HQ2 started construction at a rough time.

Just before the COVID-19 pandemic began, Amazon selected Bethesda, Maryland-based companies Clark Construction and JBG Smith to lead the $2.5 billion project’s first phase of construction and development. Neither firm could see the challenges just over the horizon.

Nevertheless, Clark took time to plan.

“Most people say the pandemic didn't start any trends — it accelerated trends that existed,” said Lee DeLong, CEO of Clark Construction’s Capital Group.

During the complex’s grand opening ceremony Thursday, DeLong told Construction Dive his team worked on planning for Amazon’s future second headquarters in Arlington, Virginia, for over a year prior to starting work, which helped ease pandemic-related issues that plagued other builds.

“Our involvement with the project began quite early. And I think that's a recipe for success,” he said.

That planning helped lead the project to an on-time completion, culminating in Thursday’s grand opening of Metropolitan Park, the first of two planned phases of the HQ2 complex.

A giant complex

Met Park, as it’s called, features two 22-story buildings and includes more than 2.1 million square feet of space, a 2.5-acre community park and 50,000 square feet for retail businesses. In addition, builders used mass timber technology on the build, and the project team used concrete with carbon capture technology to reduce the building’s total emissions. 

Amazon selected Arlington in 2018 following a competitive pitching process from other locations around the country. Met Park has been open since May 22.

DeLong said the pandemic put a premium on space, particularly for indoor projects. But, by a stroke of luck, the project had just begun the early stages.

“We were able to modify our construction techniques on site to ensure that workers were staying away from each other,” DeLong told Construction Dive at the event.

Modifications were no small feat, even as supply chains became snarled and labor issues intensified.

For instance, DeLong said that picking the right trade partners for the project was crucial. During the interview process, each potential partner produced a “manpower curve,” to forecast what their depth could be.

While estimates are important, many contractors also struggle to adequately staff their projects. On that front, DeLong praised the project’s prevailing wage agreement, a big get for enticing potential workers.

“When the wage is set at a prevailing wage, that's an attractive thing. So we were fortunate that our client made that commitment,” DeLong said.

Clark also thought out how to deal with material issues, particularly as other contractors across the country reported issues obtaining materials for their jobs. During construction of Met Park, DeLong said that the team put a cement batch plant at nearby Pen Place, the future site of HQ2’s planned second phase, lessening the waste and the time needed to move the crucial construction material to the jobsite.

Looking ahead

Other Amazon facilities have had different trajectories in recent days. Amazon had closed, canceled or delayed nearly 100 facilities as of February. In nearby Loudoun County, Virginia, Amazon recently purchased nine office buildings, but instead of occupying them, the company plans to tear them down to build data centers.

In addition, groundbreaking has been delayed for Pen Place, HQ2’s planned second phase, which includes the “Helix” building, a spiraling glass tower with vegetation on the outside. Officials at the event and at a later panel said that the delay was due to an abundance of office space at Met Park, but offered no insights as to when the project will move forward.

Christian Dorsey, the chair of the Arlington County Board, told Construction Dive that he was confident Phase 2 would eventually break ground, and he estimated that more information would be available early next year. 

“Amazon is doing what everybody else is doing right now, trying to figure out what the future of their office space requirements will be and seeing whether or not what they have approved still makes sense. So they're going through a period of figuring that all out,” Dorsey said.

With trillions of dollars in new work coming online this year, contractors — already struggling to retain craft workers during a historic shortage — now face the challenge of competing with big projects that come to town with a lot to offer workers. 

This year, the $1.2 trillion Infrastructure Investment and Jobs Act and the CHIPS and Science Act, which allocates $39 billion to build and expand semiconductor manufacturing plants, will create thousands of new construction jobs — on top of what Ken Simonson, chief economist for Associated General Contractors of America, called “an unusually large concentration of really large projects right now.”

“A remarkable number of multibillion-dollar projects are showing up in many states,” Simonson said. “In many cases, the owners of these projects, while not insensitive to cost, may have more flexibility and willingness to pay and offer a range of benefits that smaller companies can’t.” 

When projects compete for the top available labor, “it gets messy,” said Portland, Oregon-based Eric Grasberger, construction and design group chair of national law firm Stoel Rives. 

