Posted on 03/11/2015 4:28:26 PM PDT by 2ndDivisionVet
Some are calling it one of the biggest construction projects in the country right now — the $400 million expansion of Google’s data center operations in Council Bluffs, a massive undertaking involving roughly 2,000 construction workers with no deadline announced.
“We don’t how long it’s going to be going on, we just know that they’re continuing to build,” said Bob Mundt, president and chief executive of the Council Bluffs Area Chamber of Commerce.
Since 2007, Google has invested more than $1.5 billion in its facilities in the Lake Manawa area and now at a 975-acre site opposite the MidAmerican energy plant.
Google’s expansion is just one of several big-dollar construction projects on either side of the Missouri River. And though welcome, the metro-area construction boom that began two years ago is creating a local shortage of ironworkers, steamfitters, sheet metal workers, plumbers, electricians and other skilled labor.
To help plug the gap, local unions and their contractor-partners are recruiting skilled union workers from Connecticut to California. Lured by long-term assignments, overtime and the lack of sustained work back home, more than 1,000 out-of-state union workers — “travelers” as they’re called — have flocked to the Omaha Council-Bluffs area in the last year or so.
Their presence has boosted receipts for hotels, motels, landlords, restaurants and retailers.
Unions also are calling members out of retirement and revitalizing training programs that had shrunk or closed during the Great Recession.
The labor shortage has become a concern for some local developers, who are worried that manpower shortages could translate into delays, particularly for smaller projects, as local contractors struggle to round up enough tradespeople to complete their work orders.
“You get projects like Google and StratCom (Offutt Air Force Base) and they tend to suck up all the skilled labor,” said Royce Maynard, president of Dicon Corp. in Omaha.
Dicon, which has about a dozen local projects in the works, has had issues with plumbing and drywall subcontractors unable to complete work on time because they don’t have enough craftsmen, Maynard said. As a result, “We’ve had to extend delivery times on some projects.”
He doubts the situation will improve anytime soon. For now, said Maynard, “We’re all in the same boat as regards to labor.”
* * *
From a distance, the Google site near U.S. Highway 275 and South 11th Street looks like the U.S. portion of the Olympic Village, dotted with more than 30 construction huts and with signs, decals and license plates from across the country.
At the adjacent gravel parking lot the size of two football fields, Nebraska and Iowa license plates predominate, but you’ll also see them from Massachusetts, Connecticut, New York, New Jersey, Florida, Ohio, Pennsylvania, Illinois, Nevada and California.
Climbing into a van displaying Florida plates, a union electrician who declined to give his name said he’s been working on the project for nine months, commuting back and forth from a hotel in Papillion.
“There wasn’t enough work in Fort Lauderdale.” And “this,” he said, nodding toward the Google site, “is just the biggest project in the country.”
(Unions and contractors refer to the project with nods or as “CBFS,” short for Council Bluffs Facility South, due to nondisclosure agreements they’ve signed with the Silicon Valley giant.)
Omaha has its own abundance of big-ticket projects requiring plenty of hands: the U.S. Strategic Command’s new $524 million facility at Offutt Air Force Base; the $323 million Fred & Pamela Buffett Cancer Center at Nebraska Medical Center; the $93 million Madonna Rehabilitation Hospital, just west of Village Pointe shopping center; and the $81.6 million University of Nebraska at Omaha arena at 67th and Center Streets, as well as “a ton of smaller jobs,” union officials say.
It’s a welcome windfall for the region. Wages and overtime are up for many construction workers, and contractors are flush with work for the first time in years.
“Everything is just busting loose all at once. The last time we had this much work was before the recession,” said Mark Ondracek, business manager for the Steamfitters and Plumbers Local Union 464 in Omaha.
Said Jean Petsch, executive director of the Associated General Contractors, Nebraska Building Chapter in Lincoln, “We’ve gone through the abyss and now we’re on the other side.”
* * *
Tom Plambeck, age 70, hasn’t seen much late-night television since returning to work last November after five years of retirement.
“I used to stay up and watch Jay Leno. I haven’t seen him or his replacement since,” said Plambeck, a steamfitter with Local 464. “I’m in bed by 8 p.m.”
Just as the construction industry is experiencing a revival, another crunch is underway. “Baby boomers are retiring faster than people coming into the construction industry. It’s the perfect storm,” Petsch said.
The steamfitters and plumbers union has added about 50 travelers. It has also declared a “severe work shortage,” which allows retirees to work as many hours as they want and still collect their full pension.
Local 464 has a presence at more than 95 percent of the area’s big projects, including the Joslyn Art Museum, where its mechanical systems are being upgraded.
The museum declined to provide a dollar amount for the project.
Plambeck is putting in 40-hour workweeks at a commercial project near 72nd Street and West Center Road.
“It’s nice to be around people,” he said.
But the biggest perk is being able to put a little more money away for retirement. Plambeck said he plans to work as long as he’s eligible under union rules. On that point, he’s good for three more months.
