COVER STORY, SEPTEMBER 2004

BUILDING UP TO 2005
New technology and a recovering economy give the Midwest construction industry an optimistic outlook.
Lindsey Walker

The last few years have seen a subdued, money-conscious construction industry — clients have been cautious in terms of new builds and expansions, and contractors have limited spending — causing an overall slowdown in construction. The struggling economy is seeing slow improvement, and newfound reliance on high-tech building technology, electronic communication and costeffective management tools is leading hopeful, but wary, contractors in an ever-changing age of construction.

“The business world is evolving every day,” says Fred Liesveld, business development manager of Ronnisch Construction Group in Southfield, Michigan. A growing trend is total project management, where the builder is being asked to manage more than just construction. Instead, builders are getting requests to handle design, Internet service technologies, telephone systems, security systems, furniture and even the moving process, Liesveld says. Government approvals and permits are becoming harder and harder to obtain, making this design/build methodology a popular alternative — only one firm is accountable to deliver the design, approvals, permits and construction, so only that firm interacts with the municipalities. “Construction companies interface with municipalities every day, so it makes sense for them to coordinate the approval process because the relationship with the municipalities is already established,” Liesveld asserts. Ronnisch recently was the design/builder for New Bright Industries in the construction of 31060 Oakcreek Drive, a 136,000-square-foot industrial facility in Wixom, Michigan. The company was accountable for the approvals, permits, construction and total delivery of the project.

Communication Goes Digital

F.H. Martin recently completed a 3,227-square-foot banking facility for Charter One Bank in Sterling Heights, Michigan.

When one company is not in charge of all aspects of a project, communication is key. “Construction projects involve so many different players — owners, architects, engineers, construction managers, trade contractors and suppliers,” says Andrew Martin Jr., president of Eastepointe, Michigan-based F.H. Martin Constructors. “There is a tremendous amount of communication that needs to take place among all of these parties in order to build a building.” Many builders are using Internet-based project tools, such as Constructware, which allows them to have and share real-time project information wherever there is a Web connection. “This tool facilitates collaboration among all the parties in the construction process,” Martin says.

“From the bidding process to the construction phase, the Internet has become a major tool for the industry,” Liesveld says. Simply by logging on to a contractor’s Web site, owners can view real-time budget and schedule information and view their jobs’ progress live from cameras that have been placed on the jobsites. Also, through the use of laptop computers, wireless aircards, wireless Internet, and VPN systems, field supervisors and office personnel are better able to communicate, he says.

Steven Moberger, vice president of sales and marketing for Construction One in Columbus, Ohio, agrees that effective communication is a must in today’s market. “The construction industry is constantly changing with new and improved methods to provide services, and probably the best new method would have to do with communication,” Moberger says. “New improved portable laptops, digital cameras, wireless phones and modems make it easier to communicate with the customer during all phases of a project.”

Construction One has implemented this technology in the construction of the 513,000-square-foot American Signature Furniture store and warehouse in LaPort, Indiana. “Because this is outside of our headquarters in Columbus, we have had to rely on all of the communication advancements to make this a success,” he says. “Our project managers and superintendents on site are all equipped with mobile phones, digital cameras and wireless modems for e-mail so all new project information can be transmitted back to our client.”

Duke Construction is building a 689,000-square-foot bulk warehouse/distribution center in the Lebanon Business Park in Lebanon, Indiana. The facility, which features a 36-foot ceiling height, is scheduled to be completed by the end of this year.

Indianapolis-based Duke Construction uses the latest electronic innovations to keep up with its projects, past and present. “We’ve got a document management system in which we put our record drawings when projects are completed so we can retrieve them electronically,” says Steve Kennedy, Duke’s executive vice president of construction. “We’ve also internally developed some proprietary software for proposal and contract tracking.”

Changing Times, Changing Methods

The retail industry has changed the most in terms of construction in the last 5 years, according to Brian Arnold, operations vice president of O’Fallon, Missouri-based Paric Corporation. “You’re seeing a lot of retail projects that are being built using a tilt-up construction method, in which all of the exterior walls of the building are cast in concrete and formed right on the floor slabs of the building and then tilted in place,” he says.

Paric Corporation recently completed Patients First Health Care center, an $11.2 million, 83,000-square-foot center in Washington, Missouri.

Another change in the retail market is the move toward open-air lifestyle centers, as opposed to enclosed shopping malls. “More neighborhood strip centers have been developed while fewer larger mall projects have been completed,” Liesveld says. “Retailers are trying to locate closer to where people live.”

Kennedy also notes the trend in building these types of centers. “This really is a big product change,” he says. “Of all the product types, I think [retail centers] are the ones that have changed the most.”

Duke is currently working on Algonquin Commons, a nine-building, 420,000-square-foot lifestyle center in Algonquin, Illinois, for Jeffrey R. Anderson Real Estate. Completion is set for October.