“In order to compete, the contractors on those jobs have to go to the owners and say, ‘We can’t get the labor, and we’re not going to get the labor unless you authorize an increase in the hourly wages, the per diem or both — or perhaps other incentives,’” Grasberger said.

To attract and retain workers, many local companies are finding more compelling benefits well beyond money. They’re offering everything from hot meals and heated bathrooms on jobsites to paid volunteer and educational opportunities that may even extend to workers’ families.

“They’ve got to sell something bigger than just a project, because typically those industrial projects pay a lot more per hour than your average contractor might pay,” said Greg Sizemore, vice president of workforce development, safety, health and environmental for Associated Builders and Contractors. “In middle-class America, it’s about selling the value, which is beyond just the dollar.”

Free lunch, wellness centers

In central Ohio, megaprojects are becoming the norm rather than the exception — a $20 billion semiconductor manufacturing plant for Intel, a $4.4 billion electric vehicle battery plant for Honda, data centers for Google and Amazon, and a biomanufacturing plant for Amgen are just a few. 

The flurry of building activity means construction workers have the potential to make as much as $135,000 per year, said Dorsey Hager, executive secretary-treasurer of the Columbus/Central Ohio Building & Construction Trades Council.

Throwing more money at workers to keep up with megaproject salaries is not an option for many local contractors, but Dorsey said it’s probably not the most effective tactic anyway. In their efforts to hang onto workers, central Ohio construction firms are offering amenities such as free breakfast and lunch, onsite wellness centers, heated restrooms and changing areas and convenient paved parking, he said. 

Sizemore said tradesworkers used to ask just three questions when considering a job: how much it paid per hour, how many hours they would work and what the per diem was. 

“Now, the whole world’s changed,” he said. “We’ve got new people coming into the industry who are looking for opportunities to go to work for contractors that have a long-term value proposition that meets their needs — things like paid time off, maternity and paternity leave.”

Younger generations of workers are asking more questions about company culture, what types of projects they would be working on and even safety protocols, said Keyan Zandy, CEO of Skiles Group, a mid-size general contractor in Dallas. 

In his market, Zandy is facing competition from a host of massive industrial, infrastructure and residential projects such as a $3 billion 112-acre mixed-use development that recently broke ground near Dallas. The Mix — which will include 375,000 square feet of retail, a 200-room boutique hotel and a 400-room business hotel — will be under construction through 2026. 

Skiles Group makes a concerted effort to align workers with the firm’s core values and include them in all of the company’s activities, whether volunteer programs or company picnics, Zandy said.

“It’s about not treating your labor like they’re a secondary component of what you do,” he said. “That’s really the main thing—we should be doing everything we can to empower these people because if it weren’t for them, nothing would ever get built.”

While smaller firms might not be able to compete when it comes to salaries, they have the advantage of being able to offer workers more personal relationships with owners and senior management and possibly even meaningful ownership shares, Sizemore said. 

“It really is about making people feel like they’re a part of something as opposed to just working for Amazon,” he added.

Sponsored content

By XYZ Reality Ltd

As I’m writing this article I’m switching back and forth between Google searches and asking ChatGPT questions like, “How many data centers are there in the world?” It turns out there are over 8,000 data centers as of 2021, but the point is that we are living in a time where everyone relies on technology – and the computing power required to support it – in order to live and work. Our demand on technology appears to be growing exponentially, and that growth will require us to build more and more data centers

An Increasing Demand for Complex Projects

Ask anyone who has worked on a data center project and they will tell you that it’s one of the most complex projects to build – right up there with hospitals, pharmaceutical plants, and stadiums. Data centers are massive structures with evolving and increasing demands being placed on their facilities.

Let’s take a minute to look at the task at hand.

The data centers that we are building today are megaprojects. They are multistory structures consisting of thousands of servers and storage units. Managing a data center project requires intricate design and meticulous planning to ensure that everything is built to plan, on schedule, and within the budget. Delays in getting data centers online on time can cost up to thousands of dollars each day, with experts estimating an average cost of $5,600 per minute of downtime.

