July 12, 2022

CT Construction Digest Tuesday July 12, 2022

Meriden housing authority board authorizes $129M in bonds for projects

Mary Ellen Godin

MERIDEN— City officials are seeking more information following a June 27 vote by the Meriden Housing Authority Board of Commissioners to allow the authority to issue up to $129 million in bonds for two construction projects.

The housing authority board voted 3-2 to issue bonds on behalf of the Maynard Road Corp. to develop 100 apartment units, a black box theater and commercial space for no more than $75 million. The MHA board also approved by a 3-2 margin a resolution to issue up to $54 million in bonds for the Yale Acres Community Center project. The center will house a swimming pool, a warming center greenhouse and a power generation facility on site for community use. 

The resolutions allow Executive Director Robert Cappelletti to sell the bonds to raise funding for the projects. The bonds are special obligation of the MHA payable only from the revenues and assets of that entity. They are not the obligation of the city or state or other political subdivision. The authority’s use of reasonable efforts to sell the bonds does not constitute a commitment to provide financing for the projects, according to the resolution.

Former City Manager Lawrence Kendzior, who now sits on the MHA Board of Commissioners. voted against both resolutions, as did commission member Carlos Ruiz, who questioned the late addition of the resolutions to the June 27 meeting agenda. Commission Chairman Neil Ivers, and members Scott Griffith and Nancy Rosado voted to approve.

Cappelletti would not comment on the board’s vote and Ivers, Kendzior and Ruiz could not be reached for comment. The MHA and the Maynard Road Corporation, which shares the same board of commissioners, does not provide video replay of their recorded virtual meetings and their minutes were unavailable Monday.

Kendzior had previously opposed efforts to involve the MHA in financing the West Main Street project calling it “reckless.” Agency leaders have sought multiple avenues to finance the mixed-use development, including housing and historical tax credits that were not successful. The proposal was also packaged as a federal Opportunity Zone project for investors seeking to divest of capital gains taxes.     

 A spokeswoman for the New England region of the U. S. Department of Housing and Urban Development was looking into the bond issuance and meeting notice and had no comment as of Monday afternoon.

City Councilor Bruce Fontanella, the council’s liaison to the MHA, said he had heard the board was going to vote on the bonding resolutions and called the votes controversial.

“The fact that there were a couple of people who voted against it will raise questions for the council,” Fontanella said. “I would have to do more investigation into what is being bonded and bring it to the City Council.”

Phase I of the Yale Acres moderate income housing project is complete and management has been turned over to Maynard Road Corp. The MHA and Maynard Road have been actively trying to secure property in the area for Phase II and improved access. 

The housing authority and Maynard Road also secured private property for the West Main Street mixed-use project.  

The 143 W. Main St. project has been discussed for several years and City Councilor Michael Rohde said he knew the MHA and Maynard Road were trying to secure finanacing.

Rohde, chairman of the council’s Economic Development Housing and Zoning Committee, said he is generally supportive of the West Main project because the corner is in need of improvement, he said. But he respects Kendzior’s fiscal warnings.  

“They are pretty independent,” Rohde said about the MHA.

Current City Manager Timothy Coon said he is also aware of the two basic proposals but said there hasn’t been much recent discussions about them. He was unaware of the issuance of bonds, he said. 

 “MHA has not approached the city to partner on these two projects,” Coon stated in an email. “ As for support of the project, I would yield to (City) Council on the decision to support or not.  Larry Kendzior’s opinion as a former City Manager and a lifelong resident does carry weight.” 

The city has partnered with the MHA in the past on several housing projects, including 24 Colony St., and the MHA oversees the Section 8 voucher program at 11 Crown St., a mixed-income housing development built on land formerly owned by the city, which purchased the property from the Record-Journal.

The housing authority also worked closely with the city to relocate tenants displaced from the Mills Memorial Apartments and in a land swap that allowed for the extension of the Meriden Green.

Mayor Kevin Scarpati said he was not aware of the vote on 143 W. Main St. and needed more details before commenting on specifics.

“We know the project was never off the table after first proposing the concept many years ago,” Scarpati said via text message. “However, I have been very open regarding my concern for more affordable and low-income housing within the downtown area. I’ll need to review the project and proposal before I speak to specifics.” 


