Virginia Fires on All Cylinders

Activity remains strong in nearly all sectors throughout Virginia.

With the possible exception of condominium projects, construction activity remains active throughout most of Virginia, including the state’s capital, Richmond, and contractors anticipate even more work as the military implements decisions by the Base Realignment and Closure Commission.

“2007 looks terrific for many, many of our members,” says Harold B. Kelly, vice president of Associated Builders and Contractors Inc. Virginia Chapter in Richmond. “Several of our member companies have significant backlogs for 2007. They have booked a ton of business.”

John R. Lawson II, president and CEO of W.M. Jordan Co. headquartered in Newport News, Va., reports a one-year backlog. W.M. Jordan works in the Richmond, the Williamsburg peninsula, and Norfolk and Virginia Beach areas.

“Business conditions in Virginia have been very good,” says Steve Vermillion, CEO of Associated General Contractors of Virginia in Glen Allen, Va. “Our laws are good, our regulations are good and [so is] our proximity to D.C. and port facilities. We’ve got a lot going in this state. The economic development folks do a tremendous job, and it’s paying off.”

Vermillion reports an “unbelievable” amount of work in Northern Virginia, with strong activity in Richmond and the Tidewater area.

John Gillenwater, vice president of business development for KBS Inc. of Richmond, Va., calls the market very dynamic, with mixed-use projects containing retail and multifamily units remaining hot.

Kelly reports that commercial, institutional and retail “look fabulous.” He predicts consolidation of Army logistics units at Fort Lee, in Prince George County, will have a major impact on the market. The base will add 10,000 jobs and plans to spend at least $1 billion to build 6 million sq. ft. of new space.

Fort Belvoir, in Fairfax County, will add about 21,000 military personnel. The Army anticipates major construction of new office space and infrastructure, with completion by 2011.

“It’s billions of dollars in work that has to be accomplished in not that many years,” says Chris Jahrling, vice president and general manager for Turner Construction Co. in Virginia and the District of Columbia, with an office in Arlington, Va. He anticipates the U.S. Army Corps of Engineers will use the design-build delivery method to meet the schedule and cost demands. In addition, he anticipates commercial activity will pick up to provide infrastructure, housing and retail for the influx of people.

“It’s all about job growth,” Jahrling continues. “The job growth numbers are in the tens of thousands, and that speaks greatly for the economy.”                                           

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Other public projects

Turner is finishing the second and final phase of the $200 million, 471,500-sq.-ft, Virginia Beach Convention Center. The company also is working on a $30 million nanotechnology laboratory at Norfolk State University. 

Universities have stepped up construction activity. Lawson attributes that to a bond issue and supplemental funding bill to cover inflation, as well as an increase in philanthropy by baby boomers with an emotional tie to their schools.

W.M. Jordan recently started a $52 million, 540,000-sq.-ft., 800-car underground parking garage and a 400-bed dormitory with retail space at Virginia Commonwealth University, schedule for completion in 2008. Also at VCU, Gilbane Building Co., headquartered in Providence, R.I., is working on an $84 million, four-story, 260,000-sq.-ft. building to house the business and engineering schools. Work on that project is expected to wrap up this fall.

At the VCU Health System campus, W.M. Jordan is constructing a $119 million, 430,000-sq.-ft., 232-room critical-care hospital, featuring expanded intensive care units. Buildings on all four sides surround the new 15-story structure, complicating logistics. The first four, cast-in-place concrete-frame stories are at grade on the east side and below grade on the west. W.M. Jordan is using structural steel and composite decks on the upper floors. Because the planned structure’s footprint did not fit on the parcel, designers cantilevered the long axis of the building above the first at-grade floor out 8 ft., explained Brooks Ballance, project manager for W.M. Jordan. 

Kenbridge Construction Co. Inc. of Kenbridge, Va., is building the Virginia Center for Behavioral Rehabilitation for the Virginia Department of Mental Health. The $36 million, 174,000-sq.-ft., two-phase project includes three housing pods containing 300 units. The job consists of tilt-up exterior wall construction and precast cell modules.

In Richmond, Gilbane is expected to complete this year the $200 million state capitol historic restoration and addition of an underground visitor center. Work has commenced on two other restorations of state office buildings at Capitol Square: The Patrick Henry Building and the Oliver W. Hill Sr. Building, at $32 million and $26.32 million respectfully. 

Tompkins Builders Inc. of Washington, D.C., is working on a $120 million federal courthouse in Richmond. Completion is expected in 2008.

Looking ahead, Gov. Timothy M. Kaine plans to introduce legislation authorizing $250 million in bonds to upgrade sewage treatment plants throughout the Chesapeake Bay watershed. The governor also has earmarked $50 million for two Port of Virginia expansions: The Commonwealth Railway Mainline Safety Relocation Project and the Craney Island Marina Terminal. Virginia Port Authority has requested engineering proposals to design the Craney Island project.

Private commercial investment

“The private sector seems to be going along better than usual,” says Douglas Sauer, vice president of Kenbridge Construction, which began construction in December on the $22.5 million, seven-story, 167,000-sq.-ft. Westin Hotel at Reynolds Crossing in Richmond. 

