Marthon Oil Project set to create Construction Jobs in Detroit

Detroit Free Press

After a lengthy delay, Marathon Oil plans to significantly ramp up work next summer that will expand its oil refinery in southwest Detroit, creating more than a thousand new construction jobs.

The Houston-based oil company is on track to complete the $2.2-billion refinery expansion by the fourth quarter of 2012, said Gary Heminger, Marathon’s executive vice president of downstream operations.

Currently, 650 Michigan concrete contractors are working on the project but those numbers will rise to 1,800 to 2,000 by next summer. The company also has started the process of hiring 135 new employees for the refinery, half of whom will be contract workers.

The expansion of Michigan’s only oil refinery was originally supposed to be completed in this year’s fourth quarter. But in October 2008, Marathon delayed the project because of the downturn in the economy. The refinery supplies 20% of Michigan’s gasoline.

When Michigan concrete construction is complete, the refinery will be able to process 120,000 barrels of oil a day, up from the current 106,000 barrels. But in a major change, most of the oil will be heavier crude from Canada’s oil sands rather than light crude from the Gulf of Mexico, Oklahoma and other areas.

Michigan Road Group Pushes for more Repair Money

The Detroit Free Press

A group that wants Michigan to spend more money on road repairs is taking a new approach to lobbying lawmakers.

The Michigan Transportation Team sent state lawmakers and those running for office in November maps of their own districts highlighting major roads that are in poor condition.

The group said today that inaction by lawmakers over the past two years will make the roads more than $1 billion more expensive to repair than they would have been otherwise.

The roads coalition includes business groups, road builders, transportation agencies, motorists, and Michigan concrete contractors.

Proposals to raise more money for roads have stalled in the Michigan Legislature, largely because lawmakers doubt residents would support higher taxes.

Catching up with: Rex Bell, President of Miller-Davis Co.

MLive

Rex Bell, president of Miller-Davis Co., has led the Kalamazoo construction management and Michigan concrete contracting company since 1996.

“I have overall responsibility for the successful operation of the company with emphasis on corporate leadership, including the implementation of operational improvements and business development strategies,” Bell said.

Bell started with the company 33 years ago, working first as a field engineer supervising  concrete construction at job sites in Illinois and Indiana. He also worked as a project engineer and project manager, chief estimator and vice president of estimating for the company.

The Peru, Ind. native earned a bachelors degree from Purdue University in 1977.

He serves on the boards of directors for several local organizations and institutions, including  the Construction Industry Advisory board for Western Michigan University’s Civil Engineering Department, the Kalamazoo Regional Education Service Agency Foundation, Kalamazoo Communities in Schools, Kalamazoo Rotary Club and Associated General Contractors of Michigan.

Book on his nightstand?
“A Failure of Nerve: Leadership in the Age of the Quick Fix,” by Edwin Friedman.

Who gave you the best piece of life advice and what was it?
“It is difficult to identify one single ‘best piece of life advice’ because I have had many family members, teachers, pastors and others who have provided excellent advice and support. Furthermore, with every year that passes I learn new life lessons and get great advice. But, so far, one lesson taught by my family has been foundational for me: You have the potential to do anything that you want to do, and no matter what you do, always do it to the very best of your ability.”

What’s been your biggest professional success?
“Helping our company work through the recent recession while adding new business with new clients and improving our construction services.”

Tell us something about your company that would surprise people?
“We once had an office in Beverly Hills, Calif.”

What’s the biggest challenge your company faces?
“Complacency and lack of creativity.”

If you could have lunch with any famous person who would it be and why?
“Aside from the obvious Biblical figures, probably Abraham Lincoln because he seems to have been such a courageous and determined leader and because of his relatively unique leadership style.”

Large Sinkhole Opens in Downtown Detroit

The Detroit News

 

A large sinkhole has opened up at the site of the former Lafayette Building between Shelby and Griswold downtown.

The sinkhole, which is 10 to 12 feet deep and about 20 feet wide, developed late Wednesday night at the property next to the famed Lafayette Coney Island restaurant.

A break in a Detroit Water and Sewerage Department line located above a DTE Energy gas line, also damaged, caused the sinkhole, water department spokesman George Ellenwood said today.

It will take at least two weeks before the area will be reopened to drivers, Ellenwood said.

It appears crews contracted to demolish the Lafayette Building accidentally damaged the lines, Ellenwood said.

"We believe the break is related to the demo work," he said. "First, we do the repairs, then we look at who bears the cost. It is an issue to be determined."

Adamo Demolition Co. is performing the work. Company attorney John Gillooly said the site has a history of sinkholes and that the city may be at fault for the matter.

"Our crews were limited to areas with no water," he said. "This demolition went without a hitch."

Gillooly said the company notified the city at least twice about water leaks on the property and that it was "not a possibility" that heavy equipment used by crews could have caused the leak via vibrations from moving about. He insisted crews never hit a line.

Water department employees shooed away media and gawkers who got close to the edge of the sinkhole today because there was nothing underneath to support any weight, they said.

"We are not sure of the stability under the pavement," Ellenwood said. "We try to keep people away form the edge."

