Construction on Birmingham’s Pizitz Building Starts This Week

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Bayer Properties, in association with Wisznia Architecture & Development of New Orleans and Baton Rouge-based Stonehenge Capital, are finally beginning their much-anticipated renovation of the historic Pizitz building in downtown Birmingham. Redevelopment of the 251,210-square-foot building will cost an estimated $66 million. This project is set to transform the building into six floors of mixed-use residential and commercial retail space. There will be 143 multifamily units and office space on the mezzanine level. A public urban market will occupy much of the ground floor, with conventional retail taking up the rest. The seven-story parking garage attached to the building will also be redeveloped.

It is expected that redevelopment of the Pizitz, which was constructed in 1923, will catalyze the redevelopment of the city center while maintaining the volume of redevelopment happening on Second Avenue North. The area has seen many historic renovations, redevelopments, and new tenants in recent years, but the Pizitz project is the crowning achievement in the effort to revitalize downtown.

In an interview with the BBJ, Bayer principal David Silverstein was quoted as saying, “We’re extremely excited for being able to start the Pizitz project … It’s a great project for our company, but most importantly, it’s an even more important project for the revitalization that’s ongoing in downtown Birmingham.” This week’s efforts will focus on demolition of the annex, which is not part of the historic original structure.

The Pizitz, located at 1821 Second Ave. N. at 19th Street, was purchased by Bayer a decade ago. In that time, the building has been the subject of numerous redevelopment proposals. According to Bayer CEO Jeffrey Bayer, the time is now right for the project to proceed. “When we acquired the Pizitz Building and parking deck, we believed that the size of the property was of a scale that, when appropriate for a redevelopment, it would have a profound impact on the future of the central business district,” he says, “That time has now arrived, and we are thrilled to be a part of this gentrification.”

In fall of 2014, Bayer went public with the building’s plans and finalized agreements on funding and initial physical alterations to the property. The financial arrangements came together last week through the assistance of the city of Birmingham, Birmingham’s Highland Commercial Mortgage, US Bank Community Development Corp., Iberia Bank, the Birmingham and Atlanta offices of the U.S. Department of Housing & Urban Development, National New Markets Fund LLC, and ServisFirst Bank. Last March, the city agreed to provide $1.9 million for enhancements around the building and back Bayer properties on a $3.2 million Section 108 loan. “We appreciate the support of Mayor (William) Bell, the Birmingham City Council, our financial partners, and the community without which this project could not have happened,” says Silverstein, “[and] we’re looking forward to a new neighborhood emerging in 2016.”

Wisznia Architecture & Redevelopment has subcontracted with Birmingham’s own KPS to provide on-site architect support services. Brasfield & Gorrie will serve as the general contractors on the project, which is scheduled for completion in 2016.

Crockett High School Building Trades Program is Expanding

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South Austin’s Crockett High School has a double dose of awesome with its new Construction Technology Program. Students who successfully complete the program can walk directly into a job on a work site. Program instructor Duane Lardon says that the starting salaries for entry-level workers “[is] substantial. I think they start at $15 an hour just at the base level.” Austin-based subcontractors looking for skilled labor to complement their teams might consider looking into the program’s pool of recent graduates.

Students who choose to continue their construction technology and project management studies in Higher Ed will earn college credit for the course. To offer the most expansive program possible, Crockett partnered with Austin Community College to develop the curriculum and ensure that the credits earned are transferable. The program began in 2009, and thus far is the only high school construction technology program in the Austin Independent School District. The school is currently building a 12,000-square-foot workshop this summer. Beginning in Fall 2015, the six-year-old program will be adding advanced carpentry, plumbing, electrical, and HVAC courses to their current offerings.

In addition to the nuts-and-bolts of the building trades, program participants learn teamwork and leadership skills. They apply their algebra and geometry skills to solve construction problems, and their science skills to understand green building techniques. Safety protocols and OSHA regulations are also an important part of the curriculum. The introductory course is one semester long, and provides foundational skills like how to safely use power tools. They build picnic tables, bookcases, and other small, student-chosen projects. Students also construct a building for sale, the proceeds of which reimburse the materials expense of the program and help it to be self-sustaining.

Field trips, career networking, and social activities give students the opportunity to interact with team members and co-workers. There are two other courses in the program: Building Trades I/CNBT 1411: Construction Methods & Materials, and Building Trades II/CNBT 1402 Mechanical, Plumbing and Electrical. BT1 teaches students site layout, framing, concrete pouring, and roof framing. BT2 teaches infrastructure and interior finish work.

