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Delta Construction is the sitework subcontractor under
general Nordic PCL Construction for the new Ewa Makai Middle School.

Since sitework contractors are usually the first on any given jobsite, it would stand to reason that they could also function as fairly accurate weather vanes for the paving, building and finishing (sub)contractors who follow. Of course, they are also usually
the last on the jobsite as well, so it may be a somewhat slanted perception.
While national and local reports offer a mixed bag of forecasts,
what do the sitework specialists see? How are they keeping busy and —
because construction is cyclical — how are they preparing for when it will get busier?

Not a Pretty Sight?

If sitework contractors really were heralds, what would they have to report? Most say that while there are some fledgling signs of recovery, it is still a bit further down the road and probably not this year.
“There is no question that the global recession has affected Hawaii’s construction industry. Delta has experienced a decreasing backlog of projects and decreasing magnitude of projects as owners/developers struggle with the challenge of obtaining financing for projects,” says Kenneth Kobatake, president of Delta Construction Corp.


Grading and infrastructure for D.R. Horton Hawaii’s Mehana, a live-work-play master-planned community in Kapolei, is being done by Delta Construction. Nanala at Mehana will be the first subdivision to open.

However, he adds, “There is light at the end of the tunnel. It may be 24 to 30 months before we see visible signs of a bright light, but it’s coming. In the meantime, we need to adjust our individual situations to be prepared for the opportunities afforded by a healthy and robust economy.”

Rodney Nohara, president of Jayar Construction, Inc., says that because sitework contractors are both first on and last off a jobsite, they are not necessarily the best bellwethers of future work. “I can say that the sitework contractors here in Hawaii haven’t been hit as hard as the building contractors,” he adds. “There seems to be more infrastructure and road work than building construction. My guess is that 2010 will be the same as 2009 and any improvement won’t happen until 2011.”

In agreement with Nohara but hoping they both will be proven wrong, Ray Skelton, Maui regional manager of Goodfellow Bros., Inc., also predicts some improvement in late 2011, “perhaps the third quarter.” He says that with an infrastructure system on the verge of collapse, it’s not from a lack of work. But with financing still difficult to obtain, permit reform slow, and lack of heavy demand from the tourism sector, recovery will be gradual.

Roadway, streetscape and drainage improvements are part of Goodfellow Bros.’ Market Street project on Maui.

“While I don’t have a crystal ball,” says Ben Prock, area manager of Kiewit Pacific Co., Hawaii area office, “it does appear the housing market has flattened out, or maybe is even starting to improve in some areas based on recent home values. However, I think it will be some time before that market regains its strength. The good news is the federal, state and county projects seem to be gaining momentum, which we are hopeful will continue to shore up the weakened private sector.”

“Presently, we think the light at the end of the tunnel is at least a year away, if not two,” says Glenn Nohara, president of Koga Engineering & Construction, Inc. But he also mentions one bright hope. “The one project that would spark our recovery sooner is Honolulu’s rail project,” he says. “If the first two or three phases of this project could begin by this summer, it would immediately jump start our economy. I am a strong proponent of this project not only for the jobs that it will create, but also – more importantly – for the quality of life of future generations of our people and the long-term protection of our environment. It is simply the right thing to do. It would provide the most seamless transportation energy transition when, and not if, we develop our self-sustaining energy grid.”

Best Place to Dig

If you’re a regular reader of Building Industry, then it should come as no surprise to learn that, like the building contractors, siteworkers also are hanging their hard hats on public work, primarily infrastructure work. Are these projects the only channels of opportunity?

“Because much of the private work has stopped,” says Mike Nakashima, vice president and division manager of Hawaiian Dredging Construction Co., Inc.’s heavy division, “more civil contractors are focusing on projects being advertised by the different government agencies, which makes the whole atmosphere more competitive.

Hawaiian Dredging continues work on the Opaelua Reservoir in Waialua, being developed by Kamehameha Schools.

