THE MAGAZINE OF THE MASTER BUILDERS’ ASSOCIATION OF WESTERN PENNSYLVANIA JULY/AUGUST 2017 CAN WE MAKE THINGS IN PITTSBURGH? Norfolk & Southern’s Conway Maintenance Facility INNOVATION. SAFETY. QUALITY Featured Project: Hot Metal Flats, Pittsburgh, PA LET’S BUILD . A Drug Free Equal Opportunity Employer A Drug-Free Equal Opportunity Employer Commercial Construction | Service | Power & Industrial | Metal Fabrication www.mckamish.com Building Excellence in the Pittsburgh region for over 40 years Bakery Square Project A valued partner American Geosciences during“ all stages of NNNN NNNN property development — Trusted Environmental Consultants due diligence, site investigations, Due Diligence Site Remediation remediation, or asbestos surveys — Site Investigation Compliance American Geosciences has exceeded our Asbestos Surveys For LEED Professionals: expectations and Geothermal Testing kept our best interests in mind.” todd e. reidbord, president walnut capital management, inc. American Geosciences, Inc. Visit AGI: www.amergeo — or Call: 724.733.7000 Powering Pittsburgh Businesses Since 1984 724.873.3500 LighthouseElectric.com 2 www.mbawpa.org 2 0 1 Contents 7 PUBLISHER Tall Timber Group www.talltimbergroup.com EDITOR Jeff Burd 412-366-1857 Cover image: [email protected] Norfolk Southern Railroad Conway PRODUCTION Yards Locomotive Carson Publishing, Inc. Maintenance Facility. Kevin J. Gordon Photo by Massery ART DIRECTOR/ Photography. GRAPHIC DESIGN Carson Publishing, Inc. 321Blink CONTRIBUTING PHOTOGRAPHY Massery Photography NAIOP Pittsburgh Green Building Alliance Chapman Properties Poema Photography Tall Timber Group Master Builders’ Association of Western PA ADVERTISING DIRECTOR Karen Kukish 7 REGIONAL MARKET UPDATE 53 MBE/WBE SPOTLIGHT 412-837-6971 Advantus Engineering [email protected] 11 MARKET METRICS 57 TREND TO WATCH MORE INFORMATION: 13 NATIONAL MARKET UPDATE A Housing Shortage Looms BreakingGroundTM is published by Tall Timber Group for the Master 17 WHAT’S IT COST? 67 INDUSTRY Builders’ Association of Western & COMMUNITY NEWS Pennsylvania, 412-922-3912 or 18 FEATURE www.mbawpa.org Can We Make Things 73 AWARDS & CONTRACTS Here Again? Archive copies of BreakingGroundTM 76 FACES & PLACES can be viewed at www.mbawpa.org 33 PROJECT PROFILE No part of this magazine may be Norfolk Southern Rail Car 80 CLOSING OUT reproduced without written permission Maintenance Facility Petra Mitchell, CEO by the Publisher. Catalyst Connections All rights reserved. 43 FIRM PROFILE This information is carefully gathered McKamish Inc. and compiled in such a manner as to ensure maximum accuracy. We cannot, and do not, guarantee either the 46 LEGAL PERSPECTIVE correctness of all information furnished Navigating the Buy American Act nor the complete absence of errors and omissions. Hence, responsibility for same neither can be, nor is, assumed. 49 FINANCIAL PERSPECTIVE Surety Market Update Keep up with regional construction and real estate events at www.buildingpittsburgh.com BreakingGround July/August 2017 3 THE WESTERN PA CHAPTER, NECA 2%/0%[-^! WOULD LIKE TO THANK YOU FOR MAKING OUR 3RD ANNUAL INDUSTRY EVENING & KEYNOTE EVENT SUCH A GREAT SUCCESS PUBLISHER’S NOTE here are certainly a whole host of things to dislike crazier things that happened was that a Republican candidate about the current political climate. Regardless on swung enough working-class voters to his side by making which side of the aisle you sit, there isn’t a whole unrealistic promises about bringing jobs back. That’s normally lot being done and there’s a whole lot of untruths the role the Democrats play! What neither candidate did, of being told. course, was talk frankly to those same voters about reality. Talk- ing about bringing these jobs back may generate votes for a TOne area that has been the subject of a whole lot of untruth is candidate but there is little that can be done that will generate also the subject of the current BreakingGround. Manufacturing those jobs. The reality is that few of the jobs in the mines and in the U.S. remains an important part of the economy and one mills are coming back. Those voters need different skills and that is in a state of flux. That can be very discomforting for training to meet the new needs of industry. What the politicians those who are victims of the flux. By the same token, change should have talked about was how their administration was go- is the one constant in the economy and the manufacturing ing to help the workers get those new skills. economy of the U.S. has always been very dynamic. More than 12 million people are still employed in manufac- Pittsburgh is a great example of how that dynamism has played turing in the U.S. That’s down seven million jobs from the out over the last generation. Like the rest of the country Pitts- peak in 1980 but still a major piece of the employment pie. burgh was impacted when U.S. heavy