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Illinois Report

Construction rides recession; more companies compete for projects

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Weak private sector demand and diminished state and local construction budgets have shrunk construction employment in Illinois.

Photo courtesy of F.H. Paschen, S.N. Nielsen
Chicago’s Calumet Water Reclamation Plant is undergoing a multiphase, $500-million construction upgrade program. Phase one began in 2007 and is scheduled for completion this year.
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The state’s construction jobs totaled 198,500 in June, down 19,100 or 8.8% from the June 2009 figure of 217,600.

“Nationwide, we’ve seen unprecedented levels of unemployment in our industry,” says Al Leitschuh, president of the Builders Association, the Chicago-area chapter of the Associated General Contractors of America. “We’ve seen shades of improvement here and there, but the drop in employment didn’t happen in one day and it’s not going to improve that way, either.

“In Illinois, in particular, they’re still building schools, hospitals and doing road work. On the other hand, there are many more companies bidding for those jobs than there may have been in the past.”

Leitschuh adds that because of the decreased workloads, “many of our members have taken the opportunity to increase their training. We’re confident that when the economy does rebound completely, those companies will be well positioned for future success.”

In the industrial sector, Jeffrey A. Raday, president of McShane Construction Co. of Rosemont, says the only new development business today and for the foreseeable future is highly specialized build-to-suits. “Any user that can possibly utilize an existing vacant building will do so due to the potential spread between fitting into an existing facility and building new,” he says.

The biggest inhibitors to a more rapid recovery continue to be lack of new debt being offered by both big and small banks, Raday says.

Infrastructure Some large infrastructure work is plugging away. In downstate Roxana, near St. Louis, the Wood River WRB Refinery is undergoing a $3.6-billion expansion. The joint effort of Calgary-based EnCana and Houston-based ConocoPhillips will increase processing capacity and allow the facility to refine sediment-laden crude oil from Canada’s oil sands area.

A 2,150-mi-long, underground Keystone pipeline owned by ConocoPhillips and TransCanada Corp., an energy infrastructure firm, will transmit the 590,000 barrels of oil per day from Alberta, Canada.

Irving, Texas-based Fluor Corp. and Bechtel Power Corp. of San Francisco are overseeing the project, which is expected to begin operation in 2011.

Chicago’s Calumet Water Reclamation Plant, dating back to the 1920s, is undergoing a multiphase, $500-million construction upgrade program. Phase one, a $120-million project that involved the construction of a 600-million-gallon pump building, screen building and pump discharge line, began in 2007 and is scheduled for completion this year.

The $230-million phase two, slated to be complete in early 2012, includes building a “grit” building to house eight rectangular grit chambers and constructing 12 cast-in-place, 160-ft-diameter circular settling tanks.

“The overall project is roughly 70% complete,” says Marty Platten, project manager for Chicago-based F.H. Paschen, S.N. Nielsen, which is the managing partner in a joint venture with Elgin-based IHC Construction Co. serving as contractor.

Roads Illinois lawmakers approved a six-year road construction plan this year that will create 167,000 jobs and total $12.8 billion, according to the Illinois Dept. of Transportation. More than 40% of the total will be for maintaining existing roads, with 22% for bridge maintenance and 25% for relieving congestion.

Significant roadwork downstate includes the relocating of Interstate 70 and construction of the $670-million Mississippi River Bridge near East St. Louis into St. Louis.

Heavy spring rains halted progress on the project, which broke ground in April. “We’ve been flooded out since then,” says Mark Schnoebelen, project sponsor for Massman Construction/Traylor Bros./Alberici Constructors, a joint venture working on a $229-million contract on the bridge. “We have installed and tested a drilled shaft and that’s about it.”

Renovation A $118-million renovation of the Everett M. Dirksen U.S. Courthouse is underway. Completed in 1964, it was the first building Mies van der Rohe designed for Chicago’s Federal Plaza. It has 30 floors, 57 courtrooms, 11 federal government offices and is home of the nation’s third-largest federal district court.

Skidmore, Owings and Merrill of Chicago is the architect for the project, and Turner Construction, Chicago, is the general contractor. The major focus will be the replacement of the building’s nearly 50-year-old heating and ventilation, fire alarm and lighting systems.

“All of this construction is going on and the courts are remaining open,” says David Wilkinson, public affairs officer for the U.S. General Services Administration. “The construction is being done at night for the most part.”

 

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