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November 23, 2007

Trades writing their chapters in Book-Cadillac's renovation

Challenges to prevailing wage don’t add up

‘Better times’ ahead for Michigan construction, says latest forecast

Congress provides the key to new Soo lock

News Briefs


Trades writing their chapters in Book-Cadillac's renovation

By Marty Mulcahy
Managing Editor

DETROIT - The Westin Book-Cadillac Hotel is quite literally coming out of its shell.

Just over a year ago, developer John Ferchill led a tour of journalists through the ruins of the historic hotel. The tour revealed what was common knowledge: a building that was once Detroit's finest hotel had been reduced by the elements and urban scavengers to a damp, stripped-down, dangerous structure whose fate could have included a date with a demolition crew.

Instead, after some false starts in arranging financing, a savior arrived last year in the form of a $180 million commitment by a wide group of investors, which was led by the Cleveland-based Ferchill Group.

Fast forward to a year later, and the 33-story hotel, to be operated by Westin hotels, is well on the road to rehabilitation. The project is currently at peak construction activity, with 300 to 400 Hardhats on site on any given day.

"We're about 65 percent complete, and things are going well," said Michael Schumaker, project manager - site division for general contractor Marous Brothers Construction. Aside from the shell of the building, he said. "nothing, nothing has been retained. "Heating, cooling, electrical, windows. Everything is new."

Schumaker said the renovation plan had the trades start on floors 23 and 13, and work their way down floor by floor, then in the same direction on each level. With the exception of the suites on the top seven floors, the floor plans are all basically the same, "so once you get all the bugs worked out, we started to move quicker," he said.

Along the way, the trades, contractors and architects have had to figure out how to hide wiring, wireless Internet antennas, as well as plumbing and storm drains from the roof. "Michigan has an abundance of good tradespeople, and we have a really good crew here," said Schumaker, a Cleveland native.

Tracy Scott of Plumbers Local 98, project foreman for Western Mechanical, said plumbers and the rest of the trades arrived on the job about a year ago to find original interior walls torn out and debris removed, leaving wide open spaces on each hotel room floor.

"The challenge we have is fitting modern plumbing code into a building that was built in the 1920s," Scott said.

To start, they had to drill no less than 300 holes in each floor: most through concrete, sometimes through steel plate. With drain pipes, vent stacks and supply lines going up vertically from floor to floor - and then usually in-between walls - there is often only a 1/16th-inch gap of play for installation of larger pipe.

Not much room for error - and Scott said the situation is complicated by the Book leaning an inch-and-a-half to the north. "It doesn't sound like much, and it's not unusual for any building to lean a little, but it has made for some interesting moments for us," he said.

In the end, "tubs had to go where they had to go, and walls had to go where they had to go," Scott said. "We're making it work." One of the hotel's old elevator shafts has been turned over for routing some of the building's mechanical systems, and that has helped, he said.

The original boilers in the third level basement are still in place, but they're being abandoned. The new building will have new hot water heat and air conditioning.

A year ago, Ferchill said he didn't anticipate any surprises structurally, since "there wasn't much left to uncover" in the interior of the building. Earlier this month, Schumaker said that has been the case, with a significant exception being the need to replace decorative masonry "water table" on the roof of the building.

Ferchill also said a year ago that the project had been slow to start because of their inability to acquire an exterior elevator - a buckhoist. "They're all in China," he said. One was acquired, and these days, Schumaker said the lone buckhoist on the west side of the building is the lifeline of the project. "It's pretty reliable, but when it goes down the whole project bottlenecks," he said.

With its mass of brick and other types of masonry features, the trowel trades are playing a vital role in the project. Masons are employed on the project by Western Waterproofing and Dixon Masonry. Paul Misiolek is the Bricklayers and Allied Craftworkers Local 1 is foreman on the project, working for Western.

He said the Book was "built right" by craftsmen in the 1920s. "The old guys did a really good job," he said, citing the intricate work and the use of "tie-in" brick courses behind the exterior. "You don't have to worry about the walls falling down on you."

Still, masonry will not maintain its integrity without some maintenance - and
there is a tremendous amount of masonry rehabilitation necessary at the Book. Starting at the top, masons have rebuilt the north and south towers, "which were really bad" and needed to be completely rebuilt, Misiolek said.

On the 23rd floor, the terra cotta water table feature was found to be in bad shape - Misiolek said 532 lineal feet will be replaced with a fiberglass look-a-like. Behind that, galvanized steel will replace the rusting original steel to which that water table was attached.

