Interview: Brian Diehl, Regional

Busier than ever

Lower tax revenue will likely hurt public projects but residential continues to soar

Brian Diehl

Regional Vice President – Pennoni

How how have you seen demand develop in the past year? We’ve been very lucky in that we’ve been busier than ever in the past year and I don’t see that slowing down. But in Florida, the No. 1 revenue generator was tourism and there was a downturn starting last March. The tax revenue going to the government agencies will certainly be less than in the last few years, so we expect some impact on public projects. That being said, the residential market is getting hotter and hotter. We can’t keep up with the residential work that is coming in throughout the state. This will probably balance the work we potentially lose in the public sector. I think between low interest rates and low taxes in Florida, people can now afford things that maybe they could not previously, so this is also bolstering demand for our services.

What areas of Tampa Bay are seeing the greatest new development activity? Pinellas County is pretty built out, so it’s more redevelopment activity taking place here. Pushing out the I-4 Corridor from Tampa to Orlando, there’s a lot of room for new development. This means infrastructure along this corridor, including transit, transportation, water and sewer, will also need to be added or upgraded. Some towns along this corridor are building master plans where they envision doubling the size of the towns in the next few years. We’re having to hire additional crews and environmental scientists for these residential projects and we see this continuing in the years to come.

What are the major trends in the market and what are your top near-term priorities? We have a group at Pennoni that handles sustainability and resilience. In Florida, sea level rise is a big factor that we already design for and it will continue to be a major factor in development. Municipalities are amending their codes to account for this. The FEMA floodplain maps are being amended again as well.

My top priority is diversification between public and private work. As a company, we’re around the 50-50 mark. During economic downturns, the public work typically gets us through this. It could possibly be different in the next few years. We’re very excited that we’re not seeing a slowdown in our proposals, which demonstrates that there is no near-term downturn. We’re getting new requests for proposals every day and the developers want to move fast, especially with over 1,000 people a day moving here. The engineering firm that can meet the developer’s needs is the one that is successful.

( ) metropolitan area by 2024. In the next 20 years, there will be 25% population growth. This should benefit the construction sector. Of the 30,400 private sector jobs added in 2020, 8,000 were in construction. The effect of this population growth can be seen in the housing market, where sales are expected to grow by 8.7% in 2021 while prices are due to rise by 7.5% year-over-year, according to the Tampa Bay Business Journal.

In addition to people, companies are also eyeing the Tampa Bay region. Tech companies, such as CodeBoxx and JustProtect, are moving to the area to such an extent that Tampa is developing the appellation “the Austin, Texas of the East.” Financial firms, too, are seeing Tampa as a viable alternative to colder Northern cities. All of this economic activity equates to a need for more housing. Indeed, in the booming multifamily market, the effects of the pandemic were hardly felt at all.

All told, over $13 billion in building projects are underway, putting the region (according to a 2018 PwC survey, among others) in the Top 10 locales in the country for real estate investment. Much of this development has been seen along the waterfront, which was under-used until relatively recently. Among the premier projects is the $3 billion, 50-acre Water Street

Tampa Bay real estate agents have seen a mass exodus from the Northeast to Florida’s mild climate.