Demand and material costs high for area school construction projects

Apr. 14—TRAVERSE CITY — The construction hangover from the shutdown in the early months of the COVID-19 pandemic is still causing some headaches.

Low supply of construction materials coupled with rising prices of those materials, long lists of projects that keep getting longer and a shrinking labor pool are forcing some contractors to step back from bidding on work they normally would.

"I don't know if any of us have caught up from that 7-week shutdown last winter. It continues to snowball and add up," Jeff Fedorinchik, president of Hallmark Construction, said.

Hallmark construction had to pull their bid on auditorium upgrades at Traverse City West Senior High School. Hallmark took work at Westwoods Elementary, but Fedorinchik's crews have projects along Eighth Street, at the Common Ground and Westshore Bank as well as several private jobs.

That has Hallmark at capacity, Fedorinchik said.

"It affects our strategy for taking on more work," he said. "Everyone has to be more selective in the number of projects they could pursue."

The Traverse City Area Public Schools Board of Education approved bids on five projects Monday. Treasurer Matt Anderson voiced concern because the district received just one bid on two of those projects — entry renovations at Cherry Knoll and Long Lake elementary schools as well as Central High School and Traverse City High. Both went to Grand Traverse Construction.

TCAPS received three bids each for entry renovations at East Middle and the auditorium upgrades at West and four bids for entry renovations at West Senior.

"We want to make sure we're getting competitive bids and that we have a lot of interest in our projects," Anderson said.

Paul Thwing, TCAPS director of capital projects and planning, isn't too concerned about the single bids this time, but only because of the district's history with Grand Traverse Construction and because the bids came in on budget.

What did concern Thwing is the reason why. Thwing said they had a good turnout at the pre-bid meetings with three to five contractors. Public notices for the work went statewide. So getting just one left Thwing scratching his head.

Thwing said it likely has to do with "pent-up construction needs" related to COVID-19.

"We're not the only ones in the market," Thwing said. "We're competing for these contractors and their time and manpower."

Fewer bids and spiking prices of materials has TCAPS officials hitting the pause button on some of its projects. Thwing said they are holding off bidding work at the transportation building, West Senior High athletic facilities and Thirlby Field.

Steel prices hit a record high in February — up from $440 per ton to more than $1,200 — but they have since declined. Lumber prices, however, are nearly triple what they were a year ago ($1,048 per thousand feet), and market analysts expect that price to continue to rise.

"We're slowing those down to see if the market is going to correct itself," Thwing said.

TCAPS is still moving forward with design on its projects, and Thwing said they could go out to bid later in 2021 or after the first of year in 2022.

TCAPS also requires that renovations of existing school buildings be done during summer break as to not disrupt education. Summer is the busiest time of the year for contractors with demand sky-high.

"That's part of the challenge," Anderson said

Other school districts are hopeful their bidding process will go smoothly.

Benzie County Central Schools got the thumbs up from voters on its $39 million bond proposal back in November after three failed attempts.

The highlight of the 25-year, $39 million proposal is the construction of a new kindergarten through fifth grade elementary school. Other projects include adding two early education classrooms to Lake Ann Elementary; replacing the roofs at Lake Ann, Betsie Valley and the middle and high schools; upgrading HVAC systems; remodeling the science labs; increasing security measures; building a new bus garage and buying new buses every year for the next decade; and improving technology throughout the district.

Benzie Superintendent Amiee Erfourth said the district has seen a good showing from contractors on bids for its sinking fund projects and the roofing projects scheduled for the summer.

"We're hoping to see that same interest when we go out for bid this fall for the first phase of the bond projects," Erfourth said.