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Public works builders eye benefits from state funding

Rochester Business Journal
April 20, 2012

Public works builders stand to benefit from expedited funding announced earlier this month by Gov. Andrew Cuomo for road, bridge and park projects.
 
In particular, the state support will ease pressure on transportation contractors that had taken on smaller projects and cast a wider net for work during a three-year slowdown.
 
"It's certainly very good news on a lot of different levels," says Michael Elmendorf II, president and CEO of Associated General Contractors of New York State LLC, which is based in Albany.
 
The initiative also bodes well for the state as a whole, given that "our transportation infrastructure, our building infrastructure, our environmental infrastructure have been neglected for a long time," he says.
 
When assessing how public works construction has fared here in recent years, construction experts say the devil is in the details.
 
Preliminary findings from the latest research for the Builders Exchange of Rochester show that the public building market, also known as the public works vertical market, has remained stable here despite the economic downturn.
 
"In Rochester, total dollar volume of public building increased in 2011, but the number of projects declined," says Builders Exchange president Aaron Hilger, whose organization now is analyzing the market data. Buffalo and Albany were stronger markets in 2010 and 2011 due to high levels of state spending, he adds.
 
Opinions differ on how the heavy and highway side of public works construction has fared. Hilger says it has been reasonably strong over the past three years, though the Rochester area has received less funding than other parts of upstate.
 
Chris Bollin, corporate secretary and general manager of Crane-Hogan Structural Systems Inc. in Spencerport, says the flow of large-scale bridge and heavy and highway projects slowed here in the past two or three years.
 
"It's primarily (due to) funding," Bollin says.
 
When faced with a lower volume of projects, contractors of all stripes resort to rooting out inefficiency, Hilger says.
 
"They start looking at their overhead very carefully and paying attention to who they're paying, how much they're paying them and making sure they're able to tie each position in the office to sales and growth and effective construction management or project management," Hilger says.
 
He adds: "The other thing that our contractors have really done much more so than contractors from the surrounding cities like Buffalo, Syracuse or even Albany is they have expanded into other markets. There's a very strong Rochester contractor presence (in those cities), and you don't see the reverse (here)."
 
To offset the slowdown, Crane-Hogan bid on smaller jobs and expanded its geographic reach, Bollin says. In the last six months, the company bid jobs in Pennsylvania and near Watertown, Jefferson County, though most of the firm's work still is in Western and Central New York.
 
On the plus side, the city of Rochester and Monroe County have had more work opportunities for heavy and highway construction this year.
 
"Some of that's already been bid," Bollin says. "There's more to come."
 
One ongoing project for Crane-Hogan is the $11 million rehabilitation of the Irondequoit Bay Bridge for the state Department of Transportation. The project, which began in 2011 and will wrap up later this year, involves concrete repairs on the substructure, joint replacement on the deck and repainting.
 
Another ongoing project for the firm involves linking the RS&E Hikeway/Bikeway Trail with the Erie Canalway Trail at Cobb's Lane in Perinton via a pedestrian and bicycle bridge. The town of Perinton is investing $1.7 million in the structure, which began construction in March, and has received a $1.5 million grant toward the total project cost of $3.2 million.
 
Poised to fuel infrastructure improvements statewide is the recently announced transportation component of the NY Works program, which includes $247 million in state funds and $917 million in federal money for repairing and replacing deficient roads and bridges. The nearly $1.2 billion program is separate from $1.6 billion already allocated by the state this year to the core transportation capital program for roads and bridges.
 
Across the state, the expedited projects will include $212 million for deck and structural replacement or rehabilitation on roughly 115 bridges; $250 million for more than 2,000 miles of low-cost pavement preservation and treatments; and $687 million for other transportation projects.
 
Elmendorf says contractors statewide welcome the program.
 
"They're energized," he says. "They're eager to get to work."
 
Adds Elmendorf: "And the timeline for those projects is very accelerated, so the governor and the state want this work done very, very quickly."
 
Also working in builders' favor is the state's recent enactment of design-build legislation. NY Works will leverage the project delivery method, which links designers and builders under one contract.
 
"That's a big change ... for both the industry and for the state," Elmendorf says.
 
Though largely untested on public works endeavors in New York, design-build appears to be capable of pushing projects to completion faster and perhaps also less expensively, he adds.
 
Bollin sees the new access to design-build in New York as revolutionary. Prior to the law's passage, the state largely had limited its use to urgent infrastructure repairs in the aftermath of Hurricane Irene, which hammered the Capital Region last August.
 
Some $32 million from NY Works will repair 227 miles of roads and 10 bridges in the Rochester area. The projects range in scope from deck replacements on bridges to multiphase roadway improvements.
 
NY Works has designated $5.5 million for an upgraded I-390 interchange at Kendrick Road. The multiphase project aims to ease traffic flow from the University of Rochester, Rochester Institute of Technology and Monroe Community College, create a new entrance ramp that will facilitate expansion at the UR Medical Center and make safety improvements.
 
The funding for the interchange follows the governor's pledge in February to provide $26 million for the $100 million project.
 
NY Works' oversight may pave the way for speedier funding of other projects as large as I-390 at Kendrick Road, Hilger says. Funding small pieces of projects "is incredibly inefficient from a design and construction standpoint and ends up costing more," he adds.
 
Other local projects receiving NY Works support include $2.9 million for repair of the Route 15 bridge over I-390 in Rush and $2 million for the I-490 bridge over Route 204 in Gates.
 
NY Works also has allocated funds for state park projects. Those include $2.4 million for revamping Hamlin Beach State Park's electrical system, $3.4 million to connect Letchworth State Park to the municipal drinking water system in Castile, Wyoming County, and $650,000 to rebuild the public boat launch at Seneca Lake State Park in Geneva.
 
While the wheels are turning for transportation funding on the state level, federal transportation legislation remains mired in politics.
 
"We haven't had a federal transportation bill in three years," Hilger says.
 
A continuing resolution passed in Congress earlier this month "only funds current projects for three months, so if you're in the middle of that project, and you've got a year left on it, you have to wonder what happens in month four," Hilger says.
 
Still, the overall outlook for public works construction here appears reasonably good, despite the uncertainty about what Congress will do.
 
"I think we're into a stable market and perhaps a slightly growing market, particularly when you consider that the private side of the market is stronger now than it was in the last five years," Hilger says.
 
Sheila Livadas is a Rochester-area freelance writer.
4/20/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email
service@rbj.net.


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