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Yahoo
13-05-2025
- Business
- Yahoo
Tutor Perini turns a profit on growing backlog
This story was originally published on Construction Dive. To receive daily news and insights, subscribe to our free daily Construction Dive newsletter. Tutor Perini, the Los Angeles-based heavy civil construction company, is finally making money doing construction again. After several quarters of disappointing results plagued by payouts for legal disputes on legacy projects, the company reported it is collecting cash and profits from newer, ongoing jobs while building up a massive backlog. First-quarter net income was $28 million, up 77% from a year earlier. It was the first time Tutor Perini was profitable since the second quarter of 2024. That money, executives were careful to stress, wasn't the result of cannibalizing future earnings to beef up the current quarter. Instead, it came from new jobs that are now active and were bid with better terms and higher margins. 'The progress that we made in the first quarter is not from an acceleration of the profits later in the year, bringing them forward, the quarter really was strong on its own,' said Gary Smalley, CEO, on a May 7 call with financial analysts to discuss first quarter 2025 results. 'Much of the improvement over the budget is really due to large projects that are cranking up, you know, ramping up a lot faster than we expected.' Those newer projects, which have all been won in the last two years, include the $3.8 billion Manhattan and $2.95 billion Brooklyn jails and the $1.18 billion Manhattan Tunnel in New York City; the $1.66 billion third phase of the Honolulu Authority for Rapid Transportation's Skyline project in Hawaii; the $1.1 billion Kensico-Eastview Connection Tunnel in New York and the $1.18 billion Newark AirTrain in New Jersey. Progress during the quarter was so good, in fact, the company actually raised its financial guidance — the only time it's done so — and hinted at more profits ahead. 'Look, this is the first time we've ever raised guidance at Tutor Perini,' said Smalley. 'It's the first time ever, and we hope it's not the last time this year.' The firm said it now expects earnings of $1.60 to $1.95 per share for all of 2025, up from a range of $1.50 to $1.90 previously. That raised expectation is based partly on a burgeoning backlog, which now stands at $19.4 billion — Tutor Perini's highest ever — and a 94% increase from a year earlier. Revenue also grew to $1.25 billion, 19% more than the company reported for Q1 2024. That backlog included $2 billion in new awards and contract adjustments during the first quarter. Those included: The $1.18 billion Manhattan Tunnel project. $241 million in additional funding for the APRA Harbor Waterfront Repairs in Guam, bringing the overall project to $570 million. $111 million in additional funds for healthcare projects in California. $99 million in additional funding for an electrical project in Texas. After building its backlog to $14 billion during the third quarter of 2024, former CEO Ron Tutor, who now serves as executive chairman, told investors the company might pull back on bidding. On the most recent call, however, Smalley was bullish on how the high backlog positions the firm. 'Our record backlog enables us to be even more selective than before as to which of the opportunities we will pursue and to focus on bidding projects that have favorable contractual terms, limited competition and higher margins,' Smalley said. Indeed, Tutor told investors on the call that the firm was pursuing several multi-billion dollar jobs. Those include: The $12 billion Sepulveda Transit Corridor light-rail project in Los Angeles. The $10 billion Midtown Bus Terminal replacement project in New York City. The $3.8 billion Southeast Gateway light rail project in Los Angeles County, California. The $1.8 billion South Jersey Light Rail project between Glassboro and Camden, New Jersey. The $1 billion North Valley Rail passenger rail project between Sacramento and Chico, California. The $900 million Foothill Gold Line light rail project to connect Los Angeles and San Bernardino County. Though other major infrastructure contractors, including WSP and AECOM, have said they have started to see impacts from the Trump administration's tariff policies, Tutor Perini said it had yet to see policy consequences to its business. 'With respect to potential concerns regarding U.S. trade policy and various federal spending programs, I will reiterate that we do not currently anticipate any significant impacts to our business related to these factors from a project funding perspective,' Smalley said. 'We do not currently foresee the risk of any of our major projects and backlog being canceled, delayed or defunded.' That said, when analysts pressed about potential fallout going forward, Ron Tutor hedged the company's bets. 'Costs are constantly rising, particularly in New York, which is one of our biggest markets,' Tutor said. 'There's nothing to do with tariffs that has affected us as of yet, other than threats.' That said, Tutor added, 'I can't predict what impact, if any, it will have on future work. Recommended Reading Tutor Perini unfazed by Trump's tariff, funding actions
