Will the last company to leave the city please turn off the lights?

August 11, 2010

St. Louis has a problem. Practically nobody wants to build there. Too expensive. According to a report in St. Louis Construction News & Review, the cost of construction — labor, land, permits, the whole shebang — is pricing the city out of the competition for growth.

Even though St. Louis grew by 65% in the 1990s, other Midwest towns — Cincinnati and (this is hard to believe) even Detroit grew at a faster clip. Meanwhile, Austin, Texas, grew 156%. At the end of the last decade, St. Louis found itself in the bottom quarter of major U.S. cities in overall growth.

It is true that construction is only one factor in a city's economic growth, but, let's face it, it's a biggie, or you and the 76,000 other readers of this publication wouldn't be in the business. For years, companies large and small have been telling the Construction Consumers Council that they simply can't afford to build in St. Louis, and they've been taking their business elsewhere.

"One thing companies look at is the cost of facilities," says James Frey, a VP at Alberici Contractors and chairman of the newly formed Competitive Nucleus Group, a 27-member alliance of GCs, specialty contractors, and unions representing both the basic and specialty trades. "It is not the only thing they look at, but it is one thing we can impact."

The Competitive Nucleus Group has its work cut out for it. Everybody in St. Louis is pointing a finger at the other guy. Contractors complain about work rules and stoppages over jurisdictional disputes. The unions claim they've knocked off 300 work rules in recent contract negotiations. The GCs get hammered for allegedly fomenting labor disputes by intentionally misassigning work. Owners get their share of criticism, too. "None of them wants to spend the money for proper engineering or architectural design," says the president of the sheet metal workers local. "When you start with bad design, it snowballs from there."

If this sounds like your city, don't wait till you're in the kind of mess poor St. Louis finds itself in. Get the interest groups together, and tackle the problem head on. You can start by coming up with a better name than the "Competitive Nucleus Group."


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