State of the Construction Industry: Bright times ahead for NYC with $1.2 trillion federal infrastructure program

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New York Construction Report staff writer

Promising times are ahead for New York City’s architectural, engineering and design community, with the gift of billions of dollars from the recently approved $1.2 billion federal government infrastructure program, several speakers and panelists said at a Nov. 16 gathering.

“It kind of feels like Christmas morning,” keynote speaker Elizabeth Arnaiz, executive vice-president, capital programs, of the New York City Economic Development Corporation (EDC) said at Anchin’s 16th annual State of the Construction Industry breakfast.

After a break to an all-virtual format last year because of COVID-19, the gathering returned in-person at Club 101 on Park Ave., but visitors could also attend virtually through a Vimeo link. 

Several speakers said their spirits were high because the federal funding signed into law the day before the event will give a strong boost to a diversity of regional infrastructure projects. They said that work will spill over through the entire AEC community, creating opportunities in the private sector that would otherwise be slower to rebound.

While COVID-19 still is challenging the community, Arnaiz said NYC is coming back to life and “reopening for business.”

“We see it on Broadway,” she said. “We see it from the kids back in school. We see it in concerts and sporting events. We see it in the tech and the life sciences” – and the continuing commitment to the city from business and tech giants.

She said the EDC team of 500 is working on a “diverse portfolio of over 100 projects, representing nearly $6 billion in construction over the next four years.”

One major project under-way is the $800 million Ruth Bader Ginsburg hospital in South Brooklyn.

As well, “I’m proud that the mayor has doubled the city’s investment from $500 million to $1 billion to expand the life sciences sector,” she said. “We expect this investment to generate maybe 40,000 jobs in the life sciences ecosystem by 2026.”

Arnaiz said a key part of her department’s responsibility is helping to kickstart the economy by “keeping our construction projects moving and identifying key shovel ready jobs to move forward.

She observed that construction makes up 20 percent of the city’s Gross Domestic Product (GDP), while providing 10 percent of the jobs and five percent of its wages. 

Among initiatives are projects to adapt technology to the industry and build greater resilience from climate change, including “our vision to make New York City a hub for offshore wind development” with work at the Sunset Park marine terminal.

A key focus of the department is on Minority and Women Business Opportunities (MWBE). She said the EDC’s robust MBWE program “in 2021 alone made payments of $176 million to these firms with an award winning rate of 44.9%.”

“We’re working hard to address inequity as we see growing evidence that MWBE disproportionately benefits firms that are owned and operated by non-minority women and therefore do not generate as many opportunities for firms certified as Asian, Black and Hispanic owned.”

After Arniaz’s presentation, Johnny Evers, president and CEO of ACEC (Association of Consulting Engineering Companies) New York moderated a panel discussion with speakers Greg Kelly, president and CEO, STV Group, Julia Murphy, managing principal, USA and Canada East at architectural firm Skidmore, Owings and Merrill (SOM), and Elizabeth Velez, president of the Velez Organization and chairperson at the New York Building Congress (NYBC).

Evers started the discussion by inviting panelists to comment about the federal infrastructure funding impacts in the NYC area.

“I think it’s great news for New York,” STV’s Kelly said. He said he hopes that the funds will make possible new projects to reduce congestion and rethink how freight is delivered, including projects such as the Cross Harbor Freight Tunnel. 

“Authorizations are easy,” he said. “Appropriations are hard. So it’s going to take a little bit of time for the money to work through the system to hit New York. And we should use this time wisely in terms of planning and positioning the public sector to deliver programs.” He said the private sector can help in developing innovative ways to deliver programs, such as public-private partnerships.

Despite the overall positive news, NYBC chairperson Elizabeth Velez said that the organization’s recently updated construction outlook “tells a pretty sober tale.”

While conditions this year are much better than in 2020, “it’s going to take some time” for things to return to the levels before the pandemic. “Industry levels are more like they were in 2014,”she said. 

While the infrastructure spending will help government-funded projects to recover, a significant increase in residential spending isn’t expected over the next three years. “Non-residential spends in commercial, education, residential and industrial facilities’ will also continue to struggle to make gains.”

That said, the speakers generally observed they could see a bright future ahead, and the infrastructure money will make a big and transformational difference in the years ahead.

“This is indeed a transformative time with trillions of dollars with great projects, particularly here in the Empire State in New York City,” Evers said.

“And we’ve talked about what we need and what you need when it comes to an industry and our government partnerships, and about the innovation that will lead to the next generation of architects, engineers, construction and in real estate in a variety of other channels, when it comes to transforming the society and making sure that we’re very successful.”

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