As the demand for new hotels and condominium projects has weakened, New York City’s construction industry — which saw a modest increase in costs this year — is turning to the educational market for new opportunities. “Since the private market has declined so much for the past two years, it means the educational sector has grown as an overall percentage of the total market,” Richard Anderson, president of the New York Building Congress, told the Wall Street Journal. In 2008, the peak year, about $31 billion was spent on all construction activity in the city, $4 billion of which was dedicated to public schools and private institutions, Anderson said. In 2009, education construction accounted for $4.4 billion of the $27 billion in construction activity. So far in 2010, the overall market has decreased to about $25 billion, with about $5 billion being spent on school construction, Anderson estimated. But the future is uncertain for the education market, as government revenues are dwindling and private endowments are shrinking. “Our fear is that educational construction may not continue at the current level,” Anderson said. [WSJ]

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Richard Anderson, president of New York Building Congress

After declining in 2009, construction spending in New York City remains above $20 billion a year, with costs increasing modestly this year, according to a review of multiple indexes released today by the New York Building Congress. Increases in construction costs ranged from .8 percent to 4.9 percent for the first three quarters of 2010, compared to a nationwide increase of .1 percent to 7.2 percent. But these increases have been caused more by changes in commodity prices like diesel fuel, copper, aluminum and steel rather than by wage increases, the report says. Construction firm executives said that although activity for interior office renovations was up this year, they don’t expect much business from new residential or commercial development in the next year or two, The Real Deal reported in August.
“The good news is that New York City is in no way experiencing the relentless rate of cost escalation experienced during the boom,” said Richard Anderson, president of the New York Building Congress. “The bad news is that, depending upon which index you use, New York has given back most, if not all, of the cost declines we experienced in 2009.” The report also shows that New York City fared well in overall construction costs, with Class A office space construction at $288 per square foot, compared to $418 per square foot in London, its biggest international competitor. TRD

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New York City saw $2.5 billion worth of construction projects get off the ground last quarter, a 64 percent decline from the first quarter of the year’s $6.9 billion, and a sign that an industry recovery may be further off on the horizon than previously hoped, acco [more]

Terminal 4

Plans for the redevelopment
and expansion of Delta Air Lines Terminal 4 at John F. Kennedy
International Airport — which call for nine new international gates,
construction of a connector between Terminal 2 and Terminal 4, an
expanded baggage claim area and ultimately the demolition of Terminal 3 — were unveiled today by Mayor Michael Bloomberg, Governor David Paterson and Delta CEO Richard Anderson. Construction for the $1.2 billion project is scheduled to begin in September, with the first phase of development and full relocation of Delta’s Terminal 3 operations slated for completion in M [more]

Richard Anderson and Weill Cornell Medical College

The value of construction projects started by New York City public and
private institutions amounted to $8.1 billion over a two-year period
ending April, according to a New York Building Congress report released
today. The public sector was responsible for 60 percent of spending.
More than 1,500 construction projects were started by city-based
institutions over the two-year period. Construction of new government facilities totaled $4.8 billion in value, in direct contrast with the office sector, which has seen very little ground-up construction outside the World Trade Center in recent years. New construction starts include: the $650 million Weill Cornell Medical College’s research building; the $381 million City University of New York’s Advanced Research Center and $210 million Fiterman Hall; a Mount Sinai School of Medicine research building, valued at $225 million; and a $117 million Staten Island courthouse complex. New York Building Congress President Richard Anderson noted that Columbia, NYU and Fordham have unveiled detailed campus expansion plans, and CUNY has more than $1 billion in projects in varying stages of development. TRD

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Richard Anderson

New construction starts for New York City office buildings declined significantly in the first four months of the year, according to the New York Building Congress. The value of office building construction starts during the first four months of 2010 totaled $163 million, which puts it on track to reach $489 million by the end of the year — a figure that pales in comparison to 2009′s $2.6 billion and 2008′s $1.3 billion. Renovations and construction on existing office buildings comprised the majority of office building activity, according to the report, with little ground-up construction momentum so far this year. Richard Anderson, president of the building trade group, said that few projects have come down the pipeline. “As office tower projects, such as Goldman Sachs and 11 Times Square,
were completed, the projects we hoped would replace them, such as the
Gem Tower and 250 West 55th Street, are on hold,” Anderson said. “With the exception of the
World Trade Center Towers 1 and 4, and the Gotham Center project in
Long Island City, new office construction is at a virtual standstill.” TRD

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The New York City Department of Buildings issued residential permits for only 6,057 units in 1,014 buildings in 2009, marking an 82 percent drop from the number issued in 2008, when DOB granted permits for 33,911 units in 2,434 buildings. Declines in the number of permits issued were most pronounced in Manhattan and Brooklyn, which saw drops of 86 percent and 92 percent, respectively, according to DOB data. [more]

The city has slightly fewer stalled construction sites after November brought the rejuvenation of some projects that had come to a standstill. Inspection records from the Department of Buildings, analyzed by the New York Building Congress, revealed that the city is home to 515 inactive construction sites, as of Nov. 29. That’s slightly lower than the 531 such sites identified as of Nov. 1, the result of a large increase during the month of October. Nearly all stalled projects are residential developments, the Building Congress said, and they are largely concentrated in Brooklyn, which has 237, or 46 percent, of the city’s total number. Roughly one-third of Brooklyn’s stalled sites were in neighborhoods in the northern portion of the borough, like Williamsburg, East Williamsburg and Greenpoint. Queens followed with 140 dormant sites, or 27 percent of those citywide. Manhattan has 80; Staten Island has 34; and the Bronx has 24. The city recently introduced incentives for owners of stalled projects to keep their sites safe in exchange for renewing their building permits for up to four more years. “It is important for government and the development community to continue working together to minimize the immediate environmental and quality-of-life impacts of these stalled projects on the hardest hit communities,” said Richard Anderson, president of the Building Congress. TRD

Both residential and commercial construction has declined dramatically
this year, according to a report released today by the New York
Building Congress. The coalition projects that just 6,300 new
residential units will be constructed in the city this year, after five
consecutive years in which 30,000 or more residential units were
constructed. Total residential construction spending this year is
expected to amount to $3.5 billion, down 44 percent from 2008, which
reached $6.3 billion, the report, “New York City Construction Outlook
2009-2011,” says. The report projects a similar outcome for non-residential construction this year. Non-residential construction spending will hit $6.9 billion this year, the report says, marking a 38 percent decline from the 2008 spending, which was $11.1 billion. Even so, the report claims that spending and employment in the construction industry are likely to stabilize in the next two years. While construction spending in 2009 is expected to reach just $25.8 billion, marking a 20 percent decline from 2008, employment is expected to decline only 8.3 percent this year, according to the report. Spending is expected to remain steady through 2010 and 2011, reaching $25 billion and $25.6 billion, respectively, the report claims. TRD [more]

Construction spending hit a record $31.8 billion in 2008, according to
a report released today by the New York Building Congress. That amount
was up from $30.5 billion in 2007 and $26.6 billion in 2006. Public
sector construction totaled $15 billion, a slight drop from $15.6
billion in 2007. Office, institutional and sports and entertainment
construction made up $10.9 billion of the 2008 total. About $5.9
billion was spent on residential construction in 2008, down from $6.1
billion in 2007. Construction employment increased to 129,900 from
127,000 in 2007. But this year does not look as promising. “Most signs
are pointing down for the current year,” said Richard Anderson,
president of the organization. TRD [more]