West Michigan construction firms saw projects in the hospitality and office industries slow down this year because of COVID-19 restrictions, leaving many to get creative and pivot to industrial and residential markets.
Gov. Gretchen Whitmer’s initial stay-home order to slow the spread of COVID-19 halted construction projects that were not deemed essential from March 23-May 7, launching the initial strain on the industry.
Despite several obstacles this year that exacerbated construction’s ongoing talent shortage, including workers sidelined by the pandemic, industry leaders in West Michigan told MiBiz during a recent roundtable that they were aided by a healthy backlog of projects going into the year. Many are hopeful for projects in the hospitality sector to resume in 2021 with promising news about COVID-19 vaccine studies, while some also noted the uncertainty of a close presidential election now in the rearview mirror.
Participants in the roundtable were:
- Chris Beckering, executive vice president of Pioneer Construction Inc.
- Mike Bishop, head of TCF Bank’s West Michigan construction and real estate group
- Megan Feenstra Wall, architect at Mathison | Mathison Architects and incoming president of the American Institute of Architects’ (AIA) Grand Rapids chapter
- Brad Laackman, president and CEO of Honor Construction Inc.
- Ted Lott, principal at Lott3Metz Architecture
- Bob Pomeroy, architectural division principal at Fishbeck
Here are some highlights from the discussion, which was conducted virtually via Zoom:
What have been key takeaways during the pandemic for your company or the industry?
Feenstra Wall: Flexibility is the key for this year. With the AIA we had to pivot and cancel some events we were pretty excited about. Some things we could pivot to doing virtual and in that way we’ve increased some of our engagement across the state. We’re seeing more involvement from firms along the lakeshore than we were before. As a firm and an organization it’s just about being ready for what’s coming next and being flexible.
Laackman: We were also fortunate to work through the pandemic with some critical projects throughout (Grand Rapids), but it was maybe half of what we were planning. We have been making it through and making good progress on some things, but hitting the pause button on others.
Lott: We’ve been fortunate in the fact that we’ve been working straight through this. For us it’s been an acknowledgment of people we have working for us and folks we are working for. We’ve learned that we can handle it, that is one of the biggest things. We’re always challenging ourselves one way or another. It’s just heightened our confidence in ourselves.
Pomeroy: For us we were able to make the pivot to working remotely pretty easily, but we had lost a considerable amount of work so it was just a huge drop-off for us through most all of the markets we were in. We had an interesting conversation with a client, and they basically said, ‘Innovate or die.’ That became our new thing. We’re starting to find work in areas where we never were before and I think that helps us be stronger.
What new markets and projects have you been pursuing?
Pomeroy: We do a fair amount of higher education work and that really took a huge hit. It was really reaching out into biotech areas and pushing into that, which we’d never done before. We have (light industrial) clients in a different division but we had never really explored that, so we’re pushing that as well.
Beckering: When we had projects put on hold, we had guys who wanted to continue working and see what they could do, so we pivoted to the health care industry and helped some of the major health care (companies) in the area mobilizing vaccination and testing sites. We’ve been able to keep our guys busy with meaningful work while addressing the needs of the pandemic. You’ve got to be creative and do things that you haven’t done before.
Laackman: On a smaller scale we had done an enormous amount of hospitality and restaurant work, which of course took the biggest hit. Everything stopped — that was one of our specialties and so was office work, which has changed. A lot of (office projects) have turned into housing, and hospitality turned into health care for us. We switched those two areas out for the other two, called upon our old resumes and our staff’s experience to find a new way. The need was out there and we could help out in our mid-market type of way which was very helpful.
Feenstra Wall: We had a huge backlog when we first started, and we were incredibly busy in those early days of the stay-at-home order, so it was kind of overwhelming, but then we saw the same thing — some of our nonprofit, higher education and office work started to taper off. But in the meantime we also do residential and that has just been nonstop. So we were able to take some of those markets that were slowing and replace them with that residential work. All of our work has started to pick up again but residential is not slowing down. This last quarter is busier even than the first but there was certainly a lull over the summer.
How do you think the construction industry will be affected by the incoming Biden administration?
Beckering: The markets are indicating that they like the idea of a split-party president and Senate control, and it looks like that’s the direction we’re heading. From that direction, I think it should be somewhat stabilizing. From just an overall market standpoint, I think that it’s yet to be seen what Biden’s infrastructure plan entails, how that will be funded and what impact that will have on our industry.
Lott: It’s going to be much more about the next phase of the pandemic and the federal response to it. We have a huge logistical problem that we’re coming into with the vaccine distribution. This is what the federal government should be able to do well. I’m very hopeful we’ll be able to have a coherent federal response to this next phase of the pandemic. Hospitality is nonexistent right now — the quicker we get past the pandemic, the quicker those markets are going to come online. To me, that’s my biggest hope of a new administration.
What are you looking forward to in 2021?
Laackman: I’m really looking forward to the return of the hospitality industry. Out of catastrophe there is innovation and I’m really excited to see what happens in that market and also in the construction market, and the construction technologies that come out of this.
Bishop: We have had several residential builder clients that have told us that throughout all of this, 2020 will be their best year ever. Throughout this people are still buying houses.
Feenstra Wall: From an AIA standpoint I’m excited to continue the conversation of diversity and climate action. My experience with AIA is that it just moves so slowly as an organization, and I’ve witnessed this pivot. I’ve never seen them move so quickly as they have in the last few months. I’m excited about that and I feel like there might be some change coming. We have a backlog (at Mathison | Mathison) that could probably take us through the first quarter. Some of our nonprofit work is loosening up so I’m hopeful we can expand that.
Beckering: It’s all about that base, that manufacturing base in West Michigan. If we get that engine revving everything else will follow. That engine seems to be revving so we’re excited about opportunities to help local manufacturers, distributors and logistics companies expand and build new in our home town.