- With more than $2 billion worth of Detroit construction projects to juggle, developer Bedrock LLC has ratcheted down activity at its $830 million, mixed-use Monroe Blocks project to the point that work has come to a standstill, Crain's Detroit Business reported.
- Bedrock, backed by billionaire and Quicken Loans founder Dan Gilbert, broke ground on the 1.4 million-square-foot Monroe Blocks in December, and general contractor Turner Construction was expected to start excavation and site work this spring, followed by vertical construction this summer. Bedrock’s Bill Emerson told Crain's that the company is wrapping up engineering and construction for Monroe Blocks but still is trying to navigate the logistics of building several large projects at once within the same urban area. Several sources have told Crain's that construction at Monroe Blocks will be on hold for at least three to six months, although Emerson did not provide a projected restart date.
- Other major projects Bedrock has going on nearby are a new $909 million high-rise on the former site of the iconic Hudson's department store, the $311 million Book Tower redevelopment and the $95 million One Campus Martius addition.
Crain's reported that Bedrock received a total of $618.1 million in brownfield tax incentives from the state of Michigan last year for the four projects combined and must complete them by May 2023 in order to retain the entire dollar amount of the package.
Major construction projects concentrated in the same geographical areas are stressing markets all over the U.S., where labor shortages and rising costs have become commonplace. In fact, according to the latest Rider Levett Bucknall quarterly survey, construction costs rose an average of 5.7% between 2017 and 2018, with busy metros like Chicago (7.6%); Portland, Oregon (7.1%); San Francisco (6.7%); Phoenix (6.7%); Washington, D.C. (6.5%); and Seattle (6.4%) registering the biggest increases.
Possibly adding to construction costs in the months to come could be higher prices due to the latest round of tariffs imposed on Chinese goods — including materials and equipment headed for contractor supply yards — by President Donald Trump, although it's too soon to tell what the impact on the industry will be.
What should give commercial contractors some relief from rising material costs is the Trump administration's decision to lift tariffs on steel and aluminum imported into the U.S. from Mexico and Canada. In return, both countries have agreed to institute measures that will prevent Chinese steel from making its way into the U.S.