Orlando Report:

Local Construction Economy Experiencing Ups, Downs – and Hiccups

By Debra Wood

The cooling housing market has decreased Orlando condominium starts, but on the bright side, it has freed up demand for materials and labor and eased the pressure on commercial projects.

“The market is still robust,” says Mark Wylie, president and chief executive officer of the Central Florida Chapter of Associated Builders and Contractors in Winter Park. “It’s continued business expansion and primarily driven by the hospitality industry and government spending like schools, universities and public buildings.”

Scott Skidelsky, vice president and general manager of Turner Construction Co. of Orlando, agrees, calling the market strong with a shift toward education and smaller commercial buildings such as bank branches and interior build-outs.

Plenty of office, retail and hospitality work exists, and the market is strong,” adds Charlie Dorr, vice president of business development for Hardin Construction Co. of Orlando.

Randy Bernard, senior vice president of Skanska USA Building in Orlando, says, “Overall, the commercial sector is still booming. However, it’s getting more competitive. The market is such we have more people competing for the same number of jobs.”

More projects are in the works. Skidelsky highlighted upcoming opportunities related to three planned public venues—a new arena, a performing arts center and renovation of the Citrus Bowl—and the Lake Nona medical campus, where the University of Central Florida will build a medical school and California’s Burnham Institute for Medical Research plans an East Coast laboratory.

City of Orlando and Orange County commissioners still must approve funding of the $1 billion public venues package. Though they were initially ballyhooed as a done deal by Orlando Mayor Buddy Dyer, the political support for these projects has waned.

Approval by the county commission for the projects has been held up as the Florida Legislature debates property tax reform, which if passed will likely limit municipalities’ incomes. Negotiations with the prime tenant, the Orlando Magic, over the team’s financial contribution to the project, also have stalled.

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Hospitality Heats Up

Orlando’s hospitality corridor has experienced another growth spurt, with multiple timeshare, condominium hotels and other projects in the works.

Turner received a $155 million contract to build the Hilton Grand Vacation Co.’s new Ruby Lake resort. The company broke ground this spring on the first two 14-story buildings. The company expects to complete the first tower in January 2009 and the second in January 2010. Ultimately, the timeshare resort will include 1,200 one- and two-bedroom units.

For Wyndham Vacation Ownership of Orlando, WELBRO Building Corp. of Maitland, Fla., recently completed its fourth 15-story, post-tensioned concrete building at the Bonnet Creek Resort complex and was working on building five, with completion scheduled for next March. McGraw-Hill Construction Dodge estimates the cost between $40 million and $50 million.

Jordan Development Group of Winter Park, Fla., tapped WELBRO to build its $120 million, 650-unit, short-term rental WorldQuest Resort of Orlando. The first five-story concrete structure wrapped up in fall 2006 with the second 68-unit building getting under way this spring.

Prices for the individual units range from the high $400,000s to the low $500,000s. Jordan Development operates the complex as a hotel.

Hardin has begun sitework for a 300-room suites expansion of Disney’s Contemporary Resort. Dorr would not release a contract amount.

Near the Orange County Convention Center, Hardin, in conjunction with Ledcor of Vancouver, B.C., is working on The Village of Imagine for Intrawest Resort Development Group of Orlando. This $60 million, 12-story phase will become a 437,100-sq-ft, 463-unit Westin condo-hotel with an elevated corridor to the convention center.

WELBRO is completing preconstruction estimating for the 19-story Orlando Hilton Convention Center Hotel. Project manager Linda Bell expects the company to begin construction in June, with completion scheduled for August 2009.

SeaWorld Orlando is developing a new water park called Aquatica, with 36 water slides and more than 80,000 sq ft of beach. PCL Construction Services of Orlando is working on the park’s salt-water system, life-support system and restaurants. The park will open next March. McGraw-Hill Construction Dodge values the project at $90 million.

Transportation

Hensel Phelps Construction Co. of Orlando began work on a $93 million renovation of and addition to Airside Three at Orlando International Airport in November and projects a May 2009 completion. The job includes repairs to areas damaged by the 2004 hurricanes and the addition of skylights to let more natural light into the airport. All work must progress without disturbing the traveling public.

The Orlando-Orange County Expressway Authority is widening 12 mi of the East-West Expressway. Lane Construction Corp. of Meridian, Conn., has two of the current contracts, totaling $180 million, and Hubbard Construction of Orlando was in the final stages of wrapping up its $74 million project.

Also for the authority, Ranger Construction Industries of Winter Garden, Fla., began constructing the first $105 million segment of the $425 million, elevated John Land Apopka Expressway in January, with completion scheduled for 2009. Hubbard Construction received the $89.7 million contract for the next section and expected to begin construction in June.

Retail

In the tourist corridor, Hardin has broken ground on a $30 million expansion of Orlando Premier Outlets. The project begins with a four-level parking deck, which will enable expansion of the shopping center on the former parking lot.

