Contractors Gird for School Building Rush

By HOWARD FINE
Staff Reporter

It's bonanza time for building contractors who specialize in school facilities.

Earlier this month, California voters approved $22 billion in school facilities bonds, including a $13 billion statewide bond, a $3.34 billion bond for the L.A. Unified School District, known as Measure K and nearly $1 billion in bonds for other school districts in L.A. County.

In the next two to three years, much of that money will go to hundreds of building contractors, pipe fitters, electrical wiring companies, schoolyard asphalt pavers and other construction firms for the building of new schools and expansions of existing campuses.

Also benefiting will be dozens of architectural and engineering firms, many of which made campaign contributions to help pass the bond measures.

Some of the money is already flowing: the Los Angeles Unified School District is proceeding with its plan to put hundreds of millions of dollars in contracts out on the street within the next 90 days.

"Thanks to the passage of the school bond measures, we've got 10 bid openings moving forward in the next 30 days and by January, we should be averaging one bid per day on new schools," said Guy Mehula, director of new construction for the L.A. Unified School District.

The open spigot could provide a boost to the local economy as engineers and construction workers find themselves with more disposable income.

"School construction is now definitely going to be one of the bright spots in the market for us," said David Colon, an independent building contractor in Mission Hills. "A lot of builders are looking at all this public investment and saying they want to be a part of that."

Colon's firm, N.K. David Constructors, is one of hundreds of companies already prequalified to bid on local school contracts. Others include New York-based Turner Construction Co., San Francisco-based Swinerton Builders and McCarthy Building Cos. of St. Louis. Local construction powerhouse Tutor-Saliba Corp., which gave $50,000 to the campaign to pass Measure K, is also on that list.

Several major architectural and engineering firms also stand to benefit, including Pasadena-based Parsons Corp., DMJMH & N Inc., a unit of Aecom Technology Corp., and Johnson Fain Partners.

Labor demands

A battle may be brewing that could impact the flow of contracts. The local building trades union wants all the contracts let with funds from just-approved Measure K to be subject to a project labor agreement, where the work goes to union shops or adheres to union rules and pay scales.

"We haven't started discussions with the (L. A. Unified School) District yet regarding a PLA for Measure K, but we intend to very soon," said Richard Slawson, executive secretary of the Building Trades Council of Los Angeles and Orange County.

Currently, all contracts using funds from Proposition BB (the $2.1 billion school facilities bond approved by L.A. area voters five years ago) are subject to a project labor agreement.

Non-union contractors are gearing up to fight this new agreement.

"We want to see our members get their fair share of the new construction," said Shane Hoggard, president of the L.A. and Ventura chapter of Associated Builders and Contractors.

This budding dispute will not affect the projects set to go out to bid in the next 90 days. Nor will it affect many of the larger contractors who draw on both union and non-union workers.

Contractors have other worries, such as bureaucratic delays or poorly supervised projects.

"We are concerned that all these billions of dollars coming in be managed well," said Tom Holsman, chief executive of the Associated General Contractors of California, an industry group of union and non-union contractors. "There have been problems in awarding contracts in the past, with delays or shifting rules midway through. School districts must be given clear guidelines from the state on the most efficient project delivery and contract awarding process."

In recent years, this has been a huge problem at LAUSD, as seen by the Belmont Learning Complex debacle. That high school project just west of downtown L.A. went through several transformations before construction began, then it was halted over concerns about environmental contamination. The total tab so far is $170 million, with an estimated $100 million more to go after the district's decision earlier this year to restart construction. It's by far the most expensive high school project in the nation.

Changes made

In the last couple of years, prompted in large part by Belmont, the LAUSD has overhauled its facilities division, and the consensus from union leaders and contractors is that the process is now much smoother.

"With the team they have in there now, you are going to see a major improvement in how the contracts are awarded and administered," said union leader Slawson.

"We're not now overly concerned about bureaucracy and delays," said William Cody, southwest region manager for Turner Construction. "There's been a lot of improvement in school districts up and down the state including L.A. Unified in how they spend their bond money."

The other concern for contractors revolves around the level of neighborhood opposition to these projects, particularly the building of new schools. While schools may be more desirable in neighborhoods than mini-malls, intense opposition can be expected as the LAUSD and other school districts use their power of eminent domain to take over homes and businesses. That opposition can delay projects for months, if not years, slowing the flow of bond monies to contractors.

"The LAUSD is going to be building in the densest neighborhoods," said David Abel, publisher of the Metro Investment Report and founder of the New Schools Better Neighborhoods coalition, which advocates for neighborhood-friendly school development. "The question is, will the district's planning and execution of these projects be more intelligent and respectful of the other great needs these neighborhoods have?"

For reprint and licensing requests for this article, CLICK HERE.