Doug Wignall, national healthcare director for Omaha-based HDR Architecture, the highest-ranking architectural firm in the survey, reports that his company had its second-straight record-breaking year. The company finished with nearly $6.33 billion in work last year, which was up 7.1% from the almost $5.91 billion it performed in 2008.
Wignall credits the company's decision to diversify “at the right time in the right places” and winning the “largest commission in the country” last year for its success. The big domestic contract that HDR landed was for the new $1.27 billion, 862-bed Parkland Hospital in Dallas. Groundbreaking is expected to be in the fall, with the project to be completed around mid-2014.
“In general, the marketplace is down, and I'm not convinced it's coming back yet,” Wignall says, adding that Texas and the Mid-Atlantic region are “booming,” but the California, Illinois and Wisconsin markets are particularly depressed.
Wignall says HDR is also doing well with Defense Department contracts—working on a new medical complex at the U.S. Army's Camp Humphreys in South Korea, the $806.9 million Fort Belvoir (Va.) Community Hospital, and the $1.8 billion medical complex at Fort Bliss in El Paso, Texas. The firm is also active in Canada and with other international projects such as the 360-bed Cleveland Clinic Abu Dhabi hospital in the United Arab Emirates and a replacement for the Port-of-Spain General Hospital in Trinidad and Tobago.
Wignall adds that the Canadian economy is feeling the effects of a two-year, $55 billion government stimulus plan and that HDR now has four offices in the province of Ontario that hold 100 employees who “specialize in nothing but healthcare.”
At Turner Construction, Brownrigg says the domestic market appears to be picking up this year after a disappointing 2009.
After breaking ground on a combined 6.3 million square feet of construction in 2008, Turner saw its activity decrease to 5.5 million square feet in 2009, Brownrigg says. However, its dollar volume increased some 5.5% to more than $2.77 billion in 2009 from almost $2.63 billion in 2008.
Brownrigg notes that eight Turner projects were put on hold in 2009, though two have restarted: the Cleveland Clinic's $96 million, 190,000-square-foot Twinsburg (Ohio) Family Health and Surgery Center and the $190 million Clarian Saxony Medical Center campus in Fishers, Ind., an Indianapolis suburb.
The Cleveland Clinic is building another family health and surgery center in the town of Avon, Ohio. San Francisco-based URS Corp. is providing planning, architecture and engineering services for the $95 million project. Both the Twinsburg and Avon facilities are expected to open next year. In all, Cleveland Clinic has some $848 million in construction and renovation projects planned.
The Saxony project is one of two in the Indianapolis area that shut down in early 2009, only to restart later in the year. The other was the $265 million St. Francis Hospital and Health Centers in Beech Grove, which restarted construction last September.
In Atlanta, Emory Healthcare reports that its package of $1.5 billion worth of construction projects that it put on hold in March 2009 remains in limbo and will probably remain that way through 2010.
“It's still on hold for the indefinite future,” Emory spokesman Lance Skelly says. “They haven't been canceled; they've been shelved in response to the economy.” Emory does plan to go forward with a $90 million pediatric research and autism-care center it's building as a joint project with Children's Healthcare of Atlanta.
Also in the Atlanta area, four-hospital Piedmont Healthcare system restarted construction on its 143-bed Piedmont Newnan (Ga.) Hospital, where work had stopped soon after a fall 2008 groundbreaking. Piedmont officials announced that, during the downtime, it had rebid several parts of the project resulting in about $30 million in savings, and they expect to reduce the cost by at least $5 million more, taking the project's cost down to about $162 million from $193.6 million.
“A lot of projects that were put on hold in 2008 will be released in 2010, and I'm more optimistic about how much the healthcare sector will rebound than I was three months ago,” Brownrigg says. “Something has changed in the last several weeks, and the activity in the market has significantly improved. Around Dec. 15, the gates opened, and there are now a number of projects on the street we are angling for.”
Of the 186 companies participating in this year's survey, 116 say they had projects stall in 2009. In all, 575 projects were reported stopped and, of those, 135 restarted during the year.
Except for Defense Department projects, which tend to use the design-build method, which results in a quicker start time, Brownrigg says the construction outlook for 2010 is basically flat, but “a possible uptick” is being forecast for 2011 as construction work begins on projects designed this year. Otherwise, Brownrigg says, most of the projects completed this year will probably be at the $250 million-and-under level, which is fine with him.
“We as an industry would rather see it come back in a smooth fashion rather than a spike,” Brownrigg says, adding that a spike could result in a shortage of the skilled labor that hospital construction requires.