Lights burning once again for Michigan construction after COVID-19 shutdown
Just a few months ago, Michigan construction crews were working overtime, importing workers from out-of-state to keep pace with demand.
Then, "It was like a light switch," said Patrick Devlin, secretary-treasurer of the Michigan Building Trades Council representing some 100,000 skilled trades workers. Most building activity across the state abruptly came to a halt March 24, per an executive order from Gov. Gretchen Whitmer answering the coronavirus pandemic.
The lights turned back on Thursday, with construction and real-estate activity allowed to resume under new safety protocols. Experts say the restart process will be less like flipping a switch and more a gradual ramp-up: The coming days and weeks will provide more clarity on supply-chain delays, the shutdown's effect on project budgets and timelines, and whether safety protocols will do enough to assuage worker concerns about the possible spread of COVID-19 on job sites.
"I never underestimate the grit or the resilience of Detroit," said Eric Larson, chief executive officer of the Downtown Detroit Partnership. "I’m very encouraged that we will come out of this, but it won’t be without some real pain."
Workers will be returning to a new normal of face masks, frequent hand-sanitizing and physical-distancing. And downtown Detroit will strive to regain the momentum that had propelled it forward in recent years and made it one of the nation's greatest stories of urban reinvention.
Major real-estate projects such as Bedrock’s Hudson's site and Ford Motor Co.’s Corktown campus — anchored by a Michigan Central Depot still in the early stages of renovation — are moving forward, even as the seven-week shutdown may have killed some smaller ventures without deep pockets to buoy them.
Builders must enforce physical-distancing measures, designate an on-site supervisor to oversee COVID-19 control strategies, conduct daily health screenings of workers, require face masks or shields when physical-distancing is not possible, and ensure that workers have access to hand-washing stations, among other requirements.
The Home Builders Association of Michigan is anticipating strong demand as residential construction resumes, CEO Bob Filka said in a statement: “With residential construction permits up by 10% from last year, we know there is demand and a need for housing in our communities. We are proud of our members for working hard to adjust their work practices to meet new health safety guidelines.”
Mayor Mike Duggan on Thursday said work will start on several new housing projects and resume on six ongoing ones the city is financially backing. The ongoing projects, totaling a $120 million investment, include 170 units, 46% of which are affordable.
"We know one of the obligations we are going to continue to have ... is affordable housing, particularly considering how hard the city has been hit economically," he said, adding that city inspectors will verify those job sites are in compliance with safety protocols.
Ryan Maibach, CEO of Southfield-based construction firm Barton Malow, helped craft the state protocols. He stressed that the industry must make sure they are followed, but it remains to be seen how safe workers will feel.
"We’re just not sure (about the) individual level of comfort in coming back," he said. "We’re optimistic. We’re going to make sure the sites are safe and ready, but we’re just not 100% sure what the workforce will look like in the days and weeks ahead.”
Devlin has heard mixed reactions from trade union members, about 65% of whom he estimates were out of work during the shutdown. And the trades council remains concerned about the lack of available COVID-19 tests: Testing is "going to be the answer to turning this thing around eventually. That’s a big piece of the puzzle that has to be figured out."
On Thursday, as the governor announced plans to restart manufacturing operations as early as next Monday, Barton Malow was preparing to reopen construction sites at the 123 active projects it has in the state, including the Hudson's site downtown.
Prior to the shutdown, workers there were finishing up laying foundations for the nearly $1 billion mixed-use development that will span more than 1 million square feet on Woodward Avenue. Supervisors visited Thursday to make sure the site is ready for construction workers, who are slated to return Monday.
"The first order of business will be to get back and complete the foundations," said Joe Guziewicz, vice president of construction at Bedrock, developer of the project. "It’s all gearing toward Monday, when we expect to have the full crew to jump into the deep foundations. They’re really the linchpin in the schedule. We've got to get them done."
Guziewicz said some impact on the project’s budget and completion date is likely, but is unknown at this time. The project had been slated to be done in 2023, The Detroit News previously reported.
Ford also is gradually ramping back up its redevelopment of the Michigan Central Depot, part of a larger $740 million campus project in Corktown, considered the city’s oldest neighborhood. The station would house some 5,000 workers in an innovation hub centered around the automaker’s next-generation mobility, autonomy and electrification initiatives.
"Our original construction completion date was by the end of 2022, but I think it’s important we're realistic that there will probably be changes in our plan," said Mary Culler, development director for the project, chief of staff to executive chairman Bill Ford and president of the company’s philanthropic arm.
The company may need to evaluate its decisions on the project and "make sure ... we’re prioritizing the most important pieces" of it, she said. But "at this point, we don’t have any huge changes to report."
When construction crews return next week, they will pick up where they left off with phase two of restoring the station. Pre-construction on another component of the campus, the former Detroit Public Schools Book Depository, also will restart.
Fiat Chrysler Automobiles NV, meanwhile, is aligning the restart of construction on its new assembly plant on Detroit’s east side with the resumption of auto production on May 18. Efforts to prepare for that restart have begun. The plant will support 3,850 new jobs for which Detroiters had the first chance to apply. The $1.6 billion project is transforming the former Mack Avenue Engine Complex to produce the next-generation Grand Cherokee and new unnamed three-row Jeep SUVs.
Less certain is the future of smaller developments, said Larson, who also heads up a Bloomfield Hills-based real-estate investment and development firm. Larson Realty Group recently completed The Corner, a mixed-use development on the site where Tiger Stadium used to stand.
The project includes retail space for small local businesses, all but two of which have had to pause building out their spaces. Overall, though, Larson believes downtown is well-positioned to rebound from the crisis — with greater focus, he hopes, on the inequalities that have been laid bare by the pandemic.
"The city has come a very long way, and we were very much hitting our stride on a number of different fronts," he said. "The actual pure enjoyment and energy within the city was significantly improved, so this has obviously paused all of that. I do believe it’s more of a pause, though.”
Even as ongoing projects appear to be getting back on track, industry players like Barton Malow’s Maibach wonder which projects will never see the light of day: "What happens to our pipeline? As our clients are grappling with the realities of COVID-19, I think the biggest question for us and for other firms is: What happens to those projects?"
Staff Writer Breana Noble contributed to this report.