By ART NADLER
April 22, 2012 - 1:05 am
You could easily compare Nevada's current construction industry to an emotionally abused community scared by the devastating 150 mph winds of an unforgiving tornado.
More than 77,000 construction jobs have been lost in Nevada to date during what some are calling the nation's worst recession on record. Companies, whose family roots go back generations, uplifted and pulled from their foundations. Gone forever.
But for now the winds of recession have appeared to subside, or so industry analysts and the remaining contractors who survived are hoping. Many contractors feel their bleeding industry has finally stopped hemorrhaging. They're hanging on, just praying nothing - any little thing - doesn't go wrong to blow the few remaining construction jobs off the market.
Building department single-family new project permit reports for the months of January and February 2010, 2011 and 2012 show a slight increase for Las Vegas, up from 128 in 2010 and 107 in 2011 to 137 in 2012.
Henderson permits were up from 60 in January/February 2011 to 109 in January/February 2012, but not quite as high as in January/February 2010 that saw 128 new projects permitted.
On the other hand, North Las Vegas has shown a steady decrease of new permits from 93 in January/February 2010 to 47 in January/February 2011 and 39 in January/February 2012. Likewise, new building permits for single-family homes in unincorporated Clark County have declined for the months of January and February over the last three years.
Building permits for remodels and additions to single-family homes have also steadily declined for Las Vegas, North Las Vegas and unincorporated Clark County. Only the city of Henderson saw a slight tick up to 234 permits in January/February 2012 from 231 in the same period in 2011, but significantly down from 825 that were issued in January/February 2010.
So if prospects for prosperity remain bleak on the residential front - with an almost mirror image projected in the commercial sectors - then how are contractors surviving?
The bulk of business at present is from municipality contracts - various infrastructure projects such as highway and road improvements, storm drainage and other community water projects, the creation of parks, bridge and overpass repairs, etc.
J.A. Tiberti Construction, a Las Vegas general contracting company founded in 1950, is currently the contractor on the $10 million upgrade to the Durango Hills Water Resource Center. Tiberti hired approximately 20 field workers for the project, three construction managers and seven subcontractors who are expected to employ about 30 workers. The project is expected to begin this month.
"I think it will be a subdued recovery, but we are headed in the right direction," said company executive Renaldo Tiberti. "We are hopeful about coming towards the end of this recession. Consumer confidence is up, and the banks are doing a little more."
Tiberti said the company has its eyes on some more municipal jobs in the near future. If they win the bids, they will be adding more employees, and he expects any subcontractors employed also will be adding personnel.
Jeremy Aguero, a principal at the market and research company Applied Analysis in Las Vegas, believes the public sector will be the main source of construction jobs in Southern Nevada for the next several years. And while new-home construction is at a standstill, he believes redevelopment in the form of tenant remodeling will continue at a slow but steady pace.
Ryan Mandenhall, division manager of Las Vegas Paving, said his company has experienced a slowdown, but hasn't been hurt like his competitors because they have always focused on public works projects rather than residential and commercial. They currently are working on 20 to 50 projects concurrently, including the $22 million Jones and Valley View corridor improvement that will add one lane northbound on Valley View Boulevard north of Desert Inn Road and one lane southbound on Jones Boulevard north of Sahara Avenue. Construction is scheduled through early 2013.
On average, Mandenhall said between 20 to 30 workers are employed daily on this project, including heavy equipment operators, laborers, masons, truck drivers and flaggers. The average wage for heavy equipment operators is $40 per hour, $25 per hour for laborers and between $20 and $47 per hour for a flagger.
Mandenhall said Las Vegas Paving hasn't hired any new employees recently, but on the positive side they haven't laid anyone off because of this steady flow of public sector projects.
"We definitely have had a slowdown," Mendenhall said. "I think it is pretty stale for now. I don't see it (construction) going up, but I don't believe it will get much worse."
On the other hand, Mendenhall was a little disappointed in the number of public works projects being put out to bid for the first quarter of 2012. He said only $29 million in work was released, as compared to $70 million for the first quarter of 2011.
"We are hopeful the second and third quarters of this year will increase dramatically," he said.
Ledcor Construction Inc. is currently involved in several construction projects throughout Southern Nevada that include the construction of the 25-acre Splash Canyon Waterpark, a $20 million family water park located near the Las Vegas Beltway and Sunset Road in southwest Las Vegas. An additional $10 million is earmarked for its infrastructure.
Ledcor also is providing construction management for the Skyvue Observation Wheel Project located on the Strip, the Seven Hills Medical Office Development and various projects that include alternative energy, big-box retail, multifamily residential and apartment complexes.
Mason Gorda, regional manager with Ledcor, said he has noticed a little bit of improvement in the economy, but several obstacles for construction still exist. These include a high vacancy rate for several commercial buildings and limitations in obtaining construction financing.
"As the market absorbs the vacant properties, we fully expect Las Vegas growth to move from the zero or negative growth we have been witnessing towards a sustainable upward trend over the next two years," Gorda predicted.
Gorda said Ledcor is involved in construction management on projects nationally and if people are willing to travel, work can be obtained. As an example, the company is currently involved in contract mining projects in Elko where jobs in the mining industry, because of the rising price of gold, are plentiful.
Gorda suggests those seeking employment visit the Ledcor website at www.ledcor.com for current opportunities. The company also posts employment opportunities on other websites that include Nevada Job Connect, LindedIn and Facebook.
For those who are unemployed and having a hard time finding employment, Gorda suggests they take the opportunity to advance their education and take classes to improve their skills in areas construction companies are demanding experience in such as advanced scheduling software, LEED accreditation, OSHA 30 certification, CPR and first aid, etc.
Tand Inc., a North Las Vegas general contractor, is handling the $400,000 Rancho Median Landscape Restoration project for the city of Las Vegas. This will include adding landscaping and other enhancements to the median islands along Rancho Drive between U.S. Highway 95 and Charleston Boulevard. The company specializes in the installation of utilities, grading and construction management. Other projects have included work on city of Henderson's Hidden Falls Park and current improvements to the city's Pittman Wash Trail.
"For me, it looks flat for now," said Peter Young, a project manager with Tand. "It's about the same as last year, mostly public works (projects) and a couple parks. Typically, the public sector follows the private sector and that's the way it will be for the next three to five years."
Young believes midlevel contractors like Tand have been able to survive because of bond money financing public sector jobs.
"We have four active projects in the park area right now," Young said. "There has been no major upswing or downswing for us. The general feeling is that the market has bottomed out."
Gone are the $50 and $60 million projects, Young points out, and they have been replaced by smaller jobs that contractors who have survived the recession are vigorously competing to obtain.
Joe Gilmer, a sales representative with Blaine Equipment, a local construction equipment rental company, agrees. His rental business has picked up considerably since the recession began.
"There are small jobs scattered all over town," Gilmer said. "No one wants to lay out the cash to buy equipment, so they rent it as needed. Since the end of 2007, these smaller jobs have been bid out by the municipalities."
Gilmer has noticed a survival-of-the-fittest quality emerging within the construction industry, which he believes will be a key ingredient for future growth in Southern Nevada. He believes contractors who are making it through this recession will be the main policymakers on how business will be conducted in years to come.
"I think we are going to have some really smart people involved," Gilmer said. "I think people will work smarter. I think people are going to be really keen. It will be more of a scientific approach to construction, rather than throwing a bunch of people and equipment on a job to see what happens."