More than 2,800 bridge repair and replacement projects have been launched across the country in recent months, according to a White House release marking the one-year anniversary of the Infrastructure Investment and Jobs Act. That legislation, signed into law by President Biden in November of last year, carried a $1.2 trillion price tag and was designed to address bridge, road, electric grid, and broadband infrastructure needs. According to the White House, the bridge work under the auspices of the U.S. Department of Transportation and the Federal Highway Administration is seeing some $120 billion spent on projects for fiscal years 2022 and 2023. Last month, the Federal Highway Administration issued a statement saying that competitive grants under the Bridge Investment Program had thus far been sent to 23 states. In a statement, Deputy Transportation Secretary Polly Trottenberg said those grants “will be used to create a pipeline of future bridge construction projects.” The bridge work represents the largest federal investment in such work since the original passage of the Federal Aid Highway Act of 1956, which was signed into law by President Eisenhower and launched the building of the nation’s Interstate Highway System. Of the $120 billion coming out of Washington, Arizona has received around $2.1 billion for bridge and roadway work; while Colorado has been the recipient of some $1.7 billion in funds for the same work. At the same time, up to $1.1 billion in funding has been announced for bridge and roadway work in New Mexico. Texas, meanwhile, has been on the receiving end of around $10.8 billion in spending from Washington. According to a report issued earlier this year by the Congressional Research Service, up to 44,000 bridges nationally are classified as being in poor condition. Of that total, around 80% are located in rural areas. By Garry Boulard
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Just two years after it revealed plans to put up an initial production plant in Phoenix, the big Taiwan Semiconductor Manufacturing Company says it wants to construct a nanometer chip manufacturing facility in the same city. According to analysts, the new plant is evidence of TSMC’s desire to expand its advanced chip manufacturing profile in the U.S. The announcement of the new factory was made by Morris Chang, TSMC’s founder and former chief executive officer, who told the news service Reuters that plans for the project are yet to be finalized. Launched in 1987, TSMC, based in Hsinchu, Taiwan, is not only one of the largest companies in industry-rich Taiwan, but is the biggest independent semiconductor foundry in the world. The company currently manufactures around 90% of the chips used in most advanced technologies and enjoys annual revenues in excess of $35 billion. TSMC declared its intention to build a $12 billion fabrication plant in Phoenix in the spring of 2020 with plans later announced to build up to half a dozen additional factories at the site. Work on the initial facility is expected to be completed in 2024. According to the website Siliconangle, a new TSMC nanometer factory would leave the company in a “much better position to compete with Intel for customers that want their advanced chips to be manufactured domestically.” By Garry Boulard Costs of Proposed New Mexico Executive Office Building May Be Too High, Notes Legislative Report11/23/2022 Plans to build a massive $221 million New Mexico government executive office building should be revised to take in the impact of telework. That’s the conclusion of a report recently completed by the New Mexico Legislative Finance Committee looking at the cost of building new government structures, as well as maintaining existing ones. The report, Program Evaluation: State Facilities and Space Utilization, notes that the State of New Mexico has been planning for more than a decade to build an executive office building that would house several agencies currently located in a variety of office buildings in other parts of the city. In 2009, members of the New Mexico State Legislature voted to approved authorizing the New Mexico Finance Authority to issue up to $115 million in bonds for the project. During the most recent legislative session earlier this year, lawmakers appropriated $70 million from the state’s general fund, along with another $15 million in severance tax bonds, for the project. But, according to the Legislative Finance Committee report, four of the seven state agencies expected to eventually move into the new executive office building have high rates of employees. Those agencies are the State Auditor’s office, the Office of the State Treasurer, the Public Regulation Commission, and the Public Education Department. Each agency, at the time the report was being put together late this summer, had well over 50% of its staff teleworking, and in some cases upwards of nearly 80%, prompting the report to question the need for building new office space for those agencies. The report additionally notes that the planned three-story executive office building project could cost upwards of $221.6 million, with anticipated annual cost escalations coming in at around $27 million. Noting a proposed $46 million parking structure that will be a part of the project, the report also asserts that current state government parking space has a utilization rate