Around Washington: Public Works Blooming

 By Wolfe Guest

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There is a growing fear that the construction market is dead – or at least headed that way. Recent figures indicate that overall building is on the decline and that, specifically, public contracting has falled at least 12% over the month of February.

Despite rashes of optimism that new building is up, the figures tend to tell a different story. Both private and public investment in new building are both on the decline. The drop off indicates that there is certainly a lack of funding and construction “players” who drive the industry.

But some states tell different stories. Some actors seem to be driven by falling costs in the construction market, and secured future sources of funding.

Take the State of Washington for example, who has recently experienced a bounding growth in publicly managed and publicly subsidized projects. Here is a peak at what is going on in the Northwest corner:

• Pave Those Highways – Try to drive anywhere in the Seattle area and you cannot miss the traffic. Recent highway projects have taken over Interstate 5 with the intention of improving drive quality for commuters. The state estimates that over $2 billion of repairs are needed to improve I-5 in the Seattle metropolitan area. Unfortunately, the state has earmarked on a small fraction of that amount in order to complete reconditioning. Luckily, Department of Transportation administrators are not backing down, despite potential funding issues. DOT said that 2009 will be “one of its most intense and complicated construction seasons in its history.”

• Beacon Tunnel Acceleration – The Beacon Tunnel has become one of Seattle’s most anticipated projects. The tunnel was funded initially in 2003 by voters who wanted faster transit from the sprawling Tukwila area, north into downtown Seattle. With fears rising about missing the projected opening of the Seattle Light Rail project, lawmakers sought to accelerate the completion of the projects,adding contractors around the clock to complete the final testing stages of the tunnel. Sound Transit, the project’s managing agency, is spending millions in order to ensure that the work is completed timely. But recent reports indicate that the $2.4 billion project is on schedule and $125 million under budget.

• Clean Energy Money to Spur Wind Power Growth – Klickitat County is a small rural area in the South of Washington state. At times the county had one of the highest unemployment rates in the State of Washington – over 12% in January 2009. However recent trends toward “clean energy” have shown vast investment in the area and resulting job growth. The main reason for this growth, is the influx of wind energy farms, no doubt assisted by the promise of over $129 billion in financial incentives for clean energy. In Klickitat, the incentives are pushing further investment in wind farms, especially for San Diego developer Cannon Power Group. The CA company has invested in two farms which will stretch 26 miles of ridgeline on the north shore of the Columbia River, capable of producing power for 250,000 homes. The projects are expected to produce over $15 million annually in property taxes as well as over 500 jobs.

• Microsoft Building with Stimulus Bucks – The Seattle Times reported that Microsoft will use around $11 million of federal stimulus funds to build a bridge over Highway 520 in order to connect its westside and Redmond campuses. The funds are being disbursed by the Puget Sound Regional Council, who has been earmarked to receive over $214 million of those stimulus funds. Some are not too thrilled about the use of these funds to assist a multi-billion dollar company, who recently cut around 5000 jobs. Regardless, the project is certain to spur some growth in an otherwise stagnant building industry.

• Puget Sound Rebuilding – There has been quite a bit of coverage about the battle of development versus the Puget Sound. Several ecologists are gearing up for the Summer of 2009 with an open eye towards educating builders and local officials on conservation techniques. One interesting technique pays landowners to preserve their land, by making public officials competitors with developers looking to build on land abutting waterways. Unfortunately, the substance missing from all of this reporting is the alternatives – how do builders continue with growth, without disturbing the wilderness?