published Saturday, January 25th, 2014

Chattanooga contractors hope for new mega-projects

  • photo
    Quentin Hall measures the depth of a drilled support hole on the U.S. Highway 27 project near downtown Chattanooga.
    Photo by Staff File Photo.
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2013's TOP TEN VALUED CHATTANOOGA BUILDING PERMITS

1. Memorial Hospital, expansion, $24.5 million -

2.Volkswagen, expansion, $9.7 million

3. Chattanooga Airport, interior renovation, $7.2 million

4. MHC Kenworth, new dealership, $6 million

5. Southern Surgical Arts, new headquarters, $4.2 million

6. Chattem, packaging area addition, $3.9 million

7. Infiniti, new dealership, $3.4 million

8. Publix, new grocery story, $3.2 million

9. Vision Hospitality, new headquarters, $3 million

10. Uncle Bob's Self Storage, new facility, $3 million

Source: Chattanooga Building Inspection, Department of Public Works

Regional construction companies are hoping easier lending and growing consumer confidence will drive up demand in the Chattanooga region during 2014, even as several of the region's biggest construction projects start to wind down.

A handful of major construction endeavors have kept thousands of construction workers in jobs during the last three years in the Chattanooga region, from Wacker to Watts Bar.

Workers have put more than 5.5 million hours into Wacker's $2 billion manufacturing facility in Charleston, Tenn., where about 1,000 people are still working on-site every day. And more than 2,100 people have worked on the first two phases of Memorial Hospital's massive expansion since it started in 2011. Watts Bar, TVA's nuclear power plant, employs a whopping 3,300 workers who are working around the clock to finish the Unit 2 reactor.

But all good things must come to an end. Memorial Hospital's work should be finished by June. Wacker is on track to be completed in mid-2015 and the second reactors at Watts Bar should be generating power by December 2015.

The city of Chattanooga issued $632 million in building permits in 2012 -- $183 million to Memorial alone. But building permits dropped to just $294 million during all of 2013, and that could could spell trouble for Chattanooga's commercial contractors as work from 2012's mega-projects dries up.

But some are confident that new big deals are on the way in 2014.

"I have a real feeling there is more work on the horizon that will come out to fill the gap between these projects we have that are finishing up," said Mitchell Simpson, a vice president at Wright Brothers Construction. "It seems like everybody feels like the economy is getting better and there is work that is coming."

It's a reflection of tentative optimism in the construction industry across the nation. For the first time since 2008, a plurality -- 36 percent -- of contractors surveyed by The Associated General Contractors of America expect the construction market to grow this year, according to the AGC's annual outlook.

But in Tennessee and Georgia, contractors are a little less consistent: only 20 percent of Tennessee contractors expect growth in 2014, versus a whopping 44 percent of Georgians.

"I guess hoping might be a better word to use," said Larry Parks, owner of T.U. Parks Construction. "I do see signs that the construction industry is coming back a bit. There is more activity, more jobs up for bid, more people soliciting proposals for some type of construction or design. There seems to be more of a conversation."

At Wright Brothers, the company's around 400 employees are still busy finishing the first phase of the Highway 27 widening project and working at Wacker. But the company also just picked up a $45 million job for the Alabama Department of Transportation for work near Birmingham. And closer to home, Wright Brothers is handling grading work for Engineered Floors, the Whitfield County carpetmaker that announced a $500 million expansion in May 2013.

Parks said he thinks some companies are starting to revisit construction jobs that were put on a back burner during the recession, and said that banks seem to be more willing to lend than the past few years.

"I think some things have been on the shelf for a while and at times I've sensed the banks beginning to be a little more open with lending money," he said. "Clearly one thing that hurt our industry is banks no longer wanting to share the risk with the developer or project owner."

Besides Engineered Floors' major expansion, the Tennessee Department of Transportation is expected to open the second phase of the Highway 27 project to bids in late 2014, Simpson said. The $80 million plan calls for two new lanes on the Olgiati Bridge and reworked exit ramps and corners on the stretch of Highway 27 that cuts through Chattanooga.

Construction on that project should start in 2015, just as others are wrapping up. TDOT is also planning a $14.5 million widening on East Brainerd Road and a $26.7 million widening on Apison Pike, with construction slated to start in mid-2014 and early 2015.

In the private sector, a 190-acre, $100 million shopping, apartment and office project in Hixson earned a stamp of approval from city planners at a January meeting. The project, Hillocks Farm, could become reality if the Chattanooga City Council signs off on the idea at its Feb. 11 meeting.

If Volkswagen Chattanooga earns the new SUV line, that could lead to a $1 billion investment at the plant.

Contractors expect to hire to meet this year's demand, according to the AGC. About a third of Tennessee contractors and 43 percent of Georgia contractors expect to hire new workers this year. Nationwide, only two percent of contractors that did not change staff levels in 2013 make layoffs in 2014, the report states. That's strikingly different from 2013, when 23 percent of firms expected to make layoffs.

"Southeast Tennessee has been really blessed with Volkswagen, Wacker and Engineered Floors," Simpson said. "I don't think this is the end of it it. I think there will be more opportunities long term as the Volkswagens and Wackers of the world come in and with them will come more work."

Contact staff writer Shelly Bradbury at 423-757-6525 or sbradbury@timesfreepress.com.

about Shelly Bradbury...

Shelly Bradbury joined the Times Free Press as a business reporter in January 2013, after starting with the paper as a general assignment intern in July 2012. She is from Houghton, New York, and graduated from Huntington University in Huntington, Indiana, with a bachelor’s degree in journalism and minor in management. Before moving to Tennessee, Shelly previously interned with The Goshen News, The Sandusky Register and The Mint Hill Times. Outside the newsroom, Shelly enjoys ...

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