What Does Chicago's Construction Landscape Have That Other Markets Don't? Skilled Labor.
Through June 30, construction spending in the Chicago MSA was down for the third straight month, but it's still up 6.2% compared to 2015. For the first six months of the year, construction jobs rose by 5.3%, year-over-year. But will concerns over city and state finances put a stop to that progress?
A rapt audience of 300 guests attended Bisnow's fourth annual construction and development forum at the Swissotel Chicago this morning to hear our expert panelists discuss a litany of topics, from where we are in the current cycle to how the political climate is affecting construction and development. Here's what they had to say.
Clark Construction SVP Dave Trolian says that, despite the various financial issues Chicago is facing, it really isn't slowing down public works programs. Mayor Rahm Emanuel and city planning agencies are being creative in finding the money for social infrastructure projects, and are very good at private/public partnerships, particulary with the announced renovation projects for O'Hare and Midway airports. The flip side of the coin is the ongoing budget stalemate in Springfield, which has negatively impacted infrastructure projects and capital improvements to state colleges.
W.E. O'Neil Construction president John Russell says the city's expansion of DX zoning from Halsted Street west to Ogden Avenue will be a boon for developers in Fulton Market and the West Loop, as it allows them to build up to accommodate greater density. John mentioned a couple of notable West Loop projects in the works—the Brooklyn Bowl retail complex and the plumbers union's new 100k SF state-of-the-art training center—as examples of continued demand in the market and why the zoning relaxations are important.
Snapped: McShane Construction EVP Mat Dougherty, MRSA Architects and Planners partner Michael Semenzin, Ryan Cos Great Lakes region president Tim Hennelly and Jameson Sothebys International Realty's Jason Hiller. Mat and Tim say a shortage of workers is driving an increase in construction costs in Chicago, but there's a greater lack of skilled labor in secondary and tertiary markets. Mat says Chicago construction firms are fortunate enough to have strong unions and well-trained labor to keep projects on schedule.
Union Station Co president Ray Lang gave updates to the progress of the Union Station Master Plan, which will transform how city and suburban residents commute. Union Station is running at capacity, with a combined 410 trains between Metra and Amtrak ferrying 30,000 passengers into and out of downtown daily. The first infrastructure improvements, which are in the design phase, include a pedway connecting Union Station directly with the Clinton Blue Line station, which will allow 30,000 Blue Line riders direct access to Union Station. Another pedway will connect Union Station and the Ogilvie Transportation Center, connecting another 250,000 passengers between the two stations. Finally, Union Station will become a true transit center with a nearly completed bus station providing direct underground connection to the station.
We asked MPEA director of intergovernmental affairs Michael Merchant about how the state's credit downgrades have impacted the construction of McCormick Place's Marriott Marquis Hotel, the shared arena between McPier and DePaul University, and the $120M renovations to Navy Pier. Michael says the credit downgrades have adversely affected the agency's financial burden, but MPEA is in regular discussions with state officials on finding relief.