Tag Archives: construction

Tax Consequences

Steptoe hosts Construction Industry Tax Seminar

Contractors, developers, construction managers, and homebuilders are invited to attend Steptoe & Johnson’s 10th Annual Construction Industry Tax Seminar co-sponsored by the AzBusiness Magazine. Steptoe’s tax lawyers will bring participants an annual update on the latest developments in Arizona’s sales and property taxation.

The seminar will take place June 13, 2013 and the Arizona Biltmore Resort.

The program will focus on new legislation, which if passed and signed by the Governor in the coming weeks, will turn the sales taxation of contracting upside down–from taxing the prime contractor to taxing the sale of building materials, except for road and bridge construction where the prime contractor will still be taxed (H.B. 2111). In addition, seminar leaders will bring you up to date on legislation (already signed by the Governor) that does away with the “permanent attachment” test under the exemption for installing exempt machinery and equipment (H.B. 2535).

Speakers include Pat Derdenger, Dawn Gabel, Frank Crociata and Ben Gardner, all members of Steptoe’s Tax Group in Phoenix. Steptoe’s tax lawyers bring to clients decades of consulting, transactional, and advocacy experience in all substantive areas of federal and state taxation.

The luncheon speaker will be Hon. John Shadegg, partner in Steptoe’s Phoenix office and former US Congressman. He will give his perspective on the Affordable Care Act and how it will impact Arizona businesses.

For more information, call 602-257-7708. Register online at www.steptoe.com.


Miller Dealership Group to Invest More Than $30M in West Valley Reconstruction Project

Salt Lake City-based Larry H. Miller Dealership Group announced plans for the organization’s more than $30M West Valley dealership reconstruction effort with an estimated completion targeted for 2Q 2013.

With this investment, the company expects to make an impact by creating new jobs throughout the construction phase.

“After over 30 years we are thrilled to improve our dealerships on Bell Road to offer a more enjoyable buying experience for consumers in the greater Phoenix automotive market,” said Dean Fitzpatrick, President and COO for the Larry H. Miller Dealership Group.

“We are proud to show our commitment to the West Valley and look forward to seeing this reinvestment continue to give back to the community by creating new jobs and pumping more dollars into the Greater Phoenix economy,” Fitzpatrick said.

After all construction has been completed, the Larry H. Miller brand will have invested more than $30M and countless man hours in the West Valley community, contributing more than 133,000 SF of new construction to the Bell Road automotive corridor.

The Larry H. Miller Dealership Group operates five dealerships in the Phoenix market. Three of which are part of the West Valley reconstruction project; Larry H. Miller Toyota, Hyundai and Dodge Ram stores.

Construction for the Peoria projects is being managed by Miller Family Real Estate (MFRE), a Larry H. Miller organization. Planned construction will consist of the full or partial demolition and complete reconstruction and renovation of the three existing automotive dealerships located on a fully improved 25-acre site.

Site work will consist of creating new drive approaches, reconfiguring hardscape, site utilities and site lighting, removing and replacing asphalt, and completing landscaping per the requirements set out by the City of Peoria.

All existing dealership sales, service and parts departments will remain operational during the renovation portion of this project.

Project details (square footage breakdowns for the scope of work planned at each dealership site):

>> Existing Hyundai Dealership to be turned into new ground up Toyota:

Existing site area: 10.8 acres

Existing building: 48,000 SF

Demolished area: 48,000 SF

New construction: 80,571 SF

Total completed building: 80,571 SF

>> Existing Toyota Dealership to be partially demolished and turned into Hyundai:

Existing site area: 6.8 acres

Existing building: 62,278 SF

Demolished area: 15,380 SF

Existing Service/Parts to be remodeled: 46,898 SF

New construction: 10,490 SF

Total completed building: 57,388 SF

>> Existing Dodge Ram Dealership to be partially demolished and feature a new showroom addition:

Existing site area: 7.3 acres

Existing building: 65,591 SF

Demolished area: 30,136 SF

Existing Service/Parts to be remodeled: 25,445 SF

New construction: 42,301 SF

Total completed building: 67,746 SF

For more information about the Larry H. Miller Dealership Group visit lhmauto.com.




