Building activity? While large projects planned, construction still slow overall

Construction proceeds on the new Mesa County Workforce Center on 29 1/2 Road in Grand Junction. The building, scheduled for completion in April, is among a number of large projects under way or set to soon begin in the Grand Valley. Despite some encouraging exceptions, commercial construction activity overall remains slow. (Business Times photo by Phil Castle)

Phil Castle, The Business Times

Ed Forsman lists the projects his construction company has completed, the projects the Grand Junction-based firm has under way and the proposed projects on which he hopes to soon work.

FCI Constructors recently completed a combination brewery and restaurant. The company is the midst of work on the new Mesa County Workforce Center as well as a medical office building. And the firm could be involved in an even bigger project to complete two vacant floors on the patient tower at St. Mary’s Hospital.

Still, those projects constitute notable exceptions to what Forsman, president of FCI Constructors, describes as an overall slow pace for commercial construction on the Grand Valley. The pace hasn’t quickened appreciably since the dual downturns in energy production and the economy, and isn’t likely to change until the area no longer lags behind in the recovery, he says. “It’s status quo, if you will.”

Clark Atkinson, president of Shaw Construction, another large construction firm with operations in Grand Junction, shares the outlook. “It’s a little hit and miss.”

There’s at least of measure of encouragement, nonetheless, in the number and scope of construction projects that are under way or soon will be.

A medical office building is under construction near G and 23 1/2 Roads, the first phase of a campus that ultimately will include a new facility for Community Hospital expected to cost more than $40 million.

Colorado Mesa University broke ground on a new classroom on its Grand Junction campus. Work begins on the nearly $20 million classroom even as work nears completion on a $12.7 million residence hall close by.

West Star Aviation announced an $8 million project that will include a 45,500 square-foot hangar to accommodate even larger aircraft for the inspection, maintenance and painting services the company provides at the Grand Junction Regional Airport. The Grand Junction Airport Authority also plans a new administration building at the airport.

That project at St. Mary’s is expected to begin this fall and cost about $40 million.

Two more medical office buildings are under construction near First Street and Patterson Road and 11th Street and Wellington Avenue.

Still other projects in various stages of the city planning process including a new truck stop on U.S. Highway 6 & 50 that will be constructed near a realigned interchange at 22 Road, an 8,000 square-foot retail outlet on Patterson Road, a solar farm on D 1/4 Road, a new hotel proposed for Market Street and a Del Taco restaurant on North Avenue.

Lisa Cox, planning manager for the City of Grand Junction, says commercial construction activity isn’t as busy as it was prior to the recession.

But there are indications that’s changing, Cox says. “It’s making a comeback, but it’s a little bit slow going.”

Rather than develop new shopping centers or construct large buildings, businesses are changing locations or filling in vacant spaces with smaller facilities, Cox says.

Dale Beede, broker and partner at Coldwell Banker Commercial Prime Properties in Grand Junction, says one of the renovations involves a new business at GJ Scores, a large bowling alley and entertainment center that had closed.

Overall, though, sales of commercial and industrial properties remains slow, Beede says. An abundance of industrial land remains available.

Substantial job growth, particularly in the industrial sector, is needed to spur activity in commercial construction, he says.

Greg Motz, president of Sun King Management in Grand Junction, says a lot of the commercial construction that’s either under way or soon will be involves public, rather than private, projects.

Sun King was involved in the construction of the American Furniture Warehouse store in Grand Junction as well as remodeling existing buildings for new  T.J. Maxx and Tractor Supply outlets.

Overall, though, many businesses remain reluctant to invest in new buildings,  Motz says. “They’re not spending a lot of money.”

Dan Roberts, chief financial officer of Mays Concrete in Grand Junction, agrees a lot of the commercial construction under way in the Grand Valley involves public money, but has contributed to what he sees as an uptick in activity.

“There definitely is more work in the valley. That is a really good thing,” Roberts says.

While competition remains fierce, margins have improved to the point construction companies can include a profit in their bids, Roberts says.

Suzie Miller, business services manager at the Mesa County Workforce Center in Grand Junction, says there’s been a slight increase in demand for construction workers even as seasonal hiring heats up along with the spring and summer weather.

The monthly unemployment rate in Mesa County dropped six-tenths of a point to 8.2 percent in April, the latest month for which estimates are available. At this time last year, the rate stood at 9 percent.

“We are doing better,” Miller says.

While commercial construction activity has yet to produce a large increase in payrolls, Miller says she’s heartened by the announcement of large projects as an indicator of broader economic trends. “Expansion doesn’t happen if businesses feel insecure about the future.”

Kelly Flenniken, executive director of the Grand Junction Economic Partnership, agrees. “I think it says there’s some confidence that’s coming back.”

 It still could be a while, though, before commercial construction activity comes back in full force in the Grand Valley.

Atkinson says the Grand Valley continues to lag behind other areas of Colorado where Shaw Construction has projects. “Denver is just rocking and rolling,” he says.

The exception has been continued construction at Colorado Mesa University, which Atkinson calls a “bright shining star.” Shaw Construction oversaw work of the new residence hall and also will oversee work on the new classroom.

Shaw Construction also was involved in an expansion and improvement project at the central branch of the Mesa County Library. And Atkinson hopes the company also will be involved in the West Star Aviation project as well as new facilities for the St. Mary’s and Community hospitals.

Education, aviation and health care all constitute important sectors in the Grand Valley, Atkinson says. But adding more depth and diversity to the economy would help in smoothing out the cycles that can disproportionally affect the construction industry, he adds.

Back at FCI Constructors, Forsman says there have been more opportunities for his company in other areas of Colorado and other states in which it operates than in the Grand Valley.

But having lagged behind those other areas and states in experiencing the full effects of the recession, the Grand Valley likely will lag behind in enjoying a more robust recovery, Forsman says.

And when commercial construction activity does speed up, the benefits will be felt in more jobs and increased spending on everything from building supplies and gasoline to clothing and groceries, Forsman says. “It’s huge.”