The program is a key initiative in providing for Austin’s construction workforce needs, which face the same skilled labor shortages and commensurate wage spikes as other booming construction markets nationwide are facing. Austin Home Builders Association vice president Emily Lubbers says that 14% of the home price increase in 2014 was due to construction labor costs. “Home builders are still just trying to meet the demand of the market and trying to ramp up their supply so they can do that,” Lubbers explains. While ramped up building regulations and protracted planning periods are partly to blame for the labor wage spike, the biggest cause was a serious shortage of skilled labor. Few young people are interested in blue-collar work, even though the construction industry offers tremendous opportunity for growth and earning potential, as Lubbers says, “the construction industry is such a great industry. It offers such a great opportunity for career growth.”

To learn about participating in the program, or to locate recent and upcoming program graduates, contact program instructor Jim Stricklan at (512) 414-7884, or jim.stricklan@austinisd.org.

Florida Legislature to Tackle Affordable Housing, Water Policy, Taxes, and Estoppels in 2015

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According to Florida Realtors®, the Florida state lawmakers are finally addressing concerns regarding affordable housing, the state’s water policy, commercial rent taxes, and fees for estoppel certificates. All of these issues are set to impact the state’s residential and commercial construction industries. 

The first issues regards the tangle caused by Amendment 1, a measure requiring 33% of documentary stamp taxes collected on real estate transactions to go to land and water conservation efforts in Florida. Currently, 20% of the doc stamp taxes go to conservation efforts, and the 13% increase is expected to bring in over $757 million in additional funds for 2015. The passage of Amendment 1 raised concerns that funding for transportation and affordable housing initiatives in the state would face cuts in order to fully fund the measure, but this isn’t necessarily the case. 

Florida Realtors President Andres Barbar is very clear in his advocacy of Amendment 1, saying, “A vote for Amendment 1 last November was not a vote against housing … Affordable housing and the conservation of water and land resources are equally crucial goals for our citizens.” Of Floridians’ affordable housing concerns, Barbar goes on to say that, “fully funding the Sadowski Affordable Housing Trust Funds would mean that many of our state’s neediest residents – those who are homeless, low-income families and veterans – would benefit from $267 million going into home buying and rental assistance programs … Not only does a strong housing policy help strengthen and revitalize our communities, housing also creates jobs and helps to drive Florida’s economy forward.” 

The revenues needed for Amendment 1 do not need to come from the Sadowski Trust, because the General Fund and the current $1 billion government surplus can be diverted to cover the funding for the measure. Florida’s commercial builders will need to keep an eye on this funding issue to determine how it will affect their bidding on affordable housing projects. 

In keeping with the demand for water conservation, the State of Florida is initiating a comprehensive new water policy. Senate Bill 918 and House Bill 7003 address the need to balance water resource restoration and conservation while protecting private property rights. Lobbyists are asking lawmakers to consider using money from the Land Acquisition Trust Fund to maintain state-owned water resources and lands, supporting comprehensive, science-based, anti-pollution programs to keep springs, lakes, and other water clean, expand the use of alternative water supplies, and provide new water storage regulations on agricultural lands. The water rights of property holders may affect lot prices and valuation. Builders may need to factor alternative water acquisition and storage into building infrastructure as a supplement to public water or private wells.

Florida is the only state that taxes commercial rents. Currently, there is a 6% tax on rent and expenses (landscaping, insurance, and property tax) paid by commercial tenants, and local governments might charge a discretionary sales surtax on top of that. New legislation will lower the tax from 6% to 5%, beginning in 2015. 

According to Florida Realtors’ vice president of public policy Carrie O’Rourke, a tax decrease will “make Florida more competitive and business-friendly … Since Florida is the only state in the nation that charges this additional tax, it is very anti-competitive and puts our businesses at an economic disadvantage.” O’Rourke goes on to state that “adding sales tax to rent can be the difference in whether a small business can stay in business … We’ve heard from many business owners who say they could expand, hire more workers or raise salaries if this tax were to be eliminated or phased out.” Lowering the tax on commercial rent will also make commercial real estate development that much more profitable for investors and builders.

As master-planned communities and mixed-use condominium projects begin to gather traction in Florida’s construction industry, estoppel certificate fees have become quite an issue. Florida law currently demands that homeowners of properties governed by a condominium or homeowners’ association must provide an estoppel certificate, or statement of financial status, with the association before their home can be refinanced or sold. The law allows community associations to charge reasonable fees for the preparation of an estoppel certificate, but this bureaucratic task has morphed into a miniature revenue stream for many associations, who routinely charge $500 or more to prepare one.

