Whatcom County construction should continue to recover in 2014

THE BELLINGHAM HERALDFebruary 18, 2014 

Construction Dutch Mall

Stan Goss of Elements Hospitality works on the facade of the Dutch Village Mall on Front Street in Lynden, Thursday morning, Feb. 13, 2014. The renovation of the mall should be completed by late spring. Some in the construction sector are seeing more of these private sector projects in Whatcom County for 2014, a sign that the industry is slowing improving.

PHILIP A. DWYER — THE BELLINGHAM HERALD Buy Photo

Getting back to the pre-recession level of activity has been a tough road for the Whatcom County construction sector, and many in the industry are expecting more baby steps of improvement in 2014.

Construction is one of those industries that fell the hardest and has taken the longest to recover from the economic financial meltdown of 2008. As general contractors get ready for spring and summer projects, some are expecting a slightly busier year than 2013, which was just a little better than the year before.

"I'm cautiously optimistic at this point," said Liz Evans, northern district manager for the Associated General Contractors of Washington, noting that the number of private sector projects is starting to increase.

One aspect of Whatcom County construction that has definitely not recovered is the labor force. The average number of people working in the construction industry last year was 5,600, according to data from the Washington State Employment Security Department. That's the lowest annual average locally since 1997 and well below the average workforce from 2005-2008, which was 8,000 workers.

Even in the decade before that four-year boom period, the local labor force usually averaged between 6,000 and 7,000 workers.

A recent national survey by the Associated General Contractors indicates more contractors plan to hire in 2014 than they did in 2013, while nearly 75 percent expect to purchase new equipment in 2014.

In Washington state, a majority expect to see higher sales volume in a variety of categories, including marine construction, private office and water/sewer projects. Those surveyed appeared pessimistic when it comes to government projects, such as road and public building projects, with a high percentage expecting to see lower sales volume in those categories.

The optimism about more private sector projects comes as a relief in the industry. In the aftermath of the financial meltdown, the only significant projects were coming from the government through various recovery grants. As that funding has wound down, the private sector has stepped up.

"What we're seeing is more commercial tenant improvement projects; people are opening up new stores or expanding in the space they have," said Jules Manos, an estimator at Bellingham-based Credo Construction.

In recent years Credo Construction has focused more on remodeling work as well as environmentally friendly construction, Manos said.

"Last year was our best since 2009, and we're hoping to keep it going this year," he said.

One sign that 2014 will be busier is the increased activity in planning projects this winter, said Dawn Harju, who operates the Western Contractors Resources Plan Center in Bellingham. The center provides a variety of services for contractors and homeowners, including providing space to prepare bids. It's also a place where contractors can look over plans before bidding on a project.

"I'm pretty optimistic about this year. We usually slow down in October and November, but we've stayed busy through the winter," Harju said, adding that many contractors she's talked to are busy through March, even before the construction season usually gets rolling.

Another person in the "cautiously optimistic" camp is Mike Smith of Zervas Group architects. So far this year the firm is seeing a lot of smaller projects, mostly from the private sector. What's encouraging to him is that many local projects that were once dormant are being looked at again.

Evans said something that's helped is the uptick in construction work, particularly multifamily residential projects, in the Seattle area. This has allowed some local firms to land projects to the south.

MAJOR WHATCOM COUNTY CONSTRUCTION PROJECTS

Here's a list of some of the major construction projects that are just getting started or are going through the planning/permitting process and could get started in 2014:

-- Construction has begun for South Bay Suites at the corner of 10th Street and Mill Avenue in Fairhaven. The four-story building will have underground parking and space for retail, office and apartment units.

-- The Silver Reef Hotel Casino Spa is starting construction later this month on a new hotel tower and additional meeting space. Expansion plans include adding 100 hotel rooms, increasing the total number of rooms to 205. The project also will add 3,000 square feet of meeting space, an expanded hotel lobby and a new bar. The $27 million project is expected to take about 16 months to complete.

-- Construction has begun on the 83-unit Marriott's TownPlace Suites, which is going next to the 122-unit SpringHill Suites at 4040 Northwest Ave.

-- Hilton has submitted building permits to build a 106-room extended-stay hotel across the street from the SpringHill Suites.

-- Holiday Inn is expected to start construction in March on a 150-room hotel near Bellingham International Airport.

-- Work has begun on a 99-room Oxford Suites hotel near Barnes & Noble.

-- A new Costco store and a 142,000-square-foot shopping center have been proposed on a 13-acre property near West Bakerview Road and Interstate 5. The Costco store would be about 160,000 square feet and include a fueling station.

-- Safeway has submitted building permit plans to remodel the former Cost Cutter building at Sunset Square as well as add a fueling station nearby.

-- Construction of the new Birchwood Elementary School began last summer and is expected to be done before the school year starts this fall.

-- Apartments: Several apartment projects involving hundreds of new units are at different stages in the planning process, including University Ridge in the Puget neighborhood, The Grove at Bellingham near the Lakeway Fred Meyer and another 175-unit apartment complex closer to the Samish Way overpass.

-- Western Washington University: 2014 should be a relatively light year for major construction projects, but quite a few smaller ones are planned for this summer, said Ed Simpson, assistant director at the Office of Facilities Development and Capital Budget. Those projects include a renovation of the Nash Hall residential building, exterior work on the Performing Arts Center and upgrades to utilities on the north part of campus. Funding for a major renovation of Carver Gym has not yet been approved by the state legislature. If funding is approved, work wouldn't begin until 2015 at the earliest, Simpson said.

-- Port of Bellingham: With the airport expansion wrapping up, the port doesn't have any major construction projects scheduled for 2014. It does have a variety of other work that requires significant contractor help, however, including environmental cleanup work along the Bellingham waterfront. Some of the smaller construction work on tap for this year includes starting a multi-year project to replace an aging portion of the Fairhaven Shipyard pier and repairs to the Bellingham Shipping Terminal.

Reach Business Editor Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Read the Business Blog at bellinghamherald.com/business-blog or get updates on Twitter at @bhamheraldbiz.

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