New Construction Up 15% in NYC

NEW YORK CITY-The launch of work on key components of the World Trade Center helped buoy the local construction industry to a 15% increase in new starts for 2010 compared to 2009, the New York Building Congress reported Friday. An analysis of McGraw-Hill Construction Dodge construction data found that $19.5 billion worth of construction projects started last year, compared to the$16.9 billion in projects that began in ’09. However, the total is still 5% less than 2008’s tally of $20.6 billion.

The year-over-year increase was due solely to gains in the non-residential building sector including offices, hotels, schools, hospitals and other institutional structures, according to the Building Congress report. Residential projects continued declining last year, managing just $2.2 billion compared to $6 billion in ’08, a year in which many developers sought to get projects started in advance of the expiration of the 421a tax incentive for much of the city.

The public works sector declined 9% from $4.6 billion in ‘09 to $4.2 billion in ‘10. Yet both the year-over-year and two-year drops are smaller than those for residential, and the Building Congress says infrastructure spending is still the largest source of construction activity in New York City.

That being said, the two largest construction starts counted in the tally for ’10 were non-residential buildings, oth at Ground Zero: the WTC Transportation Hub valued at $3 billion and 3 World Trade Center at $1.2 billion. These were followed by the redevelopment of Madison Square Garden and the start of construction on the Barclays Arena at Atlantic Yards, valued at $850 million and $800 million, respectively.

“The ongoing redevelopment of the World Trade Center, which was bolstered by last year’s development agreement between Silverstein Properties and the Port Authority, has been vital to the overall well-being of the construction industry,” Building Congress president Richard T. Anderson says in the report. “That agreement, which established a clear and rational approach to construction scheduling and financing on the east side of the WTC site, helped unlock thousands of jobs for our industry.”

An encouraging trend seen in the ’10 results was a greater emphasis on new building starts. While construction starts in the city for ’09 were split 50/50 between new construction and alterations/renovations to existing buildings, starts on brand-new building projects accounted for 63% of the total this past year.