Gulf Coast: High Tide of Activity Settles Back

The decline in the state’s residential market is causing construction along Florida’s Gulf Coast to ease back.

By Debra Wood

After a couple of booming years, Gulf Coast contractors are noticing a tempering of new projects.

From Pensacola to Southwest Florida, construction activity has settled into a more normal pattern—solid and steady—as the residential condominium market dried up.

Still, insiders say developer interest is rekindling.

“The residential construction market as far as condominium towers has come to a screeching halt,” says John Pinholster, president of Kraft Construction Co. of Naples. “It’s not a slowdown; it’s a full stop. We are finishing up some projects. Nobody has stopped an ongoing project.”

Todd Gates, chairman of Gates McVey Builders Inc. of Naples, agrees that the residential market is flat but sees signs of a comeback.  

“We see 2007 as a stabilization year,” Gates adds. “I don’t see it getting any slower. I see it being a reshoring year, and 2008 coming back fairly strong.”

Pinholster says he also expects the condominium market will return because Florida continues to grow. However, supply currently exceeds demand and it will take time to move the inventory. Kraft, meanwhile, is working on school projects in Collier County and a jail addition for Lee County. It recently opened an office in Charlotte County.

“For us, diversity has been one of the keys to our success,” Pinholster says. “Having a broad hand in the market allows us to take a big advantage of Florida being what it is, one of the top growth states in the country. Not all sectors will grow at the same time.”
While slower than last year, the market is busy by historical norms, says Perry Covey, division manager for R.J. Griffin & Co. of Atlanta. The company is building residential condos in Tampa and the Panhandle.

advertisement

“The recent level of activity is more favorable for letting things cool off and getting more in balance,” Covey adds. “There were extreme labor and material shortages six, eight, 10 months ago, and it seems to have dissipated.”

Mike Caldwell, vice president and division manager of Brasfield & Gorie’s Alabama Coastal division, began seeing a slowdown in Panhandle residential condominium development in early 2006. He says per-sq-ft sales prices have dropped by as much as $100, from $600, but inventory still is not moving. Even so, the company is once again fielding calls from developers planning new projects.

“Developers are still waiting for the bottom,” Caldwell says. “When they are convinced we reached the bottom, I think we’ll see it pick up again. That said, developers that bought property in the last couple of years will probably have a difficult time making a project work because they paid so much for the land.”

Brasfield & Gorrie is working on the $85 million, 300-plus-unit Waterscape condominiums on Okaloosa Island and the $16.9 million, 10-unit Andante condominiums at Seacreast Beach.

Bruce Moldow, executive vice president of Moss & Associates of Fort Lauderdale, calls the Panhandle condo market soft with nothing new in the hopper. The company is wrapping up construction on the $125 million, 269-unit HarborWalk Village condominium project in Destin.

Nathan Green, president of The Green-Simmons Co. in Pensacola and president of Associated General Contractors Alabama-Northwest Florida Section, attributes the past two year’s robust activity level to repair work after Hurricane Ivan in 2004. He says a more normal pace will return to the market this year.

Green is completing a $1.7 million renovation of the National Guard Armory in Crestview and $1.2 million post-Ivan rebuilding of Wayside Park in Pensacola. The company is just starting a $1.5 million media center in Century, Fla., for the Escambia County School District.

Public and private work continues as communities aim to catch up with population growth and repair damage from recent hurricanes. Steve Cona, president/CEO of the Florida Gulf Coast Chapter of Associated Builders and Contractors in Tampa, says most of his member contractors and subcontractors still have a two-quarter backlog to work through.

“Schools, light commercial and health-care facilities continue to move forward with a strong economy,” Cona says.

Public Projects

Owen-Ames-Kimball Co. of Fort Myers is building three elementary schools as part of the Charlotte County Public Schools Hurricane Recovery program. Six of the district’s 20 schools could not be salvaged and eight sustained severe damage. Owen-Ames made stabilizing repairs as quickly as possible and prepared utilities and foundations for three temporary modular schools brought in by the district from other parts of the country. It continued with permanent repairs, demolished unsalvageable schools and has begun construction on the replacement facilities.

Kraft is simultaneously renovating and expanding six separate Collier County schools as part of an $85 million contract. It also recently started a $35 million middle school for Sarasota County Schools and is building the $45 million Island Coast High School in Cape Coral for the School District of Lee County.

But it’s not all building projects. Major transportation contracts are numerous throughout the region.

In Pensacola, the design-build team of Tidewater Skanska of Virginia Beach, Va., and Flatiron Constructors of Longmont, Colo., and Parsons Brinckerhoff Quade & Douglas of Tampa, now PB Americas, completed the first span of the Escambia Bay Bridge, restoring two lanes of traffic in each direction by the end of last year.

The feat earned the team a $10 million bonus on the $243 million design-build contract. Work continues on the second 13,830-ft, 2.6-mi-long twin span, which should be compete by the end of this year.

