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AED
Sunday, August 10, 2008
Dozen new schools energize lagging construction industry
By Copyright &Copy; 2008 By Richard Metcalf
Albuquerque Journal
Journal Staff Writer
Albuquerque Public Schools, almost always a driving force in the metro area construction sector, has exploded with a building program that is pumping millions of dollars into the economy each month.
Thirteen Big APS Projects
1: Volcano Vista High School
2: Northwest Elementary School (name to be decided)
3: Northwest Middle School (name to be decided)
4: Northwest Elementary School (name to be decided)
5: Susie Rayos Marmon Elementary School
6: Atrisco Heritage Academy High School
7: Helen Cordero Primary School
8: Coronado Elementary School renovation
9: Southwest Elementary School (name to be decided)
10: Navajo Elementary School
11: Georgia O’Keeffe Elementary School
12: Family School East Campus
13: Food and Nutrition Services
Construction is ongoing or about to begin on 12 schools with a total price tag of more than $390 million. In June alone, the district spent $19.3 million on construction.
"We should see close to that level each month through 2009," said Brad Winter, former executive director of Facilities and Support Operations and now chief operations officer at APS.
And it's coming at a time the local construction industry needs the help. Both commercial and housing starts are a fraction of what they have been in recent years.
In contrast, APS is on track to complete at least 14 new schools and substantially rebuild an additional four in this first decade of the new millennium, which is the biggest wave of new construction since 33 schools were built in the 1960s.
"We're in a second building boom right now," said Kizito Wijenje, capital master plan director at APS.
The district expects to pull building permits for more than $270 million in new construction in 2008, an amount that could equal or surpass private sector spending on new commercial construction in the city for the year.
For comparison, the dramatic rebuild of the Big I, completed in 2002, cost $293 million while the major expansion of the University of New Mexico Children's Hospital, completed last year, cost $244 million.
'At a good time'
The sheer volume of APS construction — totaling more than 1.8 million square feet of new space — is playing a major role in sustaining the local construction sector.
Home building has traditionally been the biggest piece of the construction pie in Albuquerque. But home building is at less than one-third of the level it was in 2005, when it accounted for 72 percent of all spending on new construction in the city.
Commercial construction is also slowing. Across the metro, Grubb & Ellis New Mexico reported only 591,000 square feet of new industrial, office and retail projects at midyear. For comparison, the metro averaged more than 2.5 million square feet of new commercial space in 2006 and 2007.
"Because of the uncertainty in the market right now, there's not a lot of work in the pipeline," said Lynne Andersen, president of the local chapter of the National Association of Industrial and Office Properties. "It's not that the money isn't there to do new jobs, it's more that people are cautious."
For the construction sector, she said, the APS projects "come at a good time."
The metro added 600 construction jobs in May and June, ending a 15-month slide in construction employment, according to the Department of Workforce Solutions. The sector had 30,100 workers in June, down by 1,300 from a year earlier.
While the APS projects have been a boost to the metro's construction sector, said Larry Waldman, senior economist with UNM's Bureau of Business and Economic Research, "how much it helps the overall economy is questionable."
While new schools create jobs and improve the quality of life in their neighborhoods, the cost to build them is ultimately paid by taxpayers, he said.
"If that money was left with the taxpayers, they'd spend it somewhere else," he said. "It would go to other sectors in the (local) economy."
Need for new schools
"We're playing catch-up," Wijenje said about the current explosion in building new schools at APS. "They were needed yesterday."
The need for new schools hasn't been driven by surging student enrollment districtwide. When Rio Rancho Public Schools was established in the mid 1990s, APS lost 6 percent of its students. In addition, some schools in older parts of Albuquerque were losing students due to changing demographics.
"We averaged 1 percent increases (a year) through the '90s," he said. "This decade, we're averaging half a percent a year."
The problem has been where enrollment was growing fast — on the West Side and, to a lesser extent, Far Northeast Heights. "The growth has been very area specific," he said.
Between 1990 and 2004, for example, nearly 33,000 single-family houses were built on Albuquerque's West Side, according to the Home Builders Association of Central New Mexico. An estimated 3,500 apartment units were also built.
During those years, student enrollment west of the river grew by 6,177 students, or 19 percent, Wijenje said. APS responded by building six elementary and three middle schools on the West Side between 1990 and 2004.
Today, enrollment in just those nine schools is 2,400 students higher than what they were designed for, Wijenje said.
"Basically, we didn't have enough money to keep up with building schools on the West Side," Winter said. "Some critics would say it wasn't a priority."
The public outcry about overcrowded schools grew so loud that, in 2004, serious discussions were held on creating a separate West Side school district.
"There were a lot of projects in the master plan that hadn't been built," Winter said. "We realized we needed to look at ways to raise money (to do them)."
Mosaic plan
The turnaround came with the development of the comprehensive capital mosaic, which involved tapping three revenue streams.
In 2006, voters approved $475 million in general obligation bonds in two separate elections and the city imposed a facilities fee on new residential construction with the proceeds going to APS for school construction. In addition, there was a major infusion of state funds to APS for school construction in 2006.
The mosaic plan will generate $1.2 billion in funding to be spent on a variety of capital improvements between 2006 and 2013. About $900 million of that money is budgeted for new construction, renovation and repairs, Wijenje said.
During the first year of the mosaic plan in 2006, APS got city building permits for $79.2 million in new construction, more than triple what it had spent the previous year, and $5.9 million for repairs and renovations.
In 2007, the district got permits for $74.4 million in new construction and $5.4 million for repairs and renovations.
This year will mark the high point of the mosaic plan. The district expects to pull permits on just over $270 million in new construction and $14.6 million for repairs and renovations.
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