Saved by the (School) Bell (CA bonds= jobs)

Los Angeles Daily News ^ | 12/15/02 | Barbara Correa

[Mark]

Saved by the (school) bell

Passage of Measure K means construction professionals are now in great demand

By Barbara Correa

Staff Writer

Saturday, December 14, 2002 - Southern California construction contractors are about to become some of the most sought-after employees in the region, thanks to voters passing a slew of local school bond issues in the midterm elections.

With the passage Nov. 5 of a $3.35 billion school construction bond (Measure K) for the Los Angeles Unified School District to build 80 new schools, plus another $2 billion from a state bond issue (Proposition 47) to go toward repairs and additions at districts in San Bernardino, Riverside and Ventura counties, construction workers from ditch diggers to electricians to drywallers are in high demand.

"This is a tremendous fiscal shot in the arm," said John Hakel, executive director of the Monterey Park chapter of the Associated General Contractors of America, an industry trade group. Hakel also sits on the oversight board for Proposition BB, a school building bond issue approved in 1997.

"These bonds will be a savior to bankruptcies in Southern California in our industry. ... It sets us up for the next three or four years."

The local construction industry has never fully recovered its 1980s glory days, when commercial real estate was booming and interest rates and workers' compensation rates were low.

There was a mid-to-late 1990s flurry of dot-com- and IPO-fueled activity, but since that dried up, public works projects have kept the industry alive, said Hakel.

"(Measure K) was a biggie," said Jim Burton, executive vice president of the Southern California Contractors Association, a trade group and labor negotiator whose members are concentrated in site preparation and infrastructure for projects such as the schools construction plan. "It's good for our guys, and it's good for the city. I thank the voters very much."

The $5 billion influx of cash to the industry won't only affect construction companies in Los Angeles proper. General contractor firms named on the LAUSD's list of firms prequalified to bid on projects valued at $5 million or higher include companies located in the Inland Empire, San Gabriel Valley, Ventura County, Long Beach and the Antelope Valley.

Even out-of-state contractors bidding on school and university projects would still need to hire local crews because bringing them in would be too expensive, said Samuel Yoshida, director of facilities contracts.

"Next year, we're expecting very strong growth, and Measure K is a part of it," said James Klassen, regional vice president of Contractors Labor Pool Inc., a national construction staffing company with eight offices throughout Southern California.

In some areas, however, construction workers have already gotten all the work they can handle.

In the Inland Empire, construction companies have their hands full with still-growing home construction, industrial "tilt-up" building (a method of concrete construction used in schools, warehouses, shopping centers, etc.) and highway construction, said John Husing, an economic consultant in Highland who specializes in the Inland Empire. "There's no capacity. They're fully employed," he said.

In addition to accounting for 39 percent of all new home construction in the first nine months of this year, the area has recently passed a slew of school bond issues of its own, including one for the Redlands School District and another for the Ontario-Montclair School District. "(Construction) is the fastest growing sector in this area," said Husing.

Indeed, while construction employment declined in the Los Angeles-Long Beach area from 133,300 on average in 2001 to 129,350 through October, in the Riverside-San Bernardino area, it rose from 86,600 to 95,000 in the same period, according to the Bureau of Labor Statistics.

Meanwhile, school and community college district building in Los Angeles County rose 14.5 percent from the first 10 months of 2001 compared to the same period this year. In neighboring Riverside County, it jumped 83 percent through October 2002, said Ben Bartolotto, research director at the Construction Industry Research Board in Burbank.

Construction in San Bernardino County dropped 32 percent through October, and it fell 15 percent in Ventura.

New funding passed Nov. 5 is sure to increase those numbers. The question now is how the industry will meet the demands.

One problem is lingering concern among constructors about how the school districts will manage the construction.

The management of Measure K's predecessor, Proposition BB, a $2.4 billion school construction bond issue approved in 1997, was riddled with problems, as teachers with no construction expertise on the LAUSD staff struggled to manage the massive project.

As a result, there were delays in payment to some contractors, though, to some degree, that's part of doing business with a gigantic bureaucratic entity like the school district.

The same complaints may be heard again under Measure K construction, because contractors and subcontractors used to getting paid in 30 days will discover that things work very differently in the public sector, said David Colon, owner of NK David Constructors, a small construction company in Mission Hills that has had good experiences doing school upgrades for the LAUSD. "There are so many government regulations. It's not an LAUSD problem; it's the same with any public entity," he said.

One change from the Proposition BB era has managed to reassure contractors that the building process will run more smoothly this time around. When LAUSD Facilities head Jim McConnell came to the district a year and a half ago, he organized a facilities staff with extensive experience in construction, replacing staff with, in some cases, no knowledge of the industry.

"I was very impressed with (Superintendent Roy) Romer's discussion with the facilities committee on how they're going to go about all this," said Jim Burton. "What they are doing seems logical and proper."

Another obstacle that affects the industry throughout the region is the lack of highly skilled construction workers. "We're seeing a graying of the construction labor force," said James Klassen. "There aren't as many people moving into the field."

He said years of public education institutions emphasizing college as the only viable alternative has helped create a negative perception about the industry that is untrue. "I wouldn't be surprised if, in the next 10 years, a journeyman electrician would be making more than an engineer," he said.

In an effort to reintroduce the construction industry to a new generation of workers, Associated General Contractors has been pushing LAUSD schools for the last year or so to bring back introductory courses like woodshop and metal shop to their core curricula, said John Hakel, a director at the group.

The problem he faces is one he's also solving through his members' school building activity. "Where are they going to have the classrooms?"

The AGC offers management training courses that teach ways to motivate crews and meet job site safety regulations. But it really wants to attract younger people to the industry. It may face an uphill battle.

"No one wants to get dirty," said Hakel. "They look at the industry as a dead end for people who don't have other options. But the reality is if you're a good carpenter, laborer, plumber or electrician, you're becoming more like a doctor, because there aren't many of them. People are paying more and more for those services." Have a comment or suggestion? Call Barbara Correa at (818) 713-3021.

[Mark]

Maybe this article should be re-written into the Spanish language.