Over the next five years, the city will fund everything from new streets to a new runway at Sky Harbor International Airport as well as libraries and arts facilities. It's been more than 12 years since the city approved issuing general obligation bonds for capital improvement projects.

Phoenix has budgeted a little more than $1 billion this year and next for the host of projects. The city will spend $925 million in 2003, $895 million in 2004, $553 million in 2005 and $421 million in 2006. The number of private commercial projects have decreased in the recent months--most notably in the office and industrial sectors--but contractors and architects throughout the Valley have been heartened by the flood of public projects that are on the drawing board and have funding.

In addition to the city projects, the state will spend more than $1 billion over the next two years to bring schools up to par. Phoenix, Tempe and Mesa also plan to spend more than $1 billion to build a light-rail system that will run from the northwest to Mesa. Work on that is expected to begin later this year.

Two other major projects that use public money--a new $175-million hockey arena for the Phoenix Coyotes and $375-million football stadium for the Arizona Cardinals--should be under way in the near term.

"It's a lot of work," Don Puddy, a vice president with Kitchell CEM, tells GlobeSt.com "It's nice to have this amount of varied work looming on the horizon when we could be heading into a market that could be softening."

Phoenix has a history of releasing major capital improvement projects during lulls in the private sector, the last time coming in the late 1980s. At that time, a high-rise city hall was added to the Civic Plaza and a Downtown library, art museum and science museum were built. Because it released the bids during a downturn, the city was able to get very competitive prices on the projects.

"It seems to cycle back and forth between private and public," Puddy says. "That's a good leveling device for the construction industry."

The dozens of projects included on the capital improvement program were approved by a 300-member citizens' panel last fall. The five-year bond program was approved by city voters in November. Some of the projects will be funded by general obligation bonds, while others will come from taxes and fees charged by respective departments, such as aviation and water.

Because of a new law enacted late last year, municipalities are able to bid out public works projects on a design-build basis, or negotiated price, a move away from the strict low-bid structure that had been prevalent for so long. That change has swayed many more contractors to bid, says Sandy Werthman, Kitchell Contractors' marketing director. "It makes it a whole lot more approachable to the better contractors," she says. "It's not just low bid, but allows for quality." In the past Kitchell Contractors has not bid on city projects, but plans to do so this time around, she says.

The city has not yet identified which projects it plans to release using which bid process, but that news is expected in the coming weeks. Some of the largest projects coming later this year or early next include $369 million from the aviation department; $89 million from parks and recreation; $76 million from public transit; and $59 million from the streets department.

Instant Insights /

Phoenix Pushes $3.8-Bil Mix of Capital Improvement Projects

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