Tampa Report

Though Residential Starts Have Slowed, the Rest of the Tampa Market is Picking Up

By Debra Wood

Construction activity remains strong in Tampa, despite a significant, continuing dropoff in residential projects.

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“The economy is good,” says Dave Marshall, account executive with Batson-Cook Co. of Tampa. “I’ve worked in Tampa since 1965, and I think [the market] is as good as it’s ever been. We see a lot of good things happening.”

Kevin Glenn, manager of business development for Bovis Lend Lease in Tampa, agrees. “Tampa’s a hot market,” he says. “There’s a lot of diverse activity.”

Fred Hames, executive vice president of Skanska USA Building in Tampa, adds that “developers with a track record, who know what they are doing, continue to be successful. We see a lot of new opportunities especially in the corporate, commercial market.”

With the residential slowdown, Steve Cona Jr., president and CEO of the Florida Gulf Coast Chapter of Associated Builders and Contractors in Tampa, says many of his members are breaking into different markets. Overall, though, he says he considers the market good, with subcontractors carrying a backlog into the middle of 2008.

Hospitality and office

Skanska recently received the contract for one of them. It will build the $200 million, 1.3-million-sq-ft MetWest International mixed-use center for the Metropolitan Life Insurance Co. of New York. The first phase includes a 200,000-sq-ft office building, a restaurant and retail village, and two parking garages. Hames says he anticipates more office construction activity in the near future.

“We see a lot of new opportunities for office buildings in the Westshore area,” he adds.

Opus South of Tampa is building Tampa Oaks II, a 103,000-sq-ft, three-story, tilt-wall construction office building at Interstate 75 and Fletcher Avenue.

Hardin Construction Co. in Tampa has several office projects in preconstruction, but it has nothing currently under way.

“A lot of things are being planned, but developers are proceeding with caution,” says Page McKee, senior vice president with Hardin. “It will be the first part of next year before we see much office activity.”

McKee is more upbeat about the hospitality sector and says his firm recently started work on the $39 million, 240-unit Westin Hotel at Rocky Point.

Bovis is providing preconstruction services on the Aqualea Beach Resort and Residences on Clearwater Beach, which includes a 17-story Hyatt condo-hotel with 18 condominium residences. Owner NJR Development Co. of Tampa expects to break ground later this year and complete construction in 2009.

“Hospitality and commercial probably in the next two to three years will get stronger,” Glenn says.

Health and entertainment projects

Brasfield & Gorrie of Lake Mary, Fla., continues work on a $194 million, 675,000-sq-ft, 11-story replacement hospital for All Children’s Hospital in St. Petersburg and a $39 million central energy plant at the medical facility. Completion of the plant is scheduled for 2008 and the tower for fall 2009.

Skanska has several large hospital projects and biomedical research projects under way, including a $127 million, 380,000-sq-ft addition and energy plant expansion at Tampa General Hospital and a $67.8 million, 90,000-sq-ft addition to the H. Lee Moffitt Cancer Center & Research Institute. The company also will start work this year on a lab and tissue bank for Lifelink of Tampa.

At the University of South Florida, Skanska expects to begin construction at the end of the year on a $40 million visual and performing arts center. It also received a $40 million contract from the city of Tampa to serve as construction manager of a new waterfront park, Museum of Art, children’s museum and restoration of Kiley Gardens, a historic, downtown open-air space. Hames says work should begin by yearend on the municipal project.

Residential

While new starts are less prevalent, high-rise condominiums are still keeping many firms busy. Bovis recently topped out at Signature Place, a $113.5 million, 36-story, mixed-use project in downtown St. Petersburg, for Cantor Development in St. Pete Beach. The 740,000-sq-ft tower is expected to finish in 2009.

Opus South Contractors of Tampa expects to complete the 29-story, 370,577-sq-ft 400 Beach Drive in St. Petersburg in December and the 26-story, 312,928-sq-ft Water’s Edge in Clearwater in June.

Batson-Cook topped out The Sage, a 112-unit condominium in downtown St. Petersburg, early this year. The $53 million total value project for Miles Development Partners of Atlanta is expected to finish later this year.

In Tampa, Batson-Cook expectes to finish the $100 million Towers at Channelside by November for Key Developers Group of Tampa. The dual 29-story towers are one of several projects in the revitalized Channelside district.

Manhattan Construction Co. of Tampa broke ground in January on the Element, formerly called the Franklin Tower, in downtown Tampa. The company expects to complete the 35-story, 800,000-sq-ft tower in January 2009. Dodge Reports pegs the project at $72 million.

Hardin Construction Co. has several condominium projects wrapping up, including Grand Central at Kennedy, a $90 million 1.3 million-sq-ft, two-building, 392-unit condominium project in the Channelside area for Mercury Advisors of Tampa. This fall, the company plans to finish The Plaza, a $65 million, 21-story, 142-unit condominium on nearby Harbour Island developed by Patrinely Group of Houston.

“A tremendous amount of product is finishing this year,” McKee says. “Close to 1,200 to 1,500 units will be completed.”

McKee says that as condominiums fill up, demand for shopping should trigger new retail projects.

Those condos do not seem to be driving greater demand for schools. Although Batson-Cook is continuing to work on additions at six Hillsborough County Public Schools, McKee says the school district has canceled construction of four new schools because population growth hasn’t met expectations.

“We’re seeing K-12 slow down,” Hames adds. “Enrollment is down some due to the decrease in the residential industry. People are not moving into the state as much as they were it seems.”

Infrastructure improvements

However, the region continues to need road and infrastructure upgrades. Florida’s Department of Transportation has multiple projects under way.

Archer Western Contractors of Jacksonville began two new interchanges on U.S. Highway 19 between 49th Street and 126th Avenue in Pinellas County, which will eliminate signals and enhance traffic flow. The $89 million project, which includes a one-way frontage road system to provide access to local businesses, began in November and should conclude in summer 2009.

On Interstate 75, PCL Civil Constructors of Tampa is building a flyover bridge at County Road 581, Bruce B. Downs Boulevard. The $41 million project is scheduled to wrap up in spring 2009.

PCL also was scheduled to begin in mid-August a $103.7 million, 929-day widening and reconstruction of Interstate 275 between Himes Avenue and Ashley Drive at the Hillsborough River. This represents the first of several projects planned to rebuild I-275, says FDOT spokesperson John McShaffrey.

Covanta Energy Group of Tampa began work on the $120 million Hillsborough County Resource Recovery Facility Expansion project in May. Sauer of Pittsburgh, Pa., serving as general contractor, will add one 600-tons-per-day mass burn combustion unit, increasing the plant’s electrical generating capacity by 50%.

“When completed, the expansion unit will increase the Hillsborough County Resource Recovery Facility’s overall renewable energy generation ability from 30 to 47 megawatts,” says Joe Treshler, spokesperson for Covanta.

Encore/Mathews Construction, a joint venture between Encore Construction Co. of Winter Garden, Fla., and Mathews Construction of Tampa, is expanding and upgrading Plant City’s wastewater system and reclamation facility. The $42 million in new tanks will add 5 million gallons a day to the plant’s capacity, says Nolan Hale, senior project manager for Encore. Work began in February 2006 and is expected to wrap up in December.

Hames says Tampa Bay’s strong economy, smart growth and experienced owners will help it continue as a “very strong and stabile market. It’s a positive market, but it’s in a bit transition.”