Building Market

'Calm, cool' days predicted for south central construction

By Sandra Bearden

Like a string of calm, cool days, the economic climate for the south central region promises to be uneventful and more of the same for the remainder of 2005 and for 2006.

While the economy is beginning to rebound, such factors as overseas manufacturing competition and tightly stretched state budgets cast some clouds over building construction, several economists said.

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In Alabama, Ahmad Ijaz, economic analyst with the University of Alabama's Center for Business and Economic Research, predicted a general growth rate of 3.5 percent this year and 3.3 to 3.4 percent in 2006, adjusted for inflation.

"With the economy growing at a relatively healthy pace, I think we'll see an increase in commercial construction," Ijaz said. "Most of this will be in the metropolitan areas of the state. Nonresidential construction is pretty strong around Birmingham, Mobile, Huntsville and Montgomery.

"The automotive industry has been an engine for much of the state's commercial construction in recent years. But that's slowed recently except around Montgomery. A new Hyundai plant opened there recently."
Ijaz said that while Alabama has become a leading automotive manufacturing state, the role of manufacturing in the total economy has declined.

"About 15 percent of working Alabamians are now employed in manufacturing, compared to about 23 percent before the North American Free Trade Agreement was passed in 1993," he added. "Those percentages may not look like much, unless you think in terms of people and jobs. For Alabama, we're talking about the loss of 65,000 or 70,000 manufacturing jobs since 1993."

In Arkansas, the general economic outlook is what Dr. Jeffery Collins calls "tepid." Collins, director of the University of Arkansas' Center for Business and Economic Research, said that employment and income are growing modestly in most of the state, except for booming northwest Arkansas.

"In that area, we're seeing a great amount and variety of residential, retail, office, school, hotel and other development," Collins said. "Two lifestyle centers (mixed-use retail, office and residential developments) will open in Rogers next year, providing 2 million sq. ft. of new retail space. A number of national publications have given the area high marks for business climate and livability."

Along with the nation and the region, manufacturing is declining in Arkansas.

"We now have only about 201,000 manufacturing jobs in the whole state," Collins said. "To most people around here, that really hits home when you tell them that's fewer people than work in government jobs."

Dr. Marianne T. Hill, senior economist for Mississippi's Center for Policy Research and Planning, predicted the state will see a somewhat lower growth rate this year and next. She said growth will dip between 3.1 percent and 2.7 percent by the end of 2006.

"But the situation's definitely better than the previous three years," she added.
Hill said that construction employment grew by 1.3 percent for 2005 over the previous year, but much of those jobs were in residential construction.

"Around here, a really important factor in public/private sector construction is government buildings," she said. "Healthcare is growing rapidly, gaming is growing but beginning to stabilize and manufacturing is slowing. But there is still spin-off from a new Nissan plant in Canton."

Hill said that although manufacturing is down, it still accounts for about 15 percent of the economy. Traditionally an agricultural state, Mississippi had an increase in agricultural income during 2004, possibly because of a good crop year.

Tennessee's short-term economic outlook resembles that of other south central states.

"At a very broad level, I'm expecting economic conditions for the next couple of years to remain much as they were in 2004 and early 2005," said Dr. Matthew N. Murray, associate director of the University of Tennessee Center for Business and Economic Research. "Personal income will probably grow 5.5 or 5.6 percent annually. Overall job growth will be about 1.5 percent."

Murray expected construction activity to be stronger in commercial markets than in residential construction, except possibly in the Nashville area.

"Construction employment is improving in the metropolitan areas of the state," he said. "There's been especially strong growth in services - education, healthcare, leisure and hospitality, financial and other business and professional services."

Tennessee is losing jobs in such industries as apparel, textile and chemical manufacturing, but Murray said manufacturing of durable goods should increase.

"Transportation equipment is the state's strongest manufacturing sector," he added.

"But other products range from primary metals to computer components."

Following are a few of the most significant building projects across the region:

Embassy Suites Hotel, Huntsville, Ala. Embassy Suites may not be completed in time for the celebration of Huntsville's 200th birthday this summer, but it promises to help draw more conventions and conferences to the Rocket City.

The 300-room hotel will connect to the Werner Von Braun Convention Center in downtown Huntsville with a skywalk.

"Huntsville is a market we've studied since 1995," said Scott Tarwater, senior vice president for the owner, John Q. Hammons Hotels & Resorts of Springfield, Mo.

"Huntsville has an active military procurement and training facility, as well as many automotive, aeronautical and other high-tech firms. Its mayor and council are very pro-business."

Mike McDaniel, project manager with general contractor Flintco Inc. of Memphis, said workers ran into one early problem in building the $32.8 million, 10-story hotel.