of around 41%. For that reason, the report recommends construction of a parking structure with no more than 723 parking spaces. Ultimately, says the report, the state should “revise plans and cost estimates for the executive office building with recent construction cost calculations and expected occupant telework practices.” The long-anticipated executive office building project has been partially delayed as the state awaits a decision from the Santa Fe Historic Districts Review Board regarding the demolition of four smaller office buildings dating to the early 1930s at the site of the proposed project. By Garry Boulard Home sales nationally appear to be heading for a slight decline in the immediate coming months, according to the chief economist with the National Association of Realtors. Speaking at the group’s latest Residential Economic Issues and Trends Forum, Lawrence Yun said despite the sales drop-off heading into 2023, home prices are slated to increase by about 1% next year, with a much more robust 5% expected for 2024. Yun added that “half of the country will see minor price gains, the other half of the country will see minor price declines” in 2023. For realtors, this means simply enduring next year’s market conditions. “But after that everything should be in a better situation,” Yun remarked, looking at the probable state of the overall market in 2024. In fact, the NAR is forecasting a decline of 7% in unit sales for next year, along with a 1% rise in the average price of a home. Those numbers improve to 10% in 2024 in unit sales, along with a 5% increase in the average price of a home. Yun also predicted 2023 fluctuations in the commercial real estate market, noting that “nationwide, we are beginning to see some decline in commercial appraisal values.” “Cap rates simply cannot match up with higher borrowing costs, especially among people who need to refinance their properties,” the economist continued. Yun added that “offices are the most vulnerable to these prices decreases. We are seeing a rise in office vacancies in many cities, driven by a preference for remote work.” By Garry Boulard Built in 1917, what is popularly known as the El Paso Laundry Cleaners Building is one of the classic structures of downtown El Paso. Measuring more than 36,400 square feet, the two-story brick building is now on the market for $2.9 million. Located at 901 Santa Fe Street, the building sits on a just under 1-acre site and includes a basement. Used for decades as a functioning laundry, the building is being advertised by realtor Sonny Brown Associates for its upgraded, repurposed multi-family potential. In its heyday, with a staff of 200 people, it was noted by the El Paso Evening Post that the El Paso Laundry Cleaners Building was the largest electricity-user in the city for the simple reason that it “uses more steam than any other plant in El Paso.” By Garry Boulard Members of the Las Cruces City Council have voted unanimously to demolish a long-standing motel that was first opened for business in December of 1941. In doing so, council members affirmed a resolution saying that the motel was “so ruined, damaged, and dilapidated as to be a menace to the public comfort, health, peace, or safety.” Located at 1045 S. Main Street, the structure was originally known as the Kilby Kourt, becoming the Kilby Motel in the 1950s. Put up for auction in 1959, the motel was described as having “17 rooms, all air conditioned, tiled baths, carpeting, telephone, TVs and radios.” The motel fell on hard times in the last two decades, with Las Cruces officials noting that due to neglect it was no longer in compliance with city codes. In a presentation before the city council, Larry Nichols, director of community development for the city, said the motel had many structural issues, including a roof that is in danger of collapse. Las Cruces officials also said that the motel has frequently been the scene of both domestic violence calls and shootings, as well as other criminal activity. According to official documents, “the city has exhausted all attempts to compel the owners to bring the premise into compliance through voluntary and municipal summon attempts.” The council vote to do away with the Kilby does not mean it will be immediately leveled. According to the Las Cruces Sun News, the building may still be designated as a historic structure, thus complicating its demolition. The current owner of the motel is based in Salem, some 45 miles to the north of Las Cruces, and has indicated that he would like to pursue a study to determine whether it would be economically feasible to save and upgrade the motel. By Garry Boulard The nation’s architectural firms endured their first overall decline in billings in nearly two years, according to a survey just released by the American Institute of Architects. According to the association’s Architecture Billings Index, the overall score for billings in October was down to 47.7, with any score below 50 representing a decline in firm billings for the month. By contrast, the overall score for billings one year ago was 54.3, with scores for new project inquiries and design contracts coming in at 62.9 and 58.0 respectively. Inquiries into new projects, meanwhile, remained strong with a score of 52.3, while the value of new design contracts saw a decline to 48.6. Said Kermit Baker, chief economist