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Photo by Lawrence Anderson.\" class=\"image-left\" height=\"390\" src=\"/images/uploads/SYMANTEC_image.jpg\" style=\"float: left;\" title=\"he HOK-designed Symantec headquarters in Culver City, California, earned a LEED Gold certification from the U.S. Green Building Council for its innovative sustainable strategies. Photo by Lawrence Anderson.\" width=\"260\" />The rankings&nbsp;&mdash; the first&nbsp; time&nbsp; such a listing has been published in <em>ENR&nbsp;&mdash;</em> are based on revenue for design services generated in 2007 from projects actively seeking certification from major third-party environmental standards or ratings organizations, such as the U.S. Green Building council&rsquo;s LEED certification system.<br /><br />HOK generated $151.45 million, or 23 percent of total revenue, from sustainable projects in 2007. In the magazine&rsquo;s individual rankings by sector, HOK ranked first in the &ldquo;Healthcare&rdquo; sector; first in the &ldquo;Government Offices&rdquo; sector; second in &ldquo;Commercial Offices;&rdquo; and third in &ldquo;Education.&rdquo;<br />&nbsp;<br />&ldquo;The market for sustainable design has passed the tipping point and is rapidly becoming mainstream,&rdquo; according to the magazine. &ldquo;ENR\'s first &lsquo;Top Green Design Firms&rsquo; is an attempt to bypass the marketing and hype and measure the market by ranking designers based on their 2007 revenue from projects that were registered and actively seeking certification from major third-party environmental standards or ratings organizations.&rdquo;<br />&nbsp;<br />The ENR Top 100 Green Designers generated $1.74 billion in revenue from sustainable projects in 2007, with $1.62 billion domestically and $121.2 million abroad. Green design accounted for 7.4 percent of the Top 100&rsquo;s total design revenue.<br />&nbsp;<br />&ldquo;We&rsquo;re delighted that the ENR ranking reinforces HOK&rsquo;s green design leadership role and impact,&rdquo; said HOK Sustainable Design Director Mary Ann Lazarus. &ldquo;This kind of recognition doesn&rsquo;t come easily &ndash; it&rsquo;s the result of many HOK people over many years working hard to make a positive impact and raise the bar for our clients, partners and profession.&rdquo;<br />&nbsp;<br />A pioneer in the green building movement since the early 1990s, HOK&rsquo;s sustainable design expertise has led to more than 30 LEED-certified projects, six BREEAM-rated projects and more than 100 others actively pursuing certification. The firm also has placed a significant role in applying sustainable design strategies to emerging geographic regions, building types and sectors. In addition, HOK principals authored a pioneering text on sustainability, &ldquo;The HOK Guidebook to Sustainable Design,&rdquo; published by John Wiley&nbsp; Sons.<br />&nbsp;<br /><br />&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:175:\"HOK, an early adherent to sustainable design, is the greenest design firm on the planet, according to a survey published in the June 23 issue of Engineering News-Record 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Tops Engineering News-Record\'s First  \'Top 100 Green Design Firms\'\";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:31:\"HOK, green, design, survey, ENR\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:3217:\"<p>HOK, an early adherent to sustainable design, is the greenest design firm on the planet, according to a survey published in the June 23 issue of Engineering News-Record (ENR).</p>\n<p><img alt=\"he HOK-designed Symantec headquarters in Culver City, California, earned a LEED Gold certification from the U.S. Green Building Council for its innovative sustainable strategies. Photo by Lawrence Anderson.\" class=\"image-left\" height=\"390\" src=\"/images/uploads/SYMANTEC_image.jpg\" style=\"float: left;\" title=\"he HOK-designed Symantec headquarters in Culver City, California, earned a LEED Gold certification from the U.S. Green Building Council for its innovative sustainable strategies. Photo by Lawrence Anderson.\" width=\"260\" />The rankings&nbsp;&mdash; the first&nbsp; time&nbsp; such a listing has been published in <em>ENR&nbsp;&mdash;</em> are based on revenue for design services generated in 2007 from projects actively seeking certification from major third-party environmental standards or ratings organizations, such as the U.S. Green Building council&rsquo;s LEED certification system.<br /><br />HOK generated $151.45 million, or 23 percent of total revenue, from sustainable projects in 2007. In the magazine&rsquo;s individual rankings by sector, HOK ranked first in the &ldquo;Healthcare&rdquo; sector; first in the &ldquo;Government Offices&rdquo; sector; second in &ldquo;Commercial Offices;&rdquo; and third in &ldquo;Education.&rdquo;<br />&nbsp;<br />&ldquo;The market for sustainable design has passed the tipping point and is rapidly becoming mainstream,&rdquo; according to the magazine. &ldquo;ENR\'s first &lsquo;Top Green Design Firms&rsquo; is an attempt to bypass the marketing and hype and measure the market by ranking designers based on their 2007 revenue from projects that were registered and actively seeking certification from major third-party environmental standards or ratings organizations.&rdquo;<br />&nbsp;<br />The ENR Top 100 Green Designers generated $1.74 billion in revenue from sustainable projects in 2007, with $1.62 billion domestically and $121.2 million abroad. Green design accounted for 7.4 percent of the Top 100&rsquo;s total design revenue.<br />&nbsp;<br />&ldquo;We&rsquo;re delighted that the ENR ranking reinforces HOK&rsquo;s green design leadership role and impact,&rdquo; said HOK Sustainable Design Director Mary Ann Lazarus. &ldquo;This kind of recognition doesn&rsquo;t come easily &ndash; it&rsquo;s the result of many HOK people over many years working hard to make a positive impact and raise the bar for our clients, partners and profession.&rdquo;<br />&nbsp;<br />A pioneer in the green building movement since the early 1990s, HOK&rsquo;s sustainable design expertise has led to more than 30 LEED-certified projects, six BREEAM-rated projects and more than 100 others actively pursuing certification. The firm also has placed a significant role in applying sustainable design strategies to emerging geographic regions, building types and sectors. In addition, HOK principals authored a pioneering text on sustainability, &ldquo;The HOK Guidebook to Sustainable Design,&rdquo; published by John Wiley&nbsp; Sons.<br />&nbsp;<br /><br />&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:175:\"HOK, an early adherent to sustainable design, is the greenest design firm on the planet, according to a survey published in the June 23 issue of Engineering News-Record 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I figured that the Mississippi had gone down\nenough. Well, no.</span></p>\n<p><span style=\"font-family: arial;\">I reached  the  foot of Washington Avenue near the Arch a</span><span style=\"font-family: arial;\">nd everything was under many feet of water. I  cut through Laclede\'s Landing  and  behind the Lumie</span><span style=\"font-family: arial;\">re\nCasino to the entrance of the trail, which was dry. Riding along the\ntrail was really strange. The Mississippi was just a few feet away and\nthe flow was really boiling. It gave me a whole new respect for the job that we\'re asking our floodwall/levee system to handle... and raised a lot&nbsp; of concerns. <br /><br /></span><img alt=\"St. Louis floodwall at Riverfront Trail\" class=\"image-left\" height=\"303\" src=\"/images/uploads/levee.jpg\" style=\"float: left;\" width=\"266\" /><span style=\"font-family: arial;\">The whole\nlevee situation is concerning, but one that is being addressed...