Builders Report Lots of Construction in Pipelines
YOUNGSTOWN, Ohio – The resurgence of oil and gas markets in the Utica and Marcellus shale plays, plus hefty logbooks filled with new commercial construction projects, are keeping contractors and suppliers busy as the building season hits full stride.
“We’ve experienced the largest surge this year with the exception of when the shale boom first started,” says Todd Miller, vice president of Bolt Construction Inc., Poland, a company that builds compressor, dehydration and metering stations for the oil and gas industry. “The forecast looks good.”
Elsewhere, commercial projects – both large and small – have helped general and specialty contractors enjoy a robust start this spring. Highway and roadwork have kept paving companies working, office and commercial renovations are above last year’s levels, the elder care industry is enlarging its footprint, while industrial and business expansions are evident throughout the Mahoning Valley, contractors say.
Missing for the past three years in this building mix was significant work available for contractors in the oil and gas industry, says Bolt Construction’s Miller. Since January, however, his company has been riding high as energy companies accelerate drilling programs in the Utica and Marcellus shale plays in Ohio, Pennsylvania, and West Virginia.
Central to Bolt’s business are planned pipeline networks throughout the region, Miller says, many of which are still under review by the Federal Energy Regulatory Commission, or FERC. Still, the oil and gas business has bounced back to a point where Bolt is looking for skilled workers with experience as welders, pipe-fitters, superintendents and foremen.
“It’s getting harder and harder” to find the right workers, Miller says, especially when it appears that FERC will release at one time a batch of permits for pipeline work. “We’ve been bidding nonstop since November.”
Earlier this year, Miller says, a significant number of projects were approved within days of each other, more than any one company could handle. “There were an astronomical amount of projects out there at one time and we had to turn down quite a few,” he says.
Most of this work is in the southeastern portion of Ohio’s Utica and across the Marcellus shale in Pennsylvania and West Virginia. There might be additional opportunities in the region should FERC give the go-ahead on a pipeline project planned to stretch from northern West Virginia panhandle and angle southeast through Virginia and North Carolina.
Bolt employs about 120, most of whom are deployed in the field, Miller says. Twenty or so work in the company’s fabrication shop in Poland. “The market is looking very good right now,” he says.
In other sectors, construction activity has slowly trended upward in the Mahoning Valley over the last several years, and this year appears more pronounced – even in retail pockets of the local economy.
“Last year was a record year for us, and this year looks like another record year,” says Larry Lencyk, president of Lencyk Masonry Co. Inc. in Boardman. Although the company has secured work on several major school projects out of town – two in Akron, another in Toledo – Lencyk is preoccupied with some 15 other jobs in the Mahoning Valley.
Lencyk provided the masonry work for Girard-based Windsor House Inc.’s Windsor House at Canfield, a $12 million skilled nursing center along state Route 446. The senior-care home is scheduled to open next fall. Among his company’s other projects are the brickwork on the second University Edge apartment complex, under construction at Youngstown State University. “We’re also doing some retail such as the Tiffany Plaza project in Boardman,” Lencyk reports.
Lencyk senses a general optimism about the economy, which has been slowly gaining momentum since the Great Recession in 2008-2009. “There was a level of uncertainty then, but I think people are now willing to spend money to build buildings and develop properties,” he says. In fact, Lencyk says, his company is finding it hard just to keep up with bidding, even with five full-time estimators on staff.
“It’s finally coming back,” remarks Becky Hively, office manager at Hively Construction, Canfield. “The previous five years have been slow, and it’s not quite back to where we’d like to see it, but we’re optimistic.”
Companies are reinvesting more dollars into expansion projects in this market, Hively says, evidenced by additions and renovations for industrial customers such as IES Corp. in Canfield and Duca Manufacturing in Boardman.
Among the largest project the company has landed is FedEx Ground’s $15 million expansion at its complex in North Jackson, Hively says. “There are tons of filler jobs in between,” she notes. Thus far in 2017, Hively estimates the company has bid about 100 projects. “We never stop doing that.”
Business for the general contractor has shot up about 50% this year compared to last season, she says. “There are a lot more businesses adding on and expanding rather than maintenance,” she explains. “It’s been a very good year.”
Other builders in the region say they’re experiencing the same sense of business growth, noting improvements in the retail, residential and industrial markets. And, there’s a noticeable trend in the services industrial customers want from their contractors today versus a decade ago.
“We’re seeing commercial and industrial owners looking for ways to be more involved,” says Andrew Opalinski, director of marketing and digital media at Wesex Corp., West Middlesex, Pa. “We have positioned ourselves to address that.”
Wesex employs in-house architects and has integrated building information modeling, or BIM, into all aspects of the business over the past year, Opalinski says. This includes design, construction, documentation, virtual-reality simulation, renderings, field layouts, budgeting, scheduling and shop drawings. “It allows our clients to have both one-on-one and collaboration through the digital cloud throughout their entire project.”