for the AIA, of the October numbers: “Economic headwinds have been steadily mounting, and finally led to weakening demand for new projects.” The index results were remarkably uniform across the country, with the Northeast posting a 50.3 reading, the Midwest at 50.8, and the South at 50.6. The lowest reading was recorded by firms based in the West at 49.6. The strongest sector results were seen in institutional projects at 54.3 and in mixed practices at 50.8. The multi-family sector lagged at 46.1, with commercial and industrial work bringing up the rear at 45.9. Despite the lower October numbers, Baker, in a statement, pointed out that “Firm backlogs are healthy and will hopefully provide healthy levels of design activity against fewer new projects entering the pipelines should this weakness persist.” By Garry Boulard One of the classic shopping centers of Phoenix is now in line for a substantial upgrading. Located at 9617 N. Metro Parkway, the modernistic Metrocenter was designed by well-known Arizona architect Robert Fairburn and opened in the fall of 1973. For decades, the 1.4 million square foot mall was one of the most popular shopping centers in the southwest but began to lose out to competition from other malls by the 1990s. It finally closed completely in the summer of 2020. Now members of the Phoenix City Council have given their approval to a plan that will substantially redevelop the site, seeing the construction of up to 100,000 square feet of new retail space. In a unique arrangement, the City of Phoenix has agreed to purchase the mall’s site in a move that will make it possible for mall owners Concord Wilshire Capital to not have to pay property taxes for the next 25 years. At the same time, Concord Wilshire is giving Phoenix up to $1.5 million to be used for the construction of affordable multifamily housing at the site. It is thought that the project will also see the construction of an amphitheater park. Altogether, the redevelopment of the famous mall is expected to cost upwards of $750 million over a three-phase period. Concord Wilshire is undertaking the project in a partnership with TLG Investment Partners, which is based in Fort Lauderdale, and the Houston-based global real estate investment firm Hines. Work on the Metrocenter project is expected to launch next year. By Garry Boulard A move is on in Colorado Springs to secure the construction of an advanced semiconductor manufacturing plant. The effort, currently known only as Project Garnet, is being conducted somewhat in secrecy in terms of revealing the company involved. But city, El Paso County, and State of Colorado economic development officials have been involved in a protracted process of putting together an attractive incentives package in the hope of securing the plant. To date, Colorado Springs and El Paso County have pledged a combined $111 million for the project. Now, members of the Colorado Economic Development Commission have added another nearly $4 million in incentives for the project. According to published sources, the project would bring with it a potential capital investment of $631 million initially, growing to more than $1 billion during its phase two development. The project, according to local economic development officials, may be eligible for federal funding via the Chips Act, otherwise known as the Creating Helpful Incentives to Produce Semiconductors and Science, which was signed into law last summer by President Biden. While speculation has only naturally been heightened regarding the identity of the company, state officials, according to the Colorado Springs Gazette, have described it as a “world leader in electronic materials and process solutions for the semiconductor, life sciences, and other high-tech industries.” A timeline for when Project Garnet may be officially announced is not yet known. By Garry Boulard The prices paid by builders for a variety of steel products saw significant declines last month, according to new numbers released by the Bureau of Labor Statistics and crunched by the Associated General Contractors of America. Those numbers show that the Producer Price Index for steel mill products was down by 6.6% in October compared with September. The decline from October of 2021 to October of this year was even more dramatic at 22.9%. Copper and brass mill shapes, meanwhile, saw a 4.9% drop between September and October of this year, with an 11.5% drop year over year. Aluminum mill shapes, similarly, were down 3.3% in the last month, and 9.3% between October 2021 and this most recent October. In taking a larger look at Producer Price Index trends, the BLS noted that “prices for diesel fuel, fresh and dry vegetables, residential electric power, chicken eggs, and oil field and gas field machinery also advanced.” Trend lines for other construction materials showed a 3.3% decline in lumber and plywood products, and a large 9.3% drop over October of 2021. Those numbers follow on the heels of double-digit increases in lumber and plywood products throughout most of 2021. Despite the decline in the price of individual materials, the BLS numbers showed that the price contractors say they would bid on any given project was up by 3% from September to October of this year, and significantly up by 20.2% over October of 2021. By Garry Boulard |
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