K-12 Schools Report: Building on a Curve

The strength of school construction markets varies significantly across Southeast

By Debra Wood and Bea Quirk

Population increases or declines across the Southeast are affecting school construction, with many Florida districts experiencing a drop in demand while areas such as Atlanta still need more schools.

“We had a period a couple of years back when school construction was really hot,” says Mike Geary, executive vice president of Pirtle Construction Co. of Davie, Fla., which has several school projects in South Florida. “What we are seeing is a slowing down in all markets.”

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Due to the faltering economy, competition is increasing for school jobs. Mike Dunham, executive vice president of the Georgia Branch of Associated General Contractors, reports that a few months ago school districts could not find enough bidders for two $45 million schools, but at the most recent prebid conference, 16 contractors showed up.

“We are going to experience a tightening of the market,” says Dunham, adding that builders once dominant in other market segments will turn to schools. “It will help the owners.”

In Orlando, Scott Skidelsky, vice president and general manager of Turner Construction Co., adds, “When you look at the most recent Orange County Public Schools project, 25 (contractors) were submitting bids, where in the past there maybe would have been 10.”

Florida

From July 2006 to July 2007, Florida’s population increased by 193,735 people, compared to more than 300,000 in each of the prior five years, according to the U.S. Census Bureau. The economic slowdown and related housing bust in Florida also has negatively affected the state’s budget, resulting in extensive cutbacks to school allocations.

Meantime, numerous school districts across the state reported declining student enrollments.

“In the last couple of years, the major markets down here have seen stagnant or, in some cases, negative growth in student-station requirements,” Geary says. “In addition, the whole state is going through a period of tax change, and many districts are concerned about where their revenue will come from to construct and operate schools.”

In the final day of the state legislative session, May 2, Florida lawmakers passed a budget bill that will allow school districts to use a portion of local property taxes that are normally set aside for construction and maintenance and shift them toward operating budgets, funding teacher salaries or textbooks. That would not only diminish the amount of funding available to pay for projects but also reduce a school district’s leverage for bonding related to construction activity.

In addition, the Legislature will allow the districts to pull up to $65 per student out of the construction capital outlay money to pay for property and casualty insurance.

Wayne Blanton, executive director of the Florida School Boards Association in Tallahassee, estimates the changes will result in about $200 million being shifted away from construction, but says it will not hurt too much.

“Student enrollment is down substantially. We don’t have as many students coming in, so we don’t have to build as many new classrooms,” Blanton says. “And the cost of construction is down. We can get through this year, have the money moved and not affect anything on the books ready to go right now.”

But it could affect projects not yet out of the ground. Victor Alonso, design officer for Miami-Dade Public Schools, says his district will be re-evaluating future projects that would have been awarded in the next year or two. However, he adds that the district has already let about 90% of its $3.5 billion capital improvement program.

Alonso says Miami-Dade has so much work now under way that it will not feel the full affects of the state cuts in construction for a year or two, but the district is dealing with a $300 million loss in operating funds.

Miami-Dade Public Schools

Miami-Dade schools will open 15 new schools this year, adding to the 25 that were completed in the three earlier years during the five-year capital plan. The district has seen a slight decline in enrollment caused the decrease to the state’s troubled housing market and the high cost of living, Alonso says. MCM of Miami completed the $49 million, four-story Westland Hialeah Senior High School in April. It features a gymnasium atop a parking garage.

Meanwhile, the first of seven prototype K-8 schools will open in 2008. State School DD-1 in Homestead, State School CC-1 in Naranja, State School E-1 in North Miami, State School P-1 in Dora and State School D in Aventura will open in time for the fall semester. The schools cost about $34 million each and all are being constructed by Pirtle.

Pirtle also is working on a $32 million, four-story facility in downtown Miami that will incorporate the city’s College of Policing and a high school designated as the School of Law Studies, Homeland Security and Forensic Sciences. And the company recently completed the $58 million Miami Jackson Senior High School.

BCA of Miami recently broke ground on the Miami-Dade district’s first LEED-registered school, YYY1 in Kendall. The $35.2 million middle school uses a prototype design.

LEED in Palm Beach

Geary says there has been an increase in LEED school projects.

“The long-term, life-cycle cost savings you experience through energy savings, water consumption and operational costs are attractive to an owner,” he adds.

The School District of Palm Beach County has decided all newly constructed schools must receive LEED silver certification, even though it finds doing so adds between 2% and 3% to the cost of the project.

“We believe it will have a positive payback,” says Joe Sanches, chief of facilities management for Palm Beach County schools. “We should be able to recover any additional cost within seven to 10 years.”

Pirtle expects to finish Palm Beach County’s first LEED gold-certified school this summer. The $30.3 million facility, which will serve as Florida Atlantic University’s Pine Jog Environmental Education Center and the school district’s Pine Jog Elementary School, consists of four tilt-wall concrete buildings. Sustainable elements include use of fly ash in the concrete mix and a photovoltaic system.

Palm Beach County has about 14 projects under construction as part of an $800 million, five-year capital improvement program. It has built 83 new or replacement schools during the past decade. The district will open three elementary schools in August and a high school in 2009.

“We were growing at 5,000 students a year, until the hurricane’s struck in 2004 and 2005,” Sanches says. “We project during the next five years, a decrease of 1,300 students, mostly at the high-school level.”

Orange County, Fla.

