Private commercial construction: steady growth in anchorage continues.

• Author: Cottrell, Paula
• Position: CONSTRUCTION

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Modest construction growth increases of 3 percent over the last few years may not be an indication of a strong, rebounding economy, but it does have Alaskan developers guardedly optimistic. "There are many projects in progress across the state that are getting completed," says Mark Pfeffer, president of Pfeffer Development, a multidisciplinary commercial real estate development firm based in Alaska. "We may not be seeing a lot of new, large-scale commercial projects being built right now, but construction on the mid- to smaller-scale has been relatively steady."

Alaska construction spending was estimated to come in around $7.7 billion dollars this year, an increase of 3 percent over last year, according to the annual construction forecast released in February compiled by Scott Goldsmith and Mary Killorin of the Institute of Social and Economic Research at the University of Alaska Anchorage. ]his report, prepared for the Construction Industry Progress Fund and the Associated General Contractors of Alaska illustrates small, steady growth in the construction industry since the national economy hit all-time lows in 2008.

Of the estimated 2012 $7.7 billion, $5.1 billion will go toward private commercial projects. Of that $5.1 billion, an estimated $3.5 billion will be spent in the mining and oil and gas industries. That leaves only $1.6 billion being spent on utilities, rural, basic industry and other commercial and residential projects across Alaska in 2012.

A sluggish national economy combined with uncertainty regarding the future of oil and gas development in the state has caused some developers to proceed with caution. While it's true that Alaskans haven't endured the worst of what the recession has to offer--high unemployment, extreme crashes in the housing market and credit woes--the national economy does influence investment in commercial and residential markets. Some of that investment is in retrofits and tenant improvements, some in new builds.

Retrotit or Build

Over the last three years, Dave DeRoberts, president of Criterion General Inc., has noticed that his business has increased at a fairly steady rate. In fact, Criterion, a contractor that specializes in private construction, is on track to having its busiest year ever. "In my opinion, we're in a good place," DeRoberts says. "We have a proven track record with our clients and are seeing a lot of repeat business."

Criterion General is currently working with Pfeffer Development and kpb architects on a complete retrofit of the Unocal/Chevron building located at 909 West Ninth Avenue in Anchorage. According to Pfeffer, the company that purchased the building from Chevron was in the middle of tackling the asbestos abatement issues that required a complete demolition of all of the building components down...