February 20, 2015
Association Highlights
 
FMI's Craft Labor Recruiting & Retention Survey Report
FMI Warns Craft Labor Shortage May Slow Construction

FMI recently released the Craft Labor Recruiting and Retention Survey. Companies reporting in this survey have gone from “culling to pulling.” One important finding in the report is that more large contractors are increasing the amount of work they self-perform, thus adding risk as well as seeking to provide more services and greater profits. The challenge will be to find, retain and train talented workers at all levels.

For this report, FMI surveyed the membership of the Construction Personnel Executives Group (CPEG), whose members consist of human resources executives for many of the largest contractors in the country. When it comes to recruiting and retaining craft workers, many of the challenges covered in this report are more germane to larger contractors. For instance, national contractors that perform much of their own work need to develop traveling crews for national markets. Nonetheless, midsized and smaller contractors will face, or are now facing, many of the same issues as the larger contractors, and many will have a greater struggle in some areas when it comes to recruiting and retaining the best employees, especially if they are competing with these larger companies for talent.

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AGC-GM Welcomes Gilbane, Inc. as General Contractor/Construction Manager Member

The AGC of Greater Milwaukee would like to welcome its newest General Contractor/Construction Manager Member, Gilbane Inc.

Gilbane Inc. is one of the largest privately held family-owned real estate development and construction firms in the industry. The have been family-owned and operated since 1873, and is a three-time member of the FORTUNE100 "Best Companies to Work For” list for 2009, 2010, and 2011.

Gilbane Inc. comprises two operating companies: Gilbane Building Company and Gilbane Development Company. These two often work jointly as one company to provide integrated expertise in finance, property development, planning and commercial construction.

We gladly welcome their experience and skill as a company to the Association!

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AGC's Annual Safety & Management Training Day - Last Chance to Register, Donate!

Best Western Plus Milwaukee Airport Hotel and Convention Center
5105 S. Howell Ave., Milwaukee
Cost $55 Members; $95 Non-Members

The AGC of Greater Milwaukee is pleased to present this valuable event for the construction industry.  Join us in a full day of safety training on topics such as Confined Space, Fire Extinguisher Training, Proper Use of PPE, Understanding the OSHA Process and more.  In addition to more interactive safety training, this event will provide a management training track on such topics as negotiation, partnering and sales.

Thank you to the companies that have generously sponsored this event!

Langer Roofing & Sheet Metal Inc.
J.P. Cullen & Sons, Inc.
SRS Roofing and Sheet Metal, Inc.
Wall-Tech, Inc.

While sponsorships have closed, there is still time to register, or donate a door prize.  Save 10% when you register 10 or more! 

For more details on registration or door prize donations, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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In the News
 
First look: Developer Unveils Designs for 450 Apartments on Gallun Site in Milwaukee

Atlantic Realty Partners is doing its first major outreach to the neighborhood around its Gallun tannery site near downtown Milwaukee to get feedback on plans for four major buildings with 450 apartments. Get the first view of what the project will look like in the attached slideshow.

The project would transform a now-vacant former tannery property at 1775 N. Water St. on the Milwaukee River. It was designed by James Shields, principal with HGA Architects, Milwaukee.

Pending approvals by the city of Milwaukee, construction is to start this year with occupancy on the first phase, with 240 apartments, as early as summer 2016, Richard Aaronson, president of the Atlanta-based development company told the Milwaukee Business Journal. The two-phase project will take four to five years to complete.

Aaronson has held meetings with city officials and neighborhood business groups, but on Tuesday night is holding the first broader neighborhood meeting at The Hamilton in Milwaukee. Depending on reactions from the neighbors, Aaronson said he may seek city plan approval as early as next month.

The project would have four buildings, standing four stories tall from Water Street. About 60 percent of the apartments would be one-bedrooms, including some studios, and the remainder would be two- and three-bedroom units, Aaronson said.

The buildings would be U-shaped, with each building having two arms extending toward the river, surrounding open-air courtyards. Parking would be in two underground levels below the grade on Water Street.

"It's really designed to maximize the view of the river," Aaronson said.

