Commercial construction still slow to rebound

The return of speculative industrial construction to the Reno-Sparks market in 2014 provides a minor ray of light in an otherwise gloomy outlook for contractors and construction workers.

Dermody Properties is expected to develop a 624,000-square-foot building at Lemmon Drive and North Virginia Street to be built by United Construction, but the project isn’t expected to kick off until the third quarter. And Lake Washington Partners of Seattle acquired 66 acres at the Spanish Springs Business Park on the west side of Pyramid Highway and plans to develop a 600,000-square-foot building.

Those two projects, coupled with the $15 million Galaxy Theaters project nearing completion at Legends at Sparks Marina, might be the largest private construction jobs in the Reno-Sparks market all year.

Walmart said a few weeks ago that it plans on building a 180,000-square-foot supercenter at Legends, and pending approvals from the City of Sparks the company could break ground on its project in 2014, says Robyn Young, executive vice president of marketing and communications for Legends owner RED Development.

But the volume of public works projects remains low. The lone highlight is the Southeast Connector project being built by Kiewit Corporation. Kiewit is building a 1,300-foot bridge over the Truckee River as part of the first phase of the $250 million project. The second phase, building 4.5 miles of roadway from Clean Water Way to the intersection of Veterans Parkway and South Meadows Boulevard, could begin later in 2014.

John Madole, executive director of Nevada Chapter Associated General Contractors of America, says that the region appears to be in a holding pattern for yet another year.

“Some people seem to think that it is a little better than it was several years ago, but it’s still pretty quiet. So many people left the area that it doesn’t take as many jobs to employ everybody as did years ago.”

Commercial construction valuation in Washoe County rose in 2013 to $49.4 million, up from $33.7 million the previous year. The county issued 234 permits for commercial work in 2013 versus 202 in 2012.

Craig Willcut, president and chief executive officer of United Construction, is hopeful the coming year heats up, but for the most part large general contracting firms such as United are cautious about the potential volume of work in the Truckee Meadows.

“In my opinion it’s still going to take some time to ramp up,” Willcut says. “There could potentially be some projects in the pipeline for next year, but it’s too early to tell for us.”

United has begun grading at the Dermody industrial site, and despite extreme low temperatures in December that slowed work the firm is making strong headway on the new Boys & Girls Club of Truckee Meadows building on Foster Drive. The facility is expected to be completed early second quarter. United also is nearing completion on a new 30,000-square-foot hangar and 13,000-square-foot terminal for Atlantic Aviation off Rock Boulevard. The job is projected to wrap up in the middle to end of the first quarter.

Like many regional firms, United has cast a wide net in order to find work. The company headquartered at Mill Street near McCarran Boulevard opened an office in Chicago in February and has landed jobs in Chicago and Louisville, Ky. United in 2013 also increased its Reno office and superintendent staff by 10 people.

“We are looking throughout the Midwest at other stuff,” Willcut says. “There’s a good chance we will be working in Salt Lake City next year, and we are talking with a customer in Portland, Ore.”

Madole says other AGC member firms continue to seek work outside their home market.

“People who historically made most of their living within a couple hundred miles of Reno are chasing things in Colorado, Wyoming and Idaho,” Madole says. “The cities of Reno and Sparks do have some small public works projects and there’s some sewer work, but state highway funds are minimal and there’s very little going on around Reno as far as NDOT.”