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Construction on the new Hillcrest High School in Midvale, above right, continues on Wednesday, Nov. 27, 2019. The new school is being built next to the existing school.
Construction on the new Hillcrest High School in Midvale, above right, continues on Wednesday, Nov. 27, 2019. The new school is being built next to the existing school.
Kristin Murphy, Deseret News

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Utah high schools could soon cost $145M each in ‘era of intense construction inflation’

SALT LAKE CITY — The cost of the next Utah high schools built along the Wasatch Front could exceed $145 million, an increase of nearly 50% in recent years.

Blame it on Utah’s sizzling economy, ongoing building boom, low unemployment rate and the escalating cost of materials, driven in part by tariffs impacting steel and aluminum.

The 405,000-square-foot Farmington High School, which opened in 2018, cost $77.5 million.

Jordan School District’s 391,000-square-foot Mountain Ridge High School in Herriman, which opened this fall, cost $82 million to build, including impact and architectural fees. That figure does not include the cost of furnishing the school and equipping it with technology and fixtures, which was about $5 million

Davis, Jordan, Canyons, Granite

Contrast that to the project cost of Granite School District’s planned 505,831-square-foot Cyprus High School, which is $145 million. Meanwhile, the project cost for the 420,540-square-foot rebuild of Skyline High School is expected to exceed $127 million. Neither project has been put out to bid.

Granite District is not alone with its $145 million estimate for the cost of a new high school. Recently, voters in the Provo School District rejected a $245 million bond proposition, $145 million alone to rebuild Timpview High School.

The report of one architectural firm that assessed the school said it either needs to be replaced or issues of building settlement otherwise remediated because “the likelihood of falling hazards happening in the future is high. It is a game of roulette as to whether or not a student or faculty member is eventually injured.”

“It’s literally an economic issue. When there’s a recession, it’s bad for the community and our taxpayers but it’s good for school construction. We’re definitely not in a recession,” said Granite School District Ben Horsley.

Not only are school districts competing against one another for available construction labor and resources, construction firms have full plates with other large-scale state, municipal and commercial projects, including the $3.6 billion Salt Lake City International Airport rebuild and the new Utah State Prison. It’s estimated the new prison will cost taxpayers more than $800 million, although state lawmakers have approved roughly $900 million in bonding authority for the project.

Earlier this year, officials announced a proposed 448-foot tower in Salt Lake City’s downtown with 39 floors of luxury apartments, which would shatter the city’s height record.

Add to that hundreds of thousands of square feet of new office space being built in Salt Lake and Utah County suburbs as Utah’s Silicon Slopes is realized, and the development of substantially more Class A office space in downtown Salt Lake City.

“There’s just so much building going on wherever you look along the Wasatch Front,” said Leon Wilcox, business administrator of the Canyons School District, during a recent study session of the Canyons school board.

A question-and-answer document prepared by Provo School Board prior to the recent bond election described current conditions as “an era of intense annual construction inflation.”

Project managers who advised the school board recommended that the district plan for an annual construction inflation rate of 8%, the document states.

Under more modest estimates, school construction costs would rise millions more.

For instance, a building that costs $48 million in 2021 would cost $54 million in 2025, supposing a 3% annual inflation rate, or $58.3 million with a 5% annual inflation rate, according to recent projections prepared for the Canyons Board of Education.

While some school districts are taking a “wait-and-see” approach, others are extending project timelines and some, like Canyons District, are exploring other forms of financing to complete projects promised to voters and meet other capital needs. The district has 11.7 acres in its boundaries that the school board may consider selling to generate more revenue.

Another option is building a single school to replace Edgemont and Bell View elementary schools and combining the populations of the Sandy-area schools, which were built in the late 1950s and mid-1960s, respectively.

One school district even flirted with the idea of designing a high school that functioned like a college classroom building, with office space for educators and shared classrooms, but that was a nonstarter among teachers who prefer their own classrooms.

There seems to be no sweet spot in the offing when construction activity will decline.

Both Utah’s public school and college-age populations are on a growth trajectory, which portends a demand for more school construction and upgrades to aging buildings.

By 2065, the state’s school-age population is projected to increase by 329,743 or 49% to reach nearly 1 million, while the college-age group is projected to increase by 196,705 or 65% to reach 500,000, according to an analysis by the Kem C. Gardner Policy Institute.

Once the Utah State Prison is rebuilt, the current 700-acre Draper prison site will be redeveloped.

“If the economy is going gangbusters and you’re trying to build a new building at the same time other large buildings are going up, it can be a problem. It really can be,” said Terry Shoemaker, executive director of Utah School Boards Association.

Shoemaker said inflationary pressures are far greater now, but when he was superintendent of Wasatch School District, which rebuilt its high school while the $1.5 billion City Creek Center was under construction, the district experienced higher-than-anticipated costs because of the intense competition for construction labor, particularly subcontractors. That was during the economic downturn.

“There’s fewer people to do all these jobs, so people can charge more and it can take longer,” he said.

Canyons School District, which is coping with spikes in school construction costs at Hillcrest and Brighton High Schools, is considering using lease revenue bonds to help blunt escalating costs of school construction and renovation projects.

According to Canyons School District spokesman Jeff Haney, the Brighton High project was expected to cost $87 million. Current anticipated costs are more than $113 million, up 30%.

In 2017, the rebuild of Hillcrest High School was expected to cost $85 million. The budget for the Hillcrest project is now over $119 million, a 40% increase.

“The Board of Education is dedicated to fulfilling the promises made to the public at the passage of the bond in November 2017. The timeline may need to be extended if other additional funding sources aren’t pursued, but the district’s plans to build or renovate the remaining schools on the project list remain the same,” Haney said in an email.

Canyons school board member Mont Millerberg expressed angst after voters were asked to approve school construction bonds, with the understanding that the school district would deliver the projects, which persuaded voters to support property taxes increases only to face rapidly escalating construction costs.

“We made a commitment to our voters when we passed the bonds that we would build schools. I don’t know that we put a time frame on it but I think that the voters expected it sooner than later,” said Millerberg during a recent study session to consider other options.

Provo School District spokesman Caleb Price said the cost of its $245 million school bond — and the $145 million project cost to rebuild Timpview High School — may have been an issue for some voters, but other factors contributed to its defeat.

Utah County sent a notice to property owners prior to the election that said the county was proposing to increase its portion of property taxes substantially.

“The board is regrouping and starting to look at other options,” Price said.

Several school districts along the Wasatch Front are scheduled to put school projects out to bid in December and January, which will reflect the latest construction costs, Wilcox said.

Correction: An earlier version said the construction cost of Mountain Ridge High was $76 million. The cost of the school, including architectural fees and impact fees, was $82 million.

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