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CT Construction Digest Monday 16, 2019

Tomorrow's Bond Commission Agenda CLICK HERE

Electric Boat embarks on biggest construction project in more than 45 years
Julia Bergman
 A rendering of the building, part of a $850 million expansion, that will be constructed in Electric Boat’s south yard, where a new class of ballistic missile submarines will be assembled. (Courtesy of Electric Boat)
Groton — Electric Boat on Friday marked the start of a major construction project — the biggest to take place in its Groton shipyard in more than 45 years — that will enable the company to build the next class of ballistic missile submarines at the same time it is churning out attack submarines.
Separately on Friday, EB issued a news release saying that company President Jeffrey Geiger will retire Sept. 30 and will be replaced by General Dynamics National Steel and Shipbuilding Company President Kevin Graney. There was no mention of Geiger's impending retirement at the earlier groundbreaking ceremony.
Geiger has served as president since 2013, overseeing a time of growth at the company due to a resurgence of submarines in U.S. national security policy. The company has hired thousands of new employees in recent years, and EB's parent company, General Dynamics, is spending more than $1.7 billion to modernize and upgrade its facilities in Connecticut and Rhode Island as a result of the increased workload. Earlier this week, the company announced the completion of a building at its Quonset Point facility that will support construction of the nation's newest attack submarines.
An $850 million expansion is planned for EB's Groton headquarters, the centerpiece of which will be a new 200,000-square foot building, where the ballistic missile submarines will be assembled.
Underscoring the scope of the project in Groton, Geiger said, "about 11,000 tons of steel will be used in construction, equivalent to the Eiffel Tower."
The project will create hundreds of construction jobs, he said, and once the building is complete, more than 1,400 EB employees will be involved in constructing and testing the Columbia-class ballistic submarines over the next 20 years.
The company, which currently has a workforce of more than 17,000, will continue to hire and train thousands of new employees and grow its supply base by more than 3,000 companies, Geiger said.
"This is clearly going to be a defining moment for Connecticut's economy for decades to come," said U.S. Rep. Joe Courtney, D-2nd District, who's chairman of a congressional subcommittee with oversight of Navy shipbuilding.
"What we're doing here is not really just about the regional economy, it's something extremely important for the country and we should all, all be proud of that," Courtney said.
This will be the first time since the early 2000s that EB will be working on two different classes of submarines at the same time, and it has not built ballistic missile submarines since the late 1990s. The Columbia submarines will be the biggest ever built and involve 2.5 times the amount of work of the Virginia-class attack submarines the company is currently building.
U.S. Sen Richard Blumenthal, D-Conn., ranking member of the Senate Armed Services Committee, said the Columbia submarines will be the "stealthiest, strongest, most versatile boat involved in nuclear deterrence, the key part of our nuclear triad, the most reliable source of deterrence that we have against nuclear attack."