F.H. Martin has caught on to the new boom in construction of retail banking centers. “Not long ago, banks seemed to be doing everything they could to get customers out of the banks,” Martin says. “Now they are grabbing up high visibility sites, building lots of branches, and trying everything they can to bring those customers back into the branches.” The company has teamed up with Charter One Bank, NCBS, Tiseo Architects and Greenberg Farrow Architecture to construct new banking centers throughout southeastern Michigan. F.H. Martin recently completed a 3,227-square-foot banking facility for Charter One Bank at 14 Mile and Mounds roads in Sterling Heights, Michigan. Constructed of metal studs, brick and stone, the center features a translucent skylight system and blue standing seam metal roof.

Martin says his company has also seen a lot of attention and experimentation with different flooring surfaces in the retail environment. “Our clients are looking at long-term maintenance costs, as well as design aesthetics in looking at different materials,” he says. “We are seeing a lot of exposed concrete floors where we used to see resilient tile.” However, the different sealers, stains and the colored concrete used in some applications can present challenges in construction, such as preserving and protecting the surface after it is placed.

In industrial building construction, taller clear heights have become a hot feature. Duke’s Lebanon Building 14, which features 36-foot ceilings, is an example of the growing heights in warehouse building. And with these taller clear heights come flatter floors, according to Kennedy. “With the technology and laser screens that are used today, along with the finishing equipment, it is a lot less expensive to get flatter floors,” he says. The floor flatness (FF), which was typically 25 a few years ago, now is reaching 40 or 50.

In the office construction market, more and more office property types are going the way of wireless, which is something that contractors are keeping in mind. “One of the highest priorities is wireless modems for internal communication,” Moberger says. “More offices are going to wireless modems, so their internal wiring or wireless systems must be redesigned.”

Arnold agrees that wiring for technology and providing technological hardware are a big driver. In Washington, Missouri, Paric recently completed Patients First Health Care center — one of the most technologically advanced medical office buildings in the region. The $11.2 million, 83,000-square-foot center features a women’s health center with digital mammography, a heart center with nuclear imaging and an imaging center with X-ray, ultrasound, CT and MRI. “The medical technology is such that everything is digital, it all has to talk to each other,” Arnold says. “That’s a different deal that we have to accommodate for in the infrastructure of the building.”

Paric also observes that renovation, as opposed to new construction, is a big trend. “A big part of our business right now is the renovation of old buildings, particularly in the urban areas,” Arnold says. “As opposed to new construction or infill development, we’re seeing a lot of old office buildings and old warehouses being turned into apartments and lofts.” Paric is renovating the Paul Brown Building, which is located at 818 Olive Street in downtown St. Louis, into 222 loft style apartments for Paul Brown Developer. The $53 million project will include 20,000 square feet of street-level retail space, a physical fitness center, a rooftop swimming pool, a clubroom and 130 underground covered parking spaces. Paric will build apartments on the second through sixteenth floors and will retain the original corridor detailing of the 79-year-old building. Completion is set for next summer.

In The Know

Not every company relies on the same method to keep up with the progressive construction industry, but a few approaches have been proven more successful than others.

Whether it is through trade magazines, newspaper articles, the Internet or word of mouth, Construction One focuses on continued education to remain up-to-date. “We are always making ourselves aware of what is available,” Moberger says.

Ronnisch also invests in training, as well as in a continued alertness to industry and market changes, according to Liesveld. The company is in the process of updating its systems to support terminal services and has already implemented accounting and project management software. “As contractors come and go, the one thing that remains constant is the demand that we remain flexible and accommodate an open-door approach to new ideas and trends,” he says.

F.H. Martin finds that developing a relationship with its clients clues its company into upcoming trends in construction. “We work closely with our clients as they develop and experiment with different materials,” Martin says. “We do a lot of repeat business, so we learn with them.”

Duke prizes close interaction with clients as well. As a design/builder, the company has constant contact with design consultants and subcontractors, and as a real estate company, Duke has more than 4,000 tenants and construction clients. Through interaction with those clients, their vendors and the design industry in general, along with internal quarterly conferences with different professional groups within the company, Duke keeps its employees integrated in the marketplace.

Diversification has allowed Paric to stay on top of the trends and remain an expert in building construction. The company has three operating business units — a general business group, a hospitality group and an interior group — with three separate individuals in charge of the three units. This division lends itself to increased focus in each field, according to Arnold. “[The diversification] keeps us on the leading edge in terms of specific training for that product and what the industry trends are,” he says. “We actually have specific expertise within the organization to not only build a product, but to also understand that product inside and out.”

On The Horizon

Liesveld predicts there may be some stormy weather up ahead for the construction industry. Government approvals and permits will continue to become more difficult and will take longer to obtain, he asserts. “From urban renewal projects to new developments, owners will need to allot more time, energy and money to get approvals to break ground,” he says. “Construction companies that can show a successful track record with municipalities will be the survivors.”

Martin sees the industry becoming more and more competitive. “Buildings are being used as a tool for corporate America, and building owners are getting more demanding about what they expect from that tool,” he says. “If the building doesn’t meet their needs, they will just get a new [contractor].”

Yet, the future of building construction has a positive outlook, according to Moberger. “I believe that technology will continue to improve where we might see new advancements in the way we communicate,” he says. “We might see digital photos move into video conferencing, and, in the next 5 years, we may see computers doing work that office personnel is currently doing — reducing the need for so much overhead and allowing for more of a concentration in the field.”

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