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Sphere of Influence

Work continues on an intriguing and highly visible project to put a fresh, more watertight face on the sphere at the Basketball Hall of Fame. The project is a study in efficient teamwork and bringing intricate work to a polished finish — quite literally.

While the Campanile and the larger Court Square complex are perhaps the most recognizable landmarks in Springfield, the large sphere that encompasses the museum at the Basketball Hall of Fame has certainly joined that list.

And right now, that sphere has taken on the look of a giant jigsaw puzzle — with some pieces in place and many still missing — which, in many respects, is exactly what it is.

Indeed, the Hall of Fame is in the midst of a $4 million project to repair the outside of the dome, easily the most visible component of a larger project will modernize the Hall and make it far more user-friendly.

The dome work, which began in March, has become somewhat of a spectator sport because of the Hall’s high degree of visibility, especially from I-91 and even the MGM Springfield parking garage. What people can see is dramatic change between what would be considered the old and the new, even though the 900 panels that make up the sphere are not actually being replaced.

What people can’t see, though, is how intricate and challenging this reconstruction project is, and the high level of choreography involved as crews attempt to make a museum façade comprised of nearly 1,000 panels look like one very shiny globe.

Paul Dowd, president of Bloomfield, Conn.-based Managed Air Systems LLC, which is leading the initiative, explained that “what makes it unique is there are not many spherical buildings out there. This replication of a basketball is a unique structure in and of itself.”

“It didn’t give us the opportunity to really reflect all the content that’s out there, whether it was a long-time-ago hall of famer or an honoree just enshrined last year; we weren’t able to really bring them alive. The objective in our new Hall of Honor will be to provide as much information as we possibly can on all the hall of famers, no matter what era they came in, and have it be much more engaging.”

Elaborating, he said that, again, like a jigsaw puzzle, no two pieces of this dome are exactly the same, despite how things look to the naked eye and even the photographs on these pages. This means each panel must be marked when it is taken down in order to ensure that it is put in the same place when it is returned.

After they’re removed and marked, 10 pieces at a time are shipped to Managed Air Systems where they are sanded and painted — a process that takes several hours per panel.

Each panel is unique and must be marked before being taken off, repaired, and put in the exact same spot it came from.

Although his firm specializes in this kind of work — Managed Air applies protective or decorative coating to anything that needs it, from cars to planes to furniture — the Hall project is somewhat different in that requires a focus on timeliness and ensuring an ultra-high level of consistency across 900 individual panels weighing 110 pounds each.

“One of the big concerns going into this was having a coordinated effort from the people taking the panels off to the people doing the rubber membrane repair on the inside to us getting the panels repaired and back to them,” said Dowd. “It was a very large, coordinated effort to make this all go smoothly.”

For this issue and its focus on construction, BusinessWest takes an in-depth, up-close look at the Hall project and how it is a shining example, figuratively but also quite literally, of effective teamwork in construction — and reconstruction.

Round Numbers

By now, a good number of people across the region have seen John Doleva, president and CEO of the Hall of Fame, hold up and talk about what he affectionately refers to as a ‘spaceship.’

That’s his pet term for the individual lights that were affixed to the museum dome as it was constructed nearly 20 years ago — the lights that took on different colors for various occasions.

He calls them ‘spaceships’ because, well, they take on the 1950s-ish, sci-fi shape of a UFO.

There are — or were — 900 of these lights — one for each panel — and roughly half of them leaked, said Doleva, adding that the damage caused by these leaks inspired the $4 million reconstruction project which will restore the panels to the original luster and replace the spaceships with LED lighting.

The project commenced in the spring, and, as both Dowd and Doleva noted, it’s been an intriguing project that requires a high level of coordination among Managed Air Systems and a host of local contractors.

John Doleva says the $4 million dome reconstruction should be finished by the end of September.

That list includes Western Builders of Granby, Chandler Architectural Products Inc. of Springfield, Kent Brothers Excavating of Southampton, Superior Caulking & Waterproofing of Palmer, Collins Electric of Chicopee, Healey & Associates of Belchertown, and project management by Colebrook Realty Services of Springfield and Holyoke.

“That was a key element as we chose vendors,” said Doleva. “We wanted them to be qualified, but there are plenty of qualified vendors in our area, and we wanted to make sure that we were employing people from our region.”

Managed Air Systems spends about 10 hours, on average, refurbishing each of the panels. Some have been damaged over the years and need additional repairs, meaning they need to be kept overnight. Once the repair and reconditioning work is done, the panels are painted to give the dome a fresh, new look.

Doleva said construction is moving quickly, so when these panels aren’t quite ready to be placed back in their positions, they are stored in the garage located under the Hall of Fame.

Dowd said the board at Hoop Hall chose a high-gloss finish for the panels, which will provide long-term durability against UV rays and weather.

“It almost looks wet when you look at the panel, very similar to a freshly painted car part,” he explained. “That glossy finish helps protect it more long-term from the exposure to the sun and the elements.”

But there’s more to it than slapping some paint on. There are three different materials that go on the panels — a sealer that allows the paint to go on, a grey metallic coating, and a clear coat that encapsulates and seals the panel. Dowd says each panel is painted in a downdraft-heated paint booth that he compares to a giant convection oven. Once the panels are painted in the booth, the press of a button cures the panels at up to 200 degrees.

Perhaps the most intricate part of this process is making sure each panel looks the same as the rest, even though they are all slightly different sizes.

“From our end, the biggest challenge we have is to have the repeatability in the quality of finish,” Dowd said, adding that the company has had to redo some panels that weren’t quite right. “You want this globe, when it’s all done, if someone was to walk around it, to have the same luster and shine and quality on it to look consistent as if it was just one giant globe.”

Once the dome is finished, LED projection lighting will be installed to light the front of the building.

“I think it will attract a lot of attention,” Dowd said. “You can’t miss it when you drive on 91 — it should get some ‘wow’ factor.”

The Bigger Picture

That phrase ‘wow factor’ applies to the many other components of the Hall renovation project as well, said Doleva.

These include the new Hall of Honor, which recently opened. It allows visitors to view any hall of famer in a brand-new, digital manner.

“It didn’t give us the opportunity to really reflect all the content that’s out there, whether it was a long-time-ago hall of famer or an honoree just enshrined last year; we weren’t able to really bring them alive,” said Doleva in reference to the old display. “The objective in our new Hall of Honor will be to provide as much information as we possibly can on all the hall of famers, no matter what era they came in, and have it be much more engaging.”

This includes the next phase of the indoor construction: a complete remodeling of the top floor of the museum. Doleva says this exhibit, sponsored by the NBA Players Assoc., will feature 16 key moments in basketball displayed in graphics on the ceiling.

“We’re going to take advantage of the verticality of that space by having a big sailboat sail of graphics and then an exhibit in front of it,” he said, adding that, while they are taking a more digital approach, they are not totally abandoning the original values of the museum, which includes physical artifacts. “What we haven’t lost sight of is what makes a sports museum different than going on your telephone and looking up sports history.”

Meanwhile, the outside of this particular sports museum will have a different look and feel as well.

The refurbished sphere will reflect a new era at the Hall — in all kinds of ways.

Kayla Ebner can be reached at [email protected]

Construction

A Surge of Confidence

By Kathleen Prause and J.D. Harrison

Results from the USG Corp. and U.S. Chamber of Commerce Commercial Construction Index from the second quarter of 2019 indicate that more than half of contractors are highly confident that the market will provide sufficient new business opportunities in the next 12 months.

Overall, the Q2 composite score of 74 — up two points from 72 in the first quarter — shows a vibrant commercial construction sector, although contractors’ revenue expectations slightly decreased.