New legislation will cap the fees at $100 for owners who are current in their assessments, with an additional $50 fee to expedite or update the estoppel certificate. The $50 fee will also apply to owners who are delinquent in paying their assessments. Although this alternative mini-stream of revenue will decrease, it is doubtless that estoppel certificate reform will streamline the sale of properties in master-planned communities and condominiums.

Construction Costs Rise Faster then Inflation Nationwide

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The cost of construction is rising fast and will keep rising for the foreseeable future according to Commercial Property Executive contributing editor Dees Stribling. The Consumer Price Index for January dropped 0.7%, largely due to the 18.7% price drop for gasoline during that month. Food, fuel oil and natural gas were also low, although electricity rose 0.2% during the same time period. If the unusual energy and food transportation cost drop is taken out of the equation, prices would have risen 0.2% during January 2015. The average inflation rate across all items in the index of 2014 was 0.1% lower than in 2013, but if energy and food are taken from the calculation, then prices would have risen 1.6% for the year.

When comparing the reasonable inflation rates to the cost increases in the construction industry, it is clear that the resurgence of land development is driving a cost increase in the real estate industry that outpaces inflation.

The Engineering News-Record found that total construction costs from February 2014 to February 2015 rose 2.9%. The price increase is attributed to the rising costs of labor and materials. The baseline labor wage increase was 2.8% for 2014, but the busiest markets were seeing even higher labor cost increases. The materials costs for 2014 also increased to higher-than-inflation rates. The ENR lists a 0.1% price increase for rebar in its 20-city average price index. Rebar rates currently sit 3.4% higher than they were in February 2014. The 20-city index also lists the current average price for gypsum wallboard as 21% higher than in February 2014. Paving asphalt rose 3.5% for the year, but if oil prices remain low, that rate may be expected to drop. After a 0.4% increase in January, the most stable price to be found in the index is for reinforced-concrete pipes, which remained between 3.2% and 4.9% for the past year.

Although land prices vary widely by location, the nationwide trends show that undeveloped real estate, even for B-grade lots, are dramatically increasing in larger urban centers. The economic downturn forced many companies to divest their land holdings and discouraged firms from buying more land. As a result, the “development pipeline” for proper permitting and entitled land ready for building is very scarce. Other areas have simply run out of lots to develop. As a result, land prices are at a premium for most of the markets in the 20-city index.

Residential SIP Demand Rises

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Use of alternative building methods and materials is on the rise, especially in the residential construction industry. While stick-frame construction is still the norm in much of the U.S., many builders are embracing the use of Structural Insulated Panels, or SIP’s, in construction. As concerns over environmental pollution, energy conservation, and affordable utilities attain a critical mass, builders more and more often find themselves working with SIPs.

The typical SIP is a piece of insulating foam core sandwiched between two pieces of OSB. The foam core may be composed of extruded polystyrene or rigid polyurethane insulation, and the boards could use plywood, precast concrete, sheet metal, or magnesium board for the structural facings.

Because SIPS create a continuous thermal barrier, they lack the thermal bridging problem created when using metal or wood studs. The air infiltration and heat resistance problems of fiberglass insulation don’t exist with SIPs. SIP construction tends to be 40% more airtight than stick frame construction, and a 4” SIP outperforms a standard stick-framed, insulated structure with comparative R-value.

SIPs are manufactured in a more eco-friendly way than stick-frame building materials are. The OSB in each SIP  is manufactured from younger, faster-growing, under-utilized wood, which conserves trees that would be otherwise be cut down to make dimensional lumber. The foam core in SIP’s is only 2% plastic, much of which is recycled. Because SIPs arrive at the jobsite cut-to-measure and ready to install, there is significantly less waste. Because building with SIPs is easier and faster than with conventional building, the construction time is quicker and the labor costs are lower.

With the increasing interest in environmentally sound home building, it’s a good idea to become familiar with the procedures and techniques of building with SIPs. Whereas you won’t need a worker to cut holes into studs for wiring because the wire chases are pre-cast in the foam, you will need to be extra aware of the plumbing and ventilation fittings. The air-tightness of a SIP structure will keep standing water from roof, window, or pipe leaks locked into the structure, which can cause accelerated rotting and structural collapse.

SIPs are an excellent, eco-friendly alternative to stick-frame construction, but they aren’t perfect. Residential building professionals who are familiar with the specific demands of SIP construction will produce high-quality and eco-friendly results. Which will make them much more desirable on the job market than those who aren’t.

3 Steps to a Great Outdoor Kitchen

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GC’s and subcontractors who are keeping up with the latest design trends know that more and more homeowners want their new homes equipped with outdoor kitchens. Unfortunately, one challenge many builders face with outdoor kitchens is that they are working with materials and conditions traditionally handled by landscapers, pool installers, and deck designers. Keeping these three tips in mind will help ensure that you’re building the very best outdoor kitchens your clients could wish for.