\nfinally. Last August, FEMA asked the Corps of Engineers if the Illinois\nand Missouri levees would fail in a 100-year-flood (which, since Global\nWarning have been happening about ever 15 years). The Corps said yes,\nindeed we could be up to our eyeballs in the Big Muddy.<br /><br />This\nprompted some hand-wringing in Missouri, where the legislature had been holding levee improvements hostage and in the riverfront areas Illinois, where developers and builders feared that it would\nlose projects when developers couldn\'t get flood insurance. Three Illinois counties passed a quarter-cent sales sales tax and the City of St. Louis authorized bond dollars to fix the most immediate problems. In June, a levee conference &mdash;&nbsp; which drew levee officials from Illinois to California &mdash; was held here. During the conference the corps and\nlocal officials discussed what progress had been made.<br /></span></p>\n<p>The release of the St. Louis bond funds led to a May 13 award to A&amp;H Contractors Inc., Detroit, of $1.7 million to add 70 relief wells and replace another 103 along an 11-mile stretch of the St. Louis Flood Protection Project. Although the contract is administered by the Corps, the funds come from a city bond issue and were made available by a special project partnership agreement.</p>\n<p>The St. Louis flood-protection system has been in place for almost 50 years, and many elements are failing, Tamara Atchley, project manager for the district said. Under-seepage relief wells need to be replaced. Floodgates are rusty and deteriorating, gravity drains and valve flaps no longer work, and electrical components are wearing out in pump stations. Parts for the aging equipment often are no longer available.</p>\n<p>The Illinois tax is dedicated to refurbishing non-federal levees in the Wood River, East St. Louis, Chain of Rocks, Prairie Dupont and Fish Lake Drainage &amp; Leveedistricts. The combined 98 miles of levees protect about 323,000 people, 195,700 acres of land and billions of dollars in oil refineries and chemical plants.<span style=\"font-family: arial;\"><br /></span></p>\n<p><span style=\"font-family: arial;\">&ldquo;Until August\nlast year, we didn&rsquo;t know a whole lot about levees or think about them\nmuch,&rdquo;Les Sterman, executive director of the East-West Gateway Council\nof Governments said. &ldquo;We had a rude awakening when we were told our\nlevee systems are inadequate, and that the area would be subject to\nincreased flood risk.&rdquo;</span></p>\n<p>There was nothing magical that changed the level of risk facing the St. Louis Metro Area from levee failure: \"That&rsquo;s just when the public became aware of it, \" Col. Lewis F. Setliff, III, commander of the St. Louis District Corps of Engineers said. &ldquo;Managing flood risk is much bigger than any one group can do,&rdquo; Setliff said. &ldquo;We&rsquo;re never going to fix these levees and get them repaired without everybody participating.&rdquo;</p>\n<p>Communication of risk is integral to rallying the public, politicians and local governments behind infrastructure improvements, Setliff says. It is also a key component in improving evacuation and emergency preparedness plans. In New Orleans, many people didn&rsquo;t know the risk, says Brig. Gen. Michael J. Walsh, commander of the Mississippi River Division and president-designee of the Mississippi River Commission. &ldquo;They assumed levees, pumps and floodwalls were all in place and would work.&rdquo;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:588:\"Yesterday I was going to try to ride my bike up the Riverfront Trail. I figured that the Mississippi had gone down enough. Well, no. 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Leaky Levee\";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:37:\"levee, riverfront, Corps of Engineers\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:4592:\"<h5><br /></h5>\n<p><em>by Tom Finan, Publisher</em></p>\n<p><span style=\"font-family: arial;\">Yesterday I was going to try to ride my bike up\nthe Riverfront Trail. I figured that the Mississippi had gone down\nenough. Well, no.</span></p>\n<p><span style=\"font-family: arial;\">I reached  the  foot of Washington Avenue near the Arch a</span><span style=\"font-family: arial;\">nd everything was under many feet of water. I  cut through Laclede\'s Landing  and  behind the Lumie</span><span style=\"font-family: arial;\">re\nCasino to the entrance of the trail, which was dry. Riding along the\ntrail was really strange. The Mississippi was just a few feet away and\nthe flow was really boiling. It gave me a whole new respect for the job that we\'re asking our floodwall/levee system to handle... and raised a lot&nbsp; of concerns. <br /><br /></span><img alt=\"St. Louis floodwall at Riverfront Trail\" class=\"image-left\" height=\"303\" src=\"/images/uploads/levee.jpg\" style=\"float: left;\" width=\"266\" /><span style=\"font-family: arial;\">The whole\nlevee situation is concerning, but one that is being addressed...\nfinally. Last August, FEMA asked the Corps of Engineers if the Illinois\nand Missouri levees would fail in a 100-year-flood (which, since Global\nWarning have been happening about ever 15 years). The Corps said yes,\nindeed we could be up to our eyeballs in the Big Muddy.<br /><br />This\nprompted some hand-wringing in Missouri, where the legislature had been holding levee improvements hostage and in the riverfront areas Illinois, where developers and builders feared that it would\nlose projects when developers couldn\'t get flood insurance. Three Illinois counties passed a quarter-cent sales sales tax and the City of St. Louis authorized bond dollars to fix the most immediate problems. In June, a levee conference &mdash;&nbsp; which drew levee officials from Illinois to California &mdash; was held here. During the conference the corps and\nlocal officials discussed what progress had been made.<br /></span></p>\n<p>The release of the St. Louis bond funds led to a May 13 award to A&amp;H Contractors Inc., Detroit, of $1.7 million to add 70 relief wells and replace another 103 along an 11-mile stretch of the St. Louis Flood Protection Project. Although the contract is administered by the Corps, the funds come from a city bond issue and were made available by a special project partnership agreement.</p>\n<p>The St. Louis flood-protection system has been in place for almost 50 years, and many elements are failing, Tamara Atchley, project manager for the district said. Under-seepage relief wells need to be replaced. Floodgates are rusty and deteriorating, gravity drains and valve flaps no longer work, and electrical components are wearing out in pump stations. Parts for the aging equipment often are no longer available.</p>\n<p>The Illinois tax is dedicated to refurbishing non-federal levees in the Wood River, East St. Louis, Chain of Rocks, Prairie Dupont and Fish Lake Drainage &amp; Leveedistricts. The combined 98 miles of levees protect about 323,000 people, 195,700 acres of land and billions of dollars in oil refineries and chemical plants.<span style=\"font-family: arial;\"><br /></span></p>\n<p><span style=\"font-family: arial;\">&ldquo;Until August\nlast year, we didn&rsquo;t know a whole lot about levees or think about them\nmuch,&rdquo;Les Sterman, executive director of the East-West Gateway Council\nof Governments said. &ldquo;We had a rude awakening when we were told our\nlevee systems are inadequate, and that the area would be subject to\nincreased flood risk.&rdquo;</span></p>\n<p>There was nothing magical that changed the level of risk facing the St. Louis Metro Area from levee failure: \"That&rsquo;s just when the public became aware of it, \" Col. Lewis F. Setliff, III, commander of the St. Louis District Corps of Engineers said. &ldquo;Managing flood risk is much bigger than any one group can do,&rdquo; Setliff said. &ldquo;We&rsquo;re never going to fix these levees and get them repaired without everybody participating.