The work shortage status, which is reviewed quarterly by union officials, was renewed through May, Ondracek said.
Despite the labor shortages, Petsch is optimistic.
“We’re just excited about all the opportunities going on in the state,” she said. “We’re going to figure out how to get all these projects done.”
* * *
But, yes, the scramble for skilled workers from technicians to project managers is on.
Robert Pagan, in charge of the $20 million renovation of the DoubleTree hotel at 3650 S. 72nd St., said he believes the labor shortage played a part in delaying the hotel’s reopening by six months.
One contractor told Pagan that he fell behind schedule after several employees left his company to work on the Google project for reportedly higher pay.
Other contractors appeared to be juggling too many jobs and not enough workers, said Pagan, co-owner of Dark Canyon development company based in Rapid City, South Dakota.
“They would complete their half-million dollars worth of work,” and approaching the finish line, “jump to the next multimillion-dollar contract,” leaving the final touches untouched.
The hotel, now expected to open this month, was scheduled to make its debut last August.
The delay has proved costly. No hotel. No paying guests. “It hurts our pocketbook,” he said.
Jay Davis, the city’s superintendent of permits and inspections, said that from his vantage point, he’s encountered plenty of construction sites where labor is a sore spot. Commercial projects around town have been delayed or extended due to the unavailability of workers in specialized trades, Davis said.
Local homebuilders are bearing the brunt of the scarcity, in particular, he added, because of the difficulty finding skilled labor, especially roofers, plumbers and electricians.
The cost of doing business is going up. Recently negotiated union pay raises have affected contract bids, and non-union contractors have boosted wages and benefits packages in efforts to attract and retain skilled laborers.
John Hiller, the second-generation owner of Hiller Electric Co. in Omaha, a union electrical contractor who employs about 80 workers, said the construction boom is testing the mettle of local contractors.
“First, you have to keep the employees you have,” Hiller said. “You have to juggle the workload. You can’t take on additional work because you can’t get enough people to work and you can’t turn down too much work or you’ll go out of business.
“We’re trying to take care of our steady customers. It’s a balancing act.”
* * *
At least three factors, said Petsch, are fueling the labor shortage.
With the downturn in construction during the recession, “a lot of very skilled people left the industry and went into other things.” School districts that underwent budget cuts during the recession often shut down their trade and technical programs. And union halls, idled by a lack of work, canceled their apprenticeship programs.
The Ironworkers Union Local 21 in Omaha, for example, didn’t accept apprentices from 2009 to 2012, said Mike Baker, the union’s business manager. Now it has added 80 travelers to its rolls.
Local 22 of the International Brotherhood of Electrical Workers has enlisted 800 travelers — union electricians — to meet local demand, said Barry Mayfield Jr., business manager for Local 22 in Omaha.
“We have about 1,000 electricians over there,” Mayfield said, referring to the Google data center expansion. Local membership totals about 1,500.
The project is ramping up, and an additional 200 to 600 union electricians are needed in short order, Mayfield said.
The Google project also has helped boost union membership. Some of its larger contractors employ only union tradesmen, those familiar with the project say.
Google did not respond to inquiries about the project.
Though there are still more jobs in town for non-union workers than union, Mayfield said, IBEW Local 22 has added 350 members in the last two years.
“They know right now that electricians are in demand,” he said. And once they join, most “do make quite a bit more money.”
The construction industry is heating up nationally as well as locally.
Last year, 53 percent of Nebraska construction firms and 61 percent of Iowa firms increased their headcounts, according to a recent report by the Associated General Contractors of America. That compares with 57 percent of firms nationally.
The trend is expected to continue with 88 percent of Nebraska construction firms and 78 percent of Iowa firms planning to hire from one to 25 additional workers this year.
About 80 percent of U.S. construction firms plan to expand their payrolls this year — if they can find suitable employees: 83 percent of the more than 1,000 U.S. construction firms surveyed said they’re struggling to fill skilled positions, the AGC report said.
If the predictions come true, the construction industry could witness the largest expansion in 10 years, said Stephen E. Sandherr, the association’s chief executive.
* * *
Jacob Vogel is president of the Omaha office of MMC Contractors, a union mechanical contractor that specializes in heating, cooling, plumbing and other piped systems. The company, which has a hand in several local projects, including Google’s facility, employs from 250 to 400, depending on the workload.
MMC also is involved in mechanical renovations at Joslyn Art Museum and starting work at Madonna Rehabilitation Center. The firm is currently relying on about 50 union travelers, many of them from Alabama, to supplement its workforce. During peak periods, the firm has added up to 200 travelers, Vogel said.
“Our tradespeople are all union,” he said. Should the workload increase, MMC will join with its union partners to solicit additional workers from union halls across the nation.
Those partners include the Steamfitters and Plumbers Union Local 464 and the Sheet Metal Workers International Association Local 3. Each have recruited about 50 out-of-state travelers to Omaha.