Data centers consume a lot of energy, and forward thinking approaches to environmental concerns require new and intricate designs in advanced cooling technologies, energy-efficient hardware, and renewable energy integration. All of these components further complicate data center construction.

And we also know that the demand for additional data centers will continue to rise.

So the challenge we face now is to build a lot more data centers with great complexity while increasing the efficiency and output of the construction process.

Managing Complexity with Augmented Reality (AR)

Mission critical projects like data centers are helping drive tech adoption and innovation in the construction industry. As budgets increase and projects become more complex to build, there’s a clear need and big opportunity for new technology to help meet the demands of construction. 

The construction industry has become accustomed to relying on 2D drawings to build three-dimensional structures, and the reliance has negatively impacted project budgets and schedules. Despite the fact that millions of dollars are invested into the creation of a 3D model to coordinate the pre-construction phase of data centers, there’s a sizable gap between getting 3D models into the hands of the builders. 

At XYZ Reality we are working towards closing that gap by providing builders with a way to accurately build from holograms of 3D models – moving away from a reliance on 2D drawings and towards a future where accuracy is everything. I grew up on construction sites and worked my way up through the ranks, experiencing first-hand the problems caused by building from 2D drawings – clashes, rework, and delays. Research from McKinsey has revealed that 98% of megaprojects suffer cost overruns of more than 30%, and 77% are at least 40% late. Our own joint research showed that 99% of projects are delivered past their originally scheduled delivery dates.

What if we could build a complex project right, the first time, without any errors? The ability to visualize holograms of 3D models to millimeter accuracy enables all stakeholders on a megaproject to get closer to the build process and correct potential mistakes before they happen and before the cost has been incurred. 

Today we’re seeing construction teams and data center clients use AR technology to identify errors before they become costly. Take Georg Fischer (GF) for example. While working on a hyperscale data center project, the team at GF was able to bring the site concept to its fabrication facility through the use of AR technology. This allowed GF to fabricate the data center’s plant rooms to their exact specifications, show the work to their client, and have complete confidence that the work was done right before shipping it out to the site to be installed. 

As of today, the largest developers of data centers have implemented XYZ Reality on projects totalling over $9 billion.

While AR has had a positive impact on large-scale projects like data centers, I believe that we’re not far away from a day where everyone in construction – builders and owners – moves beyond 2D drawings and uses AR on every project. At XYZ we envision a world where everyone builds off holograms of 3D models, and it’s easy to quantify the monetary impact of doing so. Our partners have reported up to 9X ROI, explore our ROI calculator to discover potential savings for your business. 

As data continues to play a pivotal role in the digital age, the construction of data centers will remain a challenging yet vital endeavor to support the world's evolving technological landscape. The technology adopted by innovative builders and owners during this current moment in time will push the construction industry forward.

 

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References

1. Data Centers Around the World: A Quick Look https://www.usitc.gov/publications/332/executive_briefings/ebot_data_centers_around_the_world.pdf


2. The construction productivity imperative
   https://www.mckinsey.com/capabilities/operations/our-insights/the-construction-productivity-imperative


3. ONSITE WITH GEORGE FISCHER
   https://www.xyzreality.com/resources/on-site-with-georg-fischer


4. ROI Calculator
   https://www.xyzreality.com/roi-calculator

The MSG Sphere’s giant, globe-like exterior finally lit up the Las Vegas skyline this month after a number of construction price hikes due to inflation and supply chain pressures put its final price tag at $2.3 billion — nearly double its original $1.2 billion estimate.

The world’s largest spherical structure stands 516 feet wide and 366 feet tall, can seat 17,600 spectators and has standing room for an additional 20,000 people. Its exosphere, the structure’s marquee attraction, features a 580,000-square-foot fully programmable LED exterior. The multi-billion dollar venue will host a variety of events and concerts from headline artists, and will officially open on September 29 with a U2 concert.

MSG Entertainment, the recently split-off arm of the Madison Square Garden Company, assumed the construction manager role of the project after AECOM transitioned away from its general contractor role in December 2020, according to the company. MSG initially expected the project to cost around $1.2 billion in 2019, before a series of cost escalations that started in late 2020 pushed the price to its final $2.3 billion level.