manufacturing became More importantly, though, job growth in other sectors has uncompetitive in the 1980s. Inefficiency and competition from outpaced manufacturing. As of April 2017, a record six million around the globe forced manufacturers in the U.S. to adjust, job openings existed, which equals four percent of the total although not without significant pain. Pittsburgh may have felt employment. Nearly as many openings existed as there were more than its fair share of that pain, especially since the steel unemployed people. industry, which was one of the heaviest hit, was headquartered here. But, as we all know, Pittsburgh recovered. Matching skills to demand is the key to meeting the growing shortage of workers and the gap in working class employment. That recovery masks the fact that we still do make a lot of There is a great opportunity to train those in underserved com- things here in Western Pennsylvania. It’s true that the Pittsburgh munities in these needed skills, which would relieve some of economy has become something of a model of diversification the inequity in the economy while reducing the burden on gov- but manufacturing is still an important part of that mix. It is ernment support of those communities. On June 16, President exciting to see that some of the newer developments in Pitts- Trump signed an executive order on apprenticeship that was burgh’s economy - in particular the development of shale gas primarily symbolic but which provided an increased amount of - seem likely to lead to even more manufacturing. The leaders funding and increased flexibility for third parties – like trade in Pittsburgh like to hold this city up as a model for how an associations and unions – to receive help with apprenticeship. economy can be changed. We now need to think about what changes can be made so that Pittsburgh can be part of the The dwindling labor supply is a problem for business but it next generation of manufacturing. And that involves looking represents an opportunity to rebuild the middle class, which forward not backward. has been buffeted by change for a generation. I grew up at a time when the path to success went through college. Now Heavy manufacturing in the U.S. is undergoing another un- the recipe for success includes more specific skills and requires planned transformation. The same shale gas exploration that has upgrading those skills over a lifetime. That’s also the recipe for been a boon to Pittsburgh’s economy has also been something maintaining a successful construction career. of a stake in the heart for the coal industry. The steel industry has also seen a dramatic disruption because of the steelmaking Success in the construction industry requires both a commit- capacity of emerging economies. But new industries are emerg- ment to ongoing skills training and a willingness to adapt to a ing and those companies need a skilled workforce. changing environment. For the workers hoping to regain their jobs in heavy manufacturing the environment has changed, In the feature article in this edition we will touch on some of probably for good. It would be great if politicians would stop the manufacturing opportunities that are emerging in Western seeing these workers as game pieces in an election strategy Pennsylvania and in the rest of the country. You’ll read about and show leadership that would help the unemployed and a number of the advantages Pittsburgh has for manufacturers the employer at the same time. I confess I’m not pinning my – like our gas supply – as well as the conditions that make at- hopes on that. The construction industry in Pittsburgh has tracting companies difficult. One of the key factors that brings been through wrenching changes and has adapted well. There companies to Pittsburgh is its workforce. Like in almost every is work coming that will require workers who aren’t here yet. corner of the U.S., that skilled workforce is pretty thin in West- Perhaps we can be the ones who lead and show Washington ern PA. And like in almost every corner of the U.S., the problem how to do it. It wouldn’t be the first time. isn’t the lack of available people but the lack of people with the right skills for the need. This is where the politics get frustrating. The 2016 presidential election was unorthodox in nearly every way but one of the Jeff Burd BreakingGround July/August 2017 5 Commercial Real Estate solutions from the ground up. At First Commonwealth Bank® we understand the important role a fi nancial partner plays in the success of a growing business. Helping them overcome daily challenges, keeping them on track to achieve their visions, and providing solutions to meet their unique needs. Within the past year, our Investment Real Estate team extended more than $500 million for projects throughout Pennsylvania and Ohio, giving developers the support they need to build and expand throughout the region.