K-12 Schools: In Timeout
Declining Enrollments + Stressed Budgets = Big Slowdown

Some school districts are still building and renovating, while others lack the funding to continue their capital improvement programs

By Debra Wood

School projects in the Southeast, especially those funded with sales tax revenue, are still building on a limited basis, and the competition for work is fierce as more contractors take aim at the K-12 schools market.

“We are seeing far fewer projects out on the street for selection of architects and construction managers, and we’re seeing more clients publicly bidding their projects,” says Scott Skidelsky, senior vice president of Turner Construction Co. in Orlando, which is working on school projects in Polk, Osceola and Pinellas counties in Florida. “We’re seeing pricing drastically going down.”

Skidelsky estimates costs are now about on par with 2001, but on the upside, “For the schools and projects you have, the workforce is extremely qualified.”

Kevin Kuntz, president of the Southeast division of McCarthy Building Cos. in Atlanta, has experienced similar competition in Georgia. His company recently bid an approximately $16-million contract for Fulton County Schools, and 22 bidders attended the prebid meeting. That compares to three bidders that sought two school construction projects in nearby Forsyth County Schools two years ago.

McCarthy secured both of those contracts and is wrapping up construction on the $19.8-million, 145,575-sq-ft Haw Creek Elementary School and the $21.9-million, 142,170-sq-ft Lakeside Middle School on an adjacent site.

Skanska USA Building recently completed the Aversboro Elementary replacement school for the Wake County Public School System.

Even with the cost of construction down 18% to 20%, school districts are mindful to watch their spending, adds Dan Tarczynski, a partner with design firm ShenkelShultz Architecture in Orlando.

“Buildings are more efficient than they used to be, and at the same time, [school districts] are trying to maximize their dollars and the technology,” Tarczynski says.

Some districts are remodeling rather than replacing, he adds. ShenkelShultz is designing an upgrade to the Southeast middle and high school campus in Greensboro, N.C.

Many districts are using prototype schools to save costs, but some, such as Collier County (Fla.) Public Schools, are becoming more innovative. ShenkelShultz designed the $26.5-million, 92,000-sq-ft Immokalee Technical Center for Collier that combines K-12 and adult education programs.

“These buildings are not that costly to build, but they impact a wide market of people, from ninth-graders to adults being retrained,” Tarczynski says. “We have other clients we have been talking to about this.”

Mike Konieczka, senior vice president with Skanska USA Building in Durham, says that not only has construction slowed, districts in North Carolina are not buying land or planning new bond offerings. He offers as an example the Wake County Public School System, which had planned an approximately $3-billion bond referendum in 2009 but then decided the climate wasn’t right.

“We believe school construction will be dormant for the next two to three years,” he says. “Most of the large, municipal school districts have burned through and are near the end of their backlog of school construction.”

Konieczka says that, to accommodate students, districts are switching to year-round schedules and adding module classrooms or converting gymnasiums or other space to classrooms.

Skanska recently completed the $17.1-million, 84,000-sq-ft Aversboro Elementary School for Wake County in Garner, N.C., and will wrap up this summer a $14-million, 88,000-sq-ft addition and renovation at Smith Elementary School in Raleigh for the same district.

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Charlotte At Charlotte-Mecklenburg Schools in North Carolina, current projects will finish, but no new starts are scheduled. The school system does not have the capacity to issue its own construction debt. Mecklenburg County sells the bonds, but having concerns about debt capacity, the county has significantly slowed the sale of new bonds, says Dennis LaCaria, a planning specialist with the Charlotte-Mecklenburg Schools planning and real estate department. The planned January bond sale was delayed until July or August to push it into the next fiscal year.

The district is completing four elementary schools and a replacement elementary school, all scheduled for completion this fall, and two high schools are under way and scheduled to open in 2010.

Rodgers Builders of Charlotte is working on the $57.6-million Bailey Road High School, and Balfour Beatty Construction of Charlotte is completing the $53.6-million Mint Hill High School. Schools originally slated to bid this spring have been delayed indefinitely, although the district will still pursue permitting in the event money becomes available for shovel-ready projects.

“It’s frustrating,” LaCaria says. “We know there is capacity in the market to do more work, and bid prices are favorable, but we cannot take advantage of that.”

Atlanta Atlanta Public Schools continues working on projects funded through its Special Purpose Local Option Sales Tax program. Valerie Thomas, executive director of facilities services for Atlanta Public Schools, says the district expects to collect about $100 million annually and will spend that much this year.

Barton Marlow is building the $11-million Springdale Park Elementary School for Atlanta Public Schools.

“The sales tax has been really important for us to get the schools up to the standards we feel are required for our students,” Thomas says. “The best thing about it is that it’s a pay-as-you-go plan, and nobody gets in debt.”