Yahoo
26-04-2025
- Business
- Yahoo
Settlement in $324M Hitachi suit is coming, HART says
A more than $324 million lawsuit brought by rail's principal contractor against the Honolulu Authority for Rapid Transportation in 2024 appears on the verge of a final settlement, while condemnation actions will proceed on four downtown area properties. The HART board of directors oversaw both matters during its monthly meeting Friday. HART Project Director Vance Tsuda announced the rail agency was close to settling a $324.1 million lawsuit filed in December by Hitachi Rail Honolulu JV, related to work on the over-$10 billion Skyline project. Hitachi's lawsuit alleges HART's seeming dysfunction to set timely schedules caused cost increases to go off the tracks by tens of millions of dollars—expenses the train company says it was forced to solely absorb. Famous for Japan's iconic high-speed bullet train, Hitachi was hired by HART in 2011 on a $1.4 billion contract. In return the company was to design, build, operate and maintain the city's cutting-edge fleet of fully automated, driverless electric trains, expected to run along the 18.75-mile elevated guideway system to 19 stations, from East Kapolei to Kakaako. Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA. During the board's project oversight committee meeting, rail staff indicated HART is completing negotiations with Hitachi to settle the claim for alleged project delays incurred on rail segments 1 and 2. 'The claim is in excess of $100 million, ' a HART report on the issue asserts. 'Additionally, the second quarter revenues of fiscal year 2025 (were ) lower than expected based on previous year trends.' As far as planned eminent domain actions, the panel voted to adopt a request for approval to notify the Honolulu City Council of the rail agency's intent to acquire 'by eminent domain fee simple interest ' portions of three properties in Kakaako. These properties are being sought due to their proximity to the planned Civic Center Guideway and Stations project, which is scheduled to open to the public by 2031. The board also voted to condemn a fourth property on Dillingham Boulevard, between Puuhale Road and Mokauea Street in Kalihi, to allow easement access for placement of Hawaiian Electric equipment. The properties include :—560 Halekauwila St., owned by architecture firm Design Partners Properties No. 5 LLC.—609 Keawe St., owned by Bank of Hawaii, trustee for the Katherine McGrew Cooper Trust.—576 Halekauwila St., owned by Goodwill Kakaako Center LLC and Big Brothers Big Sisters Hawaii Properties LLC.—1956 Dillingham Blvd., owned by Gerald Je Chul Kang and Kloe Sookhee Kang. In a report to the board, HART staff indicated the agency requires the three Kakaako properties 'to accommodate the placement of guideway straddle bent columns along Halekauwila Street.' The amount of just compensation for each property has been determined according to the 1970 federal law the Uniform Relocation Assistance and Real Property Acquisition Policies Act, the agency's report states. 'HART provided an offer to acquire a fee simple interest in a portion of each of the properties, ' the report reads. 'Two of the owners have rejected HART's offer. The third has not responded to the offer.' The property owners, according to HART staff, have been given a reasonable time to consider the offers. 'In order to adhere to the CCGS construction schedule, it is necessary to refer the properties to condemnation, ' the staff report states. However, 'efforts will be made to continue negotiations with each owner with the goal of reaching an amicable and reasonable settlement, ' the report says. HART will now inform the Council of its intent to acquire each property by eminent domain, the report indicates. The Council has 45 days to approve or object to condemnation by adoption of a resolution of the notification to acquire the properties. Upon approval or no action by the Council, the HART board will then be requested to approve each resolution authorizing the acquisition of the property by eminent domain, the agency