New Construction and Pre-Sales Underway at Corriente Residences in Scottsdale

Condo Capital Solutions, Inc. (CCS) of Colorado recently began construction of a new building at Corriente Residences on E. Indian Bend just east of N. Scottsdale Rd.

The construction of “Building 6” represents one of the first developments of luxury condominiums in the Scottsdale market in recent years. In addition to the start of construction, pre-sale of units is underway with many of the pre-constructed units under contract. Building 6 represents the first of five additional buildings in this final phase of Corriente Residences.

“The construction of the next phase at Corriente is a unique opportunity to purchase new construction in Scottsdale,” says Nathan Ottosen, sales associate at Corriente Residences. “The area has long been built out but remains a desired residential area. We’re giving people an opportunity that hasn’t been seen in many years.”

“Real estate inventory levels are quite low in the Scottsdale market and demand for luxury condominiums is high,” says Peter Wells, principal at CCS. “This is a trend that we’ve seen in many markets nationwide and spurred our decision to begin the final phase of Corriente’s master plan.”

Corriente offers four floor plans ranging in size from 1,048 SF,  1-bedroom/1-bath units to 1,547 SF 2-bedroom/2-bath units with a study area. Prices start in the mid-$200,000 and range to the mid-$400,000.

Residents will be able to enjoy views of the adjacent public golf course, Silverado – which offers owners an opportunity to play 18 holes of golf right outside their door. Additionally, views of the McDowell Mountain Range and lake views are also available. Corriente’s resort style community also offers owners underground parking, interior elevators, a heated pool and spa, community clubhouse and fitness facility.

CCS purchased the remaining 21 units and entitlements for future development in 2010.



Beal | Derkenne Construction Project Rising Near ASU Campus in Tempe

In just two years, Beal | Derkenne Construction (BDC) — the firm founded by Andrew Beal and Michael Derkenne in 2010 — has become a major player in the construction industry leading the way with notable projects throughout the Midwest and Southwest.

Based in Des Moines, Iowa, the company is currently working on nine construction projects and pursuing prospective clients and work, ranging from adaptive reuse redevelopment to high-rise new construction. Project locations include Tempe, where new student housing is being built.

One of BDC’s present projects under construction is a large, ground up 19-story upscale student housing building (The Hub) located across from Arizona State University in Tempe. It is pursuing LEED silver accreditation.

With the Arizona construction market reemerging after several years of virtual standstill, this project is bringing in an estimated 450 jobs during construction from various trades.

“Working on a project like The Hub, as the general contractor is validation of all our hard work and dedication to our company and work ethics,” Beal says.

The Hub is estimated at $40M and a 19-month schedule with the expected completion date of July 2013. The owners of The Hub are also the shared owners of the 11-story student housing project The Vue On Apache in Tempe that both Beal and Derkenne had general contracted under a different company.

“Mike and I are proud that our clients trust our experience and knowhow to deliver the best project results possible,” Beal says.

Since becoming partners and creating Beal | Derkenne Construction in 2010, the two driven partners and their committed team have effectively completed numerous projects within the estimated value of tens of millions of dollars.

The determination and approach to “elevating the standards” have led them to form BDC in a market environment that was more than ideal in the economy. BDC prides itself on its determined scheduling and estimating approach allowing them to deliver projects on time and under budget.


Roosevelt Point

Roosevelt Point Launches Website and Leasing Office

The buildings at Third Street along Roosevelt Row have been steadily rising into the Downtown Phoenix skyline since breaking ground in March.

Now the project has a name reflecting its geographical and social place in the community: Roosevelt Point.

In addition to the new name, Memphis-based EdR and Scottsdale-based Concord Eastridge are launching the public website for potential residents to find more information on the project:  RooseveltPoint.com.