“The construction industry is a reflection of our country’s broader economic health, so contractor optimism is a great sign for everyone,” said Chris Griffin, president and CEO of USG Corp. “Even so, it is important that we think about solutions to our big challenges, like building a healthy pipeline of new workers and incorporating technology to make our job sites safer and more efficient.”

More than half of contractors (52%) are highly confident about the ability of the market to provide new business opportunities in the next 12 months, an 11% increase over last quarter’s findings. The backlog ratio — comparing contractors’ average current backlog of projects to the ideal amount of work companies would like to take on — reached 82, the highest since the Index launched in 2017. Hiring expectations also recovered between Q1 and Q2 2019, with most contractors (60%) anticipating employing more people in the next six months.

Furthermore, 60% of contractors report confidence that revenue will remain stable. They also expect access to capital to continue, with 66% believing access to financing will get easier or remain the same over the next six months.

In a notable shift from the last three quarters, the number of contractors who report “high concern” about the availability of skilled labor declined to 46% (down from 54% in the first quarter. While confidence in having access to skilled labor shows some improvement, 85% of contractors still express high concerns about the cost of that skilled labor.

For the third time since the launch of the Index in 2017, this quarter’s survey explored sustainability practices in construction. The findings show that the average share of green projects for contractors is declining. This finding is interesting, since other industry studies reveal no slowdown in the number of green construction projects. One explanation may be that the majority of green work is becoming more concentrated among a smaller group of specialized companies. The study shows that green projects are done more frequently by large contractors.

The Index also reports a mismatch between green standards and green incentives, with most contractors (84%) saying they must meet green standards on at least some projects, but fewer than half (47%) take advantage of green incentives. Finally, general contractors report that the most important green attributes swaying their purchasing decisions are energy efficiency (80%), materials without harmful chemicals (65%), and water efficiency (64%).

The Index comprises three leading indicators to gauge confidence in the commercial construction industry, generating a composite index on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis. The second-quarter results from the three key drivers were:

• Backlog: contractors’ ratio of actual to ideal backlog rose five points (to 82 from 77), hitting its highest point since the Index launched in 2017;

• New business confidence: the level of overall confidence rose three points (to 74 from 71), suggesting a return of optimism about the market’s ability to provide new business opportunities in the next 12 months; and

• Revenue: the revenue score dropped one point (to 66 from 67), although most contractors (60%) expect revenue to remain the same.

Kathleen Prause is director of Corporate Communications for USG Corp., a manufacturer of building products and innovative solutions. J.D. Harrison is executive director for Communications & Strategy at the U.S. Chamber of Commerce.

Construction

People Pipeline

Eighty percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to a national, industry-wide survey released last week by Autodesk and Associated General Contractors of America (AGC). Association officials said the industry was taking a range of steps to address the situation but called on federal officials to assist those industry efforts.

“Workforce shortages remain one of the single most significant threats to the construction industry,” said Stephen Sandherr, AGC’s CEO. “However, construction labor shortages are a challenge that can be fixed, and this association will continue to do everything in its power to make sure that happens.”

Of the nearly 2,000 survey respondents, 80% said they are having difficulty filling hourly craft positions, Sandherr noted. All regions of the country are experiencing similarly severe craft-worker shortages, with 83% of contractors in the West and South reporting a hard time filling hourly craft positions, slightly higher to the 81% rate in the Midwest and 75% rate in the Northeast.

Seventy-three percent of firms report it will continue to be difficult, or get even harder, to find hourly craft workers over the next 12 months. One reason for their worries is that contractors are skeptical of the quality of the pipeline for recruiting and preparing new craft personnel. Forty-five percent say the local pipeline for preparing well-trained and skilled workers is poor. And 26% say the pipeline for finding workers who can pass a drug test is poor.

Labor shortages are prompting many firms to boost pay and compensation. Two-thirds of firms report they have increased base pay rates for craft workers. And 29% report they are providing incentives and bonuses to attract craft workers. Firms are also taking a greater role in developing their own workforce. Forty-six percent say they have launched or expanded in-house training programs, and half report getting involved in career-building programs.

“Construction workforce shortages are prompting many firms to innovate their way to greater productivity,” said Allison Scott, head of Construction Integrated Marketing at Autodesk. “As the cost of labor continues to increase and firms look to become even more efficient, technology can enable better collaboration and ultimately lead to more predictable outcomes. There is also opportunity in untapped pools of talent such as tradeswomen, veterans, and young people looking for an alternative to the traditional four-year university.”

Scott noted that 29% of firms report they are investing in technology to supplement worker duties. One-quarter of firms report they are using cutting-edge solutions, including drones, robots and 3-D printers. Meanwhile, 23% of firms report they are taking steps to improve job-site performance by relying on lean construction techniques, using tools like building information modeling and doing more off-site prefabrication.

Association officials called on the federal government to boost funding for career and technical education. They also called on federal leaders to allow more immigrants to enter the country to work in construction, let construction students at community and career colleges qualify for federal Pell Grants, and make it easier for firms to establish apprenticeship and other training programs.

Construction

Shining Example

Sean Callahan and James Jaron didn’t expect the level of competition — make that outright opposition — they faced when they decided to enter the field of lighting distribution, which is dominated by a handful of huge, national players. But through patience, persistence, and adherence to a customer-first philosophy, they broke through, and gradually expanded their locally owned firm into a major regional player. And they’re not done lighting the way to further growth.

Opening a business — and keeping it going — isn’t an easy proposition. Still, Sean Callahan and James Jaron had no idea what obstacles lay before them when they decided to open Ion Lighting Distribution Inc. in 2016.

Jaron owned Zap Electric in Chicopee, and Callahan worked for Needham Electric Supply. “One day, we decided we needed to perfect one area of the distribution business, and that was the lighting,” Jaron said, noting that, in the large, corporate-owned stores, “the guy across the counter knows nothing about lighting, so he has to call somebody to call somebody to get some rep to talk to you” — and that adds layers of cost.

“So we established a distribution company from scratch, against all odds,” he said.

Those odds included a full-court press by those aforementioned large companies, he recalled. “They made a big effort to make sure we failed by cutting off our supply houses and manufacturers, telling them, ‘we’re multi-million-dollar companies; don’t sell to these guys, or we’re going to cut you off.”

Callahan remembers it well. “The day we started the company, I reached out to people I’d known for 15 or 18 years. All the manufacturers’ reps, literally 100%, across the board, all of them said ‘no.’ I was leaving a perfectly good job, I had customers ready to buy, and when I started reaching out to our manufacturers, it was ‘no,’ across the board — because our competition was trying to squeeze us out.”

He went so far as to e-mail the CEOs of those companies, saying, “‘I’ve been selling your products for 15 years.’ And they would look into it and say, ‘we’re not taking on new distribution at this time.’ It was very difficult to get started, but it’s nice to have people coming to us now saying, ‘hey, we screwed up. We didn’t think it was possible you guys would last. We want to do business.’”

Today, the Chicopee-based firm covers the state of Connecticut and Western and Central Mass., and extends into Rhode Island and New York City as well — and is looking to move into its fifth different facility in four years, all to accommodate Ion’s growth. How Callahan, the company’s president and CEO, and Jaron, principal and treasurer, managed that feat is a lesson in persistence.

Early on, Callahan said, “we flew to Hong Kong and China and met with manufacturers. Through that process, we found most major companies were buying overseas. So we got set up with container companies there and here and opened our business. As we got traction, more vendors started jumping on board because they saw we weren’t giving up. But it took a little while.”

Today, Ion purchases only in the U.S., he noted. “But it was tough getting started, and that was our only option at that point. It took a little more capital getting started than we would have liked, but eventually, we got our first vendor here — a small company we never would have thought about.”

Sean Callahan (left) and James Jaron

Sean Callahan (left) and James Jaron are looking for a larger headquarters — it would be their fifth in four years — to consolidate their warehouses and accommodate more growth.