1. Basic Design Principles are All-Weather Concepts

Good kitchen design is good kitchen design, period. Make sure that the layout of cold areas (refrigeration), dry areas (prep counters), hot areas (grill/stove/oven), and wet areas (sinks) in the outdoor kitchen is as efficient and functional as the indoor kitchen layout. Each zone should have proper space and appropriate proximity to the other areas.

2. Light, Climate, and Power

Locating the grill, refrigerator, and stove to maximize their access to the home’s utilities is a no-brainer. But don’t forget that outdoor kitchens have an even greater need for adequate task lighting in the different function zones because there is no ambient lighting coming from the rest of the house, and much of the entertaining outdoors is done at night. You’ll also need to address outdoor cooling and heating needs if the homeowners wish to extend the seasonal use of their outdoor kitchen. This is doubly true if they client plans on having an outdoor dining room.

3. Durability

A well-designed outdoor kitchen demands two kinds of durability: design and equipment. A durable design is one that uses sturdy materials and closely matches the design elements of the rest of the house. Repeating tile patterns, brick types, colors, and exterior wall coverings ensures that the outdoor kitchen blends so seamlessly into the overall design so that the client won’t feel the need to remodel the space later on. Durability in equipment means installing countertops, sinks, and cooking gear that is specifically meant for outdoor kitchens and can weather the elements well season after season. It also means planning space for the clients to install any equipment (warming drawers, ice makers, an upgraded grill) they may choose to add later as their entertaining needs grow.

Green Climate Control Options for New Homes

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Although summer traditionally begins on June 21st, most Americans begin to feel the heat long before then. But ever-increasing energy costs and concerns over environmental pollution have left some reluctant to crank up the A/C, leaving their homes stifling and uncomfortable. As home builders forge ahead into the construction season, it’s a good time to think about what energy-efficient air conditioning and green cooling options are available for the homes they are building. There are four good alternatives to central air conditioners.

Perhaps the most conventional is the whole-house fan, or the “attic fan” as my dad calls his. Whole-house fans use 90% less energy than an a/c unit, and can be run instead of the a/c during the evening, when the outside air is cooler.

Another alternative is the ductless mini-split system, which pairs an external, wall-mounted condenser connected to a series of wall- or ceiling-mounted indoor evaporators via refrigerant lines. Each room can be cooled separately, and the system eliminates wiring, noise, and cumbersome energy-inefficient attic duct work while offering at least 30% in energy savings.

Perfect for warmer climates with low humidity, central evaporative coolers (also called “swamp coolers”) are a good option. Costing about 50% less than conventional air conditioners and consuming about 75% less energy, the evaporative cooler exploits the fact that evaporating water cools the surrounding air.

Geothermal “heat pump” cooling systems can also be used for wintertime home heating and heating your water year-round. They use about 30%-60% less energy than a typical air conditioner. Geothermal systems rely on the circulation of fluid to transfer heat from your home into the ground beneath, and US homeowners can get a 30% tax credit on geothermal systems thorough 2016.

If budget constraints make these options unpractical for your clients’ home, there are still ways to make conventional climate control more energy efficient and environmentally friendly. One strategy is to install tinted windows to reduce the amount of light and heat that get into the house. Adding extra insulation to the attic will reduce the amount of heat that gets in and keep temperatures inside the house lower. When paired with classic a/c, the humble ceiling fan boosts the circulation of cool air, meaning that the air conditioner can run for shorter periods of time and at higher thermostat settings, saving at least $30 per month on the electric bill.

Swimming Pool Trends for 2015

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In-ground swimming pools add value to your home and enjoyment to your life. But the amount of value and enjoyment homeowners can get increases dramatically when their swimming pool design is innovative and visually interesting. Once upon a time, the people were satisfied to have a simple circle or rectangle with a white concrete bottom and cement decking. Nowadays, homeowners’ expectations of what an in-ground swimming pool should be have changed. Here are some of the top swimming pool design trends for 2015, courtesy of the Master Pools Guild:

1. Alternative Finishes

The popularity of alternative finishes has been growing for the last few years, but 2015 is the year that they’re top of the list. Aggregate pebble finishes like Pebble Tec, slate, travertine, and limestone are the most sought-after pool finishes this year, especially for the decking and pool surround. Glass tiles have become more popular as well because they are stronger and more resilient than ceramic tiles and have a broader palette of color, texture, and finish options. Glass tile is usually used to accent the water’s edge, highlight the hot tub area, and add decorative flourish inside the pool.

