Epic Expansion Driving West Texas Market

From the panhandle and the plains to the deserts of El Paso, West Texas is building like never before.

By Debra Wood

Despite a national economy in the doldrums, West Texas and the Panhandle are experiencing a boon in construction activity, in part due to military redeployments and industry moving into the region.

“El Paso is seeing unprecedented growth,” says Ed Anderson, president of Diversified Interiors of El Paso and president of Associated General Contractors of El Paso. “It’s mostly driven by the work at Fort Bliss. A new city is springing up.”

advertisement

The $4.1 billion Fort Bliss expansion program includes 90 projects, involving 300 buildings to accommodate 30,000 new soldiers in four Heavy Brigade Combat Team complexes, two Infantry Brigade Combat Teams campuses and one Combat Aviation Brigade facility.

“We have experienced significant growth in the past three years,” Anderson says. He adds that his firm has more than doubled its number of employees, from 250 to 600 during that period. “We have to pay attention to the work we are looking at, because we could get in a position in which we have more than we could do.”

Oscar Venegas, president of Venegas Engineering Management and Construction of El Paso and an AGC El Paso board member, also reports high volumes.

“In every sector, there is work,” Venegas adds.

On the flip side, Paul Bauer, vice president of the commercial group for C.F. Jordon of El Paso, says that “private work is kind of slow.” He attributes the downturn to difficulties developers face finding financing.

Industrial development, meanwhile, is driving growth and construction opportunities in the Panhandle. Hilmer Cheese opened a factory in Dalhart. The State Energy Conservation Office reports four ethanol plants will become operational this year, and two more are planned.

“There is industrial stuff coming in and bringing more people, causing the city to grow,” says Tonya Felder, executive director of the Amarillo-based Panhandle of Texas Chapter of the Associated General Contractors, who reports those projects have generated a need for retail, churches, schools and health care. “We have done $20 million more [during] the first quarter of this year, compared to last year, and last year was a record year in building permits.”

Wiley Hicks III, vice president of Wiley Hicks Jr., a general contracting firm in Amarillo, agrees. “Our backlog is as full as it has been in seven or eight years, and we have not seen any drop,” Hicks says.

Hicks’ firm primarily constructs schools and some churches.

Fort Bliss, El Paso The first two $400 million brigade combat team complexes at Fort Bliss are under construction. They contain barracks, dining facilities, operation facilities, headquarters buildings, vehicle maintenance shops, equipment parking facilities and storage.

The aviation brigade, with hangers, began in September 2006 and will be troop ready by September. The second brigade complex will come online in September 2009, with additional complexes scheduled for 2010 and 2014.

Edward Rivera, a spokesperson for the Army Corps of Engineers in Fort Worth, says the corps has awarded about $500 million in construction contracts to a pool of contractors. These include Hensel Phelps Construction of Austin, J.D. Abrams of Austin and Caddell Construction Co. of Montgomery, Ala.

Although major national construction firms have snagged the large packages at Fort Bliss, local contractors also are spending considerable time on the base. Diversified Interiors, for instance, is working on three projects for Hensel Phelps Construction and a dining hall for SGS of Oklahoma City.

Construction for billets for troops begins at Biggs Army Air Field, at Fort Bliss, Texas.

Photo by Maj. Deanna Bague, USA Courtesy Department of Defense.

C.F. Jordan of El Paso is working as a subcontractor at Fort Bliss, performing concrete and infrastructure work. It is completing about $37 million in sitework for military housing projects for Balfour Beatty Construction of Atlanta. Jordan also has contracts totaling about $5 million to provide sitework and concrete paving for various facilities as a subcontractor to Hensel Phelps and has a $17 million contract for similar work with Mapco of San Antonio.

“Local general contractors are shut out of that work, because they were huge packages,” Anderson says. “The subcontractors are absolutely full. The preponderance of the work is being done by local subs.”

Education According to the Department of Defense, five local school districts will absorb an estimated 12,000 students from Fort Bliss. Anderson says Socorro, El Paso and Ysleta independent school districts have begun building new schools.

In 2007, voters in the El Paso approved a $230 bond program that includes $142.5 million for new construction and $55 million for additions.

C.F. Jordan recently completed a $10.9 million, 107,732-sq-ft, concrete tilt-wall district service center for Socorro. The company finished $2.7 million in additions and renovations at 14 campuses for the Ysleta district.

Work is also taking place on higher-education campuses. At Texas Tech University Health Sciences Center at El Paso, Vaughn Construction of Houston recently completed a $45 million, 126,673-sq-ft medical education building. In Lubbock, Vaughn is working on a $13.6 million, 34,000-sq-ft addition, with a 150-seat courtroom, to the Texas Tech University School of Law.

Western Builders of Amarillo began construction in August on an $18 million, 48,000-sq-ft research building, with vivarium space, at the Texas Tech Health Sciences Center Amarillo. It is scheduled for completion in October.

At the University of Texas at El Paso, Vaughn is nearing completion of a 100,000-sq-ft bioscience research building this summer. The $74 million project began in April 2007.

Around El Paso El Paso’s downtown area is in the midst of a revitalization. Developers Brent Harris and Paul Foster announced plans for the Mills Plaza District, which will include restoration of the Mills Building, now under way by C.F. Jordan, as well as refurbishing the Anson Mills Building, the Centre Building and the Plaza Hotel. Neither the developers nor C.F. Jordan would release a cost.

C.F. Jordan of El Paso is working as a subcontractor at Fort Bliss, performing concrete and infrastructure work as well as site prep and concrete paving for various facilities.

Photos courtesy of C.F. Jordan.