"We had some early challenges in drilling concrete piers," he added. "Because of unsuitable rock and dirt, we had to dig out about 5 ft. of dirt and undercut the entire building. Then, as we drilled caisson holes for the piers, we ran into water that had to be pumped out continuously."

Work is now progressing smoothly. Flintco expected to complete construction on the 336,000-sq.-ft. hotel this summer in time for a fall opening.

The Mall at Turtle Creek, Jonesboro, Ark. Thanks to the efforts of Hoar Construction of Birmingham, Ala., and the U. S. Army Corps of Engineers, a river won't run through stores when Jonesboro's new Turtle Creek Mall opens next spring.

"We had to relocate Turtle Creek around the site," said Doug Williams, project manager. "We diverted it so that it makes a 'U' around the property. To make sure everything works, we put in several modular walls."

Williams said a wet winter and Mississippi Delta soil also hindered the contractor's efforts to get building pads ready. Steel started going up in May.

The $30 million, 335,000-sq.-ft. enclosed mall will feature brick facing and a pop-up glass clerestory, permitting light to flood the center of the building. In addition to the mall itself, Hoar is installing landscaping, irrigation facilities and parking areas for the mall and nearby stores being built under separate contracts.

The mall was designed by CMH Architects Inc. of Birmingham.
Viridian Tower, Nashville, Tenn. Building a $50 million, 31-story high-rise with only 6 in. of clearance on each side isn't an easy task.

That's the assignment facing R. J. Griffin workers as they build the Viridian, a 305-unit condominium in historic downtown Nashville. The stucco building will feature floor-to-ceiling windows, a grocery store on the first level and a 31st-floor pool and fitness center.

To complicate the closeness of two adjacent buildings, the building site was solid rock.

"We had to sculpt a shallow foundation from the rock," said Tom Peyton, senior project manager. "For our underground electrical vault, we had to do a mass excavation using a track drill."

Peyton and project manager Chris Champion worked with Vibratech, a firm that uses seismographs, tilt metering and videography to check drilling progress. That helped determine if there was any adverse impact on the neighbors - LNC Tower and the Cohen Building. Both were unscathed.

The project will be finished in September 2006 and was designed by Smallwood, Reynolds, Steward, Stewart & Associates of Atlanta, Ga.
First Tennessee Bank, Memphis, Tenn. Doing a complete makeover isn't simple, as any TV reality show fan knows.

"Starting with the top (25th) floor, we're gutting every floor to the beams and columns, removing all asbestos and other materials of that nature, and rebuilding that floor to Class A status," said Brett Grinder, administrative vice president for the contractor, Grinder, Taber & Grinder of Memphis.

Grinder said work on the $30 million renovation of the First Tennessee Bank Building in Memphis must be done without interfering with work schedules of bank employees and the major building tenant, the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz.

"To reduce disruption, we installed a construction elevator on the exterior of the building," Grinder said. "Workers and their equipment and materials can go in and out through the window openings by the elevator. Also, the downtown location meant there was no staging area around the building. The city agreed to close the alley next to the building, so we use the alley for material deliveries and rubbish disposal."

In addition to floor-by-floor renovation, the contractor is renovating the bank lobby and exterior plaza. A restoration company, Stuart Dean Inc. of New York, is completely cleaning and restoring the building's façade.

The project will be completed in late 2007.

Southaven Towne Center, Southaven, Miss. The fast-growing area just south of Memphis will soon have another shopping center, the Southaven Towne Center, near Interstate 55 and Goodman Road.

The 542,058-sq.-ft. open-air shopping center will include a JC Penney, Dillard's, Circuit City and numerous other specialty retailers, smaller shops and restaurants.

Most of the mall will open in October, while a two-level Dillard's will open with the second phase of the center next spring.

Doug Martin, vice president-construction operations for contractor EMJ Corp. of Chattanooga, Tenn., said that the major construction dilemma has been the flat, wet topography of the Mississippi Delta.

"One issue was relocating a stream that flowed through the property," he said. "To do that, we simply dug a new creek bed around the perimeter of the property, so now it's a meandering stream that doesn't go through the mall. Also, the soils around there are moisture-sensitive, so heavy rains presented a problem. Third, we were mitigating a wetlands area."

The EMJ contract is for about $30 million, but a Mississippi Development Authority report indicates the entire development cost for the shopping center is about $177 million.

The mall was designed by CMH Architects Inc. of Birmingham, Ala.

Useful Source:

For a comprehensive ranking of the four-state region's top construction projects, go to:
http://www.southcentral.construction.com/projects/TopProjects2005.pdf