Building boom, worker shortage

For commercial construction companies along the northern Front Range, nothing could be finer than to be in Colorado during boom times for construction in both the public and private sectors.

“There’s just a lot of work, and we’re seeing it in both the public and private markets,” said Rick Tucker, executive vice president of Hensel Phelps Construction Co. in Greeley. “In times past, you might have seen an abundance of work in either markets, but now we’re seeing both of those markets being incredibly strong.”

The company named after Abel Hensel Phelps, a farmer who started building homes and barns in 1937, is celebrating its 80th anniversary this year. Phelps son, Joe, joined the company after serving in the Korean War, when the company started venturing into commercial projects.

Joe Phelps sold the company to the employees in 1989, and it now remains employee-owned, with offices in eight regions — from Washington, D.C. to Honolulu — with about 1,000 salaried employees and another 1,000 trades people.

Therein lies the biggest problem most commercial contractors are now facing — the lack of qualified people in building crafts, including carpentry, electrical, plumbing and masonry.

“Activity has been fairly strong, from region to region, but Colorado has been very active and has great amounts of work out there,” Tucker said. “That has put a stress  on the craft subcontractor availability as we came out of the recession — that the biggest problem with any project today.

“It’s not one of those industries that young people strive to be part of, and it’s hard to keep young people in the craft trades.”

In Longmont, Golden Triangle Construction Inc. president Brian Laartz had a similar outlook.

“The construction market is pretty hot in Colorado. Denver metro and Northern Colorado are equally as busy,” Laartz said. “Costs have been creeping up due to both the labor shortage and the normal cost escalation for materials.”

But the shortage of qualified craftsmen is having the biggest effect on contractors.

“You have to examine just how badly you want a project. Meaning your own availability of labor — both for your general and subcontractors — means you need to pick and choose the projects you decide to chase,” he said.

While Laartz said there have been some projects put on hold due to pricing, by and large, commercial contractors have adjusted to the situation by paying very strict attention to staffing and scheduling.

“Golden Triangle has continued to do a lot of educational projects in Northern Colorado,” he said.  The $9.5 million Loveland Classical Academy is on that list, as is a third project for Ames Community College in Greeley valued at $25 million.

Golden Triangle also has three commercial building projects at Louisville’s Colorado Tech Center, including

* The Prairie Building at Colorado Technology Center. A 83,291-square-foot, core and shell building to be constructed with tilt-up concrete construction and a contract valued at $6.3 million.

• 633 CTC core, shell and site warehouse. A153,018-square-foot, single-story tilt-up concrete warehouse building and associated site improvements with a contract of $8.6 million.

• CTC — Accurence core and shell. A one-story, 18,137-square-foot, tilt-up panel core and shell office and warehouse building, including landscaping, a detention pond, utilities and 73 parking stalls on a 2.38 acre site, with a contract of $2.4 million.

Golden Triangle also has a $6.4 million project for the the Greeley Fire Department on the books, as well as an $8.7 million project to build a new Harley Davidson dealership in Golden.

At Roche Constructors in Greeley, the director of preconstruction, AJ. Roche, said recovery from the recession has differed in the company’s three primary markets, Colorado, Texas and Nevada.

“Here in Colorado, things kept moving, though slowly, but Texas never seemed to slow down,” he said. “In Nevada, there was nothing for quite a while, and things are pretty expensive there.”

Keeping some building activity going was essential for keeping people in the skilled trades, so Texas retained a great many skilled subcontractors. Colorado lost many but not as badly as the Nevada market.

“The cost of materials is going up, but finding enough labor in the skilled trades is still much tougher,” he said. “We’ve got a pretty good backlog of work.”

Roche has, essentially, two divisions: One for major projects and a special-projects division for projects under $1 million. The company, which has a salaried staff of about 100 employees, routinely handles project up to $25 million, but A.J. Roche said that both divisions are seeing a great deal of work.

“Historically, we’ve had a lot of K-12 (school) projects, and with all the bond issues that were passed in November, there’s a lot of work there,” he said. “But we’re now seeing a lot of smaller retail projects, as well as government public works such as town halls, police stations and correctional facilities.”

Roche recently completed the Centre Court project in Louisville, located near the Alfalfa’s Market, featuring 111 apartment units in 110,000 square feet of residential space. Private and charter schools make up a great deal of the company’s work, and in Fort Collins, the company is building the BeeBe Christian School and Seventh Day Adventist Church.

A.J. Roche said he was a bit perplexed about where all the subcontractors have gone in Northern Colorado, though he personally knows of many who just closed up shop during the recession.

“Some people went into the oilfield, and even though that has slowed down, they are not coming back to construction,” he said. “Costs are just higher now. The workforce has decreased, and there’s less competition between them.”

But the breadth and variety of work is not decreasing, Tucker said. Hensel Phelps has work ranging from the 164-room Elizabeth Hotel project in downtown Fort Collins, to a $32 million hotel in downtown Greeley financed by local business people.

Hensel Phelps also has $19 million in projects for the city of Greeley and a 40-story office tower in downtown Denver with Hines development.

In Fort Collins, the owner of Dohn Construction Inc., Doug Dohn, said the mixed bag of work his company usually takes on is getting full.

“Obviously, a bunch of school work is going to take place with all the bonds that were passed,” Dohn said. “During the last three years, that’s been a big part of our business. “

However, Dohn has also been busy with apartments from low- to high-income and student housing, such as Prospect Station in Fort Collins. His company typically has 60 people on salary throughout the year, but he’ll be ramping up soon with upcoming projects in Fort Collins, Windsor, Greeley, Boulder and Estes Park.

“The lack of skilled tradesmen is restricting everyone’s ability to do more work,” Dohn noted. “In years past, when we would get to these booms, a lot of these tradesmen would come from neighboring states.

“But now they are not coming to Colorado because the housing costs are so great they can’t afford to come here and work,” he said.

“So that’s what it is: The housing costs are so high because we can’t get tradesmen, and because the housing costs are so high, we can’t get tradesman.”

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