&rdquo;</p>\n<p>Communication of risk is integral to rallying the public, politicians and local governments behind infrastructure improvements, Setliff says. It is also a key component in improving evacuation and emergency preparedness plans. In New Orleans, many people didn&rsquo;t know the risk, says Brig. Gen. Michael J. Walsh, commander of the Mississippi River Division and president-designee of the Mississippi River Commission. &ldquo;They assumed levees, pumps and floodwalls were all in place and would work.&rdquo;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:588:\"Yesterday I was going to try to ride my bike up the Riverfront Trail. I figured that the Mississippi had gone down enough. Well, no. 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It gave me a whole new respect for the job that we\'re asking our floodwall/levee system to handle... and raised a lot  of concerns. 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href=\"http://www.trafficresults.com/click-rabbit.php?acctid=+0xL6f+F2M0=&amp;docid=AQTU53308072008-1&amp;redirect=1&amp;url=http://usa.autodesk.com/adsk/servlet/index?siteID=123112&amp;id=10326880\" rel=\"nofollow\">AEC</a>)\nsoftware. Autodesk and Bentley will exchange software libraries,\nincluding Autodesk RealDWG, to improve the ability to read and write\nthe companies\' respective DWG and DGN formats in mixed environments\nwith greater fidelity.</p>\n<p>In addition, the two companies will facilitate\nwork process interoperability between their AEC applications through\nsupporting the reciprocal use of available Application Programming\nInterfaces (APIs). 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href=\"http://www.trafficresults.com/click-rabbit.php?acctid=+0xL6f+F2M0=&amp;docid=AQTU53308072008-1&amp;redirect=1&amp;url=http://usa.autodesk.com/adsk/servlet/index?siteID=123112&amp;id=10326880\" rel=\"nofollow\">AEC</a>)\nsoftware. 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With this agreement, the companies aim to improve\nAEC workflows by enabling broader reuse of information generated during\nthe design, construction, and operation of buildings and\ninfrastructure, and by enhancing the ability of project teams to choose\namong multiple software sources.</p>\n<p>Patrick MacLeamy, FAIA, CEO of HOK\nand a founder and current chairman of the International Alliance for\nInteroperability (IAI) said, \"As a longtime advocate of interoperability, I\nwelcome this agreement as an important step toward enabling AEC\ninformation to be more broadly shared, increasing the value of BIM to\nour clients.\"</p>\n<p><img alt=\"Tin Can Phone\" class=\"image-left\" height=\"303\" src=\"/images/uploads/tin-can-phone.jpg\" style=\"float: left;\" width=\"266\" />Interoperability has emerged as a critical issue for users of\ndesign and engineering software. A 2004 study by the U.S. National\nInstitute of Standards and Technology found that users bear direct\ncosts of almost $16 billion annually from time wasted due to inadequate\nAEC software interoperability. By virtue of this agreement, and the\ninteroperable offerings that it will enable, AEC firms will be free to\nemploy software tools of choice from either Autodesk or Bentley to\naccept or submit either DWG or DGN files. By improving fidelity of work\nshared between the two file formats, users will be able to focus on\nbeing creative and getting work done, rather than being constrained by\nfile-compatibility considerations.</p>\n<p>Through supporting the reciprocal use of their available APIs,\nAutodesk and Bentley will enable AEC project teams to combine products\nfrom both providers within integrated workflows. 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In\nan industry where it is rare for companies to more than double in size\nin five years, Demand Electric grew almost 20-fold in that time,\nreporting revenues of $22 million for 2007 and employing over 100\nworkers right before the company&rsquo;s sudden collapse in August 2008.&nbsp;\nIndustry watchers described the company&rsquo;s growth as &ldquo;astronomical&rdquo; or\n&ldquo;extraordinary.&rdquo; Demand&rsquo;s growth was so rapid that Demand made the St.\nLouis Business Journal&rsquo;s 2008 list of the 25 fastest growing private\ncompanies in St. Louis.<br /> <br /> <img alt=\"Demand Electric\" class=\"image-left\" height=\"303\" src=\"/images/uploads/demand-electric.jpg\" style=\"float: left;\" width=\"266\" />CNR\nhas pieced together one version of Demand Electrics sudden ascent and\nsubsequent crash from sources familiar with the company, all of whom\ndemanded anonymity. The principals of the story &ndash; Dave Daugherty, his\nbank, and the leaders of Local 1 of the IBEW (International Brotherhood\nof Electrical Workers) &ndash; were unavailable for comment, as they had all\nagreed not to talk about the company.<br /> <br /> By all accounts Daugherty was a go-getter and a risk-taker. He had a\nnew vision of how to operate a commercial contracting business in St.\nLouis, a vision born of watching highly leveraged companies in other\nindustry sectors, and he worked hard to make it a reality. He also was\noutspokenly critical of what he saw as the timid or conservative\nbusiness practices of the local construction industry.<br /> <br /> What made Daugherty so outstanding, however, was not so much his\nattitude, as the confluence of his attitude with a credit bubble that\nallowed him to put his ideas into practice using other people&rsquo;s money.\nNew contractors typically have to put up everything they own in order\nto get a line of credit that isn&rsquo;t worth much more than their assets.\nContractors like to say, with just a bit of exaggeration, that banks\naren&rsquo;t lending them any money that the contractors don&rsquo;t already have.\nThe failure rate for new companies is quite high and lenders generally\nwant to make sure that there are sufficient physical assets pledged to\nthe loan that they can recover their money if a business fails.\nSimilarly, as contractors become established, they generally grow\nslowly because lenders still want to make sure there are sufficient\nassets pledged to cover the loan if the business fails. In effect,\nlenders are turning a contractor&rsquo;s fixed assets into cash so he can\noperate.<br /> <br /> Daugherty, however, found a banker during the inflationary period of\nthe credit bubble willing to lend him much more than he was worth so\nthat he could grow his business. That lender was The Business Bank of\nSt. Louis. The result was that Demand Electric was incredibly leveraged\nwith debt&nbsp;&mdash; observers say uniquely so.<br /> <br /> Daugherty used debt to fuel Demand&rsquo;s growth. His salesmanship convinced\nowners and general contractors to give him opportunities, but debt\nallowed him to take advantage of them. His growth was so rapid that\nincome from completed jobs was not enough to fund new work. He was\nrelying on his credit line to buy supplies and meet his ever expanding\npayroll.<br /> <br /> Earlier this year, Demand Electric reported that revenues in 2007\nreached $22 million. Times, however, were changing, and Demand Electric\nseemed unprepared for the backlash in the credit markets following the\ncollapse of speculative mortgage lending. Federal bank examiners began\ntelling banks to reduce their exposure in real estate and construction.\nWhether that is what prompted The Business Bank to take another look at\nDemand Electric&rsquo;s account, we don&rsquo;t know. In any event, the bank did\nlook again at Demand credit line and its collateral, and did not like\nwhat it saw.<br /> <br /> Some sources familiar with Demand Electric blame The Business Bank for\nDemand&rsquo;s sudden demise. They say the bank&rsquo;s decision in August 2008 to\ndeny Daugherty access to the remaining money in his line of credit is\nwhat did him in. <br /> <br /> But Demand was in trouble before that decision. A month before, Demand\nElectric&rsquo;s landlord had filed suit to evict the company from its\noffices at 1846 Craig Park Ct. for nonpayment of rent. The first vendor\nlawsuit against Demand Electric was filed in July, too.