Hardin broke ground in June 2006 on Winter Garden Village at Fowler Grove, a $78 million, 585,000-sq-ft, tilt-up-and-masonry construction, open-air retail center in western Orange County developed by The Sembler Co. of St. Petersburg. Dorr expects to begin turning over buildings in June.

Education

“There’s a lot of school work out there,” Skanska’s Bernard says. “The (Orange County) school district has a $1.5 billion building program over 10 years, and it is in the third or fourth year of the program.”

Skanska/JCB, a joint venture between Skanska and JCB Construction of Orlando, is heading for a summer completion on Orange County’s $74 million, 10-building Wekiva High School. The same team began construction in October on the $93.7 million Apopka High replacement school, using the same prototype. Because of its location on the existing campus, Skanska will phase the work and expects completion in 2010.

Also in October, Clark Construction Group of Tampa broke ground on the $85 million, 400,000-sq-ft West Orange High replacement school, which has three two-story classroom buildings, a central engineering plant and administration building. In late March, Clark had poured the slab-on-grade foundations for five buildings and began tilt-wall erection in April, says Bruce Hansley, senior superintendent.

Turner anticipates completing a new $47 million, 280,000-sq-ft, three-story high school for the School District of Osceola County this summer. 

The University of Central Florida has begun sitework at Lake Nona for the $113 million Burnett College of Biomedical Sciences building. Construction of the $43 million College of Medicine building will begin later this year. Both structures are scheduled for completion by summer 2009. The university has raised $100 million in private funds and state grants, and proposes borrowing up to $60 million to fund the projects.

UCF expected Wharton-Smith Construction Group of Sanford to complete the campus’s new $45 million, 45,000-seat football stadium in time for the 2007 football season.

Health Care and Offices

Ahead of schedule on Florida Hospital Orlando’s $150 million, 16-story, 636,000-sq-ft bed tower, Brasfield & Gorrie of Lake Mary, Fla., is pouring about 17,000 cu. yds. of structural concrete each week and was at the eighth floor at the end of March. Project manager Peyton Robertson anticipates an on-time delivery by the end of 2008.

Brasfield & Gorrie also is building the Dynetech Center, a 31-story office and apartment building in downtown Orlando. Work on the concrete structure began in June 2006 and is expected to wrap up early in 2008. McGraw-Hill Construction Dodge indicates it’s an $80 million project.

Hardin received the $100 million contract to build Darden Restaurants’ new 400,000-sq-ft  corporate headquarters in southern Orange County.

Orlando Utilities Commission and Skanska/JCB are aiming for gold-level LEED certification on the utility’s new $45.6 million, 10-story 110,000-sq-ft downtown headquarters building. Features will include under-floor air conditioning, solar panels to capture power for electricity generation and a system to capture and reuse rainwater. 

Residential

“Residential has died, but the projects we have and are completing are still very strong,” Skidelsky says.

Turner expects to begin turning over residential condo units on the first 15 floors of the 35-story, $100-million-plus Vue at Lake Eola in downtown Orlando in the third quarter of this year.

PCL began work on 55 West on the Esplanade, a $136.2 million, 32-story, 1.1 million-sq-ft, 405-unit downtown condominium and retail project in March 2006. Project manager Darren Crafton says completion is expected in fall 2008.

Work continues on Hardin’s $101 million, 16-story Paramount on Lake Eola, a mixed-use project from ZOM Development of Orlando. The Art Deco-style concrete-frame building will house downtown’s only grocery store on the ground floor, with parking and 300 residential condominiums above.

In Seminole County, north of the city, Kolter Signature Homes of West Palm Beach began construction on Grande Oakes at Heathrow, a $140 million, 314-unit townhouse project in November. It’s the company’s first project in the Orlando metro area. Units begin at $369,900.

“We see opportunities in the Central Florida market,” says Steve Bovio, senior project manager for Kolter.

Material and Labor markets

The decline in residential starts has resulted in greater availability of materials, says Central Florida ABC’s Wylie, adding that labor remains tight due to the area’s low unemployment rate. He says the slow housing market could affect the overall economy, although Central Florida’s growth may serve as a buffer, and adds that the market should stay strong for the next 12 to 18 months.

Turner’s Skidelsky says there has been a decrease in concrete prices and in bids from major trades. Dorr reports prices stabilizing during the last six months, but he is not sure that will last.

Useful Sources

Project Hometown
http://www.projecthometown.com/

Wyndham Lake Buena Vista Hotel and Spa at Bonnet Creek Resort
http://www.wyndhamworldwide.com/media_center/pr/show_release.cfm?id=54&category=2

WorldQuest Resort
http://www.worldquestresort.com/

The Villages of Imagine
http://www.villageofimagine.com

Winter Garden Village at Fowler Groves
http://www.wintergardenvillage.com/html_files/facts.htm

Dynetech Centre
www.dynetechcentre.com/

The Vue at Lake Eola
http://www.vueorlando.com/