Making it Big

“Office construction has gotten ahead of itself,” Simonson says. For the first 10 months of 2007, construction spending in this category was up more than 19 percent. “I don’t see how that can be sustained when we [in the U.S.] have only been adding jobs at a rate of 1.2 percent for the October 2006 through October 2007 period,” he adds.

(Minnesota’s job growth rate for the same period was even slower at 0.1 percent, according to the Minnesota Department of Employment and Economic Development. In mid-January, Minnesota State Economist Tom Stinson reported that Minnesota lost 23,000 jobs in the last six months of 2007.)

Yet the pipeline in office construction should sustain some Minnesota firms until the sector picks up. Kraus-Anderson, for instance, is building med-tech firm Coloplast’s 190,000-square-foot corporate expansion and renovation in Minneapolis. Weis Builders is handling Lutheran Social Services’ Center for Changing Lives offices and Park Avenue Apartments, also in Minneapolis. And Adolfson & Peterson is working on the 8200 Tower at Normandale Lake Office Park, an 11-story office building in Bloomington with 285,000 square feet of space and an adjacent six-level parking deck.

In contrast to office spending, which is only slowing, highway construction has come to a standstill. “Highway and road construction in 2008 will be flat to down as much as 5 percent, which is counterintuitive following the [I-35W] bridge collapse,” Simonson says. A lot of people assumed that the disaster would convince lawmakers to put significantly more money toward bridge and road construction, though if last session is any guide, Governor Tim Pawlenty and the state legislature will have difficulty agreeing on the level and sources of roadway funding.

Of all the construction categories, residential has been hit hardest, down nearly 16 percent for the first 10 months of 2007. Still, at least two firms are working on high-profile multifamily housing projects, though admittedly in a sector less susceptible to an economic downturn: senior housing. Kraus-Anderson will break ground on the Trillium Woods senior housing campus in Plymouth in mid-2009. And Adolfson & Peterson was the general contractor on the McKenna Crossing senior housing project in Prior Lake.