Electricians are busy this summer installing 14,000 LED lights in the Du Bois Library building at UMass Amherst, one example of a large project for which Ion distributed products. But it deals with small businesses, too.

“Little by little,” Callahan said, we started picking up more and more work, and now we can sell top-of-the-line lighting on a big UMass project or commercial job, but we also have affordable lights for someone with a machine shop or small business who doesn’t want to pay top dollar when they can buy a fixture for $50.”

Green from Green

Ion is not an installer, Jaron emphasized; rather, it sells lighting to businesses, municipalities, and schools, as well as contractors, which is the ideal client.

Today, the company is a top-five distributor for Mass Save, a rebate program for using energy-efficient products; all the states Ion distributes in have similar initiatives. But the pitch isn’t just about cost savings.

“Think about the impact we have on the environment — it’s mind-boggling,” he told BusinessWest. “When we think about LEDs, we think about rebates and electric bills, but really, it’s an environmentally conscious thing to do.”

At the same time, the goal is to give customers the best solutions for the best price. “Our products are tested. If it doesn’t pass my scrutiny as an electrician, we don’t put it out,” he said, noting that Energy Star-rated products automatically imply that the fixture has a five-year warranty and has been through a rigorous quality-assessment process.

Jaron also noted that some of the large distributors won’t always explain the Mass Save rebate to customers and pocket the savings themselves.

“We put that savings in your pocket. We’re not doing anything hocus-pocus; we’re just being fair and giving customers what they need. We take care of our customers and talk to them like human beings,” he said. “Companies out there don’t want people to know. They’re gouging the end users. We said, ‘no. Make your margins, make money, but play fair, be a human being.’ You’ve got to do the right thing, and that’s what we’re doing, and that’s why our competition hates us. We’ve disrupted their little game. And our customers are very happy.”

A lot of people don’t understand the Mass Save incentives, Callahan said, so Ion makes a point of helping people maximize them. Jaron added that Ion has no commitment to any manufacturer’s rep, which makes it fairly unique in the upper tier of the industry — and allows for more cost savings.

“When the big supply houses have a commitment, they have to use their product. So when you come in buy a fixture, they’re obligated to use these certain brands for $120 or $130, where we have the same fixture, with the same manufacturer — apples to apples — and we can sell it to you for $80. Then add the Mass Save rebate, and it goes down to $40. Think about that for a second. No wonder they were terrified — because we’re not handcuffed to use certain brands.”

In many cases at corporate-owned distributors, Callahan said, the end user saw the inflated price and often decided not to buy because they didn’t have all the facts and options, and that was frustrating.

“But we found all these little offshoot manufacturers’ reps, all these other companies that we can work with, and can offer good, solid products that I would put up against any mainline manufacturers, and we were able to have stuff people could afford.”

Ion has a presence throughout Southern New England and New York City

Ion has a presence throughout Southern New England and New York City, and a forthcoming e-commerce website aims to expand sales nationally.

Take auto garages, for instance, which use big, 400-watt fixtures that stay on for long hours. Many shop owners have seen the long-term savings of LED lighting — typically knocking off two-thirds to three-quarters of the old cost — and were willing to make the shift. But Mass Save also, in many cases, brought the initial cost of the new fixtures down to nearly nothing.

“And the maintenance is almost none; you can go 10 to 15 years without changing a bulb,” Jaron said. “With the price, the maintenance, and the environment, it’s just a win-win-win.”

Seeing the Light

When Callahan and Jaron went into electrical distribution, they decided early on it would be in everyone’s benefit — theirs and customers’ — to focus on lighting. “That was our niche, that’s what I had a passion for, and it’s what I gravitated toward throughout my career,” Callahan said. “We decided we could do lighting better than anyone else. So that’s all we do.”

It’s a model that has worked. Counting outside salespeople, Ion’s team numbers about 15, and sales have grown significantly every year. After opening in an office above Main Street in Northampton, the firm has relocated three times in the mill district of downtown Chicopee, and is looking to expand again, in order to consolidate all its operations, including its additional warehouses currently located in Palmer and Springfield.

Callahan isn’t worried demand for LED lighting will dry up anytime soon, with so many businesses and municipalities still in need of a changeover. “You can drive down any street anywhere, and you’ll find opportunities.”

Meanwhile, he noted, Ion is getting ready to launch an e-commerce website. “We’re excited to bring it to a national level and start selling to everyone in that way as well.”

He and Jaron are gratified by stories like a big job they supplied lights for in Worcester. They later received letters from the thankful customer, noting that electricity costs had dropped from almost $120,000 a month to around $68,000 — with the savings essentially paying for the project cost in year one.

“Three years ago, it was tough. We’re one of the only privately owned companies like this, because every other supply company is owned by a multi-million-dollar corporation somewhere,” Jaron said. “Now, these reps that didn’t want to talk to us, they’re coming through the doors, apologizing.”

Joseph Bednar can be reached at [email protected]

Construction

Surveying the Landscape

The National Assoc. of Landscape Professionals (NALP) recently released its annual list of the top 2019 landscape trends.

Drawing upon the expertise of the industry’s 1 million landscape, lawn-care, irrigation, and tree-care professionals, NALP annually predicts trends that will influence the design and maintenance of backyards across America in the year ahead. NALP develops its trends reports based on a survey of its members. It also draws from the expertise of landscape professionals from across the U.S. who are at the forefront of outdoor trends.

“Homeowners yearn for beautiful outdoor spaces without the hassle of upkeep. With the rise of multi-functional landscape design and automated processes, consumers can spend more time enjoying their landscapes than ever before,” said Missy Henriksen, NALP’s vice president of Public Affairs. “This year’s trends reflect current lifestyle preferences as well as innovations happening in the industry that are transforming landscapes across the country.”

NALP listed the following five trends influencing outdoor spaces in 2019.

Two-in-one Landscape Design

Functional elements are becoming a necessity in today’s landscapes. Consumers desire stunning outdoor features that have been cleverly designed to serve a dual tactical purpose. An edible vertical garden on a trellis that acts as a privacy fence, a retaining wall that includes built-in seating for entertaining, and colorful garden beds that divide properties all combine function and style.

Automated Lawn and Landscape Maintenance

The latest technology and equipment allow tasks to be more streamlined and environmentally efficient than ever before. Robotic lawnmowers continue to rise in popularity among both homeowners and landscape professionals. Also, programmable irrigation systems and advanced lighting and electrical systems help outdoor spaces become extensions of today’s smart homes. Homeowners relish knowing these technological advancements give them more time to relax and enjoy their outdoor spaces.

Pergolas

A staple of landscape design for years, pergolas constructed of wood or composite materials are now becoming more sophisticated. They can now come with major upgrades, including roll-down windows, space heaters, lighting, and sound systems. When paired with a luxury kitchen, seating area, or fire feature, pergolas can become the iconic structure for outdoor sanctuaries.

Pretty in Pink

Pops of coral and blush are anticipated to add a more feminine touch to landscapes this year. With ‘living coral’ named Color of the Year by Pantone, a leading provider of color systems and an influencer on interior and exterior design, landscape professionals predict this rich shade of pink could bring fresh blooms of roses, petunias, zinnias, and hibiscus to flower beds. Experts also anticipate light blush tones to become the ‘new neutral’ and another option for hardscapes and stone selections.

Mesmerizing Metals

Whether homeowners want a bold statement or whimsical touch, incorporating metals can bring new dimensions to landscape design. Used for decorative art, water features, or furniture and accessories, creative uses of metals, including steel and iron, can make for lovely accents or entire focal points.

Architecture Construction

Designs on Growth

As one local architect noted, we’re far enough away from the last recession to start worrying about the next one — and recessions tend to hit this sector particularly hard. Still, despite mixed signals in the long-term economic picture nationally, work remains steady locally, with municipalities, colleges, and businesses of all kinds continuing to invest in capital projects. Even if storm clouds do appear down the road, the 2019 outlook in architecture seems bright.

