South Carolina Report:

State's Construction Activity Will Grow in '07

By Bea Quirk

Although the pace of growth began to slow in South Carolina during the third quarter, 2006 was a solid year for construction in the Palmetto State.

According to McGraw-Hill Construction, the value of new 2006 contract starts in the state was projected to stay steady with '05, which marked a high point in dollar terms for South Carolina. The company estimated 2006 total construction in South Carolina would equal $12.75 billion, just down from 2005's $12.76 billion.

McGraw-Hill Construction is predicting that residential development will decline in 2007, but construction activity in nearly all other markets will be ahead of '06 levels. In fact, South Carolina will show the greatest growth of any of the Southeast Construction-area states - albeit just 2 percent. That should be enough to take the state's total to nearly $13 billion in '07.

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"We're not seeing a slowdown, and the architects we talk to are still getting a lot of inquiries," said Allen Amsler, president and CEO of Columbia-based McCrory Construction Co. "You have to remember we are coming off record years."

"Activity is still strong," said Steve Gennett, president and CEO of Carolinas Associated General Contractors in Charlotte. One day in October, the group's Web site listed 320 jobs that were out for bid, with about one-third of them in South Carolina. Gennett described that percentage as historically "above average."

Retail is one sector that has been active recently.

Among the projects McCrory is working on are a $10 million Wal-Mart Super Center in Traveler's Rest that is set to open by midyear; the $8.5million Shoppes at Summerville, a shopping center scheduled to open by year's end; and a $4.75 million expansion of a Sam's Club in Columbia with a completion date of early 2007.

Overall, "things are going to keep growing, but not as fast," said Tony Plath, a University of North Carolina Charlotte professor who compiles the Construction Barometer for CAGC, which uses objective data and surveys of contractors to track the industry in the Carolinas. "I don't think we'll see a slowdown in '07." He's predicting 4- 5 percent growth for 2007.

The greatest growth is centered in the UpCountry, or northern part of the state, and the areas along the coast, especially Myrtle Beach and Charleston. In the northern counties of Lancaster and York, the activity is primarily business-oriented, due to growth from Charlotte expanding over the state line.

In York County, 800,000 sq. ft. of office and more than 2 million sq. ft. of distribution space have gone up in the last four years. For example, Sunbelt Rentals of Charlotte was scheduled to move into a 62,000-sq.-ft. building at Gold Hill Commons in Fort Mill, S.C., at the end of 2006. Choate Construction Co. of Atlanta was the general contractor, and Price-Davis Construction of Charlotte handled the interior work.

Also at Gold Hill Commons, Corinthian Properties of Charlotte is ultimately planning 2 million sq. ft. of office. Sunbelt is the first tenant, and construction is expected to start on additional buildings in the first quarter.

ESP Associates of Charlotte also recently moved to Fort Mill, into a $5 million, 27,200-sq.-ft. corporate headquarters in Lakemont Business Park. Bovis Lend Lease of Raleigh, N.C., was the builder.

Meanwhile, York County is the only county in South Carolina to have a one-cent sales tax dedicated to road construction, and that is helping to fund major road improvements throughout the county.

In nearby Lancaster County, HSBC Mortgage Services moved into its 182,000-sq.-ft. divisional headquarters in July, the first LEED-certified office building in the area. The developer, Indianapolis-based Lauth Group, also acted as the contractor.

In November, ground was broken on a new $98 million home for Inspiration Networks, an evangelical television network. The 93-acre campus in northern Lancaster County will be called the City of Light. The first phase of the 10-year project will include 400,000 sq. ft. of studio and video production space. BE&K Building Group of Greenville, S.C., is the construction manager.

Meanwhile, condominium projects are sprouting along the coast. Dargan Construction Co. of Myrtle Beach began work in December on the $145 million North Beach Plantation in North Myrtle Beach, which will feature two towers connected by covered walkways at the bottom and top. The company is also building an $8 million garage. The second phase, a $16 million project featuring 65 villas, will begin in about a year.

Also in North Myrtle Beach, Bovis Lend Lease of Raleigh is building a condo project with 220 Mediterranean-style units at the Tilghman Beach Golf and Resort.

Phase one of Prince Resort, a 427-unit oceanfront resort located in the Cherry Grove section of North Myrtle Beach, will be finished in the spring. Constructed by Landmark Builders of the Triad, it will feature renovation of the historic Cherry Grove Pier, retail outlets and dining facilities.

And at Myrtle Beach, the $75 million Magnolia Pointe condominiums are being built by Harrington Construction Co.

With the travel industry finally rebounding from its post-Sept. 11 doldrums, hotels and tourist attractions are coming on strong.

Myrtle Beach International Airport is in the midst of a $200 million expansion that will open in 2008. The Hilton Myrtle Beach Resort is undergoing a $14.7 million renovation that will open in January 2008. It includes a 12,500-sq.-ft. conference center.

Dargan Construction also is working on Anderson Ocean Club, a 304-unit, $120 million oceanfront tower to be completed in the fall.

In addition, the 3,970-acre former Myrtle Beach Air Force Base is in the midst of being redeveloped. The 560-acre Withers Preserve will be a community with approximately 2,000 single-family homes, town homes and condominiums, as well as offices, hotels and commercial and retail space. It is adjacent to the Myrtle Beach Market Common, a 113-acre development featuring a mix of retail, restaurant, residential, hotel, civic center and parking that had its groundbreaking in October. It is set for a spring 2008 opening.

In the Charleston area, R.J. Griffin & Co. of Raleigh is working on an $83.5 million expansion of The Village at the Wild Dunes Resort at Isle of Palms set to open in 2008. In nearby Mount Pleasant, R.J. Griffin is partnering with general contractor David M. Sidbury of Charlotte for a late 2007 completion on the $70 million Tides condominium project overlooking Charleston Harbor.

American Gypsum broke ground in March on a $125 million manufacturing plant in Georgetown due to be operational by the end of '07. Lockwood Greene CH2M Hill of Greensville, S.C., is the contractor.

In health care, the Medical University of South Carolina in Charleston is looking for a summer completion for the first phase of its replacement project. The $154 million phase includes a diagnostic and treatment building, seven-story patient tower, an atrium connecting the two and a central energy plant.

The contractor, BGKS, is a joint venture between Brasfield & Gorrie of Birmingham, Ala., and M.B. Kahn Construction and Southern Management Group, both of Columbia, S.C.

McCrory Construction is building a $27 million office building and parking deck for the Lexington Medical Center in West Columbia, S.C.

The one gloomy area is road construction. Sammy Hendrix, director of the South Carolina highway division of the Carolinas AGC, said the state has budgeted only $400 million for Fiscal '07 for both new construction and maintenance on its 42,000 mi. of roads.

"That's inadequate," Hendrix said. "Hopefully, the Legislature will see fit when it meets in January to put some more money in there. If not, there will be some serious problems."

The CAGC's Gennett said that some highway contractors have already begun laying off workers and taking on different kinds of projects. With the cost of asphalt having increased significantly, the state's meager funds aren't going as far.