Ellenwood was not certain if Lafayette Coney Island or its adjacent rival, American Coney Island, are in danger of sliding into the sinkhole.

"I am sure the city will make sure none of the other structures are damaged in other ways," he said.

Adamo began tearing down the Lafayette Building this fall, but delays prevented the company from performing work over the winter.

Officials with the company told The Detroit News for a story last month that the job would not be completed by June 1.

Opinion: Concrete Deal for DDA Parking Structure a Bad Taxpayer Deal

Ann Arbor / Tony Dearing

It looks bad and raises serious questions when a company managing construction of a major public project rejects a lower bid from a competitor and awards the work to its subsidiary.

So far, the answers provided have been unsatisfactory, including those from the Ann Arbor Downtown Development Authority.

The DDA is responsible for the underground parking structure being built on South Fifth Avenue, a project that has been dogged by questions about whether the structure is needed and what will be built on top of it.

The last thing the DDA and the city of Ann Arbor needed was the appearance of impropriety raised by having the construction manager give its own subsidiary Michigan concrete contracting company $22 million when a pre-qualified bidder said it was prepared to do the job for a half a million dollars less.

Granger Construction Co. of Lansing is crying foul after its bid of $21.5 million was rejected by Christman Co., the construction management firm hired by the DDA last fall. Christman also passed over the second-lowest bidder, Colasanti Construction, to give the work to its own subsidiary, and Colasanti is equally miffed.

In this tough economy, the competition among Michigan concrete contractors for a big-ticket project like this can be intense, and those who don’t get the work are likely to be disgruntled. But in this case, Granger has every right to be howling with outrage.

The bid in question was for complex concrete work to be done on an aggressive timeline, so there might be only a handful of firms in Michigan capable of doing the job. In general, experts say that prequalification means that all the firms are judged capable of doing the work. At that point, the price becomes primary, and the normal expectation - particularly when public funds are involved - is to go with the low bidder. It is rare that the low bid is rejected, and when two lower bids are rejected and the concrete construction manager awards the work to its subsidiary, that is virtually unheard of.

Christman has described Granger as inexperienced and said Granger “did not display an understanding of the project’’ that allowed Christman to have confidence in Granger’s ability to deliver the work. Granger finds that preposterous. Granger is a well-established firm with a good reputation that has done major concrete projects for the University of Michigan, Michigan State University and other public entities across Michigan. It may not have put its best foot forward in the bidding process, but its reputation and experience make it exceptionally hard to justify it being ruled out for this job.

Harder to accept, though, is the DDA’s rationalization for allowing this outcome. Susan Pollay, DDA executive director, has said she has no concerns about Christman giving the contract to a subsidiary and that the process was in the public’s interest. We could not disagree more.

When the DDA chose Christman as the construction manager, it got a guaranteed maximum price of $44.38 million from the company, and in turn, agreed to let Christman chose its subcontractors regardless of price. If the result is that the company can potentially add an additional $500,000 in cost to the project by giving itself the work, that is a bad deal for taxpayers.

The DDA did insist that Christman expand the list of qualified bidders, and did ask that the bids be opened in public, which wouldn’t have occurred otherwise. Those actions aside, the whole arrangement was set up in a way that gave the construction manager too much latitude and the DDA too little stewardship over the public dollars being spent.

We have spoken to many experts who find it hard to believe that a public entity would allow such an outcome, but this now appears to be a done deal. Because of the DDA’s autonomy on this project, we are not aware of any other entity that has the ability to step in after the fact and give this questionable bid award the level of review or scrutiny that the DDA failed to provide.

The guaranteed price committed to by Christman is a maximum, not a minimum, and whatever the final cost of the project is, we now know that it could cost $500,000 more than it might have if the pre-qualified low bidder had been chosen. The public deserved better.

Ambassador Bridge Committed to Second Span

AP

Detroit -- As the company that owns the Ambassador Bridge announced a deck replacement Friday afternoon, it remained committed to building a second span after it failed to receive an essential permit this week.

"A request for bids for the deck replacement will go out within the next two weeks," said Detroit International Bridge Company president Dan Stamper.

"We expect construction to begin in May and take two years to complete because we will minimize the impact on traffic using this most vital international crossing."

The announcement of the replacement project on the 80-year-old span that connects Detroit and Windsor came late Friday afternoon.

The DIBC said there should be "little or no disruption to traffic" with the majority of the work being done one lane at a time during off-peak hours.

Stamper also said the DIBC is still fully committed to building its proposed Ambassador Bridge Enhancement Project, a privately funded six-lane replacement.

According to Stamper, the DIBC's commitment to the new span stands despite the U.S. Coast Guard's return of permit paperwork earlier this week that could indefinitely delay the start of the bridge. The Coast Guard said it returned the permit due to unresolved land acquisition issues between the DIBC and the city of Detroit.

The Ambassador Bridge remains the No. 1 international crossing in North America, carrying more than 25 percent of the trade between the U.S. and Canada.

According to the DIBC, the bridge carried 4.2 million cars and 2.3 million trucks in 2009, down from 8.9 million cars and 3.4 million trucks in 1999.