Wesex recently completed a 5,500-square-foot addition to its Mercer County offices and is nearly finished with a 78,000-square-foot manufacturing plant for CCL Label in New Albany, Ohio.
This summer, the company plans to begin work on three other projects, one of which is the first phase of a large distribution center in Beaver County, Pa.
“We’re beginning design and construction on the Fairlane Distribution Center – phase one of Beaver County’s Turnpike Distribution Center Master Plan – where three or four new buildings will occupy the site totaling more than one million square feet,” Opalinski says. Wesex will coordinate the construction of the first building, a 400,000-square-foot structure that can support up to four warehouse and distribution tenants.
Two other projects slated to start this summer are an interior renovation project for O’Neill Coffee Roasters in West Middlesex and a two-story interior renovation at the Keystone Blind Association in Hermitage, Pa.
Meanwhile, the retail, restaurant and hospitality market has provided GreenHeart Companies, Boardman, with a booked schedule this construction season, says its president, Brian Angelilli. “Right now, we’re getting consistent growth in all our divisions,” he says.
GreenHeart’s scope encompasses commercial construction, residential development and management, historic window restoration and property management, Angelilli says. At present, the company is among the contractors converting the landmark Stambaugh Building in downtown Youngstown into a DoubleTree hotel. “We’re doing a full window replacement in the Stambaugh,” he says.
Meanwhile, GreenHeart is building a Dunkin’ Donuts and a Domino’s Pizza shop in Niles and recently completed entrance renovations to the Eastwood Mall. “We’re seeing about a 20% to 25% growth this year,” Angelilli says.
R.T. Vernal, president at RT Vernal Paving & Excavating, North Lima, is more reserved on the business outlook the rest of the year for his company, but the work on the table is on par with last year’s volume.
“There are a lot of projects out there to bid,” he says. Margins, however, are tight at the moment. “From what I’m hearing, there’s a decent amount of work out there,” he says, “but nothing earth-shattering.”
RT Vernal is constructing an asphalt running track in Canton and working on several road-resurfacing projects, including a portion of state Route 46 in Canfield and select streets in the city of Youngstown, Vernal notes.
The company also owns and operates its own asphalt production plant on Andrews Avenue in Youngstown, Vernal adds. “We sell to ourselves and others as well,” he says. The price of asphalt is on the low end at the moment, in part because of still below-normal oil prices and demand that hasn’t hit its peak. Once demand rises this summer, prices should also rise, he explains.
While business expansions and new construction represent the bulk of the investments in the building market, renovations and remodeling projects in the residential and commercial sectors also command a significant portion of the market, contractors say.
“The residential remodel market is huge right now,” says Joe Fusillo of Fusillo Flooring Co., Boardman. The company handles remodeling projects – mostly kitchen, bath and basement work, he says. “There’s also some growth in the small commercial market.”
Fusillo Flooring specializes in tile, stonework, granite and marble coverings, but also works with customers on cabinetry, design and fixtures for their projects. “We handle the entire project,” he says.
New residential construction is limited in the Mahoning Valley, which leaves homeowners with the option of spending on remodeling projects. “More people are putting money back into their homes,” Fusillo says.
Richard Abel, vice president of Banner Supply Inc. in Youngstown, sees much of the same in his business, which is selling roofing tiles, siding, spouting and decking for the residential market.
“We do sell to the commercial market, but that business is moderate at the moment,” Abel says. “There has been an improvement with new assisted living facilities, nursing homes and multi-family buildings.”
About 90% of Banner’s business is devoted to residential, and business in all of the company’s product streams is consistently strong this year. Residential roof replacement is especially in demand at the moment in the wake of a line of strong storms that swept through eastern Ohio and western Pennsylvania a month ago.
Meanwhile, commercial remodeling and renovation projects are on pace with growth in the new commercial construction sector.
“We’re bidding more this spring than last spring,” says John Ciardi, president of the Ciardi Co. in Boardman. “A lot of it is in the remodeling sector.”
Ciardi is working on a major renovation and remodeling project at Valley Christian School in an effort to integrate more modern amenities into an older structure. At the same time, he’s noticed that some of the older buildings along the Market Street Corridor have sold recently or are on the market, and suspects these buildings will require some major updates.
“We do both residential and commercial projects,” he says, the latest being a new recovery housing unit for Neil Kennedy Recovery Clinic in Youngstown.
“We’re encouraged,” he says. “The second half of the year looks like it will be busy. And we’re hearing that from everyone we talk to.”
Pictured: Bobby Toporcer, an electrician with Santon Electric, works on Windsor House Inc.’s new $12-million nursing home in Canfield.
Copyright 2017 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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