Orange County Public Schools in Orlando announced it would speed up its 2002 sales-tax-supported building program “to advance school renovations and inject a financial boost to the local economy” even though school population growth has flattened.

“Construction costs in the industry are lower (now),” says Bob Proie, chief facilities officer for Orange County schools. “We will get more now than later for our money.”

In 2008, the district will move $12 million from the 2009 budget to pay for planning and design work on 15 or 16 projects it plans to advance. The projects are in design, with construction set to start this fall into early 2009. Next year, the district will move $50 million from the 2010 capital budget to fund construction. And in 2010, it will shift $96 million for construction to earlier in the year.

Clark Construction Group of Tampa is working on an $85 million replacement West Orlando High School. The Orlando office of James A. Cummings is building the $85 million University Timber Creek High School on the east side of Orlando.

And Doster/Breen Construction, a partnership between Doster Construction of Orlando and Breen Construction Services of Lake Mary, Fla., has begun the $80 million Cypress Creek Oak Ridge High School south of town. All three are scheduled for completion by next summer.

Atlanta region

“The way Atlanta is growing, the K-12 market continues to grow,” says Kevin Kuntz, executive vice president of McCarthy Building Cos. of Atlanta.

McCarthy has begun construction on two schools for Forsyth County Schools: the 145,000-sq-ft Haw Creek Elementary and the 142,000-sq-ft Lakeside Middle schools. The $41.6 million contract for both schools is funded by a 2006 Special Purpose Local Option Sales Tax/Bond referendum.

According to the U.S. Census Bureau, Atlanta had the country’s second-highest numerical growth in population from July 1, 2006, to July 1, 2007.

AGC’s Dunham says school districts to the north in Forsyth and Paulding counties and to the south of the city in Henry County have experienced large influxes of students.

“And Atlanta still has a high level of need,” he adds. “Older schools are reaching maturity and need a roof or paint or air conditioning.”

Valerie Thomas, executive director of facilities for Atlanta Public Schools, says the city is growing, but not all areas are experiencing an increase in school-age children. For example, downtown condominium towers are geared more toward adult living, but the northern, northeastern and southwestern portions of the city are seeing an increase in school-age children, Thomas says.

The Atlanta district is starting the third phase of a special-purpose local sales tax-funded building program. Tax collections began in July. Thomas anticipates spending $500 million during the next five years.

“We intend to complete the balance of our major projects and also begin putting all buildings on a cycle to do upgrades,” she adds.

Projects include two new single-gender, design-build, approximately $40 million to $44 million, middle schools now in design: the Coretta Scott King Young Women’s Leadership Academy for girls, and the Business, Engineering, Science and Technology Academy for boys. C.D. Moody Construction of Lithonia, Ga., will build the 220,000-sq-ft girl’s school. R.J. Griffin & Co. and Barton Marlow, both of Atlanta, received contracts for the first and second phases, respectively, of the BEST Academy.

Barton Marlow also will build the $11 million New Northeast School, adding a K-5 classroom building behind one of two historic houses on the property.

Atlanta Schools tapped H.J. Russell & Co. of Atlanta to renovate and add space at Young Middle School. Design in currently under way on the estimated $20 million project.

Charlotte

Charlotte-Mecklenburg Schools is putting the finishing touches on six schools set to open in the fall and is cranking up work on 11 more – eight of them scheduled to open in 2009.

The 11 schools – six elementary, three middle and two high schools – are being funded by a record $516 million bonding measure approved by voters in November. Six major renovations are also part of the bond package, encompassing work on two elementary, one middle and three high schools.

“Our objective is to get everything through as quickly as possible,” says Guy C. Chamberlain III, associate superintendent for CMS auxiliary services. To help achieve that goal, his program management department staff is being supplemented by personnel from Bovis Lend Lease.

Two contracts were awarded in early May to Charlotte-based Shelco for the $21.4 million Belmeade Middle School and to Edison Foard, also of Charlotte, for the $22.6 million Ridge Road Middle School. At the same time, CMS was negotiating construction management bids for building the two high schools and the major renovation projects.

Balfour Beatty Construction of Charlotte has been selected by CMS to provide construction management services for its new $50 million Matthews/Mint Hill High School. The project is expected to complete in June 2010.

Work includes construction of a 260,000-sq-ft, two-story high school. The 99-classroom prototype project will also include a 4,000-seat stadium, baseball and softball fields and tennis courts.

Chamberlain says each of the six elementary schools will be bid out for a prime contractor rather than a construction manager because each has a prototype design.

Local contractors are experiencing a decreased workload, which has been beneficial for CMS, Chamberlain says. “We (received) more contractor bids than we ever have, and from (firms) that typically don’t bid on school work,” he adds.

As a result, the bids for the two middle school projects came in significantly lower than anticipated, at about $115 per sq ft, rather than the typical price of $140-$150.

Chamberlain says bids have been coming in so low that CMS recently announced that instead of renovating McClintock Middle School it would build a new facility for an estimated cost of $23.9 million. The renovation had been expected to take 30 months to complete, but the timetable for building a new school is just 14 months. 

Useful Sources:

Miami-Dade County Public Schools
http://www.dadeschools.net/

Orange County Public Schools
http://www.ocps.net/

The School District of Palm Beach County
http://www.palmbeach.k12.fl.us/

Atlanta Public Schools
http://www.atlanta.k12.ga.us/content/apshome.aspx