“Even in a depressed economy, such as now, infrastructure work such as roadways, bridges, sewer, water and drainage need to be improved or replaced,” adds Nakashima. “The stimulus packages have been influential (in getting) more projects advertised for bidding ahead of schedule. … We have been successful in winning a project (Punaluu Stream Bridge), which was advertised last year.”
“Right now, there are very small pockets of opportunity, primarily in the government areas (federal, state and county),” says Koga’s Nohara. “These projects are much smaller than what was available in previous years and the competition is much greater.” The company recently worked on a number of water, sewer and drainage projects, three for the County of Hawaii and three on Kauai – two for Kauai County and one for the state. One of the Big Island projects and the two county projects on Kauai were at least partially funded through the American Recovery and Reinvestment Act (ARRA). “Though our three stimulus projects represent only 10 percent of revenues,” adds Nohara, “it did help when you consider our volume this year will probably be down 15 percent from last year, which is better than 25 percent (without the stimulus projects).”

Kobatake says, “Delta Construction has been and continues to be very fortunate in being able to weather this slowdown by maintaining a good balance between its projects. In past years to the present, Delta has been able to maintain substantial work in the residential housing projects.” One project that has kept the company busy for nine years (and counting) is Haseko’s Ocean Pointe development, including its 60-acre marina. “In the commercial section, Hilton and the city have contracted Delta to undertake a major expansion and beautification of Ala Moana Boulevard (fronting the Ilikai Hotel) leading into Waikiki, dubbed the ‘Gateway to Waikiki,’” Kobatake adds. In addition, “Delta’s fortunate relationship with major federal contractors to construct and refurbish the military housing on Oahu also has provided the company with additional opportunities to balance the slowdown in the residential housing market,” says Kobatake.

“Our focus,” says Skelton, “is getting the employees on the bench back to work and to keep the employees we have.” Skelton believes the key is continued collaboration between the public sector and construction industry. He says the state and counties are doing what they can to get projects out and, though everyone may not have been totally ready for the implementation of stimulus funding, they are now getting up to speed with all the requirements.

“This is a prime opportunity for us to hone our craft,” comments Skelton. “Think outside the box. We don’t have to do things the same way. This is the time to do our work more precisely and effectively. We need to be fast and safe so the public is not adversely impacted. And you gotta’ have a smile on your face. All of it will give our customers a better perception of the work we do.”

And today’s technology makes it possible to work better and more efficiently, says Skelton. “Further and continued enhancements in equipment have improved fuel economy, hydraulics and emissions. Technology is helping us get more done at less cost with a higher degree of safety,” he says.

Kiewit Pacific Co. recently completed the $63 million mass grading project at Kukuiula on Kauai.

Sitework Setlist

Here’s a snapshot of the projects currently keeping sitework contractors busy, along with a few they hope will start promptly.

Delta Construction — Delta has work with owner/developers such as Kapolei Property Development LLC, Haseko (Ewa), Inc., Castle & Cooke, Gentry Homes, Ltd. and D.R. Horton Hawaii, the MacNaughton and Kobayashi Groups, Actus Lend Lease, LLC, Forest City Military Communities and Hunt Building Corp. The firm is also the sitework subcontractor for the new Ewa Makai Middle School, with general Nordic PCL.

Goodfellow Bros. — Key projects on Maui, according to Ray Skelton, are the partially ARRA-funded Market Street Improvements; the first phase of Kihei’s South Maui Regional Park, for which the company is grading 21 acres of the 45-acre site; road widening at the entrance to Lahaina, a Department of Transportation project; grading and utilities at Maui Lani’s VMX subdivision; Stanford Carr Development’s site 17 of Kehalani; Phase V-B of the Central Maui landfill; and Wailuku-Kahului Wastewater Reclamation Facility tsunami protection project.

Hawaiian Dredging — The company was finally able to start on the long-delayed realignment of Honoapiilani Highway, Phase 1A. “This was a project which was in negotiations for the past two years,” says Nakashima, due to the discovery of an archaeological site within the northern portion of the realignment. “This is the largest (such project) on the island and will be able to keep our workers busy for the rest of this year.” Colloquially known as the Lahaina Bypass, the new road will be constructed in four phases and is expected to ease traffic issues in the area. Oahu work consists of the H-1 Kapolei Interchange Complex project, the Punaluu Stream Bridge project and Kamehameha Schools – Opaelua Reservoir project in Waialua.

