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MARKET SPOTLIGHT: SCHOOL CONSTRUCTION


Education Facility Markets Booming, But Workforce, Cost Challenges Remain


construction teams. For their part, institutional owners have increasingly embraced alternative delivery methods like design-build, lease-leaseback and best value selection in lieu of the tradi- tional hard bid approach.


Strong Growth Projections Te year ahead should see


McCarthy Building Companies, Inc. completed the Betty Irene Moore Hall at UC Davis last fall. The $50 million project, delivered via design-build, houses the School of Nursing. The project team’s highly collaborative approach is reflected throughout the final product which touts synergistic learning spaces in lieu of traditional classrooms. (Photo courtesy McCarthy Building Companies, Inc.)


By Carol Eaton


enced a period of steady and sustained growth. K-12 school districts as well as community colleges and univer- sities have raced to put projects into the pipeline to keep pace with rising demand. Institutional owners are not only building new spaces like science classrooms or performing arts centers for the newest generation of students, but they are also pursuing projects to renovate or replace many existing, aging facilities. Bolstered by the 2016 passage


O


of Proposition 51 – the $9 billion bond measure to help fund K-12 and community college new construction and renovation projects – the state’s school construction markets offer


10 March/April 2018


ver the past few years in California, educational facility construction has experi-


plenty of opportunity for qualified contractors. As the first new state school facility funding measure enacted in over a decade, Prop 51 provides critical matching funds and extends the buying power of myriad local funding initiatives put in place by K-12 districts and community colleges. In 2016 alone, some 170 school districts across the Golden State raised an additional $23-plus billion for new and renovation projects through passage of local school facility funding measures. But even as dollars for facility


construction programs may be more accessible today, years of deferred maintenance means these public funds need to stretch far. Many AGC contractors have taken the lead helping owners rein in costs and increase value through innovative design and construction solutions and greater collaboration among design and


continued growth in the institutional construction sector. Dodge Data & Analytics’ “2018 Dodge Construction Outlook” projects that institutional building as a whole will advance an average of 3 percent in 2018. Te Outlook notes that “educational facilities should see more substantial growth next year (2018), lifted by the passage of recent school construction bond measures.” Leading construction industry


consultant FMI Corporation also forecasts education construction put in place will grow by 5 percent in 2018 to a nationwide total of $95.0 billion. (Source: FMI 3rd


Quarter Outlook). Additionally, AGC of America


released its 2018 outlook survey of contractors this January, which found a strong expectation for industry growth. While the transportation construction market easily scored the highest net positive response from participants, the survey tagged K-12 construction at a sizeable 18 percent net positive growth rate.


Plenty of Challenges While California’s educational


facility construction market is ripe with opportunity, challenges also abound for contractors engaged in this market sector. AGC of America Chief Economist Ken Simonson, in his California Outlook article on page 16 of this issue of California Constructor, notes that AGC’s positive overall outlook for California is tempered


California Constructor


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