Salt Lake City Construction: January 2018 State of the Market

There are several large ongoing construction projects within the Great Salt Lake Valley. These projects include: The new Salt Lake City International Airport, a new state prison, and a new Amazon distribution center. Each project will take several years to build, not including all of the months of planning and designing needed for each project. In “hot” construction markets, owners and general contractors are often uneasy about budgets, and the increase in costs as projects progress. With that in mind, many owners and general contractors will often try and purchase equipment and materials in advance to try and mitigate the risk of rising construction costs.

The new SLC Airport redevelopment program is scheduled to be completed in 2023-2024. According to their own website, the current SLC airport handles about 23 million people per year, although when it was designed back in 1960, it was only built to handle about half that amount of passengers. The budget for this project is estimated to be around $3 billion, however no local tax dollars are being spent for the airport redevelopment program. With this project alone, this provides many local contractors with 7 years of steady work in the valley. For 2018, they plan to continue construction on the Central Utility Plant, Gateway Center, Parking Garage, Terminal, and the North and South Concourses-west. By 2020, flights are scheduled to be available for travelers. Separate from the new airport, the old SLC airport will be completely demolished. Concrete is being poured almost every day, which yields many opportunities for both compaction, and concrete finishing work to be performed.

Officials broke ground in August of 2017 to mark the beginning of the construction of the new Utah State Prison, which will be located about 10 miles west of the new SLC International airport mentioned in the above paragraph. The budget for the prison is $550-$650 million, and will be able to hold about 4,000 inmates. The current construction schedule is to have the prison completed by 2020, and move in the first inmates from Draper prison a year later. 2 miles of access roads have already been established for the construction site. A byproduct of this project is that it will produce new state highways through the northwest portion of Salt Lake City. This new infrastructure has made many in the area confident that they will see an increase in jobs in manufacturing and construction over the next several years.

Also being built in the northwest section of Salt Lake City is Amazon’s new 855,000 square foot regional fulfillment center is budgeted to cost about $250 million. Amazon received multiple tax incentives from Salt Lake City that totaled about $5.7 million. This project is expected to bring in 1,500 full-time jobs to the region. The state prison was critical for Salt Lake to be able to handle this new distribution center, as it is adding multiple major state highways that will be necessary for Amazon to fulfill their customers’ shipping needs. According to the Salt Lake City’s Mayor’s office, in the past year 13 new companies have moved to Salt Lake City due to the recent infrastructure development, yielding about 4,500 jobs and $607 million in new investment.  

Construction in the Great Salt Lake Valley seems to have a very strong future for the next several years. In a highly demanding and fast paced industry like construction, it is critical that all those involved are able to prepare in advance to ensure supply chains remain intact, and contractors can get the tools and equipment they need to get the job done on time and within the projected budget.