says. Before the board's vote, HART's director of transit property acquisition and relocation, Krista Lunzer, said two property owners—Design Partners Properties and Bank of Hawaii—formally rejected offers for their respective properties. She also noted Goodwill Hawaii has neither accepted nor rejected offers for its property. However, the nonprofit has publicly stated its objections to HART's intended condemnation due to potential negative impacts on Goodwill's operations and the inconvenience to staff and its disabled clients during construction and operation of the rail project Meanwhile, a co-owner of the 1956 Dillingham Blvd. property appeared before the board to oppose the eminent domain on her family's property. Kloe Sookhee Kang noted the matter involves easement access to allow placement of a Hawaiian Electric transformer and accompanying protective bollards on a portion of their property. 'Unfortunately, the proposed terms still include ongoing maintenance obligations for us as property owners, including responsibility for bollards that exist solely to protect HECO's equipment, ' she said. 'If those bollards ever fail, and damage occurs to the transformer, we would be held liable. And that kind of risk that's tied to equipment that we do not own or control is simply unreasonable, and we have a hard time accepting.' Kang requested the HART board 'remove the property owner's obligation to maintain the bollards and landscaping in that easement area, and remove the language that makes the property owner liable if bollards fail as their installation and upkeep should be HECO's responsibility.' Lunzer would later say HECO's terms related to siting its equipment on private property—and having private property owners be responsible for that equipment as well as the bollards that the rail agency, in this case, installed—was standard practice for the utility. 'That's HECO's requirement. It's their requirement across the board, and they would not change it for the Kangs. We've asked on more than one occasion, ' Lunzer asserted. 'So that is the requirement in the standard easement document.' Some board members questioned the utility's actions. 'So HECO requires that the property owner maintain the bollards ?' board member Christopher Moylan queried. 'For example, they wouldn't accept HART maintaining the bollards ?' 'It's not our facility, ' Lunzer replied. Others, like board member Anthony Aalto, said, 'My heart goes out to the Kangs. On the other hand, this easement is on the 'critical path, ' and we have an even higher responsibility to make sure the project stays on track.' After a closed-door executive session on the matter, the board returned to approve a resolution that requested the eminent domain proceed on the Kang property.
Yahoo
25-04-2025
- Business
- Yahoo
HART eyes Iwilei, Kakaako properties to condemn for rail
GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 560 Halekauwila St. 1 /4 GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 560 Halekauwila St. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 576 Halekauwila St. 2 /4 GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 576 Halekauwila St. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 1956 Dillingham Boulevard. 3 /4 GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 1956 Dillingham Boulevard. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 609 Keawe St. 4 /4 GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 609 Keawe St. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 560 Halekauwila St. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 576 Halekauwila St. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 1956 Dillingham Boulevard. GOOGLE MAPS Properties that the Honolulu Authority for Rapid Transportation is considering for eminent domain : 609 Keawe St. Four downtown area properties are being eyed for condemnation by the Honolulu Authority for Rapid Transportation. The HART board of directors today is expected to review a request for approval to notify the City Council on the rail agency's intent to acquire three Kakaako properties, due to their proximity to the planned Civic Center Guideway and Stations project. The Civic Center station, scheduled to open to the public by 2031, is slated for construction near Halekauwila and South streets. The station will serve Kakaako, Makiki, Ward and outlying residential areas, the rail agency states. A fourth property, in Iwilei between Puuhale Road and Mokauea Street, is also being considered for condemnation along that segment of city rail. 