<br /> <br /> When The Business Bank told Daugherty that they were reducing his line\nof credit by one-third to the amount he had already borrowed, he\nreportedly told the bank that he needed the additional credit to meet\npayroll, and that he was relying on that line of credit exclusively for\nthe capital for the jobs he had undertaken, sources said. That is when\nthe bank became seriously concerned. They declined to give Daugherty\nany additional money. Daugherty reportedly shopped around for another\nloan, but could not find a willing lender. The following Monday The\nBusiness Bank took control of his office and all of his business\nrecords. In the meantime, he had laid-off all of his workers, because\nhe lacked any ability to pay them.<br /> <br /> &ldquo;It was one of the most disruptive closings the industry has ever\nexperienced,&rdquo; one source said. St. Louis Community College&rsquo;s\ndistrict-wide science lab renovation program was one of the building\nprograms affected by Demand&rsquo;s collapse. The construction manager, S.M.\nWilson &amp; Co., was able to get Aschinger Electric on board to\nreplace Demand in short order. Some of the other affected projects\ninvolved Peruque Station in St. Charles County, Duke Realty&rsquo;s Maryville\nCentre, Charter Development Group, and Christian Hospital Northeast.<br /> <br /> The bank&rsquo;s takeover set in motion an avalanche of work for lawyers.\nIBEW Local 1 and NECA-St. Louis filed suit in federal court against\nDemand Electric, The Business Bank of St. Louis, and Providence\nCounseling, for contributions Demand Electric owed to electrical\nindustry trust funds.&nbsp; French-Gerleman Electric filed a mechanic&rsquo;s\nlien; Graybar and Colorado Electric Supply each sued Demand for breach\nof contract. Liebert, Western Extralite, Rexel Electric Supply, Butler\nSupply Co., and Warren Sign Co. all followed with their own liens.</p>\n<p>Demand Electric&rsquo;s sudden collapse was met almost with glee in some quarters. &ldquo;A lot of people were jealous of Daugherty,&rdquo; one source said. &ldquo;The extraordinary think was that he pulled it off for as long as he did.&rdquo;</p>\n<p>&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:183:\"Fueled by a high octane credit line, Demand Electric was a bright, soaring star among St. Louis specialty contractors. 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Electric\";s:9:\"url_title\";s:46:\"house_of_cards_the_collapse_of_demand_electric\";s:6:\"status\";s:4:\"open\";s:11:\"dst_enabled\";s:1:\"n\";s:14:\"view_count_one\";s:1:\"0\";s:14:\"view_count_two\";s:1:\"0\";s:16:\"view_count_three\";s:1:\"0\";s:15:\"view_count_four\";s:1:\"0\";s:14:\"allow_comments\";s:1:\"n\";s:23:\"comment_expiration_date\";s:1:\"0\";s:16:\"allow_trackbacks\";s:1:\"n\";s:6:\"sticky\";s:1:\"n\";s:10:\"entry_date\";s:10:\"1230223381\";s:4:\"year\";s:4:\"2008\";s:5:\"month\";s:2:\"12\";s:3:\"day\";s:2:\"25\";s:9:\"edit_date\";s:14:\"20090117115433\";s:15:\"expiration_date\";s:1:\"0\";s:19:\"recent_comment_date\";s:1:\"0\";s:13:\"comment_total\";s:1:\"0\";s:15:\"trackback_total\";s:1:\"0\";s:15:\"sent_trackbacks\";s:0:\"\";s:21:\"recent_trackback_date\";s:1:\"0\";s:13:\"entry_site_id\";s:1:\"1\";s:10:\"blog_title\";s:8:\"Features\";s:9:\"blog_name\";s:8:\"features\";s:8:\"blog_url\";s:19:\"{site_url}features/\";s:11:\"comment_url\";s:27:\"{site_url}features/article/\";s:13:\"tb_return_url\";s:27:\"{site_url}features/article/\";s:16:\"comment_moderate\";s:1:\"n\";s:22:\"weblog_html_formatting\";s:3:\"all\";s:21:\"weblog_allow_img_urls\";s:1:\"y\";s:21:\"weblog_auto_link_urls\";s:1:\"y\";s:17:\"enable_trackbacks\";s:1:\"n\";s:15:\"trackback_field\";s:1:\"5\";s:21:\"trackback_use_captcha\";s:1:\"n\";s:24:\"trackback_system_enabled\";s:1:\"n\";s:8:\"username\";s:9:\"publisher\";s:5:\"email\";s:16:\"pfinan@finan.com\";s:3:\"url\";s:0:\"\";s:11:\"screen_name\";s:9:\"Publisher\";s:8:\"location\";s:0:\"\";s:10:\"occupation\";s:0:\"\";s:9:\"interests\";s:0:\"\";s:6:\"aol_im\";s:0:\"\";s:8:\"yahoo_im\";s:0:\"\";s:6:\"msn_im\";s:0:\"\";s:3:\"icq\";s:0:\"\";s:9:\"signature\";s:0:\"\";s:16:\"sig_img_filename\";s:0:\"\";s:13:\"sig_img_width\";s:1:\"0\";s:14:\"sig_img_height\";s:1:\"0\";s:15:\"avatar_filename\";s:0:\"\";s:12:\"avatar_width\";s:1:\"0\";s:13:\"avatar_height\";s:1:\"0\";s:14:\"photo_filename\";s:0:\"\";s:11:\"photo_width\";s:1:\"0\";s:12:\"photo_height\";s:1:\"0\";s:8:\"group_id\";s:1:\"1\";s:9:\"member_id\";s:1:\"2\";s:6:\"bday_d\";s:1:\"0\";s:6:\"bday_m\";s:1:\"0\";s:6:\"bday_y\";s:1:\"0\";s:3:\"bio\";s:0:\"\";s:7:\"site_id\";s:1:\"1\";s:10:\"field_id_1\";s:0:\"\";s:10:\"field_ft_1\";s:4:\"none\";s:10:\"field_id_2\";s:0:\"\";s:10:\"field_ft_2\";s:4:\"none\";s:10:\"field_id_4\";s:0:\"\";s:10:\"field_ft_4\";s:4:\"none\";s:10:\"field_id_5\";s:48:\"House of Cards:  The Collapse of Demand Electric\";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:48:\"Demand Electric, The Business Bank, IBEW Local 1\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:6887:\"<p>Fueled by a high octane credit line, Demand Electric was a bright, soaring star among St. Louis specialty contractors. But when the credit ran out, Demand came crashing back to earth.</p>\n<p>Dennis Daugherty, formerly a project manager at Guarantee Electrical\nCompany, started Demand Electric in August 2003 with six employees. In\nan industry where it is rare for companies to more than double in size\nin five years, Demand Electric grew almost 20-fold in that time,\nreporting revenues of $22 million for 2007 and employing over 100\nworkers right before the company&rsquo;s sudden collapse in August 2008.&nbsp;\nIndustry watchers described the company&rsquo;s growth as &ldquo;astronomical&rdquo; or\n&ldquo;extraordinary.&rdquo; Demand&rsquo;s growth was so rapid that Demand made the St.\nLouis Business Journal&rsquo;s 2008 list of the 25 fastest growing private\ncompanies in St. Louis.<br /> <br /> <img alt=\"Demand Electric\" class=\"image-left\" height=\"303\" src=\"/images/uploads/demand-electric.jpg\" style=\"float: left;\" width=\"266\" />CNR\nhas pieced together one version of Demand Electrics sudden ascent and\nsubsequent crash from sources familiar with the company, all of whom\ndemanded anonymity. The principals of the story &ndash; Dave Daugherty, his\nbank, and the leaders of Local 1 of the IBEW (International Brotherhood\nof Electrical Workers) &ndash; were unavailable for comment, as they had all\nagreed not to talk about the company.<br /> <br /> By all accounts Daugherty was a go-getter and a risk-taker. He had a\nnew vision of how to operate a commercial contracting business in St.\nLouis, a vision born of watching highly leveraged companies in other\nindustry sectors, and he worked hard to make it a reality. He also was\noutspokenly critical of what he saw as the timid or conservative\nbusiness practices of the local construction industry.<br /> <br /> What made Daugherty so outstanding, however, was not so much his\nattitude, as the confluence of his attitude with a credit bubble that\nallowed him to put his ideas into practice using other people&rsquo;s money.\nNew contractors typically have to put up everything they own in order\nto get a line of credit that isn&rsquo;t worth much more than their assets.\nContractors like to say, with just a bit of exaggeration, that banks\naren&rsquo;t lending them any money that the contractors don&rsquo;t already have.\nThe failure rate for new companies is quite high and lenders generally\nwant to make sure that there are sufficient physical assets pledged to\nthe loan that they can recover their money if a business fails.\nSimilarly, as contractors become established, they generally grow\nslowly because lenders still want to make sure there are sufficient\nassets pledged to cover the loan if the business fails. In effect,\nlenders are turning a contractor&rsquo;s fixed assets into cash so he can\noperate.