Construction Advisory Group is committed to contributing to the industry by conducting a blog-conversation on monitoring projects and navigating the construction world.

Monday, December 28, 2009

Carousel Center Drama

According to New York Real-Time News, lawsuits between Carousel Center developer Robert Congel and Citigroup are growing, with the latest dispute over $410 million in mortgages on the mall.

Two of the developer’s companies, Carousel Center Co. and Carousel Enterprises Co., filed a lawsuit against Citigroup in New York State Supreme Court over two mortgage loans totaling $410 million on the Carousel Center shopping mall.

The two Carousel companies are also asking the court to order Citigroup to release $7 million to them from a loan reserve account because they have met the cash flow requirements.

Citigroup responded with a lawsuit of its own that alleges that the two Carousel companies have not met the cash flow requirements to extend the loans.

"Regardless who is right and who is wrong, it appears that, in today’s construction economy, the banks are a major factor that should be closely scrutinized," notes Val Tuhari of Construction Advisory Group, "In particular, the ones that been bailed out by this administration."

"Times will eventually get back to normality," Tuhari points out, "and owners have memory as well."

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Sunday, December 27, 2009

D7E: luxury hybrid dozer

The D7E hybrid bulldozer is in production and ready for sales next month.

This piece of equipment is the result of years of research and development, and more than 70,000 hours of lab and field tests.

The machine costs about $600,000 (a fairly small machine by comparison), a 20% premium over a non-hybrid bulldozer, but Caterpillar claims it increases fuel efficiency by 25%.

The D7E received a Clean Air Excellence Award from the Environmental Protection Agency earlier this year for its innovative hybrid drive, which also cuts carbon emissions.

Is this another embodiment of our obsession with political correctness? And this when unemployment in the construction industry just reach the 22% level.

Construction Advisory Group will wait to see how many contractors spend this outrageous sum of money for a hybrid toy. We think we will be waiting a long time.

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Monday, December 21, 2009

Diversity of Specialty

According to New York Construction, several large public projects will continue to move forward in 2010, but with the economy still troubled and financial markets unyielding, private jobs are few. “The name of the game for 2010 and beyond is to make sure you are well diversified in different product types," says Pat DiFillippo, executive vice president of Turner Construction Co. in New York.

Turner, in a partnership with Tishman Corp. of New York, will provide $105 million in construction management support services for the 800,000 square foot World Trade Center Transportation Hub in lower Manhattan, replacing Phoenix Constructors.

Diversity may by great, but when companies like Turner and Tishman get into a completely different line of work, it should ring bells of concern. These two are major names in building construction -- not infrastructure.

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Wednesday, December 16, 2009

High Strength Steel Reinforcing

High strength steel reinforcing, i.e., 90ksi and 100ksi, is gaining use in contrast to previous years when this reinforcing was cost prohibitive.

It appears that competition between the very few manufacturers of this kind of reinforcing lowered the price, making it more usable from an economical stance.

The professionals at Construction Advisory Group note that it is important to realize that while this rebar is more expensive than the conventional one, it drastically reduces the reinforcing congestion by reducing the amount of horizontal bars in columns and shearwalls -- thus generating substantial labor savings.

The reduction of horizontal reinforcing when 100ksi is used is 40% and 30% compared to when using 90ksi.

This certainly translates into less field labor, less material that is lighter in weight, less hoisting, fewer problems threading mechanical and electrical conduits and sleeves through rebar and easier concrete casting.

The use of 90ksi and 100ksi steel will be eased by the American Concrete Institute’s Design Guide for the Use of ASTM A1035 Grade 100 Steel Bars for Structural Concrete, on course for publication early next year.

This is considerable progress that deserves undivided attention.

Construction Advisory Group strongly recommends that all preconstruction efforts and cost evaluations, prior to job bid, should take into consideration this factor. Owners, general contractors, concrete contractors will all benefit, should the structural engineer of record be in agreement.

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Monday, December 14, 2009

Greenhouse Gases Endanger an Industry

According to Associated General Contractors of America, after the EPA declared greenhouse gases a danger to the public, construction groups said the decision could crush their already struggling industry.

“If the EPA sets strict rules based on that findings, it could force every construction project to undergo a lengthy review under the Clean Air Act”, said Brian Turmail, spokesman for the Associated General Contractors of America.

“If you follow the logical conclusion that greenhouse gas emission are an endangerment, the next step is just like for any other emission EPA considers an endangerment and you have to get a waiver to work on it,” Turmail said.

This morning, that stat is 21% unemployment in the construction industry. Regulation and review costs time and money. There must be a place here for balance to bolster a resurgence in building and trades.

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Wednesday, December 9, 2009

National Renewable Energy Laboratory Building to Consume "Zero Electrons"

This is the National Renewable Energy Laboratory Building, in a rendering. Doesn't it look like they are all running outside? From what, one wonders ...

According to Wall Street Journal, this unit of the U.S. Department of Energy, is midway through construction of the $64 million project.

The architects and engineers have spent thousands of hours calculating the energy use of every aspect of the building, from the elevator to the exit signs.

They have tweaked the design again and again with the aim of getting the 218,000 square foot building to perform a “net zero.” This means the building will consume so little energy that it won’t need to draw a single electron from the grid.

Did we see anything about cost per square foot?

Based on the building stats, the bill reads, simply, like this:

$64,000,000 / 218,000 sf. = $294 /sf.

For a four story building? Around the "water cooler" at Construction Advisory Group, heads are shaking. These numbers border on insane!

The more critical number would be 20% unemployment in the construction industry. It is difficult, at best, to reconcile construction costs rising like there are no limits.

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Tuesday, December 1, 2009

New York: Barometer of Construction Health

In Commercial Real Estate & Construction, Nov. 24, 2009, the New York Building Congress analysis is cited showing that construction in New York City is showing signs of stabilizing in the third quarter, with projects worth $3.9 billion getting underway.

This, per the McGraw-Hill Construction Dodge data, was the second consecutive quarter when project starts hovered around the $4 billion range.

First quarter project starts totaled just $1.8 billion, whereas starts in the third quarter of 2008 -- before the economy tanked -- added up to $5.3 billion.

Residential construction starts averaged $193 million per month for the third quarter, up to $137 million per month in the second quarter, but well shy of the $ 477 million figure of 2008’s third quarter.

Experts estimate unemployment among unionized construction workers has hit about 25%.

It is intriguing that the Building and Construction Trade Council has agreed to new hiring-hall practices that allow non–union minority or women-owned contractors to bring more of their own workforce onto jobs they manage.

This is a positive move on the part of the BCTC. But is it enough when it relates to potential savings in construction costs? No.

We are looking for New York to step back into its role as a leader in construction.

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