Few public comments on proposed $381 millon Norwich school construction project

Claire Bessette 

Norwich — Fewer than a dozen residents attended a public presentation Monday when architects presented plans for a $381 million proposal to build four new elementary schools and completely renovate one middle school.

The plan likely will be put to voters in a referendum in November.

After an estimated 67% state reimbursement, city taxpayers’ share of the $381 million project would be $149 million. Taxpayers’ portion would be substantially less than the estimated $225 million “do nothing” option for just repairs and maintenance to the seven aging elementary schools, an unrenovated Teachers’ Memorial Global Studies Middle School and central office building.

Following a presentation by representatives from the architectural firm Drummey Rosane Anderson Inc., or DRA, several residents asked questions and voiced concerns about the project.

Resident Beryl Fishbone said she was concerned about building four new schools at the same time, meaning they all would age at the same time, needing new roofs, windows and heating systems at the same time.

DRA officials said a phasing plan would be used to build the schools, and future capital projects could be grouped together for potential savings.

The proposal calls for building new elementary schools, each housing about 525 students, on the grounds of the Moriarty Environmental Sciences Magnet School, the John B. Stanton School and Uncas School and property where the Greeneville School once stood. Teachers’ Memorial would undergo a complete $99 million renovation to put it on par with the recently renovated Kelly STEAM Magnet Middle School.

School central offices and adult education would move into the vacated Samuel Huntington School. Wequonnoc School in Taftville would become a virtual learning center. The Thomas Mahan, Veterans’ Memorial, Bishop Early Learning Center and central offices in the former John Mason School all would be closed.

Resident Carol Erickson objected to losing the historic 1928 Huntington School as an elementary school. A former Huntington teacher, she called it a great school setting. School Building Committee Chairman Mark Bettencourt said the old building on a small property cannot meet modern educational standards.


Why June’s upbeat jobs report isn’t necessarily positive for construction

Joe Bousquin

Nonresidential construction added 16,500 jobs in June, according to the Bureau of Labor Statistics, a surge that offset 4,100 jobs lost in the residential sector.

The June gains helped push the industry’s overall unemployment rate even lower, to 3.7%. That’s the lowest rate for June in the data series’ 23-year history, according to Ken Simonson, chief economist for the Associated General Contractors of America.  

The job gains coincided with a 13-cent bump in hourly wages during the month, to $34.68, outpacing the 10-cent rise in wages for all industries. Over the last year, construction pay has also risen faster than in the general workforce, While additional jobs are usually viewed as a sign of industry strength, construction economists found reasons for concern.

“This does nothing, however, to dim the risk of recession,” said Associated Builders and Contractors Chief Economist Anirban Basu in a release about the numbers. “Employment tends to be a lagging indicator,” he said, meaning the gains are backward looking, and don’t portend future expansion.

Instead, he argued that the solid employment performance would make it more likely that the Federal Reserve will continue to raise interest rates. The Fed has already undertaken three increases to raise a key borrowing rate by a total of 1.5 percentage points since the beginning of the year, with more hikes likely ahead. 

Basu said higher borrowing costs, in conjunction with inflated materials prices and rapidly rising worker compensation, give project owners more incentive to postpone or cancel projects, and cuts into contractors’ profitability.

“These factors have already begun to whittle away at contractor profit margins,” Basu said.

AGC’s Simonson said the report gave contractors other reasons for worry. Namely, with more workers already added to payrolls, there are even fewer people looking for work in the sector than before.

Simonson’s analysis of the numbers pointed to the year-over-year plunge in construction pros who are looking for work. In June 2021, for instance, the unemployment rate for job seekers with construction employment was 7.5%, more than double the current rate.

In the 12 months since then, the number of construction workers looking for jobs fell by 345,000, or 47%.

That suggests there are few experienced job seekers left in the field for companies to fill the 466,000 construction jobs that were still open at the end of May. That’s the largest number of unfilled jobs in the sector for May since 2000, when the data series first appeared. 

“With industry unemployment at a record low for June and openings at an all-time high for May, it is clear contractors can’t fill all the positions they would like to,” Simonson said in a statement.