Also in the hospitality sector, Forrester Construction Co. of Rockville, Md., has started a $13 million renovation of and addition to the Kimpton Hotel in Alexandria, Va.

Armada Hoffler Co. of Virginia Beach is building the $80 million, 903,000-sq.-ft., 38-story Westin Virginia Beach Town Center hotel and residences. When complete at 525 ft., it will be the tallest building in Virginia, says Ashley Smith, vice president of sales and marketing for Smith-Midland Corp. of Midland, Va., the precast contractor. Smith is using a SLENDERWALL skin panel system for its light weight and ability to withstand the salt air. 

HRI Properties Inc. of New Orleans is converting the former Miller & Rhoads department store building into an $80 million, 250-room Hilton hotel with 132 residential condominiums, across from the convention center.

“It’s a good time to be in Richmond, because there are a lot of projects going on and a lot of interest,” says Garland Williams, interim director of economic development for the City of Richmond. “We are making conditions right for private developers.”

At the Virginia BioTechnology Research Park, Richmond officials expect Hourigan Construction Corp. of Richmond to wrap up construction this year on the $350 million, 450,000-sq.-ft., nine-story Philip Morris Center for Research and Technology.

Enticed by state and regional incentives, MeadWestvaco Corp., a global packaging company, has announced plans to build a $120 million, 300,000-sq.-ft. headquarters in Richmond. Williams expects construction to begin early in 2007 and be complete within 30 months.

Luck Stone Corp. of Manakin-Sabot, Va., recently unveiled a design and master plan by SMBW Architects PC of Richmond for a $25 million, 60,000-sq.-ft. expansion and a renovation of its headquarters building. KBS is building the structure.

“In the Richmond metro region, the construction market is very active with major projects of $100 million and up going forward full speed,” says Will Scribner, president of SMBW. “And there is a steady flow of construction activity at a lower scale, throughout the market from top to bottom in almost all sectors.”

SMBW collaborated on the design for the Virginia Museum of Fine Arts’ $85 million expansion, which was about 30 percent complete in December. The project will add 100,000 sq. ft. of space to the Richmond museum and include a triple-height atrium to connect the new building with two existing wings.

“The economy is good in Richmond, and I see it holding through 2007,” says Tommy J. West, president of Capital Interior Contractors Inc. of Richmond. The company is working on projects at Richmond International Airport and St. Mary’s Hospital.

The residential component

“It’s still very busy on the commercial side, but the mix has changed fairly significantly,” says Lawson, explaining he has observed less multifamily construction. “We haven’t seen the slow down I would have thought in hospitality and retail, but I think that is coming.”

Burrell Saunders, president of CMSS Architects PC of Virginia Beach, also reports a small decrease in new condominium starts as the market absorbs existing inventory. CMSS provided master site planning for Rocketts Landing, a 26-block, mixed-use development in Richmond. Three condominium buildings are now under construction. Plans eventually call for 2,000 units. 750,000 sq. ft. of commercial space and a marina.

Bucking the downturn in for-sale residential, Turner is about to break ground on Granby Tower, a 31-story, $100 million, luxury condominium project in Norfolk.

Bob Kettler, founder and chairman of Kettler of Vienna, Va., notes that while for-sale residential activity is mixed, new construction of rental units remains strong.

“It’s the best market in history for rental housing,” Kettler says. “We don’t see any slow down in that marketplace, because there is a shortage of supply.”

Kettler, also a developer, will complete the $100 million, 450,000-sq.-ft., 400-unit One Metropolitan Park at Pentagon City later this year. It has received approval to build a second high-rise apartment at the complex, a former warehouse site. Eventually, the eight-phase project will contain 3,200 luxury apartments and 100,000 sq. ft. of ground floor retail space.

At Midtown Reston Town Center, co-developer Kettler is completing a 1.4 million-sq.-ft., five building complex with four condominium structures and one rental building. In Prince William County, the company is developing Harbor Station, a 2,000-acre, mixed use waterfront community, with a 200-acre national security campus and a hotel and conference center.

In Richmond, SMBW designed the River Lofts at Tobacco Row, a $22 million conversion of the former Lucky Strike tobacco warehouse into 250 apartments. KBS has phase three under construction. SMBW also designed the $15 million renovation of Park Plaza at Belvidere, a 53-unit condominium project in Richmond.

The downturn in residential has helped other jobs. Jahrling and others have noted a gradual loosening of the subcontractor market and a softening on prices, with escalation somewhat abating.

“The slow down in residential has had a positive impact on commercial, because it has taken a lot of the pricing pressure off of raw materials,” Lawson says. “Some trades cross over, and that is helping the commercial side in availability.”

 Easing of resources, however, may not last once construction at the bases begins.

 “When you look at the amount of government work that is teeing itself up with BRAC and such, it’s hard to know how that is going to impact us all,” Jahrling says. “At face value, it looks like a boatload of work that could re-ignite the escalation engine.”

Useful Sources:

Base Realignment and Closure
https://www.officialbrac.com/StateVA.html

Virginia Museum of Fine Arts
http://www.vmfa.museum/expansion.html

Rocketts Landing
http://www.rockettsvillage.com/

Virginia Commonwealth University Facilities Management
http://www.fmd.vcu.edu/

Granby Tower
http://www.granbytower.com/