Huntley Area Construction Flourishes

In the first eight months of 2014, contractors working in Huntley have broken ground on over $302.5 million in new residential, commercial and infrastructure construction projects. This steady improvement dwarfs most of the rest of Illinois, the midwest and the entire country.  According to the Associated General Contractors of America, Illinois has added 7,300 construction jobs year over year, and 3,500 jobs in June 2014 alone. Only Florida shows greater growth in Construction employment.

While three fourths of states show some year over year growth in construction employment, and private construction project spending has grown at double digit percentages this year, uncertainty over state and federal infrastructure funding still threatens to keep too many tradespeople idle in the near future. Huntley is blessed with public officials having the foresight to promote a growing industrial and commercial tax base, which can support continued growth and keep a first class infrastructure in place for citizens and businesses located here. 

Huntley Opens I-90/Ill 47 Interchange

                   At 2 p.m. Friday the full, complete electronic toll interchange between the I-90 Jane Addams Illinois Tollway and Illinois Route 47 at the southern edge of the Village of Huntley formally opened, as the construction equipment pulled away from the cloverleaf and the orange barrels disappeared from view. At a ceremony officially opening the new $61 million interchange paid for in a cooperative effort by the Village of Huntley, the Illinois Tollway Authority, IDOT, McHenry County and Kane County, Huntley Village President Charles Sass thanked all the state, county and local officials involved in completing the project for their efforts, pointing out that the new interchange has “set the stage for attracting more development, creating jobs and expanding the local tax base for decades to come.”

                    The Village has zoned over 300 acres of land within the interchange area for industrial and commercial development, with streets and underground utilities already in place to support new businesses bringing construction jobs and permanent employment to Huntley. Businesses interested in developing new facilities with I-90 frontage and easy access to area highways are encouraged to work with Huntley village officials to arrange industrial revenue bond financing for their new construction within the village.

CTA And METRA Reject RTA’s Joint Bond Issue Proposal

                      CTA President Forrest Claypool promptly expressed opposition to a proposal by RTA Chairman John Gates, Jr. to have RTA take over the power to issue up to $5 billion in government bonds for funding new facility construction by CTA, METRA and Pace, replacing the borrowing now done by those individual agencies. RTA’s current borrowing limit is a mere $800 million. According to CTA spokesman Brian Steele, “This idea is simply the latest in a series of attempted power grabs that would hurt service, make it harder to invest in the system, and make the RTA answerable to no one.”

                    Ongoing METRA scandals and rising interest rates on the CTA’s sales tax backed construction bond issues have prompted Gates repeatedly to recommend legislative initiatives for consolidation of regional public transit authority planning, borrowing and spending power in RTA, as opposed to the four separate public transit agencies now operating in northeastern Illinois. Meanwhile, while Republican and Democratic politicians contend bitterly over control of the planning and funding of public transit in the region, efforts to establish commuter rail service between Huntley and Chicago for the safety and convenience of local residents, and to ease traffic congestion on I-90 between Huntley and the Loop, languish in the earliest planning stages.

Shermer Road Derailment Site Could Reopen Early

                        Union Pacific Railroad Company has completed installation of a wider railroad overpass above Shermer Road at the site of the July 2012 fatal derailment a month ahead of schedule, making it possible that the temporary track bed of crushed stone blocking Shermer near the Northbrook/Glenview boundary could be removed and Shermer Road reopened, at least partially, by year end. The $10 million, 150 foot span will permit widening of Shermer at that location to 3 lanes sometime in the future.

                    According to IDOT, plans for the widening won’t likely come to fruition for another 5 or 10 years, but Glenview and Northbrook residents will be happy to see the roadway restored to its pre-derailment 2 lane configuration as soon as possible. Union Pacific construction workers will begin removing the temporary road bed berm from Shermer in the last half of November.

2014 Construction Starts Should Increase 9%

                         McGraw-Hill’s Vice President of Economic Affairs Robert Murray announced that the Dodge Construction Outlook for 2014 predicts construction starts across the American economy could rise about 9% to a total of $555 billion, led by a solid housing market and rising commercial construction. The Dodge Outlook prediction is based on “more orderly” federal budget deliberations in Congress, and a predicted overall U. S. economy growing at between 2.5% and 3% in 2014.

                    The construction economy has been sluggish in 2013, mostly because of 2013’s contraction in overall U. S. economic growth to 1.6%, compared to 2.8% growth in 2012. Construction starts in 2012 were up 10%, but fell back to only a predicted 5% this year. Apartment construction leads all sectors with 36% growth in 2012, 19% growth in 2013, and a projected 11% growth to a total of $53.1 billion in 2014.

                     Single family home construction is expected to accelerate to $201.1 billion next year. Commercial construction starts increased 14% in 2012, 15% in 2013 and an expected rise of 17% to $72.7 billion in 2014. Nevertheless, it will be a long time before the construction industry sees 2005’s peak levels of activity, according to Murray.

Cash Strapped Owners And Developers Shift More Risk To Contractors And Trades

                   Upward creeping surety loss ratios and skyrocketing trade contractor borrowing for working capital are just two symptoms of increases in onerous contract terms imposed on the construction industry by public and private owners and developers, say speakers at the annual Construction Financial Management Conference sponsored by ACG and CFMA. According to Chubb Surety CEO Rick Ciullo, “Surety rates are down as new players join the fray and dilute prices with added capacity, helping drive profitability down 50% through June 2013.”

                    Consensus Docs Executive Director Brian Perlberg asserts that “We’re seeing larger, more complex projects that require collaboration and communication,” putting additional management responsibilities and computerization costs on building trades. Furthermore, increasing reliance on public private partnerships, design/build delivery processes and computer technology “is clouding how insurers respond to claims,” in the opinion of Marsh, Inc. Senior VP Danette Jones. The speakers agree that bonded contract loss ratios are significantly higher among smaller sureties with a higher number of small general and trade contractor principals.

                    Trade subcontractors furthest from the cash flow are being hit hardest, as both labor and material costs increase and owner payments get strung out over longer time frames. The financial stress on the trades will ultimately, of course, come back to plague owners and developers in the form of higher overhead and fee lines in trade contractor bids on future projects.

Inland Waterway Construction Moves Slowly Back Toward “Regular Order”

                       The Water Resources Reform and Development Act of 2013, passed with changes by the Senate Oct. 31, will go soon to a conference committee co-chaired by California Senator Barbara Boxer and Pennsylvania Congressman Bill Shuster. If the conference committee can reach agreement on the final details of this legislation, it will be the first time since 2007 that legislation providing for two year funding of water resources development and construction in the nation’s inland waterways has come to a vote in Congress. Because of the failure of comprehensive budget and appropriation legislation in the past three congressional sessions, projects to keep afloat the $185 billion in bulk cargoes moving on the nation’s rivers and lakes annually has ground to a virtual halt.

                    If appropriations for harbor, river and lake construction and development could once again become an agenda item of “regular order” in Congress every two years, the average of 52 service disruptions per day along the navigable waters of the United States might be brought down to more manageable proportions, not to mention the additional employment that will be generated in the construction sector of our economy.