Mississippi Report

Labor, material shortages short-circuit building boom

By Angelle Bergeron

The post-Katrina building boom predicted by many hasn't arrived yet in Mississippi.

The sluggish recovery is likely due to the ongoing difficulty in finding a sufficient workforce, the slow pace of resolving insurance settlements and rebuilding standards, and a shortage of housing.

"Especially on the coastal area, manpower is still a problem," said Buddy Edens, president of Mississippi ABC. "If you're in Mississippi and not working, you've got a serious problem. We still have a significant number of construction jobs open that we are unable to fill because there aren't enough people."

In June, Marianne Hill, senior economist at the state's Institutions of Higher Learning, estimated that hundreds of construction jobs would be added monthly, to keep pace with reconstruction.

That turned out to be an optimistic prediction.

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"I expect unemployment will go down in construction and gaming-related employment will go up, but that may not happen until the fall," she said.

At a May housing workshop for builders hosted by Mississippi Gov. Haley Barbour at the Imperial Palace in Biloxi, 59 percent of the contractors currently doing business in Mississippi cited access to labor as the single largest impediment to progress. Cost and availability of building materials placed a distant second at 34 percent and workforce housing was third at 16 percent.

Local industry experts have said that the components of labor, material costs, housing and financing are intertwined in the problem and everyone seems to agree that the current pace is not what they had hoped it would be a year after the most devastating hurricane in American history.

"The perception of the rest of the country is that it's fixed here, but that's not true," said Todd Bruce, associate director of AGC Mississippi. "The big construction boom really hasn't started on the coast, but a lot of that is due to labor shortages, which has to do with housing shortage."

A lot of people were anticipating a huge spike in construction, Bruce said.

"There is a lot more work coming online, but nothing is happening as fast as we've expected," he added. "People haven't even resolved insurance issues. Some residents haven't decided whether they are going to build. A lot of the state government work hasn't started yet."

The Mississippi attorney general has filed a class action lawsuit against the insurance industry, but there's no telling whether that will actually accelerate or stall the process, Edens said.

Projects that are moving forward are being financed by emergency federal funds or investors with deep pockets.

"We're seeing a lot of new condos and the casinos are going gangbusters," Edens said. "But anything that was standing prior to the hurricane and covered by insurance is still in a standstill mode because of insurance issues."

Work is progressing at a breakneck pace on the two U.S. Highway 90 bridge projects, both of which are being funded 100 percent by emergency federal dollars.

The $266.8 million contract to construct a new U.S. 90 bridge over Bay St. Louis was awarded Jan. 24 to the joint-venture partnership of Granite Construction Inc. and Archer Western Contractors Ltd. (GAW).

The booms of 15 cranes scrape the sky between Pass Christian and Bay St. Louis as the contractor works to open the first two lanes of traffic by May.

"The time frame is definitely a challenge," said Allen Nelson, project manager. "We've got $100,000-a-day liquidated damages if we're late for the May 16 milestone."

To date, the contractor is on schedule.

"We are working on driving pilings and placing footings from the east and we are now in the middle," Nelson said. "We are driving test piles from the west side and will work from that end toward the middle."

Even though the schedule is tight, Nelson cited the limited availability of a qualified workforce as the single greatest challenge, even though GAW provided housing.

"We bought 30 mobile homes and provide all the utilities for RVs," he added.

The project is scheduled for completion by November 2007, with no bonus but $50,000-per-day liquidated damages for the second half.

GC (Gulf Coast) Constructors won the larger, $338 million contract for the U.S. 90 Biloxi Bay Bridge, which trails the other bridge by about six months, said Kelly Castleberry, MDOT's project manager.

GC is a consortium of Massman Construction Co., Traylor Bros. Inc. and Kiewit Southern. Their first milestone is to open two lanes of traffic by November 2007. Full completion of the project is scheduled for spring 2008.

"We have removed the first eight spans of the old bridge on the Biloxi side and the first eight spans on the Ocean Springs side," Castleberry said. "The contractor has driven the first indicator test piles and is currently performing dredging to provide a work channel between the new and old bridge."

The project has a $100,000 per day penalty for late delivery and an incentive bonus of $5 million for early or on-time completion, he added.

"It takes a very aggressive schedule to build a bridge from scratch," Castleberry said.

Although the two huge projects didn't suck financial resources from MDOT's budget, a work stoppage in the wake of Hurricane Katrina and the insufficient labor force make keeping pace with routine maintenance a challenge, said Richard Sheffield, MDOT's assistant chief engineer of operations.

"It has nothing to do with being able to pay labor," Sheffield said. "You just can't find anybody." Still, the department is managing to proceed with overlay projects.

"We've got a pretty aggressive superintendent and he wants to make sure we get it done," Sheffield added.

The contractor is likely to come in a bit behind schedule on the four-laning, which is scheduled for completion later this year. Labor was once again cited as the culprit.

"It seemed like it got worse after the hurricane, but people just don't want to work," said Byron Burge with Tanner Construction Co. of Ellisville, Miss. "You can't find laborers. Steel laborers are probably in demand more than anything. It's too hot, too many hours and too hard work."

The cost of gasoline is also a contributing factor on projects in remote locations, Burge said.

"Gasoline has gone up to $3 a gallon and that's a problem for folks getting there," he added. "If a man is making $8 an hour and having to travel 60 mi. a day to work, it's just not worth it."

Local companies with a stable workforce, such as Roy Anderson Corp. of Gulfport, are able to satisfy the rigorous schedules of casino reconstruction on the coast. RAC holds the $75 million contract to rebuild the damaged Hard Rock Casino, which was scheduled to open midnight Aug. 28, 2005. Then Katrina got in the way.

"We are now building a new casino structure and repairing the damaged parking garage and low-rise structure," said Chuck Dudenhefer, project manager. The casino barge rammed into the back of the low-rise building, which is structural steel and poured-in-place concrete.

"This building is designed for 140-mph winds, but not for a 3,000-ton barge to bump into it," Dudenhefer said. "As the storm surge came in, it broke lose and impacted the back of the building."

The storm surge and wave action also destroyed the first elevated level of the parking garage by uplifting concrete slabs.

"We are tearing out the existing slab that is designed to resist the upload," Dudenhefer said. RAC started driving precast concrete piles on July 1, within the old footprint of where the barge was moored, to anchor the new casino. The contractor is currently working on the garage structure, performing interior renovations for the hotel and low rise entertainment facility and re-installing new steel framing in the low rise to replace the damaged area. When the original casino was built, it was the first structure on the property. The contractor is forced to performing pile driving and steel erection from the water to work around the existing structures. The opening is scheduled for July.

SeverCorr project not impacted by Katrina worker shortage. While the coastal portion of the state was still reeling from Hurricane Katrina, contractors for SeverCorr were proceeding with construction of an $880 million steel mill facility in Columbus, Miss.

To date, contractors have moved about 3.3 million cu. yds. of the estimated 4 million scheduled to be moved to reshape farmland into the massive facility. "We have placed 123,711 cu. yds. of concrete against an estimated plan of 130,000 cu. yds.," said Mark Bula, with SeverCorr communications.