Hubbard Construction Co. of Orlando is scheduled to complete $46.5 million in improvements to U.S. Highway 19 in Pinellas County for the Florida Department of Transportation. The work includes two flyover bridges to replace existing at-grade intersections.

Also as part of the U.S. 19 improvements, Archer Western Contractors of Jacksonville is working on constructing two six-lane bridges over 110th and 118th avenues. The $89 million project includes one-way frontage roads for local access and is scheduled for a summer 2009 completion.

Flatiron Constructors has begun replacing the existing bascule bridges at Johns Pass with low-level, twin-span bascule bridges. The $76.6 million project will increase navigational clearance and provide two lanes of travel in each direction.

Farther south, FDOT planned to award one of two prequalified design-build-finance teams a contract this spring to widen 35 mi of Interstate 75 through Collier and Lee counties. The total project is budgeted at $469 million, says FDOT spokesperson Debbie Tower. The job will be built during a three-year period, but the contractor will be paid over five years.

Also, MWH Constructors of Broomfield, Colo., continues work on a $476.5 million project to upgrade water, wastewater, sewer and irrigation lines for Cape Coral.

Private Activity

Gates says health care leads in private investment, with medical office and retail strong as well. His company recently completed an addition for NCH Healthcare System in Naples and worked on the Coconut Point regional mall in Estero with Bovis Lend Lease of Atlanta and other contractors.

Skanska USA Building of Tampa broke ground in February 2006 on the $157 million Southwest Florida Regional Medical Center in Fort Myers for HCA of Nashville. Since then, Lee Memorial Health System of Fort Myers has purchased HCA’s area hospitals and assumed responsibility for the addition already under construction.

Tracy Hunt, senior project manager, says the new owners did not alter plans for the four-story, 425,000-sq-ft expansion and 20,000-sq-ft renovation. The addition wraps around Gulf Coast Hospital, one of the two existing hospitals whose services will be consolidated in the new facility. Hunt expects to complete the project in March 2009.

Brasfield & Gorrie of Lake Mary is building a $200 million replacement facility and $40 million central energy plant for All Children’s Hospital in St. Petersburg. Brasfield & Gorrie had just started structural work in February on the 10-story, 670,000-sq-ft concrete-frame hospital. The company expects to complete the project in 2009.

Also, R.J. Griffin continues work on a $26 million, four-story medical office building and parking garage at Bayfront Medical Center in St. Petersburg.

Condos Still Wrapping Up and Some in the Works

R.J. Griffin recently topped out the $59 million, 18-story Origin at Seahaven in Panama City Beach. The 400,000-sq-ft, post-tensioned concrete structure contains 280 units, a three-level parking garage and an amenity deck.

In Tampa, R.J. Griffin is building the $63 million Skypoint Condominiums for Novare Group of Atlanta. Construction began in May 2005 on the 32-story, 450,000-sq-ft, 381-unit concrete-frame structure, which is scheduled for completion in May. The company is in preconstruction on the $100 million, 32-story Art Village condominiums in downtown St. Petersburg. Covey anticipates construction to start this summer.

Kraft’s $96 million Jasmine Bay at West Bay Club in Estero will wrap up in August. It consists of two 20-story towers, each containing 100 residential units.

Also, Opus South Construction of Tampa continues working on Water’s Edge in downtown Clearwater. The 25-story, 156-unit condominium tower will have retail on the first floor.

Jerry Shaw, Opus senior vice president, expects to complete the project in 2008. McGraw-Hill Construction’s Network pegs Water’s Edge at about $250 million.

In St. Petersburg, Opus South has topped out the 400 Beach Drive Condominium and expects to complete the 29-story, 93-unit residential tower by the end of 2007. It will have 25,000 sq ft of retail on the ground level. McGraw-Hill Construction indicates it is an $85 million project.

Chad Bratzke, a principal with Westwater Construction Inc. of Sarasota, says the company is still excited about Sarasota. It is renovating the former Forest Lakes Golf Club course at its new Legends at Forest Lakes development in Sarasota. The company plans 189 residential condominium units in seven, three-story buildings above parking.

Developers continue to attempt presales to get projects off the ground. Industry experts view the condo slump as a temporary market correction.

“As long as there’s a good quality of life and the sun keeps shining, we will be in good shape,” Gates says.

Useful sources:

Southwest Florida Regional Medical Center
http://www.leememorial.org/swfrmc_gc/swgc_groundbreaking.asp

Water’s Edge
http://www.yourwatersedge.com/
http://www.opuscorp.com/-ProjectDetail/index.html?id=2619

400 Beach Drive
www.400beachdrive.com
http://www.opuscorp.com/-ProjectDetail/index.html?id=2536

Origin at Seahaven
http://www.jedunn.com/project_details/60-1

Skypoint Condominiums
http://www.jedunn.com/project_details/61-1

Cape Coral Utility Expansion
http://www.capecoralutilityexpansion.com