stops, but [those projects] were back and driving pretty quickly, ”he said.
What continues to be a challenge, however, is finding enough skilled workers, Crownover said. To this end, its ABC section is expanding its apprenticeship program so that it can train more workers. The chapter is about to graduate 96 students, had over 425 enrolled this year, and wants to grow to support 625.
“Hopefully we will bring more guys and girls into our system so that we can train them and hire them,” he said.
Omaha, said Jean Petsch, executive director of the Associated General Contractors of America’s Nebraska Building Chapter, was another city that took a construction hiatus near the start of the pandemic but returned to normal activity shortly. afterwards, mainly due to a governor limiting the restrictions. and closures and construction designated as an essential service.
And like in other cities where construction was deemed essential, there was a brief hiatus as contractors figured out how to keep workers safe while still moving forward with their jobs, Petsch said.
Other than that, there have been no real changes in construction activity, she said.
“We don’t have big highs, but the flip side is we don’t have big lows either,” Petsch said.
And with everything that comes with being a booming construction city comes the necessary maintenance, repairs and expansion of roads, highways and bridges, said Katie Wilson, general manager. of the AGC Nebraska Chapter, whose members do this horizontal work.
The projects are fairly well funded but should be boosted by the American Rescue Plan Act, she said.
Wilson did not comment on the exact amount that would be used for the state’s DOT projects, but told Construction Dive that the state’s DOT has said some will go towards the preservation and maintenance of the state. infrastructure. Each US state is expected to receive $ 100 million and can use the money for construction projects or other initiatives deemed necessary.
One problem Omaha has – one it shares with many other cities across the country – is the lack of material availability.
“[It’s] biggest headache of the past year, ”Wilson said.
When it comes to the pandemic recovery, it doesn’t hurt to have one of the most recognized and respected names in the healthcare industry – the Mayo Clinic – as the engine of economic activity. In fact, according to Patrick Seeb, executive director of the Economic Development Agency of Destination Medical Center, Mayo employs more than 30% of Rochester’s 110,000 residents. Project DMC is a 20-year initiative that will see Mayo, private developers, and the state of Minnesota invest billions in creating a global healthcare destination.
When the pandemic first struck, however, there was a lot of uncertainty about what this would mean for the city as Mayo canceled elective surgeries and treatments in order to prepare for a possible ‘attack’ on COVID patients. -19, he said.
“The Mayo Clinic had to prepare for the unknown in terms of the COVID cases and the impact the coronavirus would have on treatment protocols,” Seeb said.
This resulted in a three to four month hiatus of about 100 construction projects totaling $ 150 million, he said. But by June, it was clear the number of inpatients wouldn’t be as high as originally feared, so Mayo resumed elective procedures and construction projects restarted.
Seeb credits Mayo’s deep cutbacks at the start of the pandemic as one of the reasons the healthcare system was able to resume its construction program so quickly, and he doesn’t expect any significant delays as these projects roll out. continue.
In fact, general contractor and developer Mortenson launched his second major project in DMC in September, and private investment in DMC last month topped $ 1 billion.
“I would say in Rochester, what people have realized is that our economy is so strong, despite a pandemic, because the Mayo Clinic is the engine,” Seeb said.