Massive construction slated for Marine Corps Base Camp Pendleton is drawing eager interest from local contractors.
As much as $4 billion is expected to be spent in the next several years improving and expanding the 125,000-acre base just south of San Clemente in northern San Diego County.
The work could to give a boost to contractors across the region that have been hit hard by the downturn in commercial real estate.
Local contractors are awaiting word of specific contracts, which are expected to cover a range of projects from building a hospital and barracks to repairing existing buildings.
So far, only a handful of projects have been awarded through an online bidding process.
“We’d love to get the work,” said Bruce Nelson, vice president of business development at the Newport Beach office of St. Louis-based McCarthy Building Cos.
Many of the projects should to be awarded by the end of September, according to Capt. Steve Wirsching, commanding officer of the Naval Facilities Engineering Command Southwest in San Diego.
“We have seen a dramatic increase in the number of construction firms interested in construction projects,” he said. “Due to the intense interest, we are seeing very competitive proposals.”
Wirsching’s operation has long-term relationships with OC contractors and is seeing interest from new ones, he said.
Building products suppliers also stand to benefit from the spending at Camp Pendleton. They include Muth Development Co. in Stanton, which is expected to supply concrete through its Orco Block unit.
Funding for the work is from four sources: the economic stimulus package; a plan started under the Bush administration to add more troops; an initiative from the Marine Corps to build better barracks; and the Pentagon’s general budget.
There are about 70 projects worth about $700 million in the works at Camp Pendleton with more to be added through fall 2010, according to Wirsching.
Economic stimulus money for Camp Pendleton and other nearby bases for the 12 months through September is expected to be $240 million and cover about 50 projects, according to Wirsching.
For the 12 months through September 2010, about $600 million will be on the table for seven projects, he said.
Money from the Bush administration’s Grow the Force program, which seeks to add about 22,000 Marines to Camp Pendleton and other bases in the Southwest, will total $200 million for the 12 months through September and nearly $700 million for the following 12-month period.
The project began in 2007 and should be completed by 2011.
More than $800 million for an upgrade of the barracks at Camp Pendleton is set to be spent through September with at least another $100 million set for the following 12-month period.
A 500,000-square-foot hospital costing $560 million is set to be awarded by September 2010.
McCarthy, which has worked on some of the largest hospital expansions in OC in recent years, isn’t sure what the details of the project will be, according to Nelson.
“They haven’t said much about it,” he said. “All we know is they want to be shovel ready by next year.”
Also planned for the base is an $11 million solar-powered system to be awarded in December, as well as a $15 million child development center due by September.
Adding to the budget are a number of smaller projects starting at less than $100,000 that can cover anything from repairing roofs and pipes to replacing communications equipment.
The military spending stands to be the biggest game in town, with the housing, office and other real estate sectors in near hibernation.
Construction in the county was down about 35% last year versus 2007, according to Chapman University in Orange. Economists at the school expect construction to be down 24% this year and 10% next year.
The largest construction project under way in the county is Oakland-based Kaiser Permanente’s Anaheim hospital complex, which is valued at $560 million.
Next is the expansion of John Wayne Airport, pegged at about $200 million including related road and other work.
The Impact
The impact of the Camp Pendleton spending is expected to be big.
This year, about $2 billion worth of private sector construction is expected in the county, down from $4.7 billion at the peak of the building boom in 2006, according to Chapman.
The estimated $4 billion being spent at Camp Pendleton during the next five years works out to $800 million a year, or 40% of this year’s total projected private sector construction in OC.
The work is welcomed but won’t have as big an impact as housing construction would, according to Chapman economist Esmael Adibi.
New homes spur more follow-up business with sales of appliances and furniture, he said.
“But any activity gives a cushion” to the construction industry, Adibi said.
Santa Ana-based Sukut Construction Inc. has been eyeing work at Camp Pendleton, according to Chief Executive Michael Crawford.
The company does excavations in the early phases of projects. It hasn’t found any projects at Camp Pendleton that fit yet, according to Crawford.
About 80% of the company’s revenue comes from the government these days, up from 40% a couple years ago, he said.
Sukut has 400 to 450 workers, down from 500 to 600 during the boom years.
Working for the government has its challenges, Crawford said. There are strict rules that cover everything from laying pipe to pouring concrete, he said.
“But in some ways it’s better because it’s very clear,” Crawford said.
