New Jersey school building drives the construction industry in state

Real Estate Weekly, Oct 22, 2003 by Barbara Nelson

Large and small companies are clamoring to get a bite out of the New Jersey School Construction Corporation's $8.6 billion construction program already underway.

In 2000, New Jersey enacted the Educational Facilities Construction and Financing Act, This Act set aside $8.6 billion in State money for the public school construction in 30 special needs school districts, known as the Abbot School Districts.

This Act has been a Godsend for the construction industry that has suffered in a sluggish economy.

"There hasn't been a lot of construction in the private sector since 9/11," said Gerald Murphy, NJSCC managing director of policy and communications. "We are the biggest and only thing going in town right now. There are an unbelievable amount of contractors bidding right now."

With the only game in town, New Jersey school construction is driving the industry, said Darlene Regina, managing director of the New Jersey Building Contractors Association.

"School construction is where it's at," Regina said. "By the end of 2003 there will be 140 design awards, which equates to $2 billion in construction in 2004. Construction companies that haven't ventured into school construction work are now going through the process to compete for bids."

Turner Construction Company is the project management firm for Region 3 for the NJSCC.

"The funding provided by the state for the entire school construction market has made it much busier," said Doug Diercksen, manager of educational construction in the Somerset, New Jersey for Turner Construction. "There are additional opportunities and associated competition."

In addition, to the NJSCC's $8.6 budget individual school districts also are spending, said Diercksen.

"We are working in 25 school districts that individually managing their own projects," Diercksen said.

KNTM Architecture and Interiors of Clifton, New Jersey competes for design bids and is pre-qualified for jobs up to $3 million.

"It's one of the four markets we target," said Karen E. Nichols, partner. "Everyone is clamoring to get certified to do New Jersey school work, New Jersey and New York contractors. It's a huge market With an extraordinary amount of work to be done."

New York on the other hand has spent it's millions on school construction.

"New York started a renewed building effort in the 1980s when they created the New York City School Construction Authority," said Jeff Zogg, executive director of the General Building Contractors Association of New York. "The last six to eight years there has been a boom in the school building in New York, as the population grows. Unfortunately, the boom has subsided."

The focus now will be on existing schools, said Lloyd Mair, senior management specialist NYCSCA.

"Most of our line projects schools from the ground up, will be slow for this year and next," Mair said. "It's a matter of funding. For the next few years we will be focusing on capital improvement projects."

This may include repairs to roofs, masonry work, electrical upgrades, and additional computer classrooms, Mair said.

With New Jersey being the market to be in, the NJSCC has devised a system to qualify contractors and design firms, said Lou Coletti, president of the Building Trade Employers' Association.

"NJSCC has a very good procurement system," said Coletti. "Contractors can expect to complete a very rigorous qualification system before they can compete for work. They did it right way."

This process helps to select the right firm for the job, Murphy said.

"We are getting a great quality of contractors," Murphy said. "And even more so in the design field."