Curtis Edgin put it in simple terms when asked how 2019 is shaping up in the architecture sector.

“We’re busy; I can’t complain,” he told BusinessWest. Those five words sum up a strong outlook in an industry that tends to be a leading indicator for the economy as a whole — when things slow down, construction, finance, and other areas tend to follow — and is currently trending up, or at least holding steady.

“We’re far from the last recession — maybe far enough to worry about the next one,” said Edgin, a principal with Caolo & Bieniek Associates (CBA) in Chicopee. “But I don’t see that coming yet, looking at our workload.”

The American Institute of Architects (AIA) reports a similar outlook, with architecture firm billings nationally strengthening to a level not seen in the previous 12 months. Indicators of work in the pipeline, including inquiries into new projects and the value of new design contracts, also improved in January.

“The government shutdown affected architecture firms but doesn’t appear to have created a slowdown in the profession,” AIA Chief Economist Kermit Baker noted. “While AIA did hear from a few firms that were experiencing significant cash-flow issues due to the shutdown, the data suggests that the majority of firms had no long-term impact.”

Broken down by region, the Northeast is performing better than the West, but slightly trailing the South (which continues to rebuild from a rough 2018 hurricane season) and the Midwest. Nationally, billings softened slightly in February from the January pace, but remain strong in the big-picture sense, Baker said. “Overall, business conditions at architecture firms across the country have remained generally healthy.”

Curtis Edgin says specializing in a range of diverse niches is a plus for any firm

Curtis Edgin says specializing in a range of diverse niches is a plus for any firm, serving as a buffer against a downturn in any one area.

Jonathan Salvon, a principal with Kuhn Riddle Architects in Amherst, reports strong business as well, especially in the education realm, traditionally a strength for the firm, with projects for UMass and a historic-renovation conversion project for Elms College.

“Then there’s a mix of multi-family housing and commercial projects,” he told BusinessWest. “We’ve got a new office building for Way Finders going up on the old Peter Pan site in Springfield, which is our biggest commercial project at the moment. And there’s a 36-unit, multi-family housing project going up on University Drive in Amherst.”

Caolo & Bieniek, known for its wide range of public projects, from schools to fire and police stations, has expanded its base of private projects since merging with Reinhardt Associates in 2017.

“It’s been kind of a good synergy. We’ve blended our strengths and their strengths,” Edgin said, noting that one example is the recently completed Baystate Health & Wellness Center on the Longmeadow-East Longmeadow line, as Reinhardt has a solid history in medical office buildings.

“E-commerce has been growing at about three times the rate of traditional brick-and-mortar sales. The slowdown in housing hasn’t helped, as new residential development often spurs new retail construction activity. Instead, larger shares of investment in these facilities is going to the renovation of existing buildings.”

Other recent CBA projects recently started or well underway include a senior center in West Boylston, a police station in Williamstown, a public-safety complex in Lenox, a renovation of Chicopee’s public-safety facility, a pre-K to grade-8 school in Easthampton, and some work with UMass Amherst, Westfield State University, and other colleges.

“There’s a good mix of private and public, and we seem to be doing a fair amount of work with human-services agencies,” Edgin added, noting that the firm just did a project for Guidewire in Chicopee, and Sunshine Village in the city has also been a consistent client. “We seem to have a bit going in that sector right now. We’re busy, and it’s a good mix all around.”

Strong Pace, but Red Flags

The AIA suggests that growth in architecture should continue at least through 2020, but a number of emerging red flags suggest a cautious outlook.

Spending on non-residential buildings nationally is projected to grow by 4.4% this year, paced by healthy gains in the industrial and institutional building sectors, it notes. For 2020, growth is projected to slow to 2.4%, with essentially no increase in spending on commercial facilities, but gains in the 3% range in the industrial and institutional categories.

“Still,” Baker said, “there is growing concern inside and outside of the industry that a broader economic downturn may be materializing over the next 12 to 24 months.”

Nationally, growth in gross domestic product is estimated to be close to 3% in 2019, while the job market continues to be healthy, with more than 2.6 million net new payroll jobs added in 2018, an improvement over 2017’s figure of just under 2.2 million. In fact, the national unemployment rate was below 4% for most of 2018. Consumer-sentiment levels remained strong, and the nation’s factories also were busy, with industrial output achieving its strongest growth in almost a decade.

Jonathan Salvon says one of his firm’s three ‘legs,’ residential work, has been impacted by a slowdown in single-family construction

Jonathan Salvon says one of his firm’s three ‘legs,’ residential work, has been impacted by a slowdown in single-family construction over the past decade, but a rising portfolio of multi-family projects has picked up the slack.

However, there are several signals that point to an emerging slowdown in the broader economy, and therefore in the construction sector, Baker noted. These include declines in leading economic indicators, weakness in some key sectors of the economy, and softness in the markets of major U.S. trading partners. “These signals may be temporary responses to negative short-term conditions, but historically they have preceded a more widespread downturn.”

Meanwhile, since dropping sharply during the Great Recession, housing starts have had a very slow recovery, the AIA notes, and Salvon can attest to that reality locally. But Kuhn Riddle has adjusted in other ways.

“We’ve always been a stool with three legs,” he said. “One-third is work for various colleges, charter schools, prep schools, secondary schools, and even some day cares — we run the whole gamut in education. The second third is residential work; in the past, before the 2009 recession, that was often single-family residences. That market has never really come back, at least for us. But we’ve been lucky to develop a new market in multi-family projects.”

The third leg is a variety of commercial projects, including office buildings, restaurants, and bank renovations, to name a few, Salvon said.

“Hopefully we all stay busy. But we do know it goes in cycles; we’ve been through plenty of slower times and a lot of boom times. But we’ve been very blessed. We’re pretty busy and hope to stay that way.”

Nationally, Baker sees design work on the commercial front as a bit of a mixed bag at the moment.

“Business investments often reflect what corporate leaders feel is the growth potential for their companies. Investment nationally in new plants and equipment saw healthy growth in 2017 and through the first half of 2018, but slowed significantly beginning in the third quarter of last year,” he noted. “Given the recent trends in business-confidence scores, investment is unlikely to accelerate anytime soon. Business confidence fell sharply through 2018, with the fourth quarter showing the lowest levels in six years.”

In the Bay State, the picture is equally muddy. The Business Confidence Index issued monthly by Associated Industries of Massachusetts (AIM) reported a gain in February after dropping in January to its lowest level in more than two years.

“Employers remain generally optimistic about a state economy that continues to run at full-employment levels and a U.S. economy that is projected to grow by 2.2% this year,” said Raymond Torto, Chair of AIM’s Board of Economic Advisors and a lecturer at the Harvard Graduate School of Design. “At the same time, the erosion of confidence among Massachusetts manufacturers during the past 12 months raises some concern about the long-term sustainability of the recovery.”

On a sector-by-sector basis, Baker reported, design work for retail facilities continues to suffer from the growth on online shopping.

“E-commerce has been growing at about three times the rate of traditional brick-and-mortar sales. The slowdown in housing hasn’t helped, as new residential development often spurs new retail construction activity,” he noted. “Instead, larger shares of investment in these facilities is going to the renovation of existing buildings.”

On the other hand, office projects represent the strongest commercial sector in construction right now, with 5% growth projected for this year and 1% in 2020. “This sector has benefited from strong job growth and the apparent bottoming out of the years-long decline in office space per employee,” Baker said. “Much of the increase has come from the booming technology sector, so the outlook is dependent on continued growth in this industry sector.”