<br /> <br /> Daugherty, however, found a banker during the inflationary period of\nthe credit bubble willing to lend him much more than he was worth so\nthat he could grow his business. That lender was The Business Bank of\nSt. Louis. The result was that Demand Electric was incredibly leveraged\nwith debt&nbsp;&mdash; observers say uniquely so.<br /> <br /> Daugherty used debt to fuel Demand&rsquo;s growth. His salesmanship convinced\nowners and general contractors to give him opportunities, but debt\nallowed him to take advantage of them. His growth was so rapid that\nincome from completed jobs was not enough to fund new work. He was\nrelying on his credit line to buy supplies and meet his ever expanding\npayroll.<br /> <br /> Earlier this year, Demand Electric reported that revenues in 2007\nreached $22 million. Times, however, were changing, and Demand Electric\nseemed unprepared for the backlash in the credit markets following the\ncollapse of speculative mortgage lending. Federal bank examiners began\ntelling banks to reduce their exposure in real estate and construction.\nWhether that is what prompted The Business Bank to take another look at\nDemand Electric&rsquo;s account, we don&rsquo;t know. In any event, the bank did\nlook again at Demand credit line and its collateral, and did not like\nwhat it saw.<br /> <br /> Some sources familiar with Demand Electric blame The Business Bank for\nDemand&rsquo;s sudden demise. They say the bank&rsquo;s decision in August 2008 to\ndeny Daugherty access to the remaining money in his line of credit is\nwhat did him in. <br /> <br /> But Demand was in trouble before that decision. A month before, Demand\nElectric&rsquo;s landlord had filed suit to evict the company from its\noffices at 1846 Craig Park Ct. for nonpayment of rent. The first vendor\nlawsuit against Demand Electric was filed in July, too.<br /> <br /> When The Business Bank told Daugherty that they were reducing his line\nof credit by one-third to the amount he had already borrowed, he\nreportedly told the bank that he needed the additional credit to meet\npayroll, and that he was relying on that line of credit exclusively for\nthe capital for the jobs he had undertaken, sources said. That is when\nthe bank became seriously concerned. They declined to give Daugherty\nany additional money. Daugherty reportedly shopped around for another\nloan, but could not find a willing lender. The following Monday The\nBusiness Bank took control of his office and all of his business\nrecords. In the meantime, he had laid-off all of his workers, because\nhe lacked any ability to pay them.<br /> <br /> &ldquo;It was one of the most disruptive closings the industry has ever\nexperienced,&rdquo; one source said. St. Louis Community College&rsquo;s\ndistrict-wide science lab renovation program was one of the building\nprograms affected by Demand&rsquo;s collapse. The construction manager, S.M.\nWilson &amp; Co., was able to get Aschinger Electric on board to\nreplace Demand in short order. Some of the other affected projects\ninvolved Peruque Station in St. Charles County, Duke Realty&rsquo;s Maryville\nCentre, Charter Development Group, and Christian Hospital Northeast.<br /> <br /> The bank&rsquo;s takeover set in motion an avalanche of work for lawyers.\nIBEW Local 1 and NECA-St. Louis filed suit in federal court against\nDemand Electric, The Business Bank of St. Louis, and Providence\nCounseling, for contributions Demand Electric owed to electrical\nindustry trust funds.&nbsp; French-Gerleman Electric filed a mechanic&rsquo;s\nlien; Graybar and Colorado Electric Supply each sued Demand for breach\nof contract. Liebert, Western Extralite, Rexel Electric Supply, Butler\nSupply Co., and Warren Sign Co. all followed with their own liens.</p>\n<p>Demand Electric&rsquo;s sudden collapse was met almost with glee in some quarters. &ldquo;A lot of people were jealous of Daugherty,&rdquo; one source said. &ldquo;The extraordinary think was that he pulled it off for as long as he did.&rdquo;</p>\n<p>&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:183:\"Fueled by a high octane credit line, Demand Electric was a bright, soaring star among St. Louis specialty contractors. 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Bond Brainchild Target of Scammers\";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:29:\"HUBZone, Kit Bond, GAO, fraud\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:6725:\"<p>An investigation by the Government Accountability Office of a federal economic development program known as the HUBZone program has found that lax oversight has left it rife with fraud.<br /><br />In the six month long investigation, which ended in June 2008, the GAO obtained HUBZone certification from the Small Business Administration for four fake businesses. Certification qualifies the businesses for federal contracts under the Historically Underutilized Business Zone (HUBZone) program. <br /><br /><img alt=\"Kit Bond\" class=\"image-left\" height=\"273\" src=\"/images/uploads/kit-bond.jpg\" style=\"float: left;\" width=\"240\" />In addition, 10 of 17 HUBZone businesses the GAO looked into in Washington, D.C. failed to meet the eligibility requirements for the program. Those same 10 firms have received more than $105 million in federal contracts since 2006. In the case of one of the firms, the GAO made multiple visits to the site listed as the firm\'s principal office, but found that no employees were working at the location and the only business equipment present was a computer and a filing cabinet. That firm received $3.9 million in HUBZone contracts from the Army and the Air Force during fiscal year 2006-2007, but its principal office was actually in McLean, VA, an upscale Washington, D.C., suburb that is not in a HUBZone.<br /><br />The House Committee on Small Business heard about the results of the investigation in a public hearing on July 17. The committee chair, Rep. Nydia Velazquez (D-N.Y.), said in her opening statement that the findings of the investigation were \"appalling.\" <br />&nbsp; <br />\"It\'s tougher to get a library card than it is to get into the HUBZone program,\" she said. \"All you need is a bit of White-out. It\'s absolutely shameful.\"<br /><br />The investigation was undertaken at the committee\'s request.<br /><br />Sen. Kit Bond (R-MO), wrote the 1997 bill that created the HUBZone program to promote economic development and employment growth in distressed rural and urban areas by giving small companies located in those areas preference in Federal contracting opportunities. Since then, he has pushed federal agencies to increase contracting through the program. A year ago, he criticized federal agencies for falling far short of meeting the goal set by Congress of awarding three percent of prime contracts to HUBZone companies.<br /><br />To qualify for HUBZone certification, a firm must be owned and controlled by at least one U.S. citizen, 35 percent of its full-time employees must reside in a HUBZone, and the firm\'s principal office must be in a HUBZone area.<br /><br />In the bi-state area, the City of St. Louis, University City, Pagedale, Pinelawn and additional parts of North County in Missouri and East St. Louis, Centreville, Washington, Fairmont City, Brooklyn, and Venice in Illinois are all in HUBZones.<br /><br />The GAO estimated that $8 billion in federal spending flow to the 14,000 firms in the program. HUBZone firms are supposed to get a 10 percent price preference when competing against large businesses for contracts. In other words, HUBZone firms can charge up to 10 percent more than their non-HUBZone competitors and still get the federal contract. According to the Missouri Small Business Development Centers, federal contracting officers also can restrict contracts to HUBZone companies if they think two or more HUBZone companies will submit bids. For contracts worth less $3 million, they can designate a HUBZone company as a sole source provider. In addition, federal agencies are supposed to require a HUBZone subcontracting plan on any prime contract with a non-HUBZone company worth more than $500,000. <br /><br />In a statement emailed by Sen. Bond\'s office, Missouri\'s senior senator said, \"Fraud, abuse and poor management found by the GAO investigators was not just troubling, but unacceptable.