2. Ledges

Instead of a settling for a uni-level pool, or a pool floor that gently slopes in one direction from shallow to deep water, many pool designers are including ledges in the pool design. Sometimes called Baja steps, thermal ledges, or lounging ledges, these areas are ideal for inexperienced swimmers and toddlers, but they make great launch spaces for water floats and toys. Ledges are also great for adults who just want to lounge in the water and not splash around too much.

3. LED lights-

LED lighting has been around for years, but the past decade has seen the popularity of LEDs soar. Their size, ease of maintenance, longevity, and shockingly low power drain has led to LEDs being used for swimming pool lighting. Instead of simple lighting for night swimming, LED’s are used to create a stunning atmosphere through outdoor lighting displays that often include Laminar jets. Homeowners who entertain often are especially keen to have breathtaking lighting design in their pool area.

If these trends show us anything, it’s that more and more homeowners believe a swimming pool should be the centerpiece of a total backyard environment. Swimming pool designers who meet these expectations will outsell and outperform those who don’t.

HUD Allocates $54 Million to Alabama for Renovation, Repair

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On February 12, the U.S. Department of Housing and Urban Development awarded $54,561,426 to Alabama public housing authorities. State agencies will now be able to make major, large-scale improvements to those properties. The funding came through HUD’s Capital Fund Program, which annually funds more than 3,100 public housing authorities nationwide for building, repairing, renovating, and modernizing public housing. These state and regional housing authorities use the funding to replace roofs, upgrade plumbing and electrical systems, and make energy-efficient upgrades. Interested contractors should submit bids and proposals through the HUD portal.

The United States federal government has been investing billions of dollars for developing and maintaining public multifamily housing for more than 75 years. An average of 10,000 public housing units are lost yearly through disrepair and dilapidation. The Capital Needs in the Public Housing Program study HUD released in 2011 found that the 1.1 million housing units managed by state housing agencies require $25.6 billion in large-scale repairs to keep the units safe for residents. Capital needs differ from routine maintenance needs in that they are extensive and intensive repairs that are needed to make the housing decent and economically viable.

To protect the federal government’s enormous investment in public housing and respond to the ever-increasing need for affordable housing, the Obama administration proposed the Rental Assistance Demonstration strategy to complement the Capital Fund program. The strategy offers a long-term solution to revitalize the nation’s stock of affordable housing, by leveraging private and public monies to make critical improvements. Much of the money allocated to Alabama by HUD last week was generated through RAD.

Of the recent awards, HUD Secretary Julian Castro says that, “Every American deserves a place to call home where they can successfully raise their kids, enhance their financial security and build a better life. Through this funding, HUD is committed to strengthening our nation’s affordable housing units and to providing folks with the springboard they need to succeed.”

HUD Southeast Regional Administrator Ed Jennings, Jr.  concurs, adding that “HUD continues to look for ways to improve the quality of life for public housing residents. This funding will help housing authorities address long-standing capital improvements and preserve and enhance America’s affordable housing.”

Prattville’s Winchester Ridge Breaks Ground

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Montgomery, Alabama’s rural suburb, Prattville, is home to a luxurious new housing development that seamlessly marries urban convenience and country living. The developers of Winchester Ridge planned the development around the historic Booth family farm to preserve the land’s historical value and the local lore surrounding the house.

According to realtor Mugs Mullins, the fourth generation of the Booth family wanted to sell the 48-acre farm but they didn’t want the 260-year-old farmhouse to be demolished. According to Mullins, local legend says “that this same property was lost in the 1800s after the then-owner found himself on the losing end of a year-long poker game. If the walls could talk,” Mullins adds, “there is no telling what we could learn.” The historical intrigue surrounding the home lead developers to “incorporate this charming home into what is now Winchester Ridge,” instead of tearing it down.

Although it is only 3 minutes from downtown, the land is in a peaceful, rural part of Autauga County. The neighborhood has several lots available which vary in size, and enjoys limited pass-through traffic. There are currently 40 people living in Winchester Ridge, which has a private, residents-only common area with splash pool, playground, and picnic area. Pending approval by the neighborhood architectural review board, buyers can bring their own plans and builders to Winchester Ridge.

The homes are built by local home builders with unique styles. Although each home is unique, all homes share massive crown molding, wood floors, ceramic tile, granite countertops, contemporary fixtures, and richly appointed master suites with garden tubs and separate walk-in showers. The median home price is $262,000, with lot prices ranging from $34,000-$35,000. There are five homes with square footage ranging from 2,001-2,791 currently on offer, with seven build-ready lots available. Several homes are currently underway, with more to be built in 2015.