'The HART board is currently considering to acquire by eminent domain portions of four properties in this area, ' Joey Manahan, HART's government relations and public involvement director, told the Honolulu Star-Advertiser via email Thursday. The properties in question include : Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA.—560 Halekauwila St., owned by architecture firm Design Partners Properties No. 5 LLC.—609 Keawe St., owned by Bank of Hawaii, trustee for the Katherine McGrew Cooper Trust.—576 Halekauwila St., owned by Goodwill Kakaako Center LLC and Big Brothers Big Sisters Hawaii Properties LLC.—1956 Dillingham Blvd., owned by Gerald Je Chul Kang and Kloe Sookhee Kang. On Thursday, Goodwill representatives told the Star-Advertiser the property being sought largely consists of a parking lot at its new executive headquarters in Kakaako. They stated the parcel, adjacent to 571 Quinn Lane, was co-purchased at the end of 2024 with Big Brothers Big Sisters Hawaii and was intended to have joint use by both nonprofits. According to a recent Goodwill news release, the two combined properties 'provide ample parking and 14, 000 square feet of interior space that will serve as offices, classrooms and large multi-purpose rooms for Goodwill Hawaii's at-risk youth and adults with intellectual disabilities programs and Big Brothers Big Sisters Hawaii's youth mentoring programs.' Goodwill Hawaii President and CEO Katy Chen expressed frustration over HART's potential actions to take her nonprofit organization's property. 'Goodwill Hawaii recently acquired a new headquarters for its Hawaii operations, ' Chen said in a statement to the Star-Advertiser. 'HART's intended condemnation of part of Goodwill's properties will impact operations and will inconvenience staff during construction and operation of the rail project.' 'Goodwill intends to assure it is fully compensated for its land lost to the rail project and for its damages, ' she added. Gerald Je Chul Kang, a real estate agent and co-owner of the parcel at 1956 Dillingham Blvd., told the Star-Advertiser he also objected to the rail's proposed condemnation of his property. 'We are going to be at the meeting ' in opposition, Kang said, adding he was worried about liability issues related to a property he owns with his wife. Bank of Hawaii and Design Partners Properties could not be immediately reached for comment. To deliberate on these proposed eminent domain actions, the board may enter into a closed-door executive session for each of these properties. In a report to the board, HART staff indicate the agency 'requires a fee simple interest in a portion of the subject properties to accommodate the placement of guideway straddle bent columns along Halekauwila Street.' The amount of just compensation for each property has been determined, according to the 1970 federal law, the Uniform Relocation Assistance and Real Property Acquisition Policies Act, the agency's report states. 'HART provided an offer to acquire a fee simple interest in a portion of each of the properties, ' the report reads. 'Two of the owners have rejected HART's offer. The third has not responded to the offer.' The property owners, according to HART staff, have been given a reasonable time to consider the offers. 'In order to adhere to the CCGS construction schedule, it is necessary to refer the properties to condemnation, ' the staff report states. However, 'efforts will be made to continue negotiations with each owner with the goal of reaching an amicable and reasonable settlement, ' the report says. Upon approval of the resolutions, HART will inform the City Council of its intent to acquire each property by eminent domain, the report indicates. If adopted, the Council has 45 days to approve or object to condemnation by adoption of a resolution of the notification to acquire the properties. Upon approval or no action by the Council, the HART board will then be requested to approve each resolution authorizing the acquisition of the property by eminent domain, the rail agency report says. In other HART business, the board is expected to receive a brief update on House Resolution 37, which formally requested HART extend Skyline beyond its station in East Kapolei, to West Oahu. As drafted, HR 37 contended the rail line 'does not adequately serve the growing communities of Nanakuli, Ko Olina, Maili ' and other spots along the Waianae Coast. But Manahan confirmed that the measure—co-introduced by Rep. Darius Kila (D, Nanakuli-Maili )—failed to receive legislative support in 2025. 'HR37 is a non-binding resolution that was not adopted by the full House of Representatives, and is 'dead' for the session, ' he explained. The HART board meeting is set to begin at 9 :30 a.m. at Alii Place, 1099 Alakea St., Suite 150.
