State funding uncertainty during the pandemic has been a key factor in the lack of large construction projects this year at community colleges and universities.
Construction firms that rely on higher education projects, including those in the state’s capital outlay list, have had to look elsewhere for work during 2020. The list includes potential projects at universities and community colleges that qualify for a portion of state funding.
“Pretty much everything” has been put on hold at public universities this year aside from some smaller projects, said Eduardo Blanc, senior vice president at TMP Architecture Inc. and director of the firm’s Kalamazoo office.
“We do K-12 and college work, that’s our bread and butter,” Blanc said. “Only the projects already in the process of being built continued to happen.”
Under the capital outlay process, public universities can apply for state funding for up to 75 percent of construction projects if it does not exceed $30 million. State universities and community colleges — especially larger universities with bigger budgets — also use their own funding for projects, which likely was on the decline this year with the uncertainty of the pandemic and decreased enrollment numbers.
Capital outlay funding must be approved by state officials. Gov. Gretchen Whitmer has vetoed several capital outlay projects at public universities, including two in 2019 and another five in late March 2020 as the pandemic took hold in Michigan.
Each year universities are required to submit a five-year capital outlay project inventory of all campus facilities, which includes priority projects in which schools plan to seek state authorization to start the design process. This year, the State Budget Office issued a letter saying it would not accept or score proposals for priority projects, taking away the first step for new capital outlay projects to get off the ground.
The change in the process this year will likely defer applications until next year, according to state officials. Some schools could decide to fund projects on their own, which has occured when projects were turned down in the past.
“Any time there is a downturn in projects and they get put on the shelf, it takes a few years for them to come back,” said Mitch Watt, senior vice president and principal at Walker-based Triangle Associates Inc.
Because the capital outlay system is on hold, most of TowerPinkster’s higher education construction projects are waiting for a state review to move forward, said TowerPinkster Marketing Manager Chloe Beighley-Ludeke.
“Private institutions were able to continue. A lot of those projects are funded by donors and alumni, so that is money that had already been secured. But the majority of our public projects were put on hold,” Beighley-Ludeke said. “We were able to do some smaller engineering projects, but big flagship projects were not able to take place.”
News coverage in the real estate and development section of MiBiz is made possible by advertising support from The Michigan Economic Development Corporation. MEDC markets Michigan as the place to do business, assists businesses in their growth strategies and fosters the growth of vibrant communities across the state. This advertisement has no effect on editorial consideration in MiBiz.