Construction will affect Iowa City area economy for years

Simultaneous on-going projects have some concerned

Take a gander at the University of Iowa campus. Over the next three to five years, it's all going to look very different.

An unprecedented amount of new and flood replacement construction at the University of Iowa, coupled with public and private building projects, is expected to have a profound effect on the community.

"The total impact to our campus from the 2008 flood is anticipated to be roughly $900 million," said Rod Lehnertz, UI director of planning, design and construction. "We're in the midst of an 18-month period where we will bid and award approximately $1 billion of construction, which does not include design and management fees.

"The university has never done that much construction work at one time and will never again do that much work at one time. It is the intersection of a lot of projects in the works for some time independent of the flood as well as the mass of flood-related construction."

Twenty-two UI buildings were damaged in the June 2008 flood and three — Hancher Auditorium, the School of Music and the Art Building — qualified for Federal Emergency Management Agency replacement funding.

Construction has begun on all three projects, which will cost a estimated $402 million, with FEMA paying $266 million.

Construction also has started on the new UI Children’s Hospital, a $292 million project set for completion in March 2016. The 480,000 square feet of new construction and 56,250 square feet of renovated existing space will be funded through bonds, patient revenue and private gifts.

One side effect will be that the massive amount of construction will swell the number of contractors and suppliers on campus for a number of years, Lehnertz said.

"At the height of construction workload previously, we have had about 1,000 construction workers on campus," Lehnertz said. "Based on the projections that we have now, we expect that will triple to about 3,000 over the next three to four years.

"It's going to be tough to fit them in, but the end results will be worth the interruptions and inconvenience. We will be bringing a lot of people into the community who will be staying in hotels, eating in restaurants and spending money while they're working in our community.

"Before the flood of 2008, we would spend about $7 million each month on construction. Over the next three years, that figure will rise to about $20 million per month."

A study by George Mason University economist Stephen Fuller found 28.5 jobs are created in the overall national economy for every $1 million spent on construction. Using that multiplier, the UI's construction program would pump over 23,000 jobs into the national economy during the next four years.

While the UI will account for the largest share over the next three to five years, public and private projects also will account for a sizable share of new construction.

The Iowa City Community School District is considering adding two new elementary schools as well as a new high school. The Clear Creek-Amana Community School District is planning a new elementary school in North Liberty.

Developer Marc Moen will be completing work on Park@201, a $10.7 million, 14-story office and residential glass high rise at 114 S. Dubuque St. on the Ped Mall in Iowa City. Moen also is negotiating a development agreement with Iowa City to build the Chauncey, a 20-story mixed-use building, on city-owned land at the northeast corner of College and Gilbert streets.

The $53.8 million project is opposed by a citizens group that contends it would violate the city’s comprehensive plan. The Iowa Coalition Against the Shadow has filed a lawsuit to block the project.

Iowa City also will be moving forward with redevelopment of Riverfront Crossings, a 278-acre area at Benton Street and Riverside Drive. The master plan unveiled in October includes housing, retail stores and offices.

Lehnertz views the volume of construction work on the UI campus and in the community as a positive "energy" that will enhance economic development.

"For any and all the inconveniences that the construction may bring, there's nothing wrong with seeing extra bodies on the streets or a little longer lines in the restaurants," Lehnertz said. "All of that is economic development.

"When all the construction is completed, we will see the transformation of the campus and the communities that surround the university."

While he sees the potential positive effects, Mark Nolte, president and CEO of the Iowa City Area Development Group, also is concerned about what he views as challenges.

"I'm concerned about how we manage the influx of skilled trades and people required for such a large amount of construction work," Nolte said. "Can we find efficiencies of scale in terms of secure storage for machinery and materials, as opposed to having stuff all over the community?

"How do you coordinate all the university and private sector projects so you can properly utilize the skilled trades coming into the community? How do you make sure your local contractors and supplies are getting good opportunities in the bidding process?

"If we do it right, and it's a very coordinated effort, it could be a great way to bring people into our community for the long haul. Rather than staying in a hotel and then leaving at the end of construction, it would be far better to attract them to move their families to the community and grow our population," Nolte said.

Lehnertz said UI has worked over the past 18 months to acquaint Iowa contractors and suppliers with the bidding process. Large projects have been broken into smaller bid packages to make them attractive to Iowa contractors in terms of bonding limits, he said.

"We've been working hard to maximize the opportunities for Iowa contractors," Lehnertz said. "The Hancher Auditorium project would very likely have attracted large national contractors.

"We subdivided it into dozens of smaller bid packages, giving a competitive advantage to Iowa contractors."

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