Tucson Activity Report
By K. Robert Wendel

Although the Tucson construction market looks to finish 2003 about 10 percent ahead of 2002, a precipitous fourth quarter drop of more than 70 percent in construction starts has contractors scrambling.

But the drop may be just a lull as massive projects at the University of Arizona break ground and the long-envisioned Rio Nuevo Project starts to materialize.

"Everything is kind of like stop and go here. It's like an engine that is sputtering. It's trying to run, but it's coughing along the way," said David Ollanik, president of Tucson's Ollanik Construction Co. Inc. "You can tell it's waiting to get some momentum and take off, but it's not going by leaps and bounds. We are seeing a lot of activity plan wise, though."

On the commercial side, by far the largest project is the $70 million Marriott Star Pass Resort. The Weitz Cos. are well underway on the upscale, 220,000-sq.-ft. resort project, which features a 27-hole golf course with a target opening date of January 2005. Project valuations rapidly drop from there, with a $14 million multi family residential project being constructed by Western Plains Development. Other notable projects include an $8 million office project for Raytheon Missile Systems and an $8 million Ford dealership being constructed by the California firm of Gordon Mountjoy and Associates.

advertisement

"We are anticipating a much stronger year in 2004," said Steve Tofel, president of TA-Wallick Construction LLC in Tucson. "2004 is definitely better looking and conservatively, there could be a 10 percent increase in construction that could go as high as 25 percent."

In November, Tucson's city council approved $20 million of a $100 million tab for the construction of a new science center. The ambitious project would span I-10 with a bridge, linking downtown Tucson with the west side of the freeway. The center would be a state-of-the-art science facility. There would be food vendors, retail shops and art displays would be constructed on the bridge, which planners said would be enclosed and air conditioned. A 1,000-space parking garage and possibly a new arena are also planned for the downtown area.

"Our expectation is to start turning dirt in January 2006 after two years of planning and design," said Karen Thoreson, Tucson assistant city manager.

The real meat is in the public market, with massive plans for new buildings at the University of Arizona, along with the $112 million federal penitentiary under construction by Dick Pacific. At the U of A, nearly $300 million in state funds has been allocated for a variety of projects mainly focused on biotechnology. Ground broke on Nov. 7 for the $130 million construction of three new biotech buildings at the Tucson campus. The U of A's capital expansion plan was recently approved by the Arizona Board of Regents, with $150 million for new projects the first year and $29.5 million for building renewal. The four projects approved are the Residence Life Building Renewal: Phase II, the Arizona State Museum Renovation & Expansion, the UA Science Center, and the ENR II.

As with the rest of the Southwest, much of the construction, especially retail, is being driven by a sizzling home market. In 2003, Tucson looks to finish its busiest year ever with 8,300 new homes, compared to a record of 7,700 new homes in 2002. One potential burr under the saddle, if Tucson voters choose to approve it, is the Sonoran Desert Conservation plan which is on the May ballot.

"The biggest thing going down here negatively for the construction industry is the Sonoran Desert Conservation plan to set aside more land," said John Strobeck of Bright Futures Business Consulting. "Should that pass, it will cause land prices to skyrocket and we are already short of land down here."