Roundtable: An atypical year

®oundtable:

An atypical year

Construction sector leaders discuss working in the past atypical year and provide their outlook and key priorities post-pandemic.

Doreen Caudell

President D-Mar General Contracting

What has been D-Mar General Contracting’s focus in this atypical landscape? We have been diversifying our customer base due to COVID-19. Prior to the pandemic, we were heavily involved in the airline industry, one of the virus’ first victims business-wise. We now have a new and different set of customers, having acquired some military and government contracts that we are excited about. These are with the U.S. Air Force and the Florida Department of Transportation (FDOT). It has also brought our team together in a much different way. We were working on all the different airlines projects we had all over the country, whereas now that we are here, we are looking to build a different type of team to diversify into the government sector, which has proven to be a highly rewarding experience.

What type of projects are you developing with FDOT? FDOT is not only bridges, roads and infrastructure; although we do have the ability to do that. The types of services that D-Mar is providing is along the lines of a design-build. FDOT has conference rooms, buildings, infrastructure projects, transit centers, to name a few.

What are your main priorities for 2021? Continuing to grow. We want to be there for these design-build projects, working with many partnerships throughout the country. There are a couple of new projects coming online, some of them touching on transit, that we are excited about because that will help the city on several fronts, including but not limited to safety, mental health, air control and carbon footprint.

Troy Hernly

Vice President & Principal Stevens Construction

How did Stevens Construction fare in 2020? The good news for Stevens is that we are still going to be profitable and meet our revenue and profit goals for 2020. However, the healthcare and hospitality sectors that Tampa specializes in were impacted due to COVID-19. This was a change compared to years past as traditionally these markets sustained us during every other economic downturn. We saw numerous jobs have funding pulled or not move forward to the next phase as priorities were shifted. This has given us the opportunity to work on diversifying our local portfolio.

What healthcare sector opportunities do you see emerging? The healthcare sector is going to create some new and exciting opportunities. One of the things that it has amplified is the need for hospitals to care for acute patients. Isolation wings are going to be needed for hospital care, whether it is this pandemic or the next. That need is going to drive off-campus developments, whether it is medical office buildings or standalone emergency departments and ambulatory surgery centers. Telemed is another trend. The healthcare delivery system in five years is probably going to look very different from what we have today.

Which areas of Tampa Bay are positioned for growth? The short answer is all of them. More and more people have “discovered” Tampa and they want to live here. If I had to pick one area, I would say Pasco. Pasco’s pro-business environment and availability of land make it very attractive to companies and individuals who are looking to leave bigger cities and come to Florida.

Frank Musolino

CEO Power Design

How did your use of technology evolve during the course of the pandemic? We’ve done a lot with electronic document management and our ability to work in a virtual, collaborative design environment through coordination. On the field side, we’ve been utilizing technology such as OpenSpace. PreCOVID, we used OpenSpace on about 10% of our projects and within a month that 10% became 90%. Now, all of our projects are using OpenSpace. OpenSpace is a company that uses a hard-hat-mounted camera to provide tapand-go passive image capture and photo mapping that allows us to see progress on our construction sites. For example, we do progress walks, inspection walks and prework walks, where we have someone walk the site, then our management teams, QC teams, or even myself can virtually walk that job site and see what’s going on.

What is your outlook for the company and the industry? We have long-term goals in our business that we think differentiate us. We are pushing to become a fully integrated MEPS (mechanical, electric, plumbing and systems) company. Long term, I see all of these components coming together as technology starts to integrate. The historic division between these trades will be challenged going forward and you won’t be able to have these individual trades anymore. From an industry standpoint, people see the light at the end of the tunnel. They know they need to start building, especially in the multifamily space. While it’s sometimes difficult to ignore the struggles of the present, we are building projects that won’t deliver until two to three years from now when this pandemic will be in the rear-view mirror. What are some of the takeaways and benefits stemming from 2020? The first thing that comes to mind when thinking of 2020 is the financial impact but we may not be the best candidate to speak to that. Our revenue was up 300% over the last 24 months and we had our highest revenue and profitability in 2020. We feel pretty blessed because we weren’t affected by the pandemic. I believe being in West Florida specifically plays a big role in our success. As we continue to grow, people are taking us much more seriously and we are now getting invited to sit at the table for these bigger projects. From a leadership standpoint, we learned the importance of people and we doubled down on investing on our current staff while aggressively ramping up external recruitment.