The initial phase of the Coretta Scott King Young Women’s Leadership Academy, built by C.D. Moody Construction of Lithonia, Ga., and the Business, Engineering, Science and Technology Academy, constructed by R.J. Griffin & Co. and Barton Marlow, both of Atlanta, will open this fall. Both are in the $38-million range.

Barton Marlow also is building the $11-million Springdale Park Elementary School. And the district expects H.J. Russell & Co. of Atlanta to complete a $20-million addition and renovation project at Young Middle School in December.

Winter Construction of Atlanta is working on additions to the Jackson Primary Center for approximately $3 million; additions and renovations to the Brandon Primary Center ($10 million); and construction of a new Smith Primary Center ($12 million). Several other rehabilitation projects are in design, and Thomas expects the renovations will begin this summer.

Orlando Orange County Public Schools in Orlando has multiple projects under way and more in the works, due to funding generated from a voter-approved sales tax and borrowing through a Certificates of Participation bond program.

W.G. Mills of Sarasota is renovating and adding on to Edgewater High School in Orlando. A rendering of the project is shown above. Aerial photo by: Smith Aerial Photos / www.smithaerialphotos.com.

“We still continue to have more than $1 billion of work in our pipeline, and we complete in excess of $200 million in work every year,” says Bob Proie, chief facilities officer for Orange County schools.

The district recently began two comprehensive renovation projects: the $72.9-million addition and renovation of Oak Ridge High School, being completed by Wharton Smith of Sanford, and the $85.7-million upgrade at Edgewater High School. W.G. Mills of Sarasota received the $55-million Edgewater construction contract, which came in at $19 million less than budgeted.

The Keene’s Crossing Elementary School, budgeted at $17.7 million, came in at $1 million less than expected. Clancy & Theys of Orlando received the contract.

As of Feb. 28, the latest data available, OCPS had $386 million in new schools under construction and $292.6 million in renovation work under way.

South Florida Sam Doggart, senior vice president and account manager in charge of South Florida for Skanska USA Building, says there is still work to bring older schools’ building systems to current standards. Skanska is finishing a $65-million renovation at Miami Central for Miami-Dade County Public Schools.

Betancourt Castellon Associates of Miami is building High School YYY1 in Homestead, Fla., for Miami-Dade Public Schools. (Photo courtesy Miami-Dade Public Schools)

“We had a big boom on new schools over the last two to four years, but the money they have now is all going to renovations and up-fit,” Doggart says.

Victor Alonso, design officer for Miami-Dade County Public Schools, says the district built more last year than anytime in the district’s history.

“It was our peak,” Alonso says. “We’ve awarded very few projects this year, compared to the last three or four years. And due to funding issues, it’s going to wind down even more.”

Miami-Dade schools spent $291.1 million in school year 2008-2009 for construction and remodeling projects. It plans to spend $44 million in 2009-2010, $16 million for new facilities and $28 million for existing schools.

“It’s a fraction of what it was this year and in prior years,” Alonso says.

Five new schools and about six addition/renovation projects will wrap up later this year. Together they will add 17,000 student stations. Projects includes four high schools: the $87.5-million Hialeah Gardens Senior High School being built by James A. Cummings of Fort Lauderdale; $39-million QQQ-1 high school in North Miami, a Pavarini Construction Co. of Fort Lauderdale project; $35-million YYY-1 in Kendall, being completed by Betancourt Castellon Associates of Miami; and $85.6-million BBB-1 being built by Suffolk Construction of West Palm Beach.

Also opening later this year is TT-1, a $31.6-million K-8 center near Homestead built by James B. Pirtle Construction Co. of Davie.

Coastal Construction of Miami has begun the second two phases of the Carol City High School in Miami Gardens. The $79.4-million, 370,000-sq-ft project includes nine buildings and space for 2,800 students. It will open in 2010.

Alonso estimates half of the funds the district receives from the state are used for debt service. If the Legislature cuts back on the amount of money set aside for capital improvements, the district likely will need to decrease the number of employees and projects, and many remodels and repairs in the five-year plan will not move forward.

“We are facing a real dire situation with funding construction in the next few years,” Alonso says.

Broward County Public Schools has approximately $350 million to spend in 2009-2010, but after that, the district is not budgeting any money for new construction. It has three elementary schools under way by Skanska, Balfour Beatty Construction of Plantation, Fla., and Padula & Wadsworth Construction of Lauderdale Lakes. Costs range from $17 million to $25 million.

“Due to declining enrollment and the aggressive building we have had over the last five years, we do not have the need or the money for any additional major schools,” says Michael Garretson, deputy superintendent of Broward County Public Schools Division of Facilities & Construction Management.

Useful sources:

Orange County Public Schools
https://www.ocps.net/FA/Pages/default.aspx

Miami-Dade County Public Schools
http://facilities.dadeschools.net/capital/index.asp

Broward County Public Schools
http://webapp.browardschools.com/fcm/default.aspx

Charlotte-Mecklenburg Schools http://www.cms.k12.nc.us/cmsdepartments/construction/Pages/default.aspx