Hurricane Idalia Prompts Site Preparations Along Gulf Coast
With Hurricane Idalia threatening Florida’s Gulf Coast, developers and contractors’ all too familiar drill of securing buildings and construction sites kicked into high gear in the Tampa-St. Petersburg area.
Over the past few days, Colliers’ Greg Main-Bailie has been in constant contact with members of his team overseeing eight buildings and construction projects along the Gulf Coast within the path of Idalia’s trajectory. As the representative for the homeowner associations and developers of those sites, Colliers is tasked with nudging contractors into action to minimize any storm-related mishaps such as unfastened construction materials turning into projectiles, Main-Bailie told The Real Deal.
“We have contractors with hurricane plans in place,” Main-Baillie said. “As the owner-representative, we make sure the contractors are enacting those protocols to make project sites safe, or at least be in the best possible position of preparedness.”
In recent years, the sense of urgency to prepare for an oncoming hurricane has become more intense in Tampa, St. Petersburg and surrounding neighborhoods. Fueled by population growth, the region has experienced a development boom that has attracted big name developers, including Red Apple Real Estate, a New York-based development firm led by billionaire John Catsimatidis, and the Related Group, the Coconut Grove-based developer led by the Pérez family.
In January, Red Apple landed a $252 million construction loan for The Residences at 400 Central, a 46-story condominium in St. Petersburg that is expected to be the tallest tower on the Gulf Coast.
In a brief phone call, Catsimatidis said he has “zero concerns” about the probability that the Tampa region could sustain storm surge or wind damage. He noted the region has avoided a direct hit by a hurricane for more than a century. “Our contractors are prepared,” Catsimatidis said. “They have secured the site.”
Construction at The Residences at 400 Central is moving along and he anticipates completing the project by late next year or early 2025, Catsimatidis said.
As of late Tuesday night, the National Hurricane Center expected Hurricane Idalia to hit Florida’s Big Bend area as a dangerous Category 4 storm on Wednesday morning, with winds topping 130 miles per hour and up to 16 feet of storm surge. While the immediate area is relatively sparsely populated compared to the rest of the state’s west coast, Idalia’s hurricane force winds are expected to extend 30 to 50 miles, and the storm could bring 4 to 7 feet of storm surge to the Tampa Bay area.
Last year, Related paid $55.5 million for a development site in downtown Tampa that is near the company’s Ritz-Carlton Residences project currently under construction. On the recently acquired site, Related is planning to break ground next year on three buildings: District Flats, a 24-story tower with 362 condo units; Icon Riverwalk, a 38-story condominium with 269 units; and an eight-story student housing building with 209 apartments.
Related declined comment through a spokesperson about Hurricane Idalia preparations, and the potential impact to its construction timeline if the Tampa region sustains significant storm damage.
Across the Gulf Coast, crews started securing commercial project sites as soon as the storm’s path was announced, said Steve Cona III, who leads the Associated Builders & Contractors’ Gulf Coast Chapter.
“Construction job sites in the path of Hurricane Idalia need to prepare for the worst case scenario,” he said. “Florida’s Gulf Coast is leading the state in population growth, so there are thousands of active construction projects.”
General contractors’ construction time frames account for delays caused by a hurricane, and their budgets include contingencies for storm-related costs.
“However, a severe storm could create budget overruns,” Cona said.
At the buildings and construction sites overseen by Colliers, the brokerage’s project managers are required to be on the premises to confirm construction equipment and materials are securely fastened if they cannot be moved to a safer location, Main-Baillie said.
“The existing buildings we represent are going through concrete restoration projects,” he said. “We need to make sure the sites are clean and loose items like plywood don’t become a danger to the building’s residents and neighboring communities.”
Contractors are also working around the clock to secure their own facilities as Idalia barrels toward Florida. International crane training company Crane Tech is fortifying its crane storage facility in Gibsonton, a small town on the bay that is about a 16-minute drive from Tampa, said Jeff Ellis, a field service manager for the firm.
“They have already secured [the storage facility] and the cranes that are stored there,” Ellis said Tuesday. “It was already done as of 5 p.m. yesterday.”
He’s also been handling calls around the clock with clients, advising contractors on the proper way to secure construction cranes for high-rise projects, Ellis said.
Industry experts cite concerns over the aftermath of the hurricane. Idalia is expected to exacerbate both supply-chain issues and skyrocketing insurance costs, which already are plaguing the real estate industry.
Homeowners insurance costs increased from 10 percent to 100 percent over the past year, according to Jim McCue, chief operating officer at NSI Insurance Group.
Hurricane Ian, which hit Cayo Costa on Florida’s southwest coast last September, caused roughly $60 billion in insured damages, further stressing premiums.
Last year, state lawmakers implemented insurance reform aimed at curbing the runaway premium hikes. Under the changes, homeowners are no longer able to assign their benefits to contractors who then aggressively go after insurers for payment. In addition, the law gives insurers a recourse out of paying full attorney fees when they lose litigation with homeowners.
Idalia “is the first test we will have since all these changes have happened,” McCue said.
Builders risk insurance, which covers windstorm, flood and other property damage for a project that’s under construction, went up by an average of 20 percent in the past year, partly because carriers want to limit their exposure to high-risk areas. Idalia could prompt further premium increases for these policies.
“It’s all tied together. If insurance companies are paying out a lot of claims in Florida, you will see some increase in costs for builders risk,” McCue said. “It will trickle down to any property insurance in Florida.”
Still, South Florida developers don’t appear to be discouraged from investing in the state’s west coast. Dan Kodsi, CEO of Royal Palm Companies, has no projects currently under construction on the Gulf Coast, but has his eye on a development site in St. Petersburg.
“We do want to buy it eventually,” he said. But any future project would likely mean “raising the land to deal with storm surge and sea-level rise.”