Tennessee Report
Activity levels to vary, but widespread growth expected in '05

By Candy McCampbell

Construction cranes and orange safety barrels will show up in more places across Tennessee in 2005.

A $400 million Spallation Neutron Source Facility in Oak Ridge will be completed this year, but other large projects will take its place: office buildings, roads, hospitals, university buildings, airports, retail centers - even a baseball stadium.

Though not as big as the SNS facility, three of the 2005 projects are for $100 million or more.

"The outlook for 2005 is stronger than 2004," said economist Matt Murray, associate director of the Center for Business and Economic Research at the University of Tennessee - Knoxville.

Rising interest rates will moderate investment in new buildings, but the state's highway system - with major work under way in all areas of the state - will continue rolling, funded by what Murray calls "dedicated money."

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"I would expect to see some … steady improvement above and beyond what we have," he said.

Business activity levels vary across the Volunteer State, but this year the state's geographic/economic regions, referred to locally as "divisions," will have one of the $100-million-plus jobs: a massive highway project in Knoxville, a "residential college" at Vanderbilt University in Nashville and a new National Guard air base in Memphis.

"I think construction will be very strong," said Bill Prince, president of building contractor BurWil Construction Co. of Bristol and president of the Associated General Contractors of Tennessee.

"(We just experienced) the busiest December ever, including bidding, work under way and work getting started," Prince said.

Even upper east Tennessee will get its share of work.

"East Tennessee is growing right now," Prince said.

New pharmacy and pathology buildings at East Tennessee State University in Johnson City, a dinosaur museum in Gray, a new plant in Bristol and new retail in the area are all breaking ground this year, he said.

Mark Smith, vice president of mechanical contractor Comfort Group in Nashville and chairman of the board for Associated Builders and Contractors' Mid-Tennessee Chapter, agreed.

"We're thinking we're going to see, beginning in the first quarter, a real flurry of activity," Smith said. "My friends in the architecture and engineering communities have a lot of work on board, which is a precursor of good things in the market."

Downtown Nashville should see the beginnings of a new baseball stadium, two office buildings and continued work on the city's courthouse, he added.

And the city's educational and religious communities are not sitting still.

"Schools and churches are still a big part of the construction industry," Smith said.

Vanderbilt University, which plans to start its new "residential college" in 2005, will add five residence halls and a dining facility in a project said to top $100 million.

Judy Filler, sales rep at Metro Ready Mix Concrete and president of the American Subcontractors Association's Middle Tennessee Chapter, said the outlook is for "healthy growth, better than last year."

The Nashville area continues to enjoy strong growth in single-family housing, as well as big projects such as Schermerhorn Symphony Hall, Gateway Bridge and multi-million-dollar water treatment plants in Nashville and suburban Franklin.

"There is a lot of redevelopment downtown," Filler said. "There's a lot of money being spent."

The industrial and distribution sector in the Nashville area "has slowed down a little bit," Smith said. "It's still healthy, but not booming."

That's not the case in the Memphis area and its massive distribution systems, said Mike Carpenter, who heads the Associated Builders and Contractors' West Tennessee office.

A ProLogis distribution center covering more than 1 million sq. ft. is an example.

Other projects include expansions and renovations at the airport for major tenant FedEx, a new building at St. Jude's Children's Hospital and a $50 million, three-school package for the city.

A new $200 million base will also be built for the Air National Guard.

"There is a lot of optimism that the industry has turned," after a "pretty slow" 2003 and some growth in 2004, Carpenter said.

Kent Starwalt, executive vice president of the Tennessee Roadbuilders Association, is more guarded.

The state transportation department "has not said what its program will be for the calendar year," he said.

Starwalt looks for the $600 million in contracts let in 2004 to continue at about the same level for 2005. Projects still in the pipeline include the second phase of Interstate 40 at White Bridge Road in Nashville and continuing work on Interstate 65 north of Nashville.

The best part of the outlook for Tennessee is the labor picture, economist Murray said. The tight labor market of a few years ago has eased and so have >> wage pressures on employers, he said.

But employers aren't totally without cost problems.

"The real issue is non-wage costs and benefits," which continue to increase, Murray said.

Project snapshots

Oak Ridge Spallation Neutron Source Facility, Oak Ridge. The $400 million Spallation Neutron Source Facility in Oak Ridge, started in 1999 as the nation's largest civilian science project, will be completed on schedule this spring.

"We started with an aggressive schedule and ended up finishing on time," said Daniel Quinn, project manager for Knight/Jacobs Joint Venture of Oak Ridge.

With 12 buildings - from the 254,000-sq.-ft. central lab and offices to the helium liquefaction building to cooling towers - the job has employed as many as 3,000. About 550 remain on the 100-acre site.

The facility will include a 1,000-ft. linear accelerator that transmits a proton beam toward a mercury target. The neutrons are then directed to instruments for analysis. The accelerator system consists of an ion source, linear accelerator and accumulator ring that combine to produce these pulses.