Which sectors will stay strong in the near term? From an economic standpoint, there are sectors we believe will continue to stay strong, both because of the pandemic and the geography we live in. Industrial is one of the sectors that will continue to see momentum, while self-storage and brick-and-mortar retail are expected to struggle. Senior living and student housing will continue to evolve given the demographics of the state. I think the restaurant world will continue to change and we have invested a lot in grocery but that could also change.

How how do you view the local talent pool? There is definitely a labor shortage in the trades. This will get worse in the coming years because so many people overlook these career paths due to a push toward fouryear college degrees.

Andy Park

Partner Park & Eleazer Construction

The rise in lumber prices has added $16,000 to the price of a home and $6,000 to the price of an apartment

( ) These are only the tip of the iceberg in terms of the development this boomtown is attracting. As well, such marquee projects do not take into account the amount of housing and industrial space that is going up to meet the demands of a growing region that is seeing expansion beyond the city of Tampa itself. “The Tampa Bay region has good land available for development. Traditionally, Hillsborough County has been the focal point for suburban development in the region, but we are now seeing neighboring areas like Pasco and Polk increasing their permit counts,” said Jim Harvey, president of Kolter Land. “These areas are becoming more attractive for new homebuyers. We have made a substantial investment in north Manatee County, where we have seen strong demand recently. The pandemic is exacerbating the already significant demand for the Tampa Bay region. As well, growth of the Tampa Bay region will increase the demand for residential development over the next few years.”

Performance If there is one area in which the pandemic has adversely affected the construction sector, it is in the disruption of the supply chain and the availability of labor. The closing down of a sheet metal factory in North Carolina on account of a COVID scare will have an effect three weeks later if a site in Tampa cannot easily access the material it needs. Furthermore, once the plant is back up and running, it will have to follow social distancing protocols, limiting productivity, and forcing it to play catch-up with demand.

The cost of materials also is going up. The price of

steel rose by nearly 10% from August to December 2020. In the case of lumber, the rise in price was enough to add $16,000 to the price of a home and $6,000 to the price of an apartment. According to one study, 41% of contractors stated that the paucity of materials was among the most debilitating outcomes of the pandemic, while 71% said they experienced at least one material shortage. “The big challenges have been related to supply chain,” said Jason Rossi, owner of Rossi Construction. “We are also stuck waiting on products, from appliances to fixtures, like HVACs and plumbing fixtures, which come from China or overseas, where most things are made, and the delay on that has been tremendous as well. We’ve been fortunate that, as a whole, things have been extremely busy, so that the backlog work has been steady and we’ve been able to increase it to account for the delays from the building department as well as from products.”

Such shortages have led to a reevaluation of issues concerning supply chains. The scare surrounding the availability of personal protective gear at the beginning of the pandemic, called into doubt the wisdom of global supply chains. Added to this are what many see as the long-overdue application of digital technologies — such as blockchain or RFID (Radio Frequency Identification) systems — which will allow goods to move more seamlessly along its route from manufacturer to purchaser.

As 2020 gave way to 2021, the supply chain issue waned somewhat, and some industry insiders like Todd Fultz, managing director for the Central Florida office of Plaza Construction, say there was even a silver lining. “The supply chain settled out somewhat.

Building-permit applications in Tampa Bay rose 24% over last year.

John Bowden

Senior Vice President, Mid-Florida – Moss Construction

From a subcontractor, tradesmen point of view, for the most part, we worked around any (labor) shortages. If we lost half of a crew or crews, we would just re-sequence the work. We didn’t try to replace people who were going to be off the job for 10 days. On the management side of our operations — superintendents, project managers — we have started to see some real talent become available in the market. There is an enormous number of projects in our pipeline that are teed up to go. Talent is going to be needed. The issues during the pandemic were rather short term. They were sharp when they happened but we were able to roll with them and figure out how to mitigate them as they occurred.