Meanwhile, eds and meds — or education and healthcare, two pillars of the Western Mass. economy — represent very healthy sectors nationally for architects and general contractors. AIA projects 5.5% in the education sector this year and an additional 4% in 2020, and 4% growth in healthcare in 2019 followed by 3.6% in 2020. 

“We’re pretty diversified and active in a lot of different environments,” Edgin said. “It’s not just schools, not just police stations, not just fire stations, but a little bit of everything.” He cited the recent renovation of Polish National Credit Union’s Front Street branch in Chicopee, as well as a new Arrha Credit Union branch in West Springfield and a project with the Boys and Girls Club of West Springfield. “A lot of things take a while, so it’s that advance planning that keeps you busy a year or two from now.”

Leading Indicator

Baker reported that business conditions at U.S. architecture firms in 2018, as measured by AIA’s Architecture Billings Index (ABI), were essentially unchanged from 2017.

“Since the ABI has been shown to lead construction spending by an average of nine to 12 months, this would suggest that the growth in spending on non-residential buildings in 2019 should be close to the growth rate of 2018,” he noted. “Additionally, new design contracts coming into architecture firms grew at a healthy pace in 2018, underscoring the robust level of backlogs currently enjoyed by most firms.”

Meanwhile, Dodge Data & Analytics recently released its 2019 Dodge Construction Outlook, which predicted that total U.S. construction starts for 2019 will be $808 billion, staying essentially even with the $807 billion estimated for 2018.

“There are, of course, mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by the stronger growth for the U.S. economy, some easing of bank lending standards, still-healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works,” said Robert Murray, chief economist for Dodge Data & Analytics.

Locally, both architects and builders are maintaining the same sort of cautious optimism, at least in the short term.

“Right now, it’s strong,” Edgin said. “We’ve increased our staffing.”

Finding talented staff remains a challenge, he said, because strong growth among architecture firms in general means stiff competition, and Greater Springfield isn’t always a top destination for young professionals in the field compared to, say, Boston or New York, where pay scales are higher (but, of course, so is the cost of living).

Salvon understands that reality as well, but said Kuhn Riddle has benefited from its location in downtown Amherst, where it has easy access to the UMass architecture program. “We’ve been a little spoiled — we’ve been privileged to get some employees out of that program over the last decade or so, and we’ve tried to make a nice work environment, so people been staying here.”

All things considered, he told BusinessWest, the outlook seems strong in architecture locally, and others agree.

“We’ve been able to build some good staff and a good team, so we’re happy about that,” Edgin said. “Hopefully we all stay busy. But we do know it goes in cycles; we’ve been through plenty of slower times and a lot of boom times. But we’ve been very blessed. We’re pretty busy and hope to stay that way.”

Joseph Bednar can be reached at [email protected]

Construction

From Bedside to Job Site

Dorothy Ostrowski says she’s never been happier than she is at the helm of a venerable construction firm.

After more than a decade in nursing, Dorothy Ostrowski says she’s never been happier than she is at the helm of a venerable construction firm.

Dorothy Ostrowski has never settled for having just one ball in the air.

Like the time, a few years ago, when she was building a house with her husband, Mike, while pregnant with their second child, completing a dual master’s degree, and starting a new nursing job.

“Somehow, I don’t know how everything fits on my plate, but it all does,” she told BusinessWest. “One of the biggest things I believe is that anyone’s capable of anything. It’s really how bad do you want it, and how much does it impact you, your life, and your family?”

“One of the biggest things I believe is that anyone’s capable of anything. It’s really how bad do you want it, and how much does it impact you, your life, and your family?”

She had to ask all those questions, plus a few more, when the opportunity arose last April to purchase Adams & Ruxton Construction, a 110-year-old West Springfield company, from its then-owner, family friend Andy Touchette.

With Mike busy running his own company, Amp Electric, it was a decision that rested fully with Dorothy, who had worked in nursing for well over a decade but was intrigued by putting the MBA she earned in 2015 to good use.

He said, ‘what do you think? Do you think you can run it?’” she recalled. “And I was like, ‘you know what? It’s time to do something for me. It’s time to do something for our family. It’s time to do something where I know I have a passion and I can be a good leader.’ So I immediately contacted Andy and said we’re interested.”

Mike had long admired Adams & Ruxton and the work Touchette did there. “I knew it wasn’t a dud. It was all about if the numbers worked and whether or not we could afford it — and whether or not she wanted to run it. That’s how it came to be.”

Once the deal and a transition plan was in place, Dorothy spent the next six months working with Touchette, unpaid, learning every aspect of the business, from contracts and estimating to equipment and planning — “every nut and bolt,” as she put it.

Mike Ostrowski knew enough about his friend’s company

Mike Ostrowski knew enough about his friend’s company — and his wife’s skillset — to know this would be a good fit.

With a diverse range of work, from excavation to commercial buildings, the firm’s recent clients include Chicopee Electric Light, Bank of America, the Diocese of Springfield, Callaway, and Coldwell Banker, among others. The company is also currently being evaluated for woman-owned and veteran-owned certifications, which would open up more doors, especially in the realm of state and federal contracts.

It’s a new adventure for sure, one far different than her career stops to this point would have predicted. For this issue’s focus on construction and architecture, BusinessWest talked with Ostrowski about the many twists in her path, from the roads outside Afghanistan’s capital to emergency departments at area hospitals, to her new task, building a new career — both literally and figuratively.

Joining the Force

Growing up, Ostrowski’s plans were much different than her eventual path into nursing. Specifically, she wanted to be a police officer, eventually studying criminal justice at Holyoke Community College.

Before that, though, at age 17, she signed up with the Army National Guard. A friend had recently joined the service, so she spoke with the same recruiter, who explained the opportunities available in a military police role.

“It was one of those turning points in life, like, ‘what am I going to do with the rest of my life?’” she recalled. After attending boot camp the summer after her junior year, she left for Fort McClellan in Alabama the following year, after her high-school graduation, for what would become a seven-year stint, with stops in Italy, Honduras, Panama, and — most memorably — a nine-month tour in Afghanistan, two years after the 2001 U.S. invasion.

“Wherever I’ve been, we’ve always talked about us opening a business — maybe a daycare for special-needs children or something else. I’ve always had that desire to do more and be more.”

“We did a lot of security stuff in Kabul; we were there to support the rebuilding of the Afghan national army,” she explained. Partway through, she became a chase driver for Gen. Karl Eikenberry, tasked with ‘defensive driving’ to protect the general and others from gunfire and IEDs.

“I’ve had dinner at President [Hamid] Karzai’s palace,” she recalled. “We traveled by Chinooks and Blackhawks with Apache escorts through the mountains, met with warlords, and rode in armored-up Chevy Suburbans with thick, bulletproof glass.”

But her future wouldn’t be in police work — civilian or military. Instead, while taking classes at HCC, she crossed paths with some people who got her interested in medical assisting. After earning her certification in that field and working for a podiatrist, she landed in the Emergency Department of Baystate Medical Center. It was an eye-opening experience.

“That was my first taste of the chaotic world of emergency-room nursing, and I loved it,” she said. “I don’t think you ever get stagnant in that kind of environment. You never know what’s going to come around the corner next, and if you become complacent somewhere, you start to miss things and start to make mistakes. It’s the ever-changing part of it and the constant knowledge. No two patients have the same cookie-cutter symptoms or diagnosis. It’s that constant education that keeps you on your toes.”

She performed well in that environment, and colleagues began suggesting she attend nursing school, which she did, earning an associate degree in nursing at Springfield Technical Community College with help from G.I. Bill benefits, and soon found herself in a new-graduate residency at Baystate.

“But I always wanted more,” she said. “I stayed there long enough to get experience, then I did travel nursing. I saw a lot of different places and different ways procedures are done.”