A second target building, estimated at $90 million, is in the planning process and will be completed by 2010, Quinn said.

MW/MB Fiberglass Manufacturing Plant, Clarksville. A $100 million fiberglass manufacturing facility in Clarksville is a fairly routine project, with a 130,000-sq-ft. structural steel frame and metal siding building and a pre-engineered standing seam roof, said Don Miller, project director for O'Neal Constructors of Greenville, S.C.

The plant is owned by joint venture MW/MB LLC.

There are also seven smaller buildings, housing utilities. Then comes the four 100-ft. silo-type tanks that are so large they had to be built on site. "People drive up and those things tend to stand out," Miller said.

The biggest challenge during this first year has been wet weather in the summer and fall, he said.

The manufacturing process involves settlement so the tanks must have heavy foundations that are slowed by the heavy clay soil, he said.

"That will diminish as we get buildings under roof." Scheduled completion is in January 2006.

Schermerhorn Symphony Hall, Nashville. The $93 million symphony building under construction in downtown Nashville doesn't have room to spare, so contractors have to use a nearby lot and a rented warehouse for storage, said John Madole, senior project manager at the site for American Constructors of Nashville.

The contract calls for building construction, landscaping and systems such as theatrical rigging, audio and video, he added.

The 197,000-sq.-ft.building, with four stories, will have 1,900 seats.

Approaching the halfway point, Madole said the big challenges would come later. The neo-classical style building will have "high-end finishes" such as $11.5 million of exterior limestone and interior marble, $4 million in millwork, $3.5 million in ornamental metals, $1 million in exotic hardwood floors, $1 million in custom chandeliers and $1 million in other lighting.

While most of the building is being constructed by local businesses, out-of-state firms have about 25 percent of the job for stonework, millwork and theatrical systems.

The project will be completed by July 2006.

I-40, Davidson County, Nashville. A $65.7 million contract for Dement Construction of Jackson, Tenn., is for Interstate 40 from the Interstate 24 junction to .5 mi. east of Donelson Pike and .88 miles on intersecting Briley Parkway to be finished in 2007.

Project manager Fred Logue is shooting for a June 2006 completion.

"We're working six days a week, all year long," he added. "We're trying for incentives."

The job requires 15 retaining walls, 10 bridges and the widening of the heavily traveled roadway, including temporary lanes.

"Phasing is a major part of the project," he said. Scheduled completion is in May 2007.

I-40, Knox County, Knoxville. This $62 million job, by Charles Blalock & Sons of Sevierville, Tenn., will mark the last leg of widening and improvements on the highway west of Knoxville when it is finished in 2006.

The project covers 4 mi. of highway near Papermill Road and includes three interchanges, 12 bridges and 16 ramps.

While much bridgework remains, the bridge at Winston Road was demolished and rebuilt in seven months instead of the 14 months planned, said Chad Woodroof, project manager at the site.

"Three (remaining) bridges are contingent on interstate traffic shifts," he said. Utilities and grading have reached the 75 percent to 80 percent completion levels, but side roads and frontage roads remain.

Scheduled completion is in December 2006.

I-40, Shelby County, Memphis. Ray Bell Construction of Brentwood, Tenn., has this $52.9 million contract to rebuild the I-40 and I-240 interchange in midtown Memphis.

That includes wiping out six bridges that have never been used by traffic after plans to run I-40 through Memphis were dropped more than a decade ago.

"We've torn down every bridge down there," said Fred Clayton, project manager. That means leveling 16 bridges and replacing them with seven others on the 1.5-mi. project.

He expects to finish the project early.

"We had nine phases set up but have combined phases and will complete multiple phases together," he said.

Scheduled completion is in December 2006.

Carriage Crossing Shopping Center, Collierville. This $35 million Carriage Crossing Shopping Center, a joint venture by Cousins Properties of Atlanta and Jim Wilson Associates of Montgomery, Ala., is a "lifestyle" center with "village-like buildings," said Michael Davis, construction manager at Cousins Properties.

The center's 800,000 sq. ft. of retail space is on one level, although the anchor department stores - Dillard's, Parisian and one other - will be in two levels.

Scheduled completion is in mid-October 2005.

MTD Products Inc. distribution center (additions), Martin. Cox Construction of Jackson, Tenn., is the contractor for this $37.5 million, 310,000-sq.-ft. multi-phase project that includes expansions to the 50,000-sq.-ft. building MTD Products already occupies.

The lawn and garden power equipment manufacturer also has a 150,000-sq.-ft. distribution center.

The project includes constructing an overhead tunnel to move goods on conveyors between the existing plant and the new distribution center, which is going up across Industrial Park Drive.

Scheduled completion is in 2007.

Village at Germantown Continuing Care Facility, Germantown, Tenn. The Weitz Co., of Des Moines, Iowa, has this $36.5 million contract to build a housing community for seniors on a 32-acre site.

The 400,000-sq.-ft.facility will include 199 housing units - 171 apartments and 28 patio homes - as well as a fitness center and indoor swimming pool.

The project will be completed this summer.