So far, Larson and Lamont don’t intersect on highways

Hartford — U.S. Rep. John B. Larson, D-1st District, joked Friday about his “tunnel vision.” For three years, he has been promoting a multi-billion dollar concept for burying the I-84/91 interchange in Hartford. And that, according to a colleague, makes him unique in Congress.
Larson, 71, a congressman for 20 years, is not simply seeking federal funding. He is working outside the state Department of Transportation on his own infrastructure vision, one that would compete with plans being developed by the administration of Gov. Ned Lamont.
“John is uniquely persistent and vocal and visionary,” said U.S. Rep. Peter DeFazio, D-Oregon, the chairman of the House Transportation and Infrastructure Committee. Asked if he could name another colleague playing the role of infrastructure auteur, he simply replied, “No.”
Larson and DeFazio held a press conference Friday in Great River Park to promote Larson’s tunnel, an event organized around three political and charitable fundraising events. Larson held a nearly identical news conference at the park in 2017 with DeFazio’s predecessor.
House Speaker Nancy Pelosi, D-Calif., arrived at midday for a luncheon fundraiser for the Democratic Congressional Campaign Committee and planned to stay for Larson’s annual charitable party: A bocce tournament at a Knights of Columbus hall in the congressman’s hometown of East Hartford, where locals mingle with Connecticut and national pols.
DeFazio’s re-election campaign was the beneficiary of a breakfast fundraiser geared to a construction trade group in Connecticut that is always happy to support whomever is chairman of the Transportation and Infrastructure Committee.
“For us, the chairman of T&I is the most important member of Congress,” said Don Shubert, the president of the Connecticut Construction Industries Association.
Notably absent from the news conference at Great River Park was any representative of the Lamont administration, which has told Larson that his tunnel plan will not be an element of a 10-year transportation plan in development by the governor. Lamont’s predecessor, Gov. Dannel P. Malloy, also never endorsed the idea.
 No one has a precise cost of Larson’s plan, since it has been sketched out only in schematics, not detailed drawings. But the congressman uses a ballpark figure of $10 billion, which could be as much as half of what Lamont intends to propose to spend on a statewide plan.
Hartford Mayor Luke Bronin, who attended the press conference, said major elements of Larson’s are attractive, namely correcting what he called “those two great planning sins of the last century” — cutting Hartford in half with I-84 and separating the downtown from the Connecticut River with I-91.
DeFazio said the interstate highway system is the neglected legacy of the post-war Eisenhower administration. 
“And in some places like here we made big mistakes when we built the interstate system,” DeFazio said. “We have to rebuild it, and when we rebuild it, we need to correct the mistakes of the past and build in resiliences for the future with the extreme weather events that are coming with climate change.”
Larson said the I-84/91 reconstruction should be a design/build project — a process in which his idea would be one of many to be evaluated.
“If we go with design/build, what they are going to have to do is take all the proposals and say, ‘OK, does this work out?’ And that’s a job for the engineers, not me. My job is to get the money and get enough money so that if we’ve got the green light, we go with what’s going to deliver the biggest bang for us,” Larson said. “And I still think that’s tunneling.”
Riverfront Recapture has reconnected the city to the river with decks over the highway, but Larson’s plan is to place I-91 in a tunnel, making way for a new pedestrian boulevard. 
It also would place I-84 in a tunnel in a new route south of downtown, opening acres of developable property. The highway currently passes through Hartford on a viaduct, which needs replacement, and below grade in a “canyon’ that separates the downtown from the North End.
One of the reasons for the administration’s lack of enthusiasm is cost. 
States typically have to contribute at least 20 percent to federally funded infrastructure projects. Even if Larson, a member of the House Ways and Means Committee, can work with DeFazio to make the tunnel project a national infrastructure priority, Connecticut could have to pay $2 billion or more.
“I understand everybody’s skepticism, but how do I ask for money to repeat the mistakes of the last 50 years?” Larson said.
Lamont and Larson are not exactly at odds. The Democratic governor and congressman are allies, and Larson invited Lamont to a cocktail party in Hartford, where the governor mingled Thursday night with DeFazio and other members of Congress in town for Larson’s bocce tournament.
In an emailed statement that read like a diplomatic communique, the governor’s communications director, Max Reiss, downplayed the differences in the transportation priorities of Lamont and Larson.
“The administration is incredibly thankful to have a partner in Washington like Rep. John Larson. He is a steadfast supporter of improving the infrastructure and accessibility in the Greater Hartford area, which is something we share,” Reiss said. “The administration will continue to work with the Congressman and other federal partners on how the state can help with this vision with assistance from the Federal Government.”
The question of whether Larson’s grand vision is viable is moot until President Donald Trump and the Senate Republican majority agree with House Democrats on a major infrastructure spending plan. Trump briefly agreed to spend nearly $2 trillion, then backed off.
DeFazio said the president recently invited House Democrats to talk again about infrastructure. But Trump is mercurial, if nothing else.
 “OK, we’ll go there again, but it has to be about funding. I don’t know if that’s going to happen or not. Day to day, you don’t know with this guy. But we can’t get through the Senate without him,” DeFazio said.
DeFazio said he hopes re-election politics prove helpful.
“He wants to build stuff,” DeFazio said of Trump. “I think the reality of his re-election is setting in. I get more and more worried as his numbers go down that people on my side will say, ‘Wait a minute, this will help him.’ I’ve been saying, ‘Look, we have plenty of things to go after him on.’ Infrastructure is for the country.”