&nbsp; While I am pleased that SBA has already taken steps to address these problems, I will monitor carefully their efforts to ensure that the program operates as intended by the Congress.\"<br /><br />This not the first time that allegations of lax oversight and fraud have dogged the HUBZone program.<br /><br />\"The GAO report confirms the claims contractors have been making for years - that the Small Business Administration (SBA) has failed to execute its oversight authority over the HUBZone program,\" said AGC\'s chief executive officer Stephen Sandherr. \"The HUBZone program has been a huge administrative failure, which has cost the program its potential as a legitimate contracting vehicle, the opportunity for growth for these disadvantaged communities and billions of lost taxpayer dollars.\"<br /><br />AGC has long expressed significant concerns about the effectiveness and fairness of the HUBZone program as it is applied to the construction industry and has advocated that significant improvements be enacted to reform the program. The program does not realize its goal of increasing employment and reinvesting in economically disadvantaged areas.<br /><br />AGC advocates the following changes to the HUBZone program:</p>\n<ul class=\"unIndentedList\">\n<li> Applying the HUBZone program only to contracts for the construction of federal projects within a 150-mile radius of the HUBZone contractor\'s principal place of business. According to the AGC, only those projects can offer employment to a significant number of HUBZone residents, and only those projects can promise to make a lasting change in their economic circumstance.</li>\n</ul>\n<p>&nbsp;</p>\n<ul class=\"unIndentedList\">\n<li> Requiring that HUBZone residents receive at least 30% of the payroll needed to perform all HUBZone contracts. According to AGC, using payroll as the measure will avoid pass through purchases of materials and supplies that encourage brokering by legal HUBZones entities that nonetheless are not actually building construction projects.</li>\n<li> Requiring the SBA to routinely investigate alleged abuses of the program within 10 days. </li>\n</ul>\n<p>&nbsp;</p>\n<ul class=\"unIndentedList\">\n<li> Reducing the price preference in construction to five percent.</li>\n</ul>\n<p>&nbsp;</p>\n<ul class=\"unIndentedList\">\n<li> Letting contractors protest a sole source designation on the grounds that the HUBZone contractor does not actually qualify for the program.</li>\n</ul>\n<p>&nbsp;</p>\n<ul class=\"unIndentedList\">\n<li> Requiring construction firms - companies that experience large fluctuations in employment throughout the course of any given year - to provide certified payroll records at the end of each year to demonstrate that HUBZone residents truly worked at least 35% percent of all the hours worked in that year.</li>\n</ul>\n&nbsp;\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:185:\"An investigation by the Government Accountability Office of a federal economic development program known as the HUBZone program has found that lax oversight has left it rife with 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Bond Brainchild Target of Scammers\";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:29:\"HUBZone, Kit Bond, GAO, fraud\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:6725:\"<p>An investigation by the Government Accountability Office of a federal economic development program known as the HUBZone program has found that lax oversight has left it rife with fraud.<br /><br />In the six month long investigation, which ended in June 2008, the GAO obtained HUBZone certification from the Small Business Administration for four fake businesses. Certification qualifies the businesses for federal contracts under the Historically Underutilized Business Zone (HUBZone) program. <br /><br /><img alt=\"Kit Bond\" class=\"image-left\" height=\"273\" src=\"/images/uploads/kit-bond.jpg\" style=\"float: left;\" width=\"240\" />In addition, 10 of 17 HUBZone businesses the GAO looked into in Washington, D.C. failed to meet the eligibility requirements for the program. Those same 10 firms have received more than $105 million in federal contracts since 2006. In the case of one of the firms, the GAO made multiple visits to the site listed as the firm\'s principal office, but found that no employees were working at the location and the only business equipment present was a computer and a filing cabinet. That firm received $3.9 million in HUBZone contracts from the Army and the Air Force during fiscal year 2006-2007, but its principal office was actually in McLean, VA, an upscale Washington, D.C., suburb that is not in a HUBZone.<br /><br />The House Committee on Small Business heard about the results of the investigation in a public hearing on July 17. The committee chair, Rep. Nydia Velazquez (D-N.Y.), said in her opening statement that the findings of the investigation were \"appalling.\" <br />&nbsp; <br />\"It\'s tougher to get a library card than it is to get into the HUBZone program,\" she said. \"All you need is a bit of White-out. It\'s absolutely shameful.\"<br /><br />The investigation was undertaken at the committee\'s request.<br /><br />Sen. Kit Bond (R-MO), wrote the 1997 bill that created the HUBZone program to promote economic development and employment growth in distressed rural and urban areas by giving small companies located in those areas preference in Federal contracting opportunities. Since then, he has pushed federal agencies to increase contracting through the program. A year ago, he criticized federal agencies for falling far short of meeting the goal set by Congress of awarding three percent of prime contracts to HUBZone companies.<br /><br />To qualify for HUBZone certification, a firm must be owned and controlled by at least one U.S. citizen, 35 percent of its full-time employees must reside in a HUBZone, and the firm\'s principal office must be in a HUBZone area.<br /><br />In the bi-state area, the City of St. Louis, University City, Pagedale, Pinelawn and additional parts of North County in Missouri and East St. Louis, Centreville, Washington, Fairmont City, Brooklyn, and Venice in Illinois are all in HUBZones.<br /><br />The GAO estimated that $8 billion in federal spending flow to the 14,000 firms in the program. HUBZone firms are supposed to get a 10 percent price preference when competing against large businesses for contracts. In other words, HUBZone firms can charge up to 10 percent more than their non-HUBZone competitors and still get the federal contract. According to the Missouri Small Business Development Centers, federal contracting officers also can restrict contracts to HUBZone companies if they think two or more HUBZone companies will submit bids. For contracts worth less $3 million, they can designate a HUBZone company as a sole source provider. In addition, federal agencies are supposed to require a HUBZone subcontracting plan on any prime contract with a non-HUBZone company worth more than $500,000. <br /><br />In a statement emailed by Sen. Bond\'s office, Missouri\'s senior senator said, \"Fraud, abuse and poor management found by the GAO investigators was not just troubling, but unacceptable.&nbsp; While I am pleased that SBA has already taken steps to address these problems, I will monitor carefully their efforts to ensure that the program operates as intended by the Congress.\"<br /><br />This not the first time that allegations of lax oversight and fraud have dogged the HUBZone program.