Moving down, much of the exterior brick of the hotel has been cleaned, which has already made a dramatic difference in the appearance of the building. Masons will lay 100,000 new brick during the course of the project. The brick is made in Ohio with a color the manufacturer had in stock, and combined with the right shade of mortar, "you can barely tell that we did any repairs," Misiolek said. The bricks did have to special-ordered: the Book's bricks were eight inches long, modern bricks are slightly shorter.

About 75 percent of the Book's 2,000 window lentils are corroded, and will be replaced with welded galvanized lentils. "They're at various stages of disrepair," Misiolek said.

Moving down to the fifth floor, all the way around the building's exterior are "capitals" - the tops of decorative terra cotta columns that are also in various states of disrepair. Misiolek said he has a "stone man" who used a laser and a laptop computer to measure existing masonry pieces so that matching replacements can be made.

Miscellaneous limestone will be repaired or replaced on the fourth floor. Down on the first floor, openings will need to be completely re-worked to accommodate the hotel's doors and new storefronts, Misiolak said.

Misiolek said the biggest challenge for masonry workers on the Book isn't replicating the old work, it's simply moving materials with the hotel's single buckhoist - and keeping out of the way of other trades. "We work inside and outside, and with some of the trades finishing up, it's tougher to stage materials," he said. "We're always just trying to avoid gridlock."

He said restoring the Book to its former glory has been a good experience. "I'm glad they decided to repair this hotel instead of knocking it down," he said. "There are a lot of nooks and crannies that are really decorative and ornate. It's great that such a unique building is going to be retained."

Here's the book on the Book

Built in 1924, the storied Book-Cadillac was the tallest hotel in the world and "Downtown's largest and arguably most beautiful vacant skyscraper," says the Forgotten Detroit website. "Long a rival to the Statler (demolished in 2005), the Book-Cadillac offered 1,200 guest rooms and some of the most amazing interior spaces in the city. It is the supreme symbol of 1920's Detroit's wealth and optimism."

Continuing, "The Book-Cadillac featured five floors of grand public rooms and shops. Among the amenities were large lounges, three dining rooms, a coffee shop, three unique and functional ballrooms, and a tea room. They were the most richly decorated interiors found in any Detroit hotel."

The Book hosted Presidents Truman, Eisenhower, Johnson and Nixon, and baseball legends Joe DiMaggio and Ted Williams, among many others. The hotel is near and dear to many in Southeast Michigan, having been a major employer as well as the site of numerous weddings and banquets.

The public spaces of the Book had gone through a number of interior changes over the decades that it was open to attract guests, but by the end of the 1970s, businesses leaving Detroit's downtown spelled the end of the Book-Cadillac. It closed in 1984.

When the building was no longer guarded after a few years, vandals stripped anything of value from the building and left it open to the elements.

The new plans for the Book will include a 455-room luxury hotel rooms and 67 lofts at the top of the hotel. According to the Ferchill Group, the hotel will include three ballrooms, two of which - the Grand Ballroom and the Italian Garden - "will be restored to their original grandeur."

A third ballroom, at 11,000 square-feet with a seating capacity for 1,000, will be added to the north side of the hotel. The property will also have a swimming pool, whirlpool, fitness center, as well as onsite retail and fine dining.

THE CLEANED UP BRICK on the massive Book-Cadillac hotel in Detroit is the most striking aspect of the building's exterior so far as the 33-story building is renovated. The Ferchill Group, the project's developer, has vowed to reproduce as many original interior finishes as possible in the hotel, which was completed in 1924. Photo by Don Coles, Great Lakes Aerial Photos/(313) 885-0900

REPLACING BRICK in the back of the Book-Cadillac is Mike Walenciej of Bricklayers and Allied Craftworkers Local 1 and Western Waterproofing. The hotel is expected to reopen in late September.

INSTALLING FLASHING near the "ziggurat" architectural feature next to him atop the Book-Cadillac Hotel in Detroit is Andy LaRoy of Sheet Metal Workers Local 80 and Detroit Cornice and Slate. The copper-encased ziggeraut, the nice brick-work, and the use of copper on the base reproduce the original architecture of the Book, whose designers spent money on building features that would rarely be seen.


