Original article in April, 2023 Properties Magazine
Stakeholders in the construction industry are managing the increasingly complex and costly challenges associated with major projects, facilities, skilled labor forces, suppliers, and real estate.
The acceleration of public infrastructure projects, together with other government manufacturing initiatives throughout the Midwest, is creating healthy demand — and exerting some longstanding pressures — on the construction industry in Ohio.
Skilled labor shortages, supply chain difficulties, and shortages of certain raw materials continue to create significant project challenges and threaten long-term productivity of the industry.
Against this challenging backdrop, sweeping construction projects are underway in Ohio. Two of the biggest employers in Northeast Ohio plan major investments — the Cleveland Clinic (63,190 full-time employees worldwide) and the Sherwin-Williams Company (57,231 full-time employees worldwide).
In May 2022, the Cleveland Clinic announced a $1.3 billion capital investment in its main campus. Projects include a 1 million-square-foot Neurological Institute building, expansion of the Cole Eye Institute building, and significant growth of research facilities by way of the Clinic’s $300 million investment in the Cleveland Innovation District (a collaboration with universities and other hospitals to create jobs and an educated workforce). Also on the drawing board: adding a 400,000square-foot research center to position Northeast Ohio at the forefront of the pathogen research vital to preparing for the next pandemic.
The Clinic also is collaborating with community partners to bring a $52.8 million Meijer grocery market and apartment complex aimed at lessening food insecurity and revitalizing its surrounding neighborhood.
Sherwin-Williams is building a new headquarters tower in downtown Cleveland, with an attached multi-level garage, as well as a research and development center in the suburb of Brecksville.
The 36-floor headquarters will house more than 4,500 employees — professional staff, engineers, technicians, and chemists — with room to accommodate future growth. Sherwin-Williams says the project will entail a minimum investment of $600 million over the next few years.
Major projects are making headlines elsewhere in Ohio, as well. Intel plans to spend $20 billion on two advanced chip factories in Licking County, just outside Columbus. The project is the largest single private-sector investment in Ohio’s history. It’s expected to create 3,000 Intel jobs and 7,000 construction jobs over the course of the build. The nearly 1,000-acre site has room for approximately eight chip factories. If it reaches full capacity, the investment could grow to as much as $100 billion over the next decade, making it one of the largest semiconductor manufacturing sites in the world.
The J.M. Smucker Co., a leading food manufacturer headquartered in Northeast Ohio, plans a 29,000square-foot research and development lab at its campus in Orville. Abbott selected a site in Bowling Green for a new manufacturing plant for nutritional products. And the clinical research company, Medpace, plans a $150 million operations and office expansion at its Cincinnati headquarters.
Automakers, meanwhile, are doubling down on Ohio in anticipation of an electric vehicle future. Ford Motor Co. is planning a massive expansion to make electric vehicles at its Ohio assembly plant in Lorain County. The $1.5 billion project is expected to add 1,800 jobs, twice the plant’s current workforce. General Motors plans a $760 million investment in its Toledo transmissions plant as it gets the facility ready to manufacture drive units for GM- EV trucks. Honda is building a $3.5 billion joint-venture electric vehicle battery factory at a site in Fayette County.
The Bipartisan Infrastructure Law, signed in late 2021, has identified over 150 specific Ohio projects for funding. Across the state, there are 1,377 bridges and over 4,925 miles of highway in poor condition. Ohio is set to receive more than $4.3 billion to invest in roads, bridges, public transit, ports, and airports, and over $240 million for clean water projects.
As more projects are announced in coming months, the federal investment in Ohio roads and bridges is projected to ramp up to $9.8 billion. Ohio also is in line for a minimum of $100 million to help ensure high-speed internet coverage across the state. And more than $131 million was allocated to Ohio in 2022 for pollution cleanup, such as capping orphaned oil and gas wells and reclaiming abandoned mine sites.
Going forward, the jury is out with respect to the extent to which an uncertain economy and high interest rates will impact the more ambitious project plans in Ohio, especially in the private sector.
Government funding from the Bipartisan Infrastructure Law, the Chips and Science Act and the Inflation Reduction Act, however, will likely keep the construction industry in Ohio on steady ground for now.