The temporary leasing office will open in the Arizona Center next to the AMC movie theater on Oct. 3, but the staff is available to answer calls now at (877) 804-7115. The leasing office address is 455 E. 3rd St., Suite #1080, Phoenix, 85004.

The project’s completion date is targeted for July 2013. The two apartment buildings are designed to be attractive options for students and new graduates affiliated with Arizona State University Downtown Phoenix Campus, University of Arizona’s College of Medicine and the Phoenix Biomedical Campus and other young urban professionals.

Upon completion Roosevelt Point will include approximately 326 apartments with studios, one-, two-, three- and four-bedrooms. Each bedroom will have a private bathroom.  The community will also feature a parking garage and other upscale amenities such as common areas, fitness and tanning facilities and swimming pools.

Rent levels have not been determined, but will include all utilities, high speed Internet and basic cable service.

7,500 SF of retail space fronts Roosevelt and Fourth streets and will be subdivided depending on future tenant needs. The company will seek retailers that will appeal to all downtown residents.

Concord Eastridge is developing the project, which will be owned jointly with EdR.  EdR is the majority owner and managing member of the joint venture and will manage the community. Hardison/downey is the general contractor.

Ryan Companies

Ryan Companies US, DAVIS to Deliver 3rd Tower To Hayden Ferry Lakeside

Ryan Companies US, Inc., will build and begin leasing the third office tower at Hayden Ferry Lakeside in Tempe, it was announced at a morning press conference near the site of the new project. DAVIS will handle architectural duties.

Ryan Companies will develop the 10-story, 250,000 SF, Class A office tower at the corner of Mill and Rio Salado Parkway. DAVIS designed the building in 2007 and has made several design enhancements to this gateway building. Officials expect the project to break ground in 4Q 2012.

“This upgraded, clean, slightly more contemporary design is the appropriate design to complete the project and leave it looking forward, well into the 21st century” said Mike Davis, founder and director of Design at DAVIS.

The land is owned by an entity affiliated with Sunbelt Holdings, which acquired the property from SunCor in 2010. The Sunbelt entity will sell the land to Ryan for the tower.

The building is the first commercial high rise to break ground in downtown Tempe since 2007. The timing of this building could not be better. Much of the office space in downtown Tempe is now leased, leaving fewer space options for large companies to locate.

“We are pleased to partner with Ryan Companies on the next office tower at Hayden Ferry Lakeside,” said John Graham of Sunbelt Holdings. “We believe the more than 900 jobs that will eventually be located there will serve to enhance demand for additional residential and commercial development on and around Tempe Town Lake.”

Hayden Ferry Lakeside was conceived in 1999 by SunCor Development as Town Lake’s first development. The project consisted of three office towers and four residential properties. During the past 13 years, SunCor completed two of the planned office towers and two condominium towers.

“Hayden Ferry Lakeside was the first mixed-use development in downtown Tempe and the first development to build here at Town Lake. It’s appropriate that once again, the development once again leads the high rise construction industry,” Tempe Mayor Hugh Hallman said. “We thank Sunbelt Holdings and Ryan Companies for their investment in our community and their commitment to Tempe Town Lake.”

The future Phase III office building serves as a gateway piece of the development. The building design maintains the same boat-shaped, nautical theme as its predecessors. It is upgraded with a clean and slightly more contemporary expression that compliments the existing office buildings.

Building finishes will incorporate the notable cobalt blue glass, aluminum panels and horizontal mullion expression of the window system. The landscape and hardscape materials will be consistent with what has already been established previously with the metaphoric stream, blue paving, completing the design as originally conceived.

“Staying ahead of the upcoming demand, Ryan recognizes the need for additional Class A office space in Tempe. With Tempe’s strong and plentiful workforce and the location of Hayden Ferry Lakeside, developing and constructing a third tower will provide an excellent home for companies looking to relocate to Tempe,” said John Strittmatter, president of Ryan Companies US, Inc. Southwest.