The project also includes an extension of the Riverwalk that would be open to the public.

"We are planning a plaza at the north end of the development that may have a public kayak floating dock," Aaronson said.

That plaza also may have a memento commemorating the site's past use as a tannery, Aaronson said. Other historical references include using cream city brick on the building exteriors facing Water Street, he said. The building would not have retail space along the sidewalks, he said.

Milwaukee Ald. Nik Kovac, whose district includes the Gallun site, said he supports housing and a Riverwalk extension on the Gallun site, but is waiting to hear input from the neighborhood on the specifics of the plan.

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Greenfield, Pewaukee Gear Up for Development Possibilities

A contractor's equipment yard in Pewaukee could be razed and replaced by 120 high-end apartments and 27 houses under a proposal by Neumann Cos. Inc.

Also, a new Goodwill store on South 76th Street and Cobalt Partners' 40-acre development near Interstate 894 are among several projects under review next week in Greenfield.

In Pewaukee, Neumann Cos. is looking to acquire more than 34 acres at Highway 74 and Lindsay Road for a new housing development. With 120 apartments, with rents ranging from $1,100 to $1,450 a month, co-owner Mark Neumann said he expects interest from young professionals and a demographic in his own age range.

"I think we'll attract people who are downsizing," he said. "I used to say seniors, but I am rapidly approaching that, so I will say young seniors."

The development would replace a line of about 12 metal industrial buildings originally built to store heavy equipment, said city planner Harlan Clinkenbeard. The city's Plan Commission is to review the project Feb. 19.

Neumann said, depending on that commission's review of the project, site work, including demolition of those industrial buildings, would begin by July so construction of the apartment buildings can start in late summer.

The six apartment buildings would each be two stories tall, according to a site plan. Apartments would range from 850 to 1,250 square feet, each with an attached garage, Neumann said. One-third of the apartments would have one bedroom, and the remaining would be two-bedroom units.

The project will start with 44 apartments that would open for occupancy in March 2016, Neumann said. Future phases of 38 apartments apiece would follow as apartments are rented out.

"From a location perspective, I think it's absolutely what people are looking for," Neumann said. "You are right on the edge of the country."

Goodwill in Greenfield

In Greenfield, an Office Depot store on South 76th Street could be replaced by a Goodwill location next year.

Office Depot leases 22,000 square feet in about half of a retail building at 4940 S. 76th St. Goodwill Industries of Southeastern Wisconsin has a lease agreement with the building's owner to take over that space in spring or summer of 2016, said Cheryl Lightholder, manager of communications for the organization. Goodwill also has new stores in the works in Brown Deer and Brookfield.

Greenfield's Plan Commission will review the Goodwill store and donation center plan on Tuesday. Also up for review during that meeting is Meijer Inc.'s proposal to open a large store to replace the former Mount Carmel nursing home on West Layton Avenue, and Cobalt Partner's planned mixed-use redevelopment near Interstate 894.

Milwaukee-based Cobalt Partners' proposal includes the former Chapman School property and a Steinhafels store on West Layton Avenue between South 92nd and 84th streets. The developer in December said the project would include a new Steinhafels store to replace the current location.

The city next week will review a general plan for that site that sets the maximum limits on what could be built there. If approved, it would allow up to 480 apartments, 240 hotel rooms, and 550,000 square feet of retail and office space. Those are maximum limits. An actual development proposal for the site still is being drafted.

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Economist: Construction spending set to increase 7.7% in 2015

According to the latest American Institute of Architects’ (AIA) Consensus Construction Forecast, conducted in December, the national building activity level for non-residential real estate is climbing. We spoke with AIA Chief Economist Kermit Baker to find out what’s behind the AIA’s prognosis. An edited transcript of that interview follows.

NREI: How does AIA monitor construction activity?

Kermit Baker: We run a Consensus Construction Forecast twice a year. We have seven or eight pros on the panel and we ask them to supply their topline forecast for non-residential building activity. We compile that and come up with the AIA Consensus, which is simply the average of all those numbers. We just did the most recent one at the end of the December, so the numbers are really pretty current. We break it down into commercial, institutional and industrial.