Challenges to prevailing wage don’t add up

By Marty Mulcahy
Managing Editor

"The prevailing wage law increases the cost of construction by 10 percent to 15 percent, and the additional costs are passed along to Michigan taxpayers." - Paul Kersey, The Mackinac Center for Public Policy, Aug. 27, 2007.

"Prevailing wage" does not mean a fair-market wage, but one artificially inflated by 40 percent to 60 percent and arbitrarily determined by an ever-shrinking minority of the construction workforce."

- Guest opinion, Chris Fisher, Oakland Business Review, Oct. 12, 2007.

LANSING - Opponents of Michigan's prevailing wage law - and they're coming out of the woodwork in droves with our state's slumping economy - claim that repealing the law will save taxpayers anywhere from 10 percent to 60 percent off the cost of a construction project.

The savings won't happen - and the estimates of how much will be saved vary wildly because they're based on false premises. So said Utah Professor Peter Phillips, who spoke at an Oct. 24 seminar sponsored by the Michigan Association for Responsible Contracting. Phillips is a labor and industrial relations economist and one of the nation's most respected presenters on prevailing wage laws.

"We can't find a statistical difference in costs," Phillips said, when it comes to measuring the absence or presence of prevailing wage laws on taxpayer-funded construction in various states.

Phillips studied the absence and presence of prevailing wage laws for school construction in three states. Kentucky adopted a prevailing wage law for school construction in 1996. Ohio repealed its prevailing wage law for public school construction in 1997.

"And then we have Michigan, the poster child," Phillips said. "They had it, they got rid of it. And then they took it back. What more could a social scientist ask? Thank you Michigan." A ruling by a federal judge revoked Michigan's Prevailing Wage Act of 1965 for nearly three years before it was reinstated by an appeals court in 1997.

"A study of the construction of 391 schools in these three states, half built under prevailing wage laws and half not, found no meaningful or statistically significant difference in the cost of construction based on regulation," Phillips wrote. Furthermore, he said construction at 4,000 schools across the nation were examined, and he got the same result: no statistical difference in costs.

"Opponents of prevailing wage laws say that these laws significantly increase public construction costs - often by 25 percent or more," Phillips wrote in his study. "Conceptually, these are doubtful claims."

The reason: on average, labor costs are only about 25 percent of total construction costs. "So if you are going to save 25 percent on total costs by eliminating prevailing wage laws, then everybody would have to work for free," Phillips said.

Often overlooked by the repeal prevailing wage crowd, Phillips said, is the value provided by higher paid workers in the form of added productivity. "Opponents of prevailing wage laws assume that cheap labor and low-skilled labor is just as productive as more expensive, skilled workers. This is just not true," Phillips wrote.

Other factors, he said, include:

  • Lower cost workers place more of a strain on society because they don't pay as much in taxes, and don't enjoy a good level of benefits.
  • The long-term needs of the construction industry entail training the next generation of workers, keeping this generation healthy and providing for the old age of the last generation of workers. Prevailing wage regulations force bidders on public works to include all these costs in their bids.
  • Prevailing wage regulations, by considering the future and remembering the past, allows for the creation of construction careers and retention of experienced workers in an inherently unstable and casual industry.

"In short," Phillips wrote, "prevailing wage regulations encourages the creation of a skilled workforce that can afford to be members of the middle class with all that means for social cohesion and economic growth. This benefits construction and it benefits the communities in which construction workers live."


‘Better times’ ahead for Michigan construction, says latest forecast

By Marty Mulcahy
Managing Editor

Time for a little construction conjecture.

As we move toward the end of the year, construction industry prognosticators unfailingly pop up and take a stab at predicting the future. One of the first we've seen is by Michigan Construction (MCN), which took a look back on 2007 and a peek into 2008 for our state.

First the disclaimer: forecasting construction activity, even by the biggest corporations and think-tanks, is "a product of educated guesswork," as MCN put it, because of the highly fragmented nature of the industry, and the inability to get good information on small, family-owned firms.