CBRE will be the brokerage firm, officials said.


Public Projects - AZRE Magazine January/February 2012

Public Projects: Keeping Construction Companies Alive

Of the 15 Arizona school districts that asked voters in November to approve bonds to build or renovate education facilities, 11 got the go-ahead despite the lingering recession.

That’s good news for many of the state’s construction companies that have relied on publicly-funded projects to boost business and keep workers employed as private investment in new buildings plummeted with economy.

And for public entities with the need and the seed money, it’s a good time to snag a good deal in a highly competitive market for construction materials and services.  But while public projects have helped, government spending has not been the great savior of the industry, according to Arizona’s construction company leaders.

The recession has taken its toll on public building plans with shrinking tax revenue sopping up funds pegged for new schools, city halls, police stations or libraries.  And as absolutely essential projects get checked off the list, public spending is expected to dwindle.  However, at least some projects are still getting budgeted and built, says Bo Calbert, president of McCarthy Building Companies’ Southwest Region.

“From 2003 to 2007, we probably had our best market in decades, but by 2008, everybody knew we were in trouble,” Calbert says.

“Private (projects) stopped overnight.  Public work continued.”

Citing a recent market outlook report for Phoenix-Mesa-Scottsdale, Calbert says overall construction value slipped 40% in 2008 from its 2007 high, tumbled another 23% in 2009 and 27% in 2010.  The report predicts 2011 value will increase 40% when the final numbers are compiled, but will sag slightly this year (2012) before heading back up in 2013.

Building During the Recession

Much of the 2011 increase is a result of federal stimulus funding for schools, infrstructure, solar-fueled projects and other green upgrades, Calbert says.

Among the infrastructure projects McCarthy landed is construction of the $140M, first phase of the PHX Sky Train, a people mover pegged to connect Phoenix

Public Projects - AZRE Magazine January/February 2012

Sky Harbor International Airport visitors and employees to the terminals, light rail system and parking lots.

McCarthy’s usually packed education division had a 2011 workload values at about $110M, Calbert says.  That’s down from a high of $170M in 2008.  And about 40% of the 2011 business was out-of-state work as McCarthy took jobs in New Mexico to make up for Arizona’s shortfall.

“Public work has kept us going, but we had to go beyond Arizona,” he says.  Among the school projects McCarthy snagged during the recession is  a $20M addition and renovation for Barry Goldwater High School, says Terry Bohl, the company’s education services director.  Parts of that multi-faceted project were completed during summer 2011 break, and other non-disruptive work is still ongoing, he says.

During the summer break, McCarthy completed 600,000 SF of school construction in Metro Phoenix, including the new buildings, renovations and mechanical upgrades. Still in the works is a new, $12M, 80,000 SF elementary school in Chandler, Bohl says.

Chandler is one of the few Arizona cities able to afford other-than-school public projects during the downturn.  The city broke ground on a $74M city hall complex in mid-2009.  After leasing, saving and budgeting for 25 years, Chandler didn’t have to borrow money to build it, says spokeswoman Jane Poston.  Best of all, Chandler’s project came in $10M under original budget thanks to the sagging economy.

“We had significant cost savings building in a recession,” Poston says.  Designing a much-needed firehouse as solar-fueled and LEED-certified helped Gilbert land a $3M federal grant from the American Recovery and Reinvestment Act, says spokeswoman Beth Lucas.

Maricopa County also saved a bundle by opting to build during the recession, says Thomas Goderre, district operations manager for Gilbane Building Company.

Gilbane teamed with Ryan Companies US on a 700,000 SF superior court tower in Downtown Phoenix (construction value $260M).

“The Maricopa County Court Tower project was big and constructed at the perfect time for Maricopa County, Gilbane/Ryan and the subcontractor community,” Goderre says.  “The county was able to realize construction cost savings in the range of $15M to $20M compared to a normal construction climate, while Gilbane/Ryan and the local subcontractors were able to put a lot of people to work during a very tough economic downturn.”

