'Major downturn' for construction

March 19, 2008
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HardhatWondering why development news seems to have ground to a halt? The nation's housing and economic woes are hitting development firms and slowing the demand for construction. The American Institute of Architects said in a study released today that "commercial construction across the country is experiencing a major downturn." A leading indicator of the demand for construction work fell to its lowest level since October 2001, leaving an average lag time of almost a year between architectural billings and construction spending. Some firms are paring their workforce; others are bidding on more stable projects such as schools, hospitals and government buildings. Construction costs are falling. What's next?
  • Cory, may you please try to update us on those two infill buildings on south Meridian Street? Thank you!
  • Now that the legislative session is over, seems like the new mayor might finally get around to deciding on tax abatements/public monies for some of the proposed major projects. Any thoughts on what will become of these: JW, MSA, PennCentre?
  • Unless I'm mistaken, the JW deal has already been inked. It was one of the last things the Peterson administration did and they consulted with Ballard to make sure he was onboard.
  • Another ray of sunshine from our beloved Cory.

    I'm actually surprised he didn't blame this downturn on Premier Properties!
  • Yes, the JW deal was set with Peterson. It will soon move to construction phase, I believe, but I know all the details have been signed off on (as of Dec 07)
  • So who is slow?
    Have you spoken with the local architectural/engineering firms? Local G.C.'s??
    Does Cory have information that is not being shared? There seem to be many jobs out for bid at this time and the dodge is full of things that are coming...so what was this based upon?
    Ahh...I re-read the article..AIA says we are down.

    Local news..it would be great.
  • The Wall street Journal article that I read was exactly opposite of this reports..showing commerical consttirction as being fairly strong in most cities.
  • Anyone else hearing what crownhilldigger is hearing? Are there still lots of jobs out for bid in Indianapolis?

    Many of the people I'm talking to are getting nervous about a low level of work available.
  • Well Cory I guess its you and me. Agreeably I disagree that there is a slow down locally and I base my input from direct solicitations that I made to principals within a couple of our top union and non-union GC's as well as w/their peers within 2 local AE firms.

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  1. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...