Here are some of the findings:

  • "MCN's educated guess is that due to the current economic slump in Michigan, the size of the construction industry market in our state was approximately $45 billion in 2006, and could possibly rise to about $48 to $49 billion by the end of this year." Of that amount, $3 billion would represent the current size of Michigan's depressed residential construction sector. In 2006 residential construction was tabulated at $4.55 billion.
  • The housing slump is real. In 2006 Michigan residential construction included 31,010 units. Through August of this year Michigan's housing starts were down 19.1 percent compared to a year ago. Residential construction in Michigan currently is about 33 percent to 40 percent off the peak established in 2004, when 52,800 units were built.
  • When the final numbers of 2007 are compiled, nonresidential construction in Michigan is expected to jump in the 5-10 percent range compared to a year ago, and possibly continuing to climb at that same level through 2008, unadjusted for inflation.
  • Office construction "appears to be falling due to a saturated market with high vacancies extending well into the double-digits."
  • Highway/bridge construction may experience no growth, or even decline when 2007 ends. On the federal level, the Highway Trust Fund is expected to reduce payments to states, and the nation is facing an estimated $4 billion deficit in fiscal year 2009 if Congress does not raise vehicle fuel taxes.
  • Industrial construction: there's good news here. "Due to the automotive product cycle, a recovery is underway," MCN said. Early this year Ford announced an $866 million investment in its southeastern Michigan plants. General Motors reports it will be investing at least $500 million in plant improvements over the next two to three years.
  • Daimler Chrysler will soon have more than $1 billion in construction underway. A number of ethanol refineries have broken ground or have been proposed, such as a $100 million cellulosic ethanol plan, which may be the first of its kind in the nation.
  • Utility construction: While being restricted to pollution control upgrades and maintenance for many years, this spring Michigan's electrical utilities announced bold plans for the construction of baseload generating plants. DTE Energy said it was looking into development of a $3 billion nuclear unit for its Fermi II facility in Monroe. A reliable source has told MCN it is also developing plans for a baseload coal-fired plant, though he could provide no details. Over the next five years DTE also plans to invest $1 billion in advanced air scrubbers at its Monroe Plant.
  • Consumers Energy is developing plans for an approximately $1.5 billion, 750 megawatt, coal fired plant to be built at its Karn-Weadock station near Bay City. In Midland, the joint venture of L.S. Power Group and Dynergy, has proposed a $1.3 billion, 760 megawatt coal fired plant.
  • Educational construction: Many of Michigan's universities, particularly the University of Michigan, fielded substantial construction programs in 2006 and are continuing to do so in 2007. The list is too long to cover here, but since the first of the year the U-M Board of Regents has acted on more than $705 million in construction projects. Regarding K-12 public education, "we expect this to remain a strong market despite Michigan's currently depressed economy," MCN said.
  • Medical Construction: Michigan's Certificate of Need Commission approved $2.46 billion for 465 projects during 2006. This compares to $1.71 billion for 2005 and $1.97 billion for 2004.
  • Commercial: During 2006 the Michigan Economic Development Corporation granted $232.8 million in Michigan Single Business Tax relief to 73 projects with an estimated total value of $3.13 billion. Much of them were for mixed use developments where residential units (apartments or condominiums) are being built with retail and office space. For the first six months of 2007 it has provided tax incentives to 55 projects that will invest $1.34 billion.
  • Retail: Nothing has changed since our January 2007 forecast. It continues to be an active market despite Michigan's relatively high unemployment level.
  • Other projects: A July 2007 decision by the U.S. Court of Appeals has finally cleared the way to allow ground to be broken for the Firekeepers Casino in Emmett Township near Battle Creek. The complex is expected to cost $270 million. In Grand Rapids bids are currently being taken for the $115 million Terminal Area & Parking Improvement Program at the Gerald R. Ford International Airport.
  • Labor: The latest data available from the U.S. Census Bureau, covering the year 2004, shows more than 172,000 engaged in construction industry employment in Michigan. "I've been told by sources within Michigan's construction industry that figure has dropped to 142,000, with the unionized construction building trades representing approximately half that number," MCN said. "The remainder are employed by open shop contractors. Note that open shop contractors build virtually all of the new homes in Michigan. There are only a handful of unionized contractors still active in residential work."

Though the current unionized labor force is aging, retirement in its ranks has slowed, and apprentice recruitment and training appears to be keeping up with demand. Shortages in certain skilled trades do persist.

"My observation," said MCN's Guy Snyder, "is the supply of journeymen for unionized contractors may be strained by the time 2008 rolls around, when manpower requirements on major projects bid and begun in 2006 start to peak."

MCN said it's "our impression of a slowly growing recovery in Michigan's nonresidential construction market. Despite heavy competition from open shop workers, the unions that typically involved in the initial stages of a construction project are experiencing better times."



Congress provides the key to new Soo lock

The U.S. Senate on Nov. 7 joined the House in overriding President Bush's veto, opening the door to the spending of $23 billion for Army Corps of Engineers water-related projects across the nation.