The court tower was completed in November.  That, along with a new Phoenix Politce precinct and four ASU student recreation centers, are among the publicly funded projects that “helped us weather the storm,” Goderre says.

Looking For New Opportunities

In Arizona, about 75% of Gilbane’s business has been publicly funded projects, he says, but Goderre sees that changing as public money dies up and private investment returns to the market.

Sundt Construction vice president Jeff Fairman says he also believes privately funded projects will take over more of his company’s resources during the next few years as cities and school districts continue to get squeezed.

Tempe-based Sundt bills about $1B in a normal year.  Business has dropped overall during the recession, but the company’s 50/50 ration of public/private business has so far remained static, Fairman says.

Sundt has about $500M worth of public work in progress right now, but most of that is in multi-year projects, he says.

Both the volume of new business and overall construction value have shrunk as pre-recession plans that weren’t shelved were at least downsized.  “The bells and whistles went away,” he says.

Besides building the new Chandler City Hall complex, Sundt landed a potpourri of publicly-funded projects during the economic downturn including K-8 and higher education buildings, municipal infrastructure projects, a federal courthouse and a U.S. Marine Corps simulator facility in Yuma.

Mesa-based Caliente Construction has specialized in upgrading or repurposing existing facilities during the downturn, says CEO Lorraine Bergman.  The company is renovating old post office space to accommodate a student center for ASU’s Downtown Phoenix campus.  Caliente has several projects completed or ongoing to make security, technology or mechanical improvements in public buildings from schools to prisons, Bergman says.  “It’s come down to necessity.  You can’t let the buildings fall apart,” she says.

Kitchell president Jim Swanson says the public sector produces “a sizable piece of our business,” typically employing about 30 percent of the company’s workforce in Arizona and California.

Commercial construction work is down for nearly all Kitchell’s business segments, Swanson says.  And public projects in no way take up the slack, he says.  Instead, he’d give props to the healthcare industry for keeping his business healthy.

For more information on the companies and public projects mentioned in this article, please visit the following websites:






AZRE Magazine January/February 2012

Kitchell, Orcutt | Winslow Picked to Design and Build New Patient Tower

Kitchell and Orcutt | Winslow have been selected to design and construct a new patient tower at Chandler Regional Medical Center, a member of Catholic Healthcare West (CHW). This project will expand capacity, enhance key service lines, and drive new office and medical development in the East Valley.

The five-story inpatient tower is anticipated to remove capacity constraints with the addition of 96 in-patient beds. Site work on the $125 million project begins this month with vertical construction of the tower scheduled to begin in November 2012. At the peak of construction it is estimated that the project will have a workforce of more than 200. It is expected to be complete by fall 2014.

 “We are confident that this expansion will help meet the needs of the community by allowing us to develop new healthcare services and expand existing ones,” said Patty White, president and CEO, Chandler Regional Medical Center.

The expansion will accommodate the hospital’s emergency and medical-surgical services, with 32 intensive care and private cardiovascular intensive care rooms, 64 telemetry and medical-surgical beds, six additional operating suites, ancillary support and infrastructure including a second helipad, chapel, kitchen and dining area, central plant and 275 parking spaces. The addition of 96 in-patient care beds will bring the hospital’s total bed count to 339.

The hospital leadership team hopes to add incremental capacity in order to continue providing for the healthcare needs of this growing community. The patient tower follows a recently completed $10 million cardiovascular department expansion, also built by the team of Kitchell and Orcutt | Winslow, including two cardiac catheterization laboratories, an additional nine-bed pre/post cardiac short stay unit and ancillary support infrastructure.

“We’re excited to continue our relationship with Chandler Regional, further expanding our portfolio of Catholic Healthcare West projects,” said Kitchell Healthcare Division Manager Steve Whitworth. “With our vast healthcare experience, hospital clients benefit from the innovations and efficiencies we’ve created on other projects.”

To learn more about Chandler Regional, please visit ChandlerRegional.org.