For commercial, we include offices, retail, hotels and other commercial activity, like banks. Industrial includes manufacturing facilities and related distribution facilities. Institutional is buildings that have either government or non-profit ownership; the biggest types of activity there are health and education, but we also ask for information on religious facilities, public safety facilities and amusement and recreation facilities.

Overall, forecast results on a construction spending basis is that overall activity for non-residential buildings is predicted to be up 7.7 percent in 2015 and 8.2 percent in 2016. In 2015, the commercial sector is projected to increase 11.8 percent, industrial to increase 10.5 percent and institutional to rise 5 percent. So they’re all pretty healthy numbers. Almost 8 percent growth would be a pretty good performance—not stellar, but good, and obviously it’s the strongest performance since the industry went into a recession at the end of 2008.

NREI: How does that compare with the lowest point?

Kermit Baker: Spending at the peak of the market in 2008 was exactly $500 billion. The trough was in 2011, when it was $337 billion. Our estimate, we don’t have final revised numbers in, but our estimate for 2014 is $377 billion. So it’s come back, but it’s certainly well below where it was before the downturn.

NREI: How will activity compare in different geographic regions?

Kermit Baker: My guess is that, broadly speaking, the South and the West that traditionally see the most construction activity had the largest overhang when the economy went into recession, so they saw the steepest declines for the inactivity [that] took place for the next few years. Now that their markets are recovering, they’re actually seeing the strongest growth, whereas the Northeast and Midwest were always a little more stable, both during the downside and now during the upswing. The strongest markets recently have been the Southcentral states—you know, Texas and the surrounding states—and then there has been some pretty healthy growth in California. In Florida, a little less so because it got hit so hard during the downturn; Atlanta was in that category too. Also Southcentral and the West Coast, particularly coastal California; some of the inland markets in California were pretty hard hit too because there was so much extra inventory there.

NREI: Do you see any dangers of overbuilding in any of the sectors?

Kermit Baker: I think there’s always danger of overbuilding, but we’re a long way from that now. The market is still well below where it was at the last peak. It’s probably not going to get back to that peak this cycle, but I would guess it would get fairly close to it. Market by market, you may see some imbalances, but I think, generally, overbuilding is not a problem. Multifamily, which we don’t include in this survey, may be the closest to that in the sense that its recovery began the earliest and it’s been very strong recently, so much so that multifamily construction activity is essentially where it was before the downturn. But single-family and all the non-residential categories are still well below.

NREI: Could you comment on the availability of financing for new construction?

Kermit Baker: We monitor that a little bit and we hear a lot about it from our members. Certainly, during the downturn, that was the most serious problem in achieving a recovery. Lenders just weren’t lending into the real estate market. I hear less of that now. There are reports from the Federal Reserve that lending standards have eased modestly with most lenders. It still is a problem, but not nearly as serious as it was two or three years ago.

In the non-residential sector, the critical piece is that the institutional market was negative and continued to be negative all the way through the end of last year. So those numbers have not begun to recover yet, that’s a very big piece of the total. Our architecture billings index measures design activity, which leads construction activity by nine to 12 months, and that has been turning up five months in the institutional sector. That means that architects are designing more institutional facilities. I think that’s a very encouraging sign that we’re likely to get a recovery this year in institutional building for the first time since the downturn. And that’s enough to really ensure that we’re going to have a stronger general non-residential recovery this year.

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Upcoming Trainings from The Knowledge Source
 
OSHA 10-Hour for Construction
February 18th, 19th, 25th & 26th, 4:30 pm to 7:00 pm

Corp. G.C. - $115, Associate - $155, CBA’s - $175, Non-Affiliated IAP - $250
Gert Grohmann & Dan Burazin, AGC of Greater Milwaukee

Need your OSHA 10-Hour training card to get on the job?  You’ve come to the right place!  This 10-Hour construction safety course was developed by the US Department of Labor to provide construction workers, supervisors, and other personnel responsible for construction activities with an awareness of construction safety and health concerns in the construction industry.  All attendees will become familiar with reading and using the OSHA standards for construction 23 CFR 1926.  Other construction safety and health standards are also discussed.  Attendees receive an update and review of standard construction safety and health principles and information that prepares them to recognize and control a variety of hazardous conditions.  An OSHA card, certificate of completion and hardhat sticker will be issued. 
Intended Audience: This course is intended for anyone within the industry who has a stake in jobsite safety, especially field crews.

