‘Nice opportunities’ expected for commercial Corridor builders in 2012

While the construction market in the Corridor was one of the safer places to be during the national building downturn, times haven't exactly been easy in many areas of the industry.

Although some in the field remain cautious, the outlook for private-sector construction during 2012 is for improved demand, according to construction sources. Richard Pankey, director of business development for Point Builders Inc. in Cedar Rapids, is on the more optimistic side.

“We're looking for a good year,” Pankey said. “We have a number of very solid prospects and past clients looking to do some work. Some of them right now are on the fence.

“We've seen the prices of our subcontractors come in very competitive.”

Point Builders has two good-sized projects totaling about $3.2 million already booked - a new facility for Area Ambulance and a new home for Acme Graphics, which is relocating from downtown Cedar Rapids due to a city buyout for flood protection.

Pat Barten, construction manager at SouthGate Companies in Iowa City, on the other hand, remains on the cautious side.

“There's plenty of work out there,” Barten said, but some projects still under bid will determine whether it's a good year or simply a fair one.

SouthGate already has started on construction of a new 20,000-square-foot warehouse for Scheel's, the sporting goods retailer, in western Coralville, and a $5.75 renovation of Broadway Condominiums in southeast Iowa City.

Miron Construction Vice President of Iowa Operations Jason Imhoff is “cautiously optimistic things are going to continue to improve.”

“There are some nice opportunities in the industrial and manufacturing sector,” said Imhoff, whose company is working on the city of Cedar Rapids's Convention Complex.

He said many projects involve flood recovery work but could lead to future opportunities in the private sector as the recovering downtown area of Cedar Rapids gains vitality.

Scott Sylvester, director of business development for Knutson Construction Co.'s Iowa City office, said much of his company's book of projects for 2012 is in the public sector, but it also has a MidwestOne Bank in Fairfield, and some sizable industrial projects at ADM and American Profol in Cedar Rapids, and DeKalb Feeds in Frytown.

“We'll have a good year,” Sylvester said.

Knutson recently completed a multimillion-dollar remodeling of Von Maur's department store at Lindale Mall in Cedar Rapids.

One barometer of how things are going in construction is hiring activity in the building trades.

Carpenters Local 308 President Dave Hogan said the union has had almost full employment since July, and sees some big projects getting started.

“I'm very, very optimistic for another very good year,” Hogan said. “We're taking in apprentices at a much more accelerated clip than we have in the past eyar. We probably added 10 or 15 apprentices in the past six months.”

The seasonal building slowdown usually often leaves 50 to 100 Local 308 members without work in December. But construction remained very active this past December due to mild weather, leaving only 15 or 20 without work, Hogan said.

The home building market has been one of the area's most affected by the sluggish economy. Mike Flynn of Flynn Homes in Cedar Rapids focuses on the high-end housing market, which has been one of the slower housing segments.

But Flynn said he's seeing signs of pent-up demand, judging from the interest of potential clients.

“I think the corner has been turned,” Flynn said. “I think next year is going to be a better year.”

The economics of building at this time is a strong selling point, he said. Interest rates, he noted, have been exceptionally low, and building material costs are “as low as they're going to be.”

In the final analysis, Flynn said that many buying decisions will boil down to consumer confidence and how consumers feel about the economic outlook.

Several large construction projects will carry forward well into 2012, including erection of the $46.5 million Physicians' Clinic of Iowa Medical Pavilion in Cedar Rapids, and the coordinated Iowa River Landing developments in Coralville that include a new Von Maur department store, Homewood Suites Hotel and Backpocket Brewing brew pub.

The PCI pavilion was the first private, for-profit investment in downtown Cedar Rapids since the flood of 2008.

Projects just getting under way will include a new $12-million Enseva data center at 755 Metzger Drive in Hiawatha, and the $22.5 million Lincolnview Square project in Marion that will transform the old Marion Shopping Center area.

Construction will continue in North Liberty on $25 million support center for the University of Iowa Community Credit Union south of the Interstate 380 Penn Street exit.

Renovation of the former Amana warehouse in Coralville began recently to create the first Costco store in the area. Coralville building official Jim Kessler said Costco has generated a lot of interest that could bring other projects.

“I look at that to spur some growth out in the (Coral Ridge) Mall area,” Kessler said. “Costco is a big deal.”

One project that could get a boost is Coral Galleria, which got under way this year. The 16-acre development just south of Coral Ridge Mall will include a 103-room Residence Inn by Marriott planned by Hawkeye Hotels of Burlington, along with the prospect of other restaurants and hotels.

Vern Zakostelecky, a planner in the city of Cedar Rapids's Community Development Department, said early requests for regulatory approvals point to a good construction year in Cedar Rapids. Interest has emerged to construct a new senior living facility, and a new Chick-fil-A restaurant, among others.

Hy-Vee has sought rezoning for a new store in North Cedar Rapids, and redevelopment work on outlying parcels of the Westdale Mall could spawn additional retail.

One of the large industrial projects moving forward in Cedar Rapids is a $38.7 million expansion and modernization at Genencor, which manufactures enzymes in southwest Cedar Rapids.

Mercy Medical Center will be putting the finishing touches on its $24.6 million, 85,000-square-foot Hall-Perrine Cancer Center at 701 10th St. SE.

In other areas of the 50-plus-block MedQuarter Regional Medical District, work will get under way on a new 45,000-square-foot professional office building planned by Steve Emerson at 600 Third Ave. SE and on a new medical pavilion parking structure at the northwest corner of Second Avenue and 10th Street SE.