Among the construction plums for Michigan in the Water Resources Development Act (WRDA): a long-awaited new $342-million lock in Sault Ste. Marie. The new lock would be a twin for the Poe Lock, and provide a backup in case the Poe experiences mechanical failure or sabotage.

Congress authorized a new lock in Sault Ste. Marie as part of its 1986 Water Resources Development Act, but made the project subject to a provision requiring a study of the project. And the federal government nearly "studied" the new lock to death.

"This legislation says to the U.S. Army Corps that you shall build this new lock," said Congressman Bart Stupak (D-Menominee). "The time for studies is over." The lock will be 100 percent federally funded.

Stupak and others have warned that if the Poe Lock were ever incapacitated, Great Lakes shipping would grind to a halt.

The largest lock at the Soo, the 1,000-foot long by 105-foot wide Poe Lock was completed in 1968 and handles the biggest iron ore- and bulk-cargo freighters. Also at the Soo are McArthur Lock (completed in 1944, 800 ft. long by 80 ft. wide) and the smaller Davis and Sabin locks, which were built more than 80 years ago.

Plans call for removing the Davis and Sabin locks and replacing them with the larger lock.

FROM LEFT TO RIGHT at the Soo Locks are the MacArthur, Poe, Davis and Sabin locks. Plans are to demolish the Davis and Sabin, which are more than 80 years old, replacing them with a single lock.


News Briefs

U-M: U.S. economy will rebound
ANN ARBOR - Despite a slumping housing market, rising oil prices, flat auto sales, a weak U.S. dollar and waning consumer confidence, America's economy will not slip into recession, say University of Michigan economists.

And the residential construction industry should start to show signs of life toward the end of next year.

"By mid-2008, the downturn in homebuilding is reaching its bottom," said Saul Hymans, U-M professor emeritus of economics, in a prestigious nationwide study released Nov. 15. "Energy prices, while still quite high, are down from their recent heights and edging lower. Consumer spending begins to pick up and nonresidential investment remains relatively strong. With all of these factors contributing, the pace of real Gross Domestic Product growth picks up during the second half of 2008 and proceeds at a healthy clip during 2009."

In their annual forecast of the U.S. economy, Hymans and colleagues Joan Crary and Janet Wolfe say, however, that national economic output growth will remain sluggish in the short term - due to the ongoing decline in residential construction and subdued growth in consumer spending.

They say the rate of economic growth will be just 2.1 percent this year, down from 2.9 percent in 2006. But output growth will increase to 2.4 percent next year and accelerate to 3.4 percent in 2009.

According to the forecast, both residential construction and existing home sales will begin to turn up in the second half of next year. US. housing starts, which are down 35 percent since 2005, will continue to fall from 1.35 million this year to 1.21 million in 2008, before increasing to 1.55 million the year after.

Marchers protest NLRB ruling
WASHINGTON (PAI) - More than 1,000 union members marched on the National Labor Relations Board headquarters on Nov. 15, protesting a slew of anti-worker rulings by the three-member majority installed by President Bush.

The protest, organized by the AFL-CIO, drew unionists, religious allies and a wide range of supporters.

"This is not the NLRB. This is George Bush's board. This is Dick Cheney's board. This is the Chamber of
Commerce's board. This is the National Association of Manufacturers' board. And it sure as hell ain't the Labor Board!' declared Mine Workers President Cecil Roberts.

The marchers protested 61 NLRB decisions, virtually all by party-line 3-2 votes, starting in late September and continuing, that stripped away many workers' rights. They included rulings making it easier to oust unions through what are called "decertification petitions," rulings making it harder for workers illegally fired for pro-union work to get back pay, and rulings making it easier for firms to break labor law.

Other NLRB rulings that the unionists protested weakened the already weak right to strike, opened the
door to retaliatory lawsuits by companies, let employers get away with illegal threats to workers, and let employers evade the law's mandate that they must bargain with the union once it is certified to represent the workers.

The stream of anti-worker rulings is so bad that last month, the AFL-CIO formally filed a complaint about
the NLRB with the International Labour Organization.

The Rev. Ron Stief, organizing director for Faith in Public Life, said the marchers "know who to give
thanks for" in the holiday season, including unions, organizers, civil rights groups, and religious groups "who stand between us and this (NLRB) behavior. And we know who the turkey is," Stief added, to laughter.


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