Robins & Morton of Dallas wrapped up construction in March on the $75 million Sierra Providence East Medical Center in El Paso. And the El Paso County Hospital District plans to start construction on an approximately $100 million children’s hospital in 2009.

C.F. Jordan began a $10.9 million taxiway reconstruction at the El Paso International Airport for the City of El Paso. It is scheduled for completion in June.

The Panhandle “The market overall is good in the Panhandle, within a 120-mi radius of Amarillo,” says Gary Purser, president of Southwest General Contractors of Amarillo. “As a general trend, customers are more selective in their invited bidding.”

Purser adds that more buyers are opting for construction manager-at-risk contracts, with some projects being postponed or reduced in scope due to rising material costs.

Southwest General has begun a $1.2 million demolition and minor renovation project at Rick Husband Amarillo International Airport in preparation for construction of a $35.2 million concourse, scheduled to start this fall and finish in 2010.

Subcontractor Cherry Demolition is removing a 15,000-sq-ft, two-story concrete building and a 70,000-sq-ft, 2-ft-thick concrete apron.

A rendering of the Mills Plaza district in El Paso includes restoration of the Mills Building, now under way by C.F. Jordan, as well as refurbishing the Anson Mills Building, the Centre Building and the Plaza Hotel.

“All of the concrete from the project was delivered to a local facility that will crush and recycle it,” says Mike Dokell, division manager for the commercial, residential and interior at Cherry Demolition.

Southwest General also is building a $7 million, 28,000-sq-ft, 110-bed jail for Childress County, and it recently completed a $6.2 million, 35,000-sq-ft medical facility in Amarillo.

Wiley Hicks Jr. is working on the new Dalhart High School, scheduled to open in August. The $15 million school will house about 700 students. The company also is completing a $1.6 million renovation at Dalhart Elementary School. And it is close to starting a $14.5 million, 100,000-sq-ft high school for Dimmitt Independent School District in Dimmitt.

Hicks expects to start construction this summer on a new sanctuary for St. Mary’s Catholic Parish in Amarillo. And the firm expects to begin work later this year on a $45 million assisted living facility. “Our area of the Panhandle has a bubble over it,” Hicks says. “We are fortunate that our economy has not taken the same downturn as it has in other areas.”

Panhandle Forces Fan Wind Power By Pam Radtke Russell The promise of Texas Panhandle wind will become a reality within years, and T. Boone Pickens has made a $2 billion guarantee that it will happen. Photo courtesy TXU Energy In May, Pickens, and his Mesa Power LLP, placed an order with General Electric for 667, 1.5 MW wind turbines for the first phase of a 4,000 MW wind farm Pickens has proposed to build in the Texas Panhandle, with or without the government's assistance in building needed transmission lines. Pickens says that the turbines will be delivering power from Pampa in 2011. In addition to Mesa Power, two other mega wind projects have been proposed for the Texas Panhandle. Together, the three projects would have the capacity to generate about 8,800 MW of power, more than doubling the current wind capacity in Texas. The Panhandle has "Great world class wind, it's steady, dependable," says Paul Sadler, executive director of the Austin-based non-profit Wind Coalition. "Secondly, these are traditional oil and gas areas," meaning it's easier to site wind turbines in the locations. While there may be great wind in the area, right now there's no way to get it from the relatively unpopulated Panhandle to the state's population centers. The Texas Public Utility Commission and the Electric Reliability Council of Texas are currently evaluating different proposals to build from $3 billion to $6 billion dollars of transmission lines from throughout the state's wind centers to its cities. The greatest need for those transmission lines is in the Panhandle. The PUC and ERCOT are expected to make a decision on those transmission lines this summer that would allow the companies to construct the lines to recoup their expenses from electric customers. Sharyland Utilities LP of McAllen, along with Babcock & Brown Renewable Holdings Inc., Celanese Ltd., and Occidental Energy Ventures Corp. have proposed a Panhandle Loop that could provide an additional 4,200 MW of transmission of wind power and could be finished as early as 2010. "Quite simply, this proposal will bring the ERCOT grid to the Panhandle. That way, the entire state can enjoy the benefits of the tremendous wind resources located there, as well as the substantial gas and coal resources," says Hunter Hunt, president of Sharyland Utilities in announcing the proposal last year. If the state-approved transmission lines don't reach Pampa, Pickens says his Dallas-based Mesa Power will built its own transmission line to the Panhandle, at a cost of about $2 billion. That's on top of the total $10 billion that the full 4,000 MW project is expected to cost when built out over Carson, Gray, Hemphill, Roberts and Wheeler counties. The project would place 2,700 turbines throuhout those counties. In a study commissioned by Mesa Power, Resource Economics Inc. forecast that the project will generate an estimated 1,495 jobs during the construction phase. The project has moved forward in Pampa, located in Gray County, because of the willingness of landowners, Pickens says. "It's clear that landowners and local officials understand the economic benefits that this renewable energy can bring not only to landowners who are involved with the project, but also in revitalizing an area that has struggled in recent years." Shell WindEnergy and Luminant Power have proposed a second large Panhandle project that would install 3,000 MW of wind capacity in Briscoe County. The project is still in development, says Shell WindEnergy spokesman Tim O'Leary, and is contingent upon Briscoe County being included in any transmission project that's approved by the PUC, he says. There's no target date for the project, and Luminant and Shell are conducting studies, signing up landowners and may soon start studying ways of storing wind energy by using compressed air, O'Leary says. A third project, proposed by E.ON Climate & Renewables North America, would install 1,800 MW of capacity in Gray and Carson counties.