Trade War Worries Compel Project Developers to Buy Materials Early

July 26, 2018 12:05 PM0 comments

JENNIFER MACKS, senior project executive of Gilbane Building Company, chosen by the F.C. School Board to construct the new George Mason High School, narrated a “virtual tour” of the preliminary design for the project to the F.C. City Council Monday night. (Photo: News-Press)

With leaders of the City of Falls Church placing heavy expectations on the realization of major economic development projects in the coming years, the impact on them by possible trade wars being kicked off by President Trump has many of them quietly worried.

It has not yet risen to the level of a major concern, except that the Gilbane Building Company, chosen this month to build the new George Mason High School it wants to start by next summer, indicated to the F.C. City Council Monday that it will begin to stockpile the materials needed for the project this fall.

That may be a wise approach in any case, but now the impact of a trade war on cost and availability of timber, steel and other basic building blocks of construction is increasingly looming in people’s minds.

In the case of Gilbane, it has until early next year to lock in a “guaranteed maximum price” for the high school project, and that price includes, of course, the cost of materials.

It’s not only the school project, but there’s also the matter of the l0-acre economic development component of that project, the 4.3-acre Founder’s Row mixed-use project by Mill Creek that is due for a groundbreaking (assuming it gets Council approval for its recent modification requests), the 2.8-acre Broad and Washington mixed-use project, the envisioned development of assembled Beyer Automotive properties on W. Broad, and WMATA’s plans for the dense mixed-use development at the West Falls Church Metro station which may get integrated with the City’s 10-acre site.

The economic feasibility of all of them is a function of expectations concerning the price of raw materials, which could be disrupted mightily by a worsening international trade war.

(U.S. news organizations are already mobilized against the impact of such developments on the cost of newsprint imported from Canada.)

This Monday, following the announcement last week by the F.C. School Board of its selection of the design-build team of Gilbane Building with Stantec and Quinn Evans Architects — and an uproariously favorable public response to the team’s virtual tour of its preliminary design for the new school — the F.C. City Council, which controls the purse strings for the project, followed on with its own unanimous approval.

The comprehensive agreement between the School Board and Gilbane was signed following the School Board vote on July 17, and the Council approved it this week. The agreement stipulates the terms for the establishment of a “guaranteed maximum price” not to exceed $108 million for the project that will be established once the design documents have been completed and approved in the December 2018-February 2019 period.
Compensation for Gilbane will be limited to $6.5 million until construction actually begins next summer.

The Gilbane plans include an “acceleration” component that allows for the potential completion of the project by the December 2020-January 2021 time frame, six months prior to what the Schools requested. “Everybody thinks faster is better,” City Manager Wyatt Shields quipped.

The accelerated schedule, according to Gilbane’s Jennifer Macks, the senior project executive present at Monday’s Council meeting to present the “virtual tour” there, will be made possible by her company’s experience and mastery of the construction process related this kind of project.

The agreement includes Gilbane’s commitment to the demolition of the old high school once its new one is ready.

Some elements still to be determined, including provision for a middle school playground, will be addressed in the coming months. Macks told the Council that consideration has been given to future expansion needs of the facility beyond the 1,500 student capacity being planned for now. They would involve bump-outs of existing buildings, and not vertical expansion.

F.C. Vice Mayor Marybeth Connelly, whose professional role with the City Schools has heightened her interest in this matter, was ecstatic in her comments just prior to the unanimous vote on Monday. She hailed the City’s “contract nerds” who worked out the details of the agreements, and noted the night’s vote followed by almost exactly one year the vote taken by the Council last summer to place the school bond referendum on the November 2017 ballot.

Working the school and economic development components of the project in tandem has been “like closing up a zipper,” she said, involving a close degree of coordination and collaboration like both sides of a zipper aligning perfectly to make it function.

“We still have a lot ahead of us,” Mayor David Tarter said. “But this is a beautiful design.”

There will be three events to which the public has been invited in which elements of the school design will be engaged. The first is the Sunday, Aug. 5, town hall at the Community Center, and there will be others on Sept. 6 and Sept. 23. There are subcommittees being set up to offer more feedback in the area of athletics, community use, fine and performing arts, parking and transportation, sustainability and environmental considerations. The public is invited to volunteer to participate on these subcommittees.

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