Ostrowski eventually returned to Western Mass., where she dated, then married Mike, and earned her bachelor’s degree in nursing at Elms College. She took ER jobs at Baystate and Mercy Medical Center, but soon decided she wanted to shift into a less hectic type of job that allowed her more time with family. So she accepted a job with Sound Physicians, a medical process-improvement company, and went back to Elms for a dual master’s degree in nursing and business administration.

“Throughout these transitions, I always wanted more,” she said. “I wanted to be more in a leadership position.”

She found that by buying Adams & Ruxton.

“Wherever I’ve been, we’ve always talked about us opening a business — maybe a daycare for special-needs children or something else,” she said. “I’ve always had that desire to do more and be more.”

After Sound Physicians, she worked at St. Francis Medical Center in Hartford as a process-improvement nurse, and had moved to a role as nurse manager at Connecticut Children’s Hospital when the opportunity arose to buy the construction company.

“I’ve never not been happy as a nurse, and I think I would have potentially stayed in nursing longer had I stayed at the bedside,” she explained. “But I had moved into more of that management piece of nursing, and I constantly struggled with being a nurse’s nurse versus the business of healthcare. It was a difficult internal turmoil to be in, when you know what you want to do through your nurses and patients, but your constraints are based on finances.”

Furthermore, the job was keeping her busy 60 hours a week or more, and she felt she wasn’t home nearly enough to be with her family, especially her older son. “He was struggling to read as a first-grader, and I could have counted on my two hands how many times I was home in time to be able to read to him.”

Time to Change

Something had to give. And her husband could see it, too.

“Between the unhappiness of where she was and having a friend of ours running this [construction] business the past 10 years and how well he’s done, that put it into perspective — ‘hey, it’s just another type of business,’” Mike said. “We’re buying a fully established business that’s completely up and running. All you have to do is go in and replicate what’s going on. You don’t have to build it from the ground up — you can make your changes, you can improve it and grow the business, but in the beginning, all you have to do is replicate it and keep it going.”

“Knowing where to get the answers and knowing to tell someone you don’t know the answer — you get more respect from that than from anything.”

The transition period was important, Dorothy said.

“Andy said he had gotten multiple offers from people he thought would potentially be able to take this business on, but they weren’t the right fit,” she noted. “There’s a certain quality that Adams & Ruxton provides. You have to be the right kind of person who’s going to be there for your clients and your prospective clients. And Andy really wanted to make this a warm handoff. So, the last six months, he made sure he introduced me to all his key clients, and he’s come back in a consultative way; if there’s someone I didn’t meet during those six months, he goes out and meets them with me so they know they’re in the same hands they were before.”

She said the most gratifying aspect of her career move was the fact that Adams & Ruxton’s employees, many of whom have been there more than 20 years, stayed on board when she arrived — and have been a rich resource.

“There’s a constant conversation — if I don’t know something in the construction realm, I have the support system and the knowledge within these walls to ask the questions. I know finances, and I understand how to run the business. I may not know everything there is to know about general contracting, but I know when to say I don’t know, and I know when to ask the questions. I have a great support team.”

Mike agreed. “Knowing where to get the answers and knowing to tell someone you don’t know the answer — you get more respect from that than from anything,” he said.

Both are pleased that business — both at the firm and in the industry as a whole — is healthy right now, Dorothy said. “Our construction rampup this year has started much earlier this year than previous years, so I have no worries about the busy-ness or sustainability.”

It’s a peace she said she began to forge during the period she worked directly with Touchette.

“Over those first six months, there were times I’d never been more sure of something in my career, even as a nurse, and I’ve never been happier than I am now,” she told BusinessWest. “I probably have more stress because I directly impact the livelihoods of the people who work for me, but I’m happier. I enjoy coming to work every day. I enjoy learning new things every day.”

Ostrowski thinks back to other times of transition during her life — like when she missed her graduation from Elms in 2010 because she was delivering her first child — and sees one whirlwind after another, but that suits her just fine.

“I’ve never backed down from a challenge, and I think this is probably the coolest challenge I can embrace, and I will make this successful because I’ve got a great team around me,” she said. “I’m lucky to be where I am right now.”

Joseph Bednar can be reached at [email protected]

Construction

Home Free

Partners Stephen Ross (left) and Bob Walker

Partners Stephen Ross (left) and Bob Walker

Construct Associates has built a reputation for home renovation and restoration in Western Mass. over the past few decades, which is fortunate these days, since business is surging in that area. The reasons are myriad — among them, plenty of old housing stock in the Pioneer Valley, a generally strong economy, and the continued aging of America and the desire among the senior set to remain in their homes and age in place. It all adds up to opportunity, and Construct is making the most of it.

Stephen Ross says residential renovation is looking up — in more ways than one.

“We’re doing a lot of aging-in-place stuff — personal elevators, residential elevators, additions,” he told BusinessWest. “I like to say that an elevator costs probably 10 months worth of a decent retirement community. There, you’re not going to get that money back. But with an elevator, it’s equity toward your house.”

Ross and Bob Walker, the partners at Construct Associates in Northampton, say aging in place is a major trend in residential construction and renovation these days, with the Baby Boom generation continuing to swell the ranks of the over-65 age group, many of them loath to give up independent living.

“I saw a poll recently where 88% of people want to remain in their home, and a lot of them are trying to do just that,” Ross said, noting again that elevators, accessible showers, and other additions pay for themselves if they make the difference between staying there and moving to a retirement community. “I’ve got two of those in the works now. One is an in-law suite, where they’re making it accessible for the in-laws, and the other is a professional couple that wants to be able to utilize their whole house.”

Meanwhile, Walker is wrapping up a first-floor master suite in Northampton with an aging-in-place concept. “It’s an older home right in the middle of town, but all the bedrooms are upstairs. A couple years ago, they did a big kitchen remodel, and now they want a bedroom and bath and laundry on the first floor, where they can get to all of it. We’re putting in a curbless shower, in case of limited mobility.”

“We did a pretty serious job search back in the fall, but we we got a lot of people we felt weren’t qualified for the quality work we do. Sometimes you do get good people come in who are older guys. The labor pool is aging, and it would be nice to see a lot more young people coming into the field.”

Not only do older people want to age in place, Ross said, but the Five College area tends to have consistent rotation of housing stock, and new owners want to come in and put their mark on their new house. And many newcomers to the region arrive from pricier markets, so they’re getting relative bargains and have money left over for remodeling.

“We’re a high-end firm,” Walker added. “We’ll do the whole gamut of work, but our real money is in high-end residential remodeling. At this point, we really are working off our reputation, our referral base. I’m doing a major house remodel in Longmeadow now — four bathrooms, going through the house and upgrading. I have another major job like that, a big Victorian in town here with a high-end kitchen, a big master bath, upgrading mechanical systems, making it as energy-efficient as possible.”

New home building remains a quieter market, Ross added, so Construct is in the right place these days. “Kitchens and bathrooms are our bread and butter, and it always seems like weve got one or two, if not four or six, going on in the background.”

Innovative Idea

Walker and three other partners — Hobie Iselin, Bob Reckman, and Chris Dawson — launched Construct Associates in 1984 with a bright idea — and good timing.

The idea was to create a construction company based on the model of a law office, where the owners share space, marketing, and accounting, but are responsible for managing their own projects.

This residential addition in Northampton

This residential addition in Northampton features an elevator, an amenity that has become more popular in recent years.

The good timing had to do with the company’s home city of Northampton, which was growing quickly and had recently begun to capture the imagination of developers. Construct had a hand in shaping the commercial rebirth of the city, building or renovating the Northampton Brewery, the Hotel Northampton, the Calvin Theater, two Bart’s Ice Cream Shops, Bruegger’s Bagel Bakery, Pinch Pottery, Pleasant Street Video, Silverscape Designs, and other properties.

Other partners have come and gone over the years; today, Walker shares ownership with Ross, who first joined the company as a carpenter in 1988 and became a partner in 2006.