“We get them from California, Arizona, Florida ... wherever there’s a shortage of work,” said Ondracek of Local 464. “We’re at a bright spot in the country.”
Ironworkers Local 21 has also brought in 80 travelers, said Baker, Local 21 business manager.
Said Kevin Timmerman, business representative for Sheet Metal Workers Local 3: “I don’t think we’ve had this many travelers in town for 10 years.”
Out-of-town workers are scattered from Omaha and Bellevue to Council Bluffs and Mineola, Iowa.
When they arrive, they usually stay at a motel or hotel, Mayfield said. After they’re here for a few weeks, they might “shack up” and rent an apartment or house with a group of people to cut expenses.
Randy Thelen, the Greater Omaha Chamber of Commerce’s senior vice president for economic development, said the traveling laborers’ presence provides a big economic spillover to the community.
Recreational and entertainment venues should benefit, Thelen said. And families of out-of-state tradesmen are likely to visit long-term workers at least once or twice and spend on lodging and food.
Eric Thompson, economics professor at the University of Nebraska-Lincoln, said that while the lion’s share of wages are probably being sent to back home to workers’ families or to pay the mortgage, some dollars will stay here.
Money spent on lodging, dining out and work clothing, he said, “We’re definitely going to see some of that.”
* * * * *
A sampling of major projects in the Omaha-Council Bluffs area
» Google data center expansion, Southlands facility, opposite MidAmerican plant along Interstate 29 south of Council Bluffs; $400 million. Since 2007, Google has invested more than $1.5 billion in data center operations in the Lake Manawa area and now the Southlands facility. Expected completion date not yet announced.
» Strategic Command headquarters at Offutt Air Force Base near Bellevue; $524.4 million. The 915,876-square-foot facility, located on the former Warrior Nine golf course, replaces the existing StratCom headquarters. Expected completion: 2016.
» Fred & Pamela Buffett Cancer Center, Omaha; $323 million facility at the University of Nebraska Medical Center. Expected to open in 2017.
» Madonna Rehabilitation Hospital, just west of the Village Pointe shopping center, Omaha; $93 million. The 200,000-square-foot, 110-bed hospital is expected to open in late 2016.
» University of Nebraska at Omaha sports arena, between 64th and 67th Streets; $81.6 million. Fall completion expected.
» Aksarben Village, Omaha. Construction of a new office-retail-garage complex expected to begin in late 2015; $50 million. Also, 40 more upscale apartments are to go up this spring and a five-story, $33 million office and retail building with Pacific Life Insurance Co. as the anchor tenant is to be completed later in the year.
» Six-story Think Whole Person Healthcare facility, northeast corner of 72nd Street and West Center Road, Omaha; $42.6 million. Expected to open this summer.
» The Lumberyard District of office, retail and apartments on the former Millard Lumber site near 135th and Q Streets, Omaha; $54 million. Construction expected to start this summer.
» Construction remains in progress on office, retail, residential, hotel and religious spaces at Sterling Ridge near 132nd and Pacific Streets, Omaha; original price tag in 2012 was $200 million to $250 million.
» Papillion expects to see construction next year on the Bellino Ninety Six project, about 25,000 square feet of commercial space and a 345-unit apartment complex at 96th Street and Cornhusker Road. Also to be completed: the $50 million Hillcrest Grand Lodge near 60th Street and Highway 370.
Time to bring in those illegals to fill all those jobs Americans just won’t do eh?
I think there’s about 83 million Americans looking for work but for one reason or another nobody will hire them.
It’s hard to remember, but this used to be a frequent occurrence in the Midwest on big jobs. Something like power plant construction in Sioux City, Iowa, or Brownsville, Nebraska, would bring in skilled workers all the way from the East Coast.
Just curious. Google doesn’t manufacture anything does it? They run a website. And? Why do they need so much new brick and mortar work space? Web commerce is supposed to replace most of that with clouds and ?
I was a heavy industry recruiter back in those days.
Don’t they have mapping, driverless cars and a bunch of other stuff? Omaha is a natural telemarketing hub because of all the telephony installed for SAC headquarters so long ago.
Make the Oracle of Omaha pay for the plane tickets to bring the wetbacks to Omaha.
“..Google data center expansion”.
They have giant buildings filled with millions of computers. They require enormous amounts of electrical infrastructure to run all that stuff.
Facebook building two ‘data centers’ in Iowa: 1.5 million square feet, 1.5 billion dollars.
It has different names. Vandelay Industries is one.
I just left that site yesterday. It is a very large project.
Yep. I remember the days of Neal III and IV, and all the construction jobs those projects brought. There hasn’t been construction of that magnitude in Sioux City in 40 years.
More super computers to spy on us?
If a measly $400 million construction project is the biggest in the country, this nation is in big trouble.
“It has different names. Vandelay Industries is one.”
Art Vandelay?
They’ve already made it clear, that they will have all physical technical work done by robots. Let them use their robots until the default process is complete.
Driverless railroad engines.
The very same.
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