New London development plan adds wrinkle to designs for State Pier
Greg Smith
New London — The city is awaiting a decision by the state on whether it will challenge a development plan enacted in the 1990s that governs activity at State Pier and the 125 acres surrounding the port.
The existence of the State Pier Municipal Development Plan adds a wrinkle, potentially an obstacle, to the $93 million in planned infrastructure improvements at the pier.
The Connecticut Port Authority, which still is finalizing a harbor development plan to establish the pier as an offshore wind hub, has not publicly addressed the issue of the MDP.
New London Mayor Michael Passero, in a recent interview with The Day, said he met with Connecticut Port Authority board Chairman David Kooris earlier this month to discuss the potential impact of the MPD on those plans.
The state has sought a legal interpretation, he said.
“We went over the fact (that the state) has an obligation now to provide us with a legal justification if their opinion is that the MDP no longer controls their development of the property,” Passero said.
At the very least, revising terms of the MDP would set into motion a statutory process in which minor modifications need to go before the city’s development arm — the Renaissance City Development Association — for approval. Major modifications are likely to set in motion public hearings and subsequently require approval by the City Council.
Passero welcomes the investment in the pier but continues to lobby for more revenue diverted to his tax-starved city.
The troubled port authority, meanwhile, has yet to fully disclose terms of the deal with Bay State Wind — a joint venture between Danish offshore wind giant Ørsted and electric utility Eversource — to convert the pier into an offshore wind hub. Part of that plan, which was announced in May, is to merge State Pier with the adjacent Central Vermont Railroad Pier and increase the facility's heavy lift capability to accommodate incoming wind turbines, according to the port authority’s pending application with the state Department of Energy and Environmental Protection.
The state has committed $35.5 million toward the infrastructure improvements, with construction slated to start in 2020.
The MDP, Passero said, was developed to stimulate economic growth in the eastern portion of the city, but he also argues it “expressly doesn’t contemplate any impact on coastal waters.” Shoreline activities are governed by the state’s Coastal Management Act.
“The whole plan to fill in between the two piers is inconsistent with the MDP,” Passero said.
“We’re not throwing this up as a roadblock. We have no interest in the MDP jeopardizing this deal. We’re saying here’s an issue you have to deal with,” Passero said. “They have to bring their plan to within the four corners of the MDP.”
The MDP further addresses a goal of diversity and increasing the port’s access to rail and highways, as opposed to a single use contemplated under the agreement with Bay State Wind.
Kooris did not immediately return calls and emails from The Day seeking the state’s stance on the MDP.
The MDP, like the one in place at Fort Trumbull, was set up with strict statutory language by the city’s development arm, at the time named New London Development Corp., and the state Department of Economic and Community Development. The plan follows the same model as Fort Trumbull, though the 8.6-acre area cleared for development at State Pier, which had included more than a dozen homes, was acquired without the use of eminent domain. The New London Development Corp. is now known as the Renaissance City Development Association.
RCDA Executive Director Peter Davis said the idea behind the MDP was to assemble the properties and market the land to commercial operations in support of existing state port activities. The property instead was conveyed to the state at no cost and incorporated into the more than 20 acres of state-owned pier property.
It remains a sticking point for Passero, who said the move has led to a major loss of tax revenue, which the city calculates to be about $1 million per year now and $3 million per year once upgrades at the pier are completed. The state now pays the city about $125,000 per year through the payment in lieu of taxes program.
Part of the agreement between the port authority and Gateway, the firm selected earlier this year by the port authority to run State Pier, guarantees New London an additional $125,000 annually — at least a $50,000 cut from port activity plus an additional $75,000 to help defray costs of municipal services.
Passero said that money is inadequate and the deal was supposed to include a permanent seat on the port authority. The city does not yet have a seat.
Of the long-term agreement being negotiated between the port authority and Bay State Wind, Passero said the addition of tax revenue to the city would amount to “crumbs off the table.”
As far as he can tell, Passero said, “right now Ørsted and Eversource are saying to us, 'We’re not even giving you the crumbs off the table.'”
“Why should Ørsted and Eversource get a free pass on their tax obligations to the city of New London? It’s a private industry making billions of dollars,” he said.
Passero said the port authority has not been transparent throughout the process and he was unaware in May, when an agreement with Bay State Wind was announced, that the agreement had not yet been consummated.
“They’re finalizing contracts based on what they called a term sheet that they announced in May. I don’t know what’s in that term sheet. It’s not public information,” he said.
Some of that might become clearer when the port authority holds its public information meeting on the State Pier infrastructure improvements starting at 5:30 p.m. Tuesday at the Holiday Inn, 35 Gov. Winthrop Blvd. There is expected to be a presentation followed by public comment session. Details of what might be announced are unclear.
Passero maintains the wind industry using New London Harbor to build components of its offshore wind farms is “a great opportunity for the region, the city and the state.”
“This industry is going to generate billions of dollars of revenue and it’s going to be centralized here in New London. How could you not want that to succeed? Of importance to the city is that it is not overlooked in receiving its fair share of the economic boom that the wind industry is going to bring to the State Pier.”