The workload has changed over the years; Construct Associates does far more residential work — mainly home-renovation projects — than it used to. But it still does some light commercial work, notably the recent renovation of New England Treatment Access, the marijuana dispensary a block away from its Northampton headquarters.

The firm’s design and construction capabilities cover everything from antique designs to modern styles, the partners note, but they specialize in older buildings, providing innovative designs and construction for kitchen and bathroom remodeling, renovations, and additions, as well as new construction projects.

“We do all our carpentry. We don’t sub out any carpentry because we have our in-house guys,” Walker said.

While the volume of work has been strong lately, he noted, the staffing issues that plague many contractors may be the only thing holding back further growth.

“We lost a few guys last year, and we’re trying to replace them. We did a pretty serious job search back in the fall, but we we got a lot of people we felt weren’t qualified for the quality work we do. Sometimes you do get good people come in who are older guys. The labor pool is aging, and it would be nice to see a lot more young people coming into the field.”

He said he hired a carpenter last year who recently graduated from Smith Vocational and Agricultural High School — one of only three students in the carpentry program at the time. That’s not surprising, as a decades-long emphasis on pushing kids into college has contributed to talent shortages in what are generally well-paying careers in the construction trades.

“The most interesting thing I see in vocational schools is the percentage that are going to college,” Ross said. “Back when we were kids, if you went to vocational school, that meant you were going into a vocation. I’m personally shocked at the kids going on to higher education.”

Walker agreed. “It’s interesting. You can make a really good wage doing this rather than try to come into the job market with some computer skill that every guy and his brother has.”

Smooth Sailing

Other than finding talent, the construction-industry landscape is looking strong in 2019, Walker said.

“One of my lumber-yard reps asked how we were doing because he was really surprised that, right after the first of the year, things are still hopping. He sees it because he supplies a lot of builders. Generally, you get to this time in January, and things kind of slow up, but they’re moving quite well.”

Part of that has been the mild winter — though at press time, shortly after this interview, a major snowstorm was expected to sweep through the Northeast.

“There are jobs where I might have pushed a little harder to get concrete in the ground had I known we would have had this mild weather,” Ross said, “but you had that first [November] snowfall that made you think winter was coming, and then it didn’t.”

He’s expecting a solid spring surge this year, though, once people get their tax refunds and the weather starts to get truly warm.

“One of my lumber-yard reps asked how we were doing because he was really surprised that, right after the first of the year, things are still hopping. He sees it because he supplies a lot of builders. Generally, you get to this time in January, and things kind of slow up, but they’re moving quite well.”

“People are funny,” he said. “They’ll call you in the spring when it starts warming up and want to do something right then, but in reality, some of them should be talking to us right now and planning ahead.”

At the start of 2019, though, the calls have been coming in, partly due to the lack of snow.

“With the weather being mild,” Ross said, “some of them are a little more anxious to get some projects started, when normally they would be hunkered down because they don’t want people tramping sand and salt into their house, and opening and closing doors. So we have more calls than we usually do this time of year, but winter will have to come sooner or later. It’ll be interesting to see what happens then.”

The desire to age in place, however, or simply to turn an old house into something fresh and modern, aren’t ideas subject to the season, and on that front, Construct Associates continues to make its mark on Northampton and the region.

Joseph Bednar can be reached at [email protected]

Construction

National Outlook

According to the 2019 Dodge Construction Outlook released by Dodge Data & Analytics, a leader in construction-industry forecasting and business planning, total U.S. construction starts for 2019 will be $808 billion, staying essentially even with the $807 billion recorded in 2018.

“Over the past three years, the expansion for the U.S. construction industry has shown deceleration in its rate of growth, a pattern that typically takes place as an expansion matures,” said Robert Murray, chief economist for Dodge Data & Analytics. “After advancing 11% to 14% each year from 2012 through 2015, total construction starts climbed 7% in both 2016 and 2017, and a 3% increase is estimated for 2018. There are, of course, mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by the stronger growth for the U.S. economy, some easing of bank lending standards, still-healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works.”

One important question going into 2019 is whether deceleration is followed by a period of high-level stability or a period of decline, he noted. For 2019, it’s expected that growth for the U.S. economy won’t be quite as strong as what happened in 2018, as the benefits of tax cuts begin to wane. Short-term interest rates will rise, as the Federal Reserve continues to move monetary policy towards a more neutral stance. Long-term interest rates will also rise, reflecting higher inflationary expectations by the financial markets. At the same time, any erosion in market fundamentals for commercial real estate will stay modest. In addition, the greater funding from state and local bond measures passed in recent years will still be present, and it’s likely that federal spending for construction programs will increase.

“In this environment, it’s forecast that growth for construction starts will decelerate further, but not yet make the transition to the point where the overall volume of activity declines” Murray noted. “For 2019, total construction starts are forecast to hold basically steady at $808 billion. By major sector in dollar terms, residential building will be down 2%, non-residential building will match its 2018 amount, and non-building construction will increase 3%.”

The pattern of construction starts by more specific segments includes the following:

• Single-family housing will be unchanged in dollar terms, alongside a modest 3% drop in housing starts to 815,000. There will be a slight decline in homebuyer demand as the result of higher mortgage rates, diminished affordability, and reduced tax advantages for home ownership as the result of tax reform.

• Multi-family housing will slide 6% in dollars and 8% in units to 465,000. Market fundamentals such as occupancies and rent growth had shown modest erosion prior to 2018, which then paused in 2018 due to the stronger U.S. economy. However, that erosion in market fundamentals is expected to resume in 2019.

• Commercial building will retreat 3%, following 2% gains in 2017 and 2018, as well as the substantial percentage increases that took place earlier. While 2018 market fundamentals for offices and warehouses were healthy, this year, vacancy rates are expected to rise as the economy slows, slightly dampening construction. Hotel construction will ease back from recent strength, and store construction will experience further weakness.

“There are, of course, mounting headwinds affecting construction, namely rising interest rates and higher material costs, but for now these have been balanced by the stronger growth for the U.S. economy, some easing of bank lending standards, still-healthy market fundamentals for commercial real estate, and greater state financing for school construction and enhanced federal funding for public works.”

• Institutional building will advance 3%, picking up the pace slightly from its 1% gain in 2018, which itself followed an 18% hike in 2017. Educational facilities should see continued growth in 2019, supported by funding coming from numerous school-construction bond measures. Healthcare projects will make a partial rebound after pulling back in 2018. Airport terminal and amusement-related projects are expected to stay close to the elevated levels of construction starts reported in 2017 and 2018.

• Manufacturing plant construction will rise 2% following a 18% jump in 2018. The recent pickup in petrochemical plant projects should continue, and cuts in the corporate tax rate from tax reform should encourage firms to invest more in new plant capacity.

• Public-works construction will increase 4%, reflecting growth by most of the project types. The omnibus federal appropriations bill passed last March provided greater funding for transportation projects that will carry over into 2019, and environmental-related projects are getting a lift from recently passed legislation.

• Electric utilities and gas plants will drop 3%, continuing to retreat after the exceptional amount reported back in 2015. New generating capacity continues to come online, dampening capacity utilization rates for power generation.

Dodge Data & Analytics is North America’s leading provider of analytics and software-based workflow-integration solutions for the construction industry. 

Construction

Screen Test

Andy Crane, executive director of the Home Builders and Remodelers Assoc. of Western Mass.

Andy Crane, executive director of the Home Builders and Remodelers Assoc. of Western Mass.

Online learning isn’t a recent innovation, but in the world of continuing education for construction professionals, there aren’t many programs doing it — and few are doing it more effectively than the Home Builders and Remodelers Assoc. of Western Mass., says the association’s executive director. Its partnership with Holyoke Community College, he notes, is helping contractors get the training they need on a schedule that doesn’t take them off the worksite at critical times — and that benefits everyone.

