91ÊÓƵ

A confluence of factors – rising stocks and demand for new homes, a 11.8 percent gain in construction jobs over the course of the past year, and an increase in construction spending – bodes well for local contractors in 2014.

But whether those factors are strong enough to override worrisome signs that remain about the economy, including a still-tight credit market, waning government spending on transportation and the threat of rising interest rates, remains to be seen.

“People have started to recognize that even though the economy is down, there are opportunities to be had,” said Corey Lohman, president of Happy Valley-based Emerick Construction Co. “The markets out there are continuing to thrive and allow us to grow and plan for the future.”

Emerick just wrapped up a $12 million emergency coordination center for the city of Portland and recently was selected along with JE Dunn Construction to serve as construction manager-general contractor for a major renovation at the Oregon State Capitol in Salem.

In addition, Emerick has a strong background in K-12 and higher education projects, Lohman said. The firm plans on tapping into that expertise as it sets its sights on finding one or two projects within the $482 million Portland Public Schools bond. The bond includes $75 million in summer remodel projects over the next six or seven years, plus three modernization projects scheduled to begin over the next four years at Grant, Lincoln and Franklin high schools. Additionally, a new Faubion School is scheduled for a 15-month construction window starting in 2016.

“Portland Public Schools has been a great client over the years,” Lohman said. “Our goal strategically is to take a couple of projects out of that bond and really go for it. That fits what we’re really good at.”

One concern that Lohman sees for the local building industry during the coming year is what he calls the “Intel effect,” which means facing the unknown impact of Intel’s construction spending slowing down after the second phase of its D1X facility wraps up at the end of this year.

Intel’s capital spending, estimated at $4.2 billion in Oregon in 2012, kept the region’s construction industry afloat during the downturn, Lohman said.

“The hope was that the Columbia River Crossing would fill the void,” he said. “The question is: ‘What is that next big project that keeps the region chugging along?’ ”

For Hoffman Construction Co., which served as general contractor of Intel’s D1X, finding new work has meant opening a Christmas gift early in the form of the Park Avenue West project, said Bart Eberwein, executive vice president of the company.

“That present has already been unwrapped,” Eberwein said of the project, where construction has already started. “We have (Robert Thompson, principal of TVA Architects Inc.), who is one of the premier architects in the world, who also happens to live in Oregon. It’s a very cool project.”

The start of Park Avenue West, a $200 million, 30-story, downtown, mixed-use project that had been put on hold during the economic downturn, could be a harbinger of things to come in the economy during 2014, Eberwein said.

“Whereas apartments have been hot, we haven’t seen downtown development, like office, mixed-use and condos,” Eberwein said. “We are hoping for that to come back.”

The lack of new building projects downtown has been offset somewhat by the demand for office tenant improvements in the Central Business District and the Sunset Corridor, said Jim Kilpatrick, president of Fortis Construction Inc.

The improvements were driven by a need for business expansion and lease renewals, said Kilpatrick, who sees continuation of current trends a worthy goal for 2014.

Some owners will push ahead with projects that have been on the books for a while, expecting interest rates to increase, he said.

“I do not see the construction economy expanding, but instead working hard to keep at current pace,” he said.

Dan Kavanaugh, vice president and general manager of Portland-based Turner Construction Co., says the challenge for next year will be finding long-term confidence when financing is still tight.

“The underwriters are very conservative,” he said. “You don’t get the vision out beyond six months because you have a limited ability to see what’s coming. It’s a gut check with people holding their cards very close to their vests.”

Turner’s most significant score this year was the contract for the “Hassalo on Eighth” project in the Lloyd District, Kavanaugh said. The project, which broke ground in summer and will be completed by summer 2015, includes three blocks of residential apartments, office space and retail.

Beaverton-based Yorke & Curtis Inc., a smaller firm, chased a lot of big projects when times got slow – and came out ahead, said Erik Timmons, principal owner of the company.

Yorke & Curtis has done a variety of projects for Walmart and Walgreens, including building neighborhood markets for Walmart and starting a Walgreens project in Aloha in late November.

The company is currently building two apartment projects in Portland valued at $3.5 million and $4.3 million, and has three more apartment building projects on the books for 2014 ranging in value from $3 million to $20 million, Timmons said.

Financing is an issue for subcontractors that should be resolved in the bidding process, he said.

“The biggest thing for us is that I want to see developers understand that we’re coming out of the recession,” Timmons said. “We want clients to understand that hard-bidding their project might save (money) during the bid process, but the project might not turn out as well as it should have.”

Other firms, such as Portland-based P&C Construction, are trying to balance themselves out as the work shifts from public back to private.

P&C kept people employed since the crash occurred because of its focus on public work, but is trying to shift that to a more balanced split over the next two years, said Steve Malany, company president.

“Increasing the private industry side of our company’s business is really the key goal of our company this year,” he said.

Much of this work will come in five key areas: seismic upgrades, health care, manufacturing and industrial warehouses, nonprofit organizations and tenant improvements, Malany said.

“We’re very excited to see the private side developments starting to occur,” he said. “Architects say they’re busy, and that’s a great sign for construction companies.”