<br /><br />\"The GAO report confirms the claims contractors have been making for years - that the Small Business Administration (SBA) has failed to execute its oversight authority over the HUBZone program,\" said AGC\'s chief executive officer Stephen Sandherr. \"The HUBZone program has been a huge administrative failure, which has cost the program its potential as a legitimate contracting vehicle, the opportunity for growth for these disadvantaged communities and billions of lost taxpayer dollars.\"<br /><br />AGC has long expressed significant concerns about the effectiveness and fairness of the HUBZone program as it is applied to the construction industry and has advocated that significant improvements be enacted to reform the program. The program does not realize its goal of increasing employment and reinvesting in economically disadvantaged areas.<br /><br />AGC advocates the following changes to the HUBZone program:</p>\n<ul class=\"unIndentedList\">\n<li> Applying the HUBZone program only to contracts for the construction of federal projects within a 150-mile radius of the HUBZone contractor\'s principal place of business. According to the AGC, only those projects can offer employment to a significant number of HUBZone residents, and only those projects can promise to make a lasting change in their economic circumstance.</li>\n</ul>\n<p>&nbsp;</p>\n<ul class=\"unIndentedList\">\n<li> Requiring that HUBZone residents receive at least 30% of the payroll needed to perform all HUBZone contracts. 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Commercial Construction Recession Bound? \";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:31:\"construction  market, recession\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:6830:\"<p><em>by Peter Downs</em><br /><br />The U.S. construction market is entering a recession from which it will not recover until 2010. That seems to be the consensus among prominent national construction economists.<br /><br /><img alt=\"recession\" class=\"image-left\" height=\"273\" src=\"/images/uploads/recession.jpg\" style=\"float: left;\" width=\"240\" />Robert Murray, vice president of economic affairs for McGraw-Hill Construction, said new construction starts for 2008 will fall an estimated 11 percent to $558.5 billion. The commercial building market, which had grown in 2006 and 2007, started to lose momentum in the second quarter of 2008, he said. The market will fall back eight percent in dollar volume and 16 percent in square feet for the year, he said, with construction of stores and warehouses suffering the most. Single-family will follow a terrible year with an even worse one, he said, declining 28 percent in dollar volume and 31 percent in dwelling units for the year. <br /><br />FMI has revised down its outlook for 2009 and expects nonresidential construction \"to falter late in 2008 and into 2009.\" According to Heather Jones, construction economist for FMI\'s Research Services, total construction spending will fall four percent in 2008 and one percent in 2009. \"The decline in 2009 will be driven by a decrease in nonresidential construction for the first time since 2003,\" she said.<br /><br />Kermit Baker, chief economist for the American Institute of Architects (AIA), predicts a \"dramatic drop\" in nonresidential construction activity in 2009, especially in the office and retail sectors. The consensus forecast developed by the AIA foresees a 1.9 percent drop in inflation adjusted construction activity this year followed by a 6.7 percent drop in 2009.<br /><br />\"We\'ve seen a dramatic contraction in design activity in recent months,\" Baker said. \"Right now things are especially hard in the West and in the commercial and multifamily residential sectors. This weakness in design activity can be expected to produce a contraction in these construction sectors later this year and into 2009,\" he added.<br /><br />\"The one bit of good news is that this contraction in activity is likely to be considerably milder than the construction recessions of the early 1990\'s and earlier this decade,\" he said.<br /><br />Baker cautioned that inflation could make the contraction worse than predicted. \"The cost of construction materials has increased more than twice that of consumer products and services - up 37 percent versus 18 percent since 2004,\" he said, and that could hold back demand for new buildings.<br /><br />\"Surging prices for diesel fuel, asphalt, steel and other materials are clobbering construction budgets,\" said Ken Simonson, chief economist for The Associated General Contractors of America (AGC).<br /><br />The PPI for inputs to construction industries--materials used in all types of construction plus items consumed by contractors, such as diesel fuel--surged 10.4 percent over the past 12 months. The index for highway and street construction leaped 18.9 percent.<br /><br />\"Bad as those figures sound, the increases in asphalt and steel costs have been even worse since these prices were collected in mid-June,\" Simonson said. \"In the first two weeks of July, asphalt prices have jumped by 40 percent in several parts of the country. Prices for rebar--steel used to reinforce concrete in highways, bridges and buildings--soared $200 per ton.\"<br /><br />In the futures markets, aluminum has been setting records, while natural gas has doubled in price from a year ago. That has triggered jumps in the cost of construction plastics--such as polyvinyl chloride pipe, insulation and flooring--that use natural gas as a feedstock.<br /><br /><img alt=\"recession\" class=\"image-left\" height=\"226\" src=\"/images/uploads/recession-house.jpg\" style=\"float: left;\" width=\"240\" />\"Unless Congress passes additional funding in the next few weeks to keep highway construction funds flowing, many states will stop awarding contracts,\" Simonson warned. \"Other public agencies, as well as private owners, must adjust their budgets promptly to reflect the new price realities for construction,\" he said.<br /><br />Associated Builders and Contractors (ABC) noted that job losses already are mounting in construction, an indication that activity has already started to slow.<br /><br />According to Gerry Fritz, a spokesman for the ABC, the nonresidential construction sector lost 5,600 jobs in June; 29,100 jobs over the last six months, and 43,900 jobs since June 2007. Total construction employment, he said, is down 452,000 since June 2007, a decline of nearly six percent.<br /><br />With developers faced with rising construction costs \"the industry can expect far fewer nonresidential construction starts in the year ahead,\" he said The ABC, he added, \"anticipates continued nonresidential construction job losses in the remaining months of 2008 and into 2009.\"<br /><br />Ed Sullivan, chief economist of the Portland Cement Association (PCA), said construction already is in recession and he expects it will not rebound until 2010 as the economy \"is being dragged down by high energy costs and weak employment fundamentals.\" Focusing on the home building industry, he predicted housing starts will fall 36 percent in 2008 compared to 2007, for a third straight year of declines. By then it should be near bottom and housing starts probably will fall only one more percent in 2009, he said.<br /><br />The number of single-family home starts in June was at its lowest monthly level in 17 years, 64.5 percent below the peak of the building boom in January of 2006, according to the U.S. Department of Commerce. Home builders do not expect it to get any better any time soon.<br />&nbsp;<br />\"Builders are reporting that traffic of prospective buyers has fallen off substantially in recent months,\" said National Association of Home Builders (NAHB) Chief Economist David Seiders. \"Given the systematic deterioration of job markets, rising energy costs and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve,\" he said. Builder confidence levels and sales outlooks in June hit their lowest marks ever in the Wells Fargo/NAHB Housing Market Index.