Higher concrete, steel prices driving up cost for UTC and other state building projects

Higher concrete, steel prices driving up cost for UTC and other state building projects

September 18th, 2016 by Andy Sher in Local Regional News

NASHVILLE — Rising prices for items such as concrete, steel and labor are helping drive up costs of some state building projects, including the University of Tennessee at Chattanooga's planned west campus housing and garage.

Tennessee Building Commission members this month approved a $3 million increase for the $80 million UTC project. It represents a 3.75 percent markup over the original estimate, bringing total costs to $83 million.

"This request covers market price increases, primarily those involving concrete and steel," University of Tennessee President Joe DiPietro told building commission members.

The project includes a 600-bed dorm, associated dining facilities and a 650-vehicle parking garage. The university's existing Racquet Center, built in 1976, is being demolished and existing tennis courts are scheduled for renovation.

Building commission members also approved a $5.7 million increase in funding for a proposed $22.3 million parking garage addition at the UT-Knoxville campus. The 900-1,000 parking space facility will be adjacent to an existing Lake Avenue garage. It's projected cost — now $28 million — is 26 percent above the original plan.

Tennessee Secretary of State Tre Hargett, a building commission member, asked DiPietro why costs at yet another proposed facility were increasing.

"Some of it involves the delicate nature of the terrain this facility is built on from the standpoint of grades and that sort of thing," DiPietro explained.

But the UT president also noted the work is being done "as everybody's building, steel and concrete costs go up. So those are the primary reasons that we have an increase."

Meanwhile, the Tennessee Board of Regents system is experiencing soaring increases at a planned fine arts classroom building for East Tennessee State University in Johnson City.

Building commission members approved an increase in total project funding from $40.65 million to $52.33 million. The change recognizes a proposed increase in the size of the facility. But it also reflects increases in estimated construction costs, according to a presentation document for building commission members.

Asked after the commission's Sept. 8 meeting whether the increases represent a trend, DiPietro said "It's typical, right? More and more building starts to happen demand gets in your way — and the pricing structure and concrete starts to go up."

DiPietro recalled that when he served as chancellor of UT's Institute of Agriculture from 2006 to 2010, building material and labor costs began falling after the Great Recession struck.

"You could get more bang for the buck," he noted.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on Twitter @AndySher1.