To register, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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Lean Construction Unit 6: Lean Design and Pre-Construction
February 23rd, 8:00 am to 12:00 pm

Corp G.C. - $100, Associate - $175, CBA’s - $200, Non-Affiliated IAP - $250
Professor Mark Federle, Marquette University

Unit 6: Lean Design and Pre-construction is a half-day, instructor-led course that introduces you to the concepts of value-based management, lean in the design process and relational contracting. The course is divided into three sessions:
Session 1 – Defining Design
Session 2 – Applying Lean in Design
Session 3 – Contractors in Design

Following this course, participants will be able to:

• Distinguish between the varying definitions for design.
• Define value and commonly used methods to maximize it.
• Discuss waste and commonly used methods to minimize it.
• differentiate between traditional project methods and lean design.
• Explain the various lean tools used in design and how to deploy them.

To register, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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STP 6: Understanding and Managing Project Costs
March 2nd, 4th, 9th & 11th, 4:30 pm to 7:30 pm

Corp. G.C. - $150, Associate - $270, CBA’s - $300, Non-Affiliated IAP - $450

STP promotes an interactive training atmosphere among course participants and employs some of the most dynamic instructors in the construction industry.  Unit six covers understanding how project estimates are compiled, how to compare actual project costs with those estimated, and how to control costs to meet the estimate.
Intended Audience:  This course was specifically designed for superintendents, foremen, project managers as well as those who aspire to hold these positions in the future.

To register, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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Understanding Your Pension Liability as a Union Contractor
March 12th, 8:00 am - 9:30 am

Corp. G.C. - Comp, Associate - $40, CBA’s - $50, Non-Affiliated IAP - $75
Mike Gantert, Executive Director - Building Trades United Pension Trust Fund (BTUPTF)

As a Union General Contractor or Subcontractor, you contribute pension benefits into the BTUPTF on behalf of all those field personnel whom you employ.  While your contributions serve to provide a pension, there are other vital considerations that you should understand as an informed contractor.  Mike Gantert has served as the Executive Director of the BTUPTF for over two decades.  He will bring valuable insight concerning various laws that come into play that dictate certain aspects of this pension plan.  Additionally, he will discuss the current pension plan status and what factors lay ahead that will have an important impact on the plan’s statue. This program is a “can’t miss” for those educated contractors who want to clearly understand the various liability aspects of your participation as a contributor to this plan.

To register, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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Surety and Bonding - How Do They Work?
March 19th, 8:00 am - 9:30 am

Corp. G.C. - Comp, Associate - $40, CBA’s - $50, Non-Affiliated IAP - $75
The Brehmer Agency

The world of surety bonding can be very confusing and intimidating, especially for contractors who haven’t been required to provide much bonding in the past.  We will shed some light on the subject by discussing how bonds work, underwriting considerations, choosing the right strategic financial partners, marketing of your bonding program and maximizing your surety credit.

To register, please contact Kim Jalalian at kjalalian@agc-gm.org or (414) 778-4100.

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In This Issue
Association Highlights
FMI's Craft Labor Recruiting & Retention Survey Report
AGC-GM Welcomes Gilbane, Inc. as General Contractor/Construction Manager Member
AGC's Annual Safety & Management Training Day - Last Chance to Register, Donate!
In the News
First look: Developer Unveils Designs for 450 Apartments on Gallun Site in Milwaukee
Greenfield, Pewaukee Gear Up for Development Possibilities
Economist: Construction spending set to increase 7.7% in 2015
Upcoming Trainings from The Knowledge Source
OSHA 10-Hour for Construction
Lean Construction Unit 6: Lean Design and Pre-Construction
STP 6: Understanding and Managing Project Costs
Understanding Your Pension Liability as a Union Contractor
Surety and Bonding - How Do They Work?
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AGC-GM Website
AGC of America Website
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