Education, Andy Crane says, isn’t an afterthought for the Home Builders and Remodelers Assoc. of Western Mass. — it’s part of its mission statement.

“We get calls multiple times a day just asking questions, all over the spectrum,” said Crane, the HBRA’s executive director. “It could range from grading the soil to what you need on the roof to what kind of energy efficiency you need, and we’re expected to know that — and if we don’t, we know who to call. The fact that you can call and get an answer to your question is, I think, critical to the building trade in general. I think it validates us.”

On a broader scale, the association has long conducted continuing-education classes for construction supervisors and building professionals. The state requires 12 hours of classwork every two years, but the value of education goes beyond that, Crane said. Take, for example, a course on writing construction contracts.

“Very few people know how to do it properly, how to write a good contract,” he told BusinessWest. “There are contracts written on the back of napkins, or on lumber yard receipts. You’re collecting thousands of dollars from Mr. and Mrs. Smith, and the contractor may or may not take off, and Mr. and Mrs. Smith have no avenue to turn to. Contracts are not just one-way — they protect me, but they protect you as well. Writing the proper contract and including the right licensing and registration numbers and insurance — it’s huge.”

In recent years, the state began allowing up to six of those 12 hours of classwork to be conducted online. Crane said the HBRA wanted to get into that — but wanted to do it right. So the association approached Ken White, dean of Community Services at Holyoke Community College (HCC), to develop an online continuing-education platform that would compare favorably with any live classroom experience.

“More and more education and training is going from live classroom instruction to convenient online learning,” White said, adding that it makes particular sense in the construction world.

“We’re serving construction supervisors who are critically important individuals on the job; they’re overseeing everything that’s happening,” he explained. “To have them off site to go to a full-day program is a huge commitment of time that many times might not be in the best interest of the homeowner or the builder.

“HBRA has been doing premium classes for decades — of the six or seven home builders associations in the Commonwealth, they’re recognized by the rest of them as the best, by far,” he went on. “They asked us if there was a way to take their live instruction and create an online opportunity. That way, they can wrap their training and continuing development around their schedules, which may be weekends, evenings, and early mornings. And instead of taking it in these huge chunks of four hours or eight hours, they can do it an hour here and an hour there.”

HCC partnered with MindEdge Learning and MRW Connected to create a gateway and learning-management platform, White explained.

“We used a videographer to actually film all the live classrooms that take place here at the HBRA, with a three-camera setup. We keep the anonymity of the students because all you’re seeing are backs of heads; the focus is on the instruction. It’s filmed, it’s edited by the college to make sure it flows correctly, then it’s reviewed by the presenter, who is a builder or someone in the construction industry here in the Commonwealth. They look at it, and when it’s approved, it’s released to the public.”

The current course list is a deep dive into key construction issues: “Building an Airtight House,” “Energy Code Overview,” “Avoiding Costly Building Mistakes,” “Lead Safety Isn’t Just About Lead Paint,” and “Fall Prevention and Silica Exposure” are just a few of the topics.

“The reviews have been superlative,” White said. “They’ve picked some really great individuals who not only know their trade, but have great communication skills and keep up to date.”

He called continuing education the “lifeblood of decision making” for construction supervisors.

“On the job, if you make the wrong decision, people could get hurt, or something could leak, or something might not be up to code. They have a lot on the line. That’s why it’s important to have to be the best-educated, most experienced individuals in this profession. The college is just happy to be a part of it.”

Anytime, Anywhere

Crane said the HBRA is still teaching about 100 people a month at its headquarters in Springfield, but contractors are increasingly choosing the convenience of the online model.

“Some leave the job site and attend a live training,” White added. “But you can get an identical experience taking the same class online around your own schedule.”

Purchasing a class is as simple as logging on to the HBRA website, perusing course options, and paying for them via a secure checkout. A few minutes after payment is processed, the user receives an e-mail with a link to log onto a class at his or her convenience.

Since the online program began in the summer of 2017, it has seen 295 registrations through the portal, White noted, adding that the HBRA of Western Mass. is at the forefront of this type of education in the construction industry.

Ken White says HCC aimed to create an online platform that would be as well-received as the live classes the local HBRA is already known for.

Ken White says HCC aimed to create an online platform that would be as well-received as the live classes the local HBRA is already known for.

“They’re the only ones who have online learning that’s a live video capture of the actual classes, so what students are seeing is a very engaging, identical experience that they can take in smaller portions if they’d like. Whenever they stop, they can get back in back exactly where they left off. And at the very end, there’s a final examination with 20 multiple-choice questions they have to get right to get credit.”

Crane noted that questions need to be answered every 20 minutes or so, too, which ensures that the user actually watches the material.

“The problem with online classes, when they first came out, was that you could literally pay your fee and pay your kid five bucks to pass the test by sitting there doing this,” he said as he mindlessly pressed a button. “Because we’re considered leaders in the industry, we thought that was wrong, so we helped get the rules changed so that, if you want people to learn stuff, you have to create a platform that makes them learn. You take a certain portion of time, maybe 20 minutes, then you’re tested on that 20 minutes. When you pass, you move on to the next 20 minutes. So you get your six hours of credit, you actually have to do six hours.”

After passing the final exam, the user prints a certificate to send in to the state to renew their license.

It works well for many construction professionals, Crane added, though many still prefer to be in a live classroom.

“You can take 12 hours live or do six live and six online. Personally, I don’t like doing things online. In fact, I hate it. I first came here because they offered classes here, downstairs in our conference room. I sat here for two days — there’s no tests when you do it this way; if you’re here 12 hours, they assume you learned.”

To feel the same confidence in an online platform, he said, “we had to build a program that follows the state’s protocol to a T, and make it tough so they’re actually learning something. Our classes are $90 for three classes. For-profit businesses will run that for $29, but they don’t care what you learn. They’re willing to wait for the hammer to drop and then close down, and they don’t care; they’ll just do it to somebody else.”

White said he works with other companies to provide various types of training, both live and online. “But in terms of this particular industry, we’re not aware of anyone else doing this. And the other plus is, with live training, most folks are local supervisors and builders. Online, we have folks as far as Cape Cod, Nantucket, even Cape Coral, Florida. It allows folks, wherever they’re located, to take this and not have to drive a half-day to get here and back and deal with traffic.”

Learning Curve

Even in its live classrooms, Crane noted, the HBRA of Western Mass. has been ahead of the curve.

“If other associations do it, they go get a professor at a college or some local professional and rent a room at the Holiday Inn and run a class,” he said. “Nobody I’m aware of has an online product. We’re the only ones out of the Home Builders Association running an online program. There are bootleg courses online, being taught by people in Arkansas and Canada and California at half the cost, but the content is nowhere near as professional as ours is.”

White said he was impressed by what he saw when he first attended a class in Springfield.

“I was really blown away because it was very professional and intensive, with an incredible amount of information, a lot of interaction between student and instructor, a lot of passion, and all relevant information that helps business owners and construction professionals and supervisors in their day-to-day decision making, whether it’s dealing with OSHA or lead issues or whatever the case may be.

“When I went back to report to my vice president, Jeff Hayden, I told him the instruction is superlative. I said, ‘there’s a lot of engagement, it was interactive — this is perfect for live video capture.”

In the end, he said, HCC and the association have turned out a premium learning experience.

“And it’s due to the folks that Andy hires to teach,” White added. “They’re experts. This isn’t a sideline; it’s what they’ve been doing all their lives. They live this 365 days a year. So folks are really happy about the product the HBRA has put out, and we’re happy to have been selected to partner with them and create these models.”

Crane agreed. “This is a unique partnership that benefits consumers, clients of builders, the state — it benefits everyone who touches this product.”

Joseph Bednar can be reached at [email protected]