Atlanta Construction Costs Hit Olympian Heights

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Though the Olympic torch has not yet arrived in Atlanta, many Georgia school districts say they've already been burned by its flame.

For more than a year, a construction boom fueled by the coming of the 1996 Summer Olympics has wrecked school-construction budgets. Dozens of Atlanta contractors are nearing completion of stadiums, housing, and related facilities for the games, and the few companies willing to bid on school projects demand top dollar.

Construction costs in Atlanta-area districts have soared by as much as 30 percent.

To tilt the law of supply and demand more in their favor, districts have combed the Southeast for companies free from Olympic fever. Others have delayed or canceled projects, despite the critical need for new schools and classrooms caused by runaway enrollment growth.

"The games will bring millions of dollars to the state," said Ron Nance, the state's school architectural-review officer. "But as we found out, you have to spend millions of dollars to host them, too."

State Is Booming

State officials say the increased construction costs might not be a problem if they did not need lots of new schools--now.

Georgia, the fastest-growing state east of the Rocky Mountains, in 1995 passed North Carolina to become the country's 10th-most-populous state. The state has 7.2 million people, the U.S. Bureau of the Census reported last month.

Key to this growth is Georgia's expanding manufacturing industry, which last year spun off a record number of jobs that drew many of the state's 77,000 newcomers.

"Young people are coming here with jobs in hand and families in tow," said Jeffrey M. Humphreys, the director of economic forecasting at the University of Georgia in Athens.

Statewide, public school enrollment jumped 55,000 students in the last two years, to 1.3 million. Building new schools to handle that growth alone would cost about $400 million, state officials say.

And the surge isn't expected to end anytime soon, particularly in areas within an hour's commute of Atlanta. Gwinnett County, an Atlanta suburb, is the state's fastest-growing district, adding about 4,500 students a year to its 85,000-student enrollment.

In DeKalb County, another of the city's suburbs, about 10,000 of the district's 88,000 students already attend school in portable-classroom trailers, and projections show enrollment there passing 100,000 by the turn of the century. The district plans to open four new schools this summer and hopes to build five or six more by 2000.

Overnight Boosts

Ambitious building programs launched in many Georgia districts coincided with the start of many Olympics-related construction projects.

As a result, school officials say, costs quickly rocketed past their projections. Statewide, the cost of putting up a new school building has shot up $10 a square foot, to $55, in the past few years, according the state's annual survey of construction costs.

Blaming this increase on the Olympics is understandable, but wrong, said Mr. Humphreys of the University of Georgia. "The Olympics had little to do with that. Olympic construction started at the same time as economic expansion in the state started" and drove up costs for all construction.

Still, school officials in many districts have little doubt that Olympics-related construction is making qualified labor scarce and costs high.

Last year, the 9,200-student Newton County district southeast of Atlanta took bids on two nearly identical middle schools. The low bid on the first school was $4.5 million, but eight months later, bidding on the second school yielded a low offer $500,000 higher.

Meanwhile, in DeKalb County, construction costs have jumped from about $50 a square foot to as much as $65, said Richard Beard, the district's supervisor of facilities and construction.

Like other school officials, Mr. Beard said Olympic construction has made qualified masons hard to find.

"Before the Olympics, we paid masons $25 an hour," he said. "Now, they can demand $50 an hour--and get it."

New Money on the Way?

Help may be on the way from the state legislature. Lawmakers are expected for the second straight year to approve $200 million for school-construction aid, double the usual appropriation.

Also, both the Senate and House have cleared a constitutional amendment that, if approved by voters in November, would give districts authority to ask local voters for a 1-cent sales tax to pay for capital projects.

"With so many districts growing so fast, this is going to dramatically change funding in Georgia," said Laura Reilly, a spokeswoman for the Georgia School Boards Association.

But if that amendment passes, some districts might be reluctant to use their new taxing authority for fear that additional taxes would undercut support for bond issues--their primary means of financing construction. In the handful of states where districts can levy a sales tax, "they're really not doing it," said Mary Fulton, a school-finance analyst with the Denver-based Education Commission of the States.

Some school officials hope that competition in the building industry will cool once the Olympic flame is snuffed. But others predict the high prices are here to stay.

"It's like a ratchet," said Jim Steele, an assistant superintendent in Gwinnett County. "Costs won't fall back."

Vol. 15, Issue 20

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