New Haven firm pitches idea for 200-unit complex in New London
Greg Smith
 New London — It appears the market for residential real estate in New London has not waned.
A month after one developer dropped its plans for an apartment complex on Howard Street, another has stepped in to take its place.
RJ Development + Advisors LLC, a New Haven-based commercial real estate development company, has put together conceptual plans and an ambitious schedule for construction of a four-story, 200-unit market-rate residential complex at the corner of Hamilton and Howard streets.
The city’s development arm — the Renaissance City Development Association — named RJ Development preferred developer on Thursday, setting into motion a due diligence period and the start of work to revise designs for the project.
The RCDA manages and markets the properties in the Fort Trumbull municipal development area for the city. Just down the road, at the corner of Bank and Howard streets and outside the municipal development area, AR Builders is constructing an apartment complex with more than 100 units.
The Howard Street parcel, once the site of Hughie's Restaurant, became available again in August when the Tagliatela family, the financial backers of the Shipway 221 project, ended two years of negotiations with the RCDA and attempts to find a financial partner.
RJ Development had been working with Shipway as its potential partner over the past several months and is familiar with the project and the site. RCDA Executive Director Peter Davis said RJ Development has an investment in the project and is well-positioned to move quickly.
“We had already had staff-level conversations about them becoming partners in the project. We’re a little bit ahead of the game,” Davis said.
RJ Development Principal Jason Rudnick said he was “excited to be part of what I consider a true renaissance in New London.”
“There are some fabulous things occurring and we’re happy to be a small part of it,” he said.
The project would be the first “out-of-the-ground” project in the Fort Trumbull municipal development area. On the Fort Trumbull peninsula — the center of the 2005 landmark eminent domain case Kelo v. City of New London — the RCDA is simultaneously negotiating with two developers who have pitched plans for a hotel and a residential development.   
RJ Development already has architects and engineering and environmental service firms on board.
Davis said RJ Development is pursuing an aggressive timeline that could include submission of a plan before the city’s Planning and Zoning Commission by spring. Rudnick said while there is not a set timeline, “we want to be able to move as efficiently and at the same time as quickly as possible.”
Former RJ Development projects include several Rite Aid Pharmacies, a $15 million, 30,000-square-foot built-to-suit corporate headquarters for Continuum of Care Inc. and the 160-unit College & Crown, billed as a “premier luxury multi-family rental apartment development in downtown New Haven.”
The College & Crown project was completed in 2017 and boasts a “fitness center, two roof-top courtyards, attended front desk with concierge services, clubhouse, 140 secured and climate-controlled parking spaces, and a hotel-quality lobby,” along with retail space on the ground level. Rents there range from $1,840 to $3,556 per month.
Davis said he expects many elements of the agreement with Shipway to be included in a future development agreement with RJ Development. Shipway had agreed to pay more than $200,000 for the purchase of the land and development fees, along with taxes on the property.
RJ also has agreed to take on remaining environmental remediation on the property and facilitate a land swap with Yale New Haven Health, which owns a small swatch of land at the site needed to complete the project.
“The bottom line is we are excited to have this opportunity, excited to work with the city and with RCDA to be able to bring this to fruition,” Rudnick said.      

The U.S. construction industry is facing 'a uniquely post-Great Recession experience'
Adriana Belmonte
Since the Great Recession, the U.S. has seen a major shortage of workers in the construction industry.
“The labor shortage, specifically in the residential construction side, has been kind of a uniquely post-Great Recession experience,” Rob Dietz, Chief Economist at the National Association of Home Builders, told Yahoo Finance.
The construction industry lost approximately 1.5 million jobs during the financial crisis, according to FRED data. The industry has not yet gained back those jobs, with Dietz describing it as a “sluggish process.”
“The JOLTS data says we’re short about 350,000 workers,” he said. “The skilled labor shortage has gotten progressively more challenging as this lengthy growth cycle has continued. The impacts of it are … how long it takes for an individual homeowner to access a remodel, or how long that project will take. Those duration times have gone up.”
‘A whole set of limiting factors’
Dietz said “there’s a whole set of limiting factors” for the construction industry over the last 10 years.
Dietz refers to these factors as the five L’s in building: lack of labor, lack of lots, lack of lending for builders and land developers, lumber and material issues, and law issues.
“The economic impact is the fact that we’ve got a housing deficit,” Dietz said. “I think that’s fairly clear. The housing deficit means a shortfall in inventory, which has resulted in home prices going up faster than incomes and faster than inflection.”
He added: “We calculate about a billion-unit deficit between apartments and single family homes, combine. And it’s contributed to the housing affordability prices. The fact that home prices have continued to outpace income growth, inflation growth. Inventory has been so tight, and the key reason for that has been the labor shortage.”
Part of the challenge is also demographics, with Baby Boomers becoming older.
“The aging existing workforce, which took an enormous hit during the Great Recession with people losing jobs, in some cases leaving the industry and not wanting to come back, means that we really have this large deficit of skilled labor,” Dietz said.
Then, there are the millennials, who are becoming more and more college-educated.
“Surveys that we’ve done of young adults, 18-25, construction doesn’t fare very well in terms of an intended career,” Dietz said. “You see stronger attachment to wanting jobs that are less seasonal, less physical, that are in office environments behind screens. That’s a consequence, I believe, of the fact that we’ve got a much greater fare of people going to four-year universities today than we did 30, 40, 50 years ago.”
Wages may play a small role in the lack of available workers. According to Bureau of Labor Statistics (BLS) data, the median annual wage for construction workers in May 2018 was $34,810.

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