Hospital Construction

Hospital construction costs go off critical list

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Date: Sunday, February 8, 2009, 9:00pm PST - Last Modified: Friday, February 6, 2009, 5:00am PST

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Construction material costs have dropped up to 20 percent, says David Jury.

Construction material costs have dropped up to 20 percent, says David Jury.

Amid the layoffs, stock market turmoil and economic uncertainty unsettling the Bay Area economy, a sliver of silver lining may have appeared: Hospital construction costs are beginning to tumble, after years of explosive growth.

Hospital officials, architects, engineers and others say the prices of construction materials such as concrete and steel have dropped as much as 15 to 20 percent since late last year, and overall costs have fallen between 10 and 15 percent.

“Yes, you can get (steel, concrete and other materials) for 10, 15, 20 percent less,” said David Jury, vice president of support services at the Palo Alto Medical Foundation, part of the Sutter Health system.

Copper prices have dropped even faster, from $4 per pound to $1 per pound, about what it cost four or five years ago, before a frenetic price escalation that inspired thieves to strip copper piping out of homes and commercial buildings to sell on the black market.

Eric Kisshauer, director of business development for the Pankow construction company in Oakland, confirms that rebar and steel prices have dipped “in the 20 percent range over the last two months,” and overall costs are falling by as much as 15 percent.

In San Francisco, HerreroBoldt, the construction manager for California Pacific Medical Center’s planned $1.7 billion Cathedral Hill hospital campus, is monitoring the same trends, says Project Executive Paul Reiser. In the last half of 2008, structural s ...

Amid the layoffs, stock market turmoil and economic uncertainty unsettling the Bay Area economy, a...