Following the Sphere’s opening in September, shows called Sphere Experiences, content specfically designed for the venue’s 4D display capabilities, will debut in October.

On the inside, the display plane wraps up, over and around the entire audience, creating a fully-immersive visual environment. For example, the rendering below displays an underwater experience for viewers, according to images shared with Construction Dive.

The space also incorporates 4D technology elements, such as changing temperatures, cool breezes or familiar scents to rouse the senses, according to the company. Sonically, the venue delivers a clear audio experience to every guest, no matter the seat or type of event, MSG claims. 

In November, the Sphere will then be prominently featured during the Formula 1 Las Vegas Grand Prix, gaining significant exposure through planned takeovers of the exosphere for race-related content, activations and advertising, according to MSG.

In between events, MSG reports the exosphere will display a wide range of artistic and branded content daily, from rituals such as sunrise and sunset, to brand campaigns.

On the outside, the exosphere consists of approximately 1.2 million LED pucks, spaced eight inches apart. Each puck contains 48 individual LED diodes, with each diode capable of displaying 256 million different colors. The venue sits one block from the Las Vegas Strip and connects directly to The Venetian resort’s Convention and Expo Center.

Demand for entertainment projects remains strong in the Las Vegas market as the city’s tourism industry bounces back from high inflation, supply chain pressures and fewer visitors during the COVID-19 pandemic.

For instance, Tim Leiweke, CEO of Los Angeles-based global development company Oak View Group, recently shared plans to build a $10 billion resort project, which includes a $1 billion NBA-ready arena, just south of the Las Vegas Strip.

Other projects in the area include the $600 million renovation of the Las Vegas Convention Center and the $3.7 billion Fontainebleau, to name a few.

Dive Brief:

• The controversial $9.7 billion I-45 highway expansion in Houston is moving forward, after Texas DOT and the Federal Highway Administration signed an agreement to resolve a civil rights investigation into the project. Opponents had raised concerns that the expansion would displace hundreds of residents — in historically Black and Latino neighborhoods in particular — and worsen air quality in the area.
• The March 7 Voluntary Resolution Agreement between the two agencies resolves the FHWA’s Title VI investigation and lifts the pause, with the agreement that Texas DOT will mitigate impact on communities living near the highway.
• First proposed in 2002, the North Houston Highway Improvement Project will rebuild nearly the entire downtown freeway network, widening I-45 from Houston’s downtown to the North Sam Houston Tollway. Many planners say the project is needed to accommodate the area’s population growth, while others argue highway expansion ultimately leads to more traffic.

Dive Insight:

The FHWA directed Texas DOT to halt further development in March 2021, before the project had broken ground, due to the potential civil rights violations.

The new agreement includes community outreach and other stipulations that Texas DOT must follow before and during construction to minimize harm. These include holding public meetings through the design and construction process twice a year, better drainage and stormwater management, installing highway caps and a directive to mitigate “displacements, relocations, housing and other community impacts,” according to the Texas DOT release.

The FHWA will monitor the project as Texas DOT proceeds.

"This agreement moves forward an important project, responds to community concerns, and improves the North Houston Highway Improvement Project in ways that will make a real difference in people's lives,” said Federal Highway Administrator Shailen Bhatt in the release. “Through this agreement the community will have a greater voice in the design and throughout the project's life cycle."

While final designs still have to be hammered out, some construction work could start in the next few years, the Houston Chronicle reported. Construction Dive reached out to Texas DOT about next steps for the project and when bidding will begin, but the agency did not respond in time for publication.

Flush with funding from the federal Infrastructure Investment and Jobs Act as well as voter-approved initiatives, Texas is going big on road building in the next decade. Last year, Texas DOT announced a record $85 billion for roadway construction and other transportation efforts over the next 10 years as part of its 2023 Unified Transportation Program, which directs federal and state funding to projects.

Such highway expansion efforts are not always welcome, however: Texas DOT is also facing pushback from some residents over similar projects in Austin, Dallas and El Paso. They say the state should invest in transit and other more climate-friendly infrastructure instead of wider highways.