Projects out to bid include phase two of the widening of Queen Kaahumanu Highway on the Big Island, the Contra-Flow Zipper Lane project for H-1 and Phase 1B of the Honoapiilani realignment.

Jayar Construction — The current workload includes a single-family subdivision on Fort Shafter with Actus Lend Lease; Disney’s recently named resort, Aulani, with general Hawaiian Dredging; and the second phase of Shriners Hospital for Children’s expansion. JE Dunn Construction Co. is the general contractor with Ralph S. Inouye Co., Ltd. acting as the major subcontractor.

Koga Engineering — “Recently we started the sitework for (the) 15 Craigside Retirement Residence project in Nuuanu,” says Glenn Nohara, with general contractor Nordic PCL Construction LLC. “We have already completed the mass grading work and Nordic PCL is coming out of the ground with the structure. Our major work now on that project is installing the offsite sewer line in Nuuanu Avenue.”
Starting soon, with general con-tractor Kiewit Building Group, is the Pearl Harbor Fitness Center. “Challenges there include petroleum and chlordane-contaminated soils and working in and around a site that has historical significance,” describes Nohara.

Delving Deeper

While definitely having the largest impact, economic woes are not the only challenges facing this trade.

“For the past several years up to last year, we were fortunate to have most of our work in fairly remote virgin areas or larger tracks of land in urban areas,” explains Koga’s Nohara. “Now we are finding more redevelopment, renovation, repair and maintenance work in congested urban and residential areas. For example, the recently completed Trump International Hotel Waikiki Beach Walk, Komohana Heights Large Capacity Cesspool Conversion, Ala Moana Center New Sewer Line Phase 2, and the Outrigger Canoe Club Sewer and Drain Improvements – all of which either involve working in high volume traffic areas, dewatering or difficult to access areas.”

Rising supply costs also are affecting profit margins, according to Rodney Nohara of Jayar. “Other challenges that sitework contractors are facing today are the ever rising cost of construction materials such as pipes and fittings, concrete, asphalt and aggregate. In addition, environmental standards for storm water runoff, air quality and noise are getting more stringent, and more emphasis is being placed on recycling and reusing demolition waste,” says Nohara. “These are all good for the environment, but it comes with a price. The added costs for complying with these requirements are usually passed on to the consumer. Contractors and the general public need to understand that these requirements need to be implemented in order to preserve our precious resources. It would require a different perspective on how the construction industry is changing. In the long run, I think that recycling will be beneficial to our society.”

In what seems to be a trickle-down effect of the dearth in projects, Nakashima says, “The increased competition from nonunion and mainland contractors has created a very competitive climate. More nonunion contractors have surfaced and are now bidding for contracts, and because of the depressed economy, companies from the mainland (also) are trying to get established in Hawaii. It is unfair that the majority of revenue acquired by these mainland firms in Hawaii are sent back to the mainland.”

But the biggest concern is the effect of the economy on personnel.
Prock’s response to “other challenges” was “keeping key personnel gainfully employed.” He says, “While we’ve got a large backlog, many of our projects are starting slow, and we’ve got key people waiting to go to work.”

“A constant challenge is employing experienced project and field personnel,” agrees Kobatake.

“We’ve got the best employees right now but they have a lot of potential demands,” comments Goodfellow Bros.’ Skelton, especially if members of their own families have been laid off, etc. “Our challenge is helping them keep focused on safety. We don’t want to lose sight of the overall goal, which is to work safe and be able to go back home to our families.”
From another perspective, Skelton adds that in tough economic times, “people change industries just to survive and they don’t always come back. The industry loses quality people who could take it to the next level.”

Skelton also believes, “This is the time to invest in and help your people, let them know they are not out there by themselves. When it comes down to it, it’s about investing for our future.”