<br /><br />Construction economists aren\'t the only ones predicting recession, according to Kevin Kliesen, an economist at the Federal Reserve Bank of St. Louis. Writing in the July issue of The Regional Economist, he noted that, \"Escalating oil price and commodity prices, a sharp contraction in the housing market, and financial market turbulence have increased the odds of recession this year, according to most forecasters.\"<br />&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:176:\"The U.S. construction market is entering a recession from which it will not recover until 2010. 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Commercial Construction Recession Bound? \";s:10:\"field_ft_5\";s:4:\"none\";s:10:\"field_id_7\";s:31:\"construction  market, recession\";s:10:\"field_ft_7\";s:4:\"none\";s:10:\"field_id_8\";s:6830:\"<p><em>by Peter Downs</em><br /><br />The U.S. construction market is entering a recession from which it will not recover until 2010. That seems to be the consensus among prominent national construction economists.<br /><br /><img alt=\"recession\" class=\"image-left\" height=\"273\" src=\"/images/uploads/recession.jpg\" style=\"float: left;\" width=\"240\" />Robert Murray, vice president of economic affairs for McGraw-Hill Construction, said new construction starts for 2008 will fall an estimated 11 percent to $558.5 billion. The commercial building market, which had grown in 2006 and 2007, started to lose momentum in the second quarter of 2008, he said. The market will fall back eight percent in dollar volume and 16 percent in square feet for the year, he said, with construction of stores and warehouses suffering the most. Single-family will follow a terrible year with an even worse one, he said, declining 28 percent in dollar volume and 31 percent in dwelling units for the year. <br /><br />FMI has revised down its outlook for 2009 and expects nonresidential construction \"to falter late in 2008 and into 2009.\" According to Heather Jones, construction economist for FMI\'s Research Services, total construction spending will fall four percent in 2008 and one percent in 2009. \"The decline in 2009 will be driven by a decrease in nonresidential construction for the first time since 2003,\" she said.<br /><br />Kermit Baker, chief economist for the American Institute of Architects (AIA), predicts a \"dramatic drop\" in nonresidential construction activity in 2009, especially in the office and retail sectors. The consensus forecast developed by the AIA foresees a 1.9 percent drop in inflation adjusted construction activity this year followed by a 6.7 percent drop in 2009.<br /><br />\"We\'ve seen a dramatic contraction in design activity in recent months,\" Baker said. \"Right now things are especially hard in the West and in the commercial and multifamily residential sectors. This weakness in design activity can be expected to produce a contraction in these construction sectors later this year and into 2009,\" he added.<br /><br />\"The one bit of good news is that this contraction in activity is likely to be considerably milder than the construction recessions of the early 1990\'s and earlier this decade,\" he said.<br /><br />Baker cautioned that inflation could make the contraction worse than predicted. \"The cost of construction materials has increased more than twice that of consumer products and services - up 37 percent versus 18 percent since 2004,\" he said, and that could hold back demand for new buildings.<br /><br />\"Surging prices for diesel fuel, asphalt, steel and other materials are clobbering construction budgets,\" said Ken Simonson, chief economist for The Associated General Contractors of America (AGC).<br /><br />The PPI for inputs to construction industries--materials used in all types of construction plus items consumed by contractors, such as diesel fuel--surged 10.4 percent over the past 12 months. The index for highway and street construction leaped 18.9 percent.<br /><br />\"Bad as those figures sound, the increases in asphalt and steel costs have been even worse since these prices were collected in mid-June,\" Simonson said. \"In the first two weeks of July, asphalt prices have jumped by 40 percent in several parts of the country. Prices for rebar--steel used to reinforce concrete in highways, bridges and buildings--soared $200 per ton.\"<br /><br />In the futures markets, aluminum has been setting records, while natural gas has doubled in price from a year ago. That has triggered jumps in the cost of construction plastics--such as polyvinyl chloride pipe, insulation and flooring--that use natural gas as a feedstock.<br /><br /><img alt=\"recession\" class=\"image-left\" height=\"226\" src=\"/images/uploads/recession-house.jpg\" style=\"float: left;\" width=\"240\" />\"Unless Congress passes additional funding in the next few weeks to keep highway construction funds flowing, many states will stop awarding contracts,\" Simonson warned. \"Other public agencies, as well as private owners, must adjust their budgets promptly to reflect the new price realities for construction,\" he said.<br /><br />Associated Builders and Contractors (ABC) noted that job losses already are mounting in construction, an indication that activity has already started to slow.<br /><br />According to Gerry Fritz, a spokesman for the ABC, the nonresidential construction sector lost 5,600 jobs in June; 29,100 jobs over the last six months, and 43,900 jobs since June 2007. Total construction employment, he said, is down 452,000 since June 2007, a decline of nearly six percent.<br /><br />With developers faced with rising construction costs \"the industry can expect far fewer nonresidential construction starts in the year ahead,\" he said The ABC, he added, \"anticipates continued nonresidential construction job losses in the remaining months of 2008 and into 2009.\"<br /><br />Ed Sullivan, chief economist of the Portland Cement Association (PCA), said construction already is in recession and he expects it will not rebound until 2010 as the economy \"is being dragged down by high energy costs and weak employment fundamentals.\" Focusing on the home building industry, he predicted housing starts will fall 36 percent in 2008 compared to 2007, for a third straight year of declines. By then it should be near bottom and housing starts probably will fall only one more percent in 2009, he said.<br /><br />The number of single-family home starts in June was at its lowest monthly level in 17 years, 64.5 percent below the peak of the building boom in January of 2006, according to the U.S. Department of Commerce. Home builders do not expect it to get any better any time soon.<br />&nbsp;<br />\"Builders are reporting that traffic of prospective buyers has fallen off substantially in recent months,\" said National Association of Home Builders (NAHB) Chief Economist David Seiders. \"Given the systematic deterioration of job markets, rising energy costs and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve,\" he said. Builder confidence levels and sales outlooks in June hit their lowest marks ever in the Wells Fargo/NAHB Housing Market Index.<br /><br />Construction economists aren\'t the only ones predicting recession, according to Kevin Kliesen, an economist at the Federal Reserve Bank of St. Louis. Writing in the July issue of The Regional Economist, he noted that, \"Escalating oil price and commodity prices, a sharp contraction in the housing market, and financial market turbulence have increased the odds of recession this year, according to most forecasters.\"<br />&nbsp;</p>\";s:10:\"field_ft_8\";s:4:\"none\";s:10:\"field_id_9\";s:176:\"The U.S. construction market is entering a recession from which it will not recover until 2010. 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