In addition to more road capacity, the I-45 project also entails adding detention ponds, pump stations and other flood mitigation efforts. Parks, trails and pedestrian and bicycle facilities will also be built.

Dive Brief:

• Applied Materials, a Santa Clara, California-based semiconductor company, plans to build a $4 billion chip research facility in the heart of Silicon Valley in Sunnyvale, California, according to a company press release.
• The chip maker expects its 180,000-square-foot innovation center to open by early 2026 and to generate about 1,500 construction jobs during the building period, according to the release.
• The overall value of Applied Materials’ investment, which can jump up to $25 billion overall, relies on support from the U.S. government through provisions of the CHIPS and Science Act, according to the release.

Dive Insight:

The $4 billion facility is the latest sign that the $52.7 billion CHIPS Act has been successful in reeling semiconductor production back to the U.S., according to a White House press release.

Private companies have announced nearly $140 billion in investments in semiconductor production, supply chains and research and development to be made over the next decade, according to the White House release. 

A few major semiconductor projects include Intel’s investment of more than $20 billion to build two semiconductor facilities in Ohio, and Texas Instruments’ $11 billion investment to extend its semiconductor wafer fab plant in Utah.

Despite those wins, the U.S. is not a lock for major semiconductor plant locating. Taiwanese electronics giant Foxconn recently broke ground on a $500 million in a factory in India, after a plan for it to build a $10 billion plant in Wisconsin fell through in 2020.  

More chips plans ahead

In the U.S., there could be more semiconductor construction activity on the horizon, even after a 68% drop in manufacturing starts in April, according to Dodge Construction Network.

For instance, the Department of Commerce has already received 300 Statements of Interest from potential applicants, including from Applied Materials, related to CHIPS incentives. Those applicants cover projects in 37 states and all parts of the semiconductor ecosystem, according to the Biden administration.

Indeed, shortly after passage of the CHIPS Act, an industry observer told Construction Dive that the $52.7 billion legislation’s true impact would range significantly higher – by as much as a factor of 10 – after the private investment it was designed to spur was taken into account. 

Once complete, the Applied Materials facility will be the world’s largest and most advanced facility for collaborative semiconductor process technology and manufacturing equipment research and development, according to Applied Materials. 

Its goal is to provide an industry resource for partnering with major universities to accelerate the commercialization of academic research for chip manufacturing and equipment as the process becomes increasingly complex. 

The multi-billion facility aims to accelerate the pace of new manufacturing innovations, reducing the time it takes the industry to bring a technology from concept to commercialization by several years, according to the company.

Dive Brief:

• Construction on the controversial $6.6 billion Mountain Valley Pipeline can be finished after the Federal Energy Regulatory Commission gave its stamp of approval on Wednesday. When complete, the 300-mile pipeline will move methane gas from Wetzel County, West Virginia, to Pittsylvania County, Virginia. 
• The move comes after Congress included language in its recent debt ceiling deal to expedite the much-delayed project, limit judicial review and order federal regulators to grant all permits within weeks. The pipeline has been championed by West Virginia Senator Joe Manchin and is nearly complete.
• Owner Equitrans Midstream Corp. said construction work should resume shortly, and it expects the project to wrap by the end of the year, according to West Virginia News. A joint venture composed of Equitrans Midstream, NextEra Energy, Consolidated Edison, AltaGas and RGC Resources is building the project. 

Dive Insight:

The pipeline broke ground in 2014 and was supposed to be finished by 2018, but was stalled by regulatory hurdles and a series of lawsuits. Environmental groups have argued the project will disrupt forests, waterways and endangered species, and represents an investment in fossil fuel infrastructure at a time when the country needs to shift to renewables to prevent the most catastrophic impacts of climate change.

Despite the odds, opponents have vowed to continue to fight the pipeline. They challenged the constitutionality of Congress’ inclusion of the pipeline in the Fiscal Responsibility Act, but a timely hearing isn’t guaranteed — Mountain Valley Pipeline has asked the federal appeals court to give it until July 10 to respond, and construction can advance until then.

West Virginia issued a water quality certification for the project on June 8, and the U.S. Army Corps of Engineers issued its own permit on June 23 for water crossings. FERC’s authorization marks the final approval needed for construction to resume.