Yahoo
15-03-2025
- Business
- Yahoo
HART's $968M budget under Honolulu City Council review
The Honolulu Authority for Rapid Transportation this week responded to City Council questions over its $968.3 million budget package proposed for fiscal year 2026. HART's budgets, expected to take effect July 1 if adopted, show marked increases to debt service on the project's loans as well as increased labor costs for the over-$10 billion Skyline construction. They show other higher costs as well. Rail officials indicate that due to the awarded contract of $1.66 billion for City Center Guideway and Stations, or CCGS, meant to take the rail line to Kakaako by 2031, the project's capital budget is expected to rise from $482.4 million in the current fiscal year to more than $526.9 million for 2026—a 9.2 % increase. In August, HART awarded the CCGS contract to Los Angeles-based Tutor Perini Corp. to design and build Skyline's last 3-mile segment to Halekauwila Street. But rail staffers say because of the large contract—about $360 million above original estimates—certain rail-related projects might need to be temporarily deferred. Don 't miss out on what 's happening ! Stay in touch with breaking news, as it happens, conveniently in your email inbox. It 's FREE ! Email 28141 Sign Up By clicking to sign up, you agree to Star-Advertiser 's and Google 's and. This form is protected by reCAPTCHA. Still, HART Executive Director and CEO Lori Kahikina told the Council's Budget Committee on Wednesday that Tutor Perini is 'moving quicker than I anticipated.' 'It's a design-build, so I thought they would take about a year alone just to do designs, ' she said. 'You should see columns starting to come up later this year.' 'They are going to start in Iwilei—kind of work out all the kinks and bugs—and they may have a second heading starting in Halekauwila, ' she added. According to HART's budget information, 2025's total operating budget will rise to $174.7 million—an increase of $36.4 million, or 26.3 %, over the rail agency's current $138.3 million spending plan. Of that amount, $169.7 million—or 97 %—is composed of debt serv ice expenditures. That includes $129 million in principal payments on outstanding general obligation bonds—an increase of $40.8 million over the current fiscal year, budget reports indicate. But the agency notes $40.3 million in interest payments on debt equates to a $4.6 million decrease compared with the current fiscal year. Conversely, total labor costs are budgeted at $1.5 million—a $368, 153 increase, or 32.4 % higher than the current year. HART's main funding sources—local taxes and federal funding—total over $1.25 billion for fiscal year 2026, budget plans indicate. The federal funding source for 2025 totals $125 million, or about 10 % of the project's funding budget, compared with $518.3 million, or about 41 %, derived from local taxes, budget reports state. Amended in February 2024, the Federal Transit Administration's Full Funding Grant Agreement initially provided $1.55 billion to construct the city's rail project. Currently, Kahikina noted, $744 million is the amount outstanding from that agreement. 'When we complete City Center's Utilities Relocation package IV—that's the Dillingham corridor—we're eligible to apply for the remaining $125 million, ' she said. 'To date, we have received—in calendar year 2024—$125 million, ' she added. 'And then when we awarded that Tutor Perini contract, that was an additional $250 million, so we received $375 million in calendar year 2024.' Two more FTA disbursements of $125 million—or $250 million in total—are expected to be gained by HART, she said. Another $119 million—not tied to any project milestones such as stations—also remains. 'So the total outstanding is $369 million, ' Kahikina explained. Rail construction money is largely gleaned from the state's general excise tax, which is projected to be $371.4 million in 2025 ; transient accommodation tax, estimated at nearly $90 million ; as well as the city's own TAT at $57.2 million, among other sources, according to HART. A $10 million city subsidy is among other funding sources comprising the remaining amounts. The proposed operating and capital budgets will fund 72 full-time equivalent positions. As of February, 47 people were employed at the rail agency. It is authorized to have a total of 98 positions, HART reports indicate. HART also proposes a $793.6 million capital budget for next fiscal year above the current $574 million—a nearly 38.3 % increase. The capital budget includes future contract awards for Skyline's Pearl Highlands Transit Center as well as an H-2 freeway access ramp. A planned Waipahu Station makai entrance—originally earmarked for $14 million—is now being proposed at $20 million, the CIP indicates. At the meeting, Council Chair Tommy Waters queried HART officials on potential impacts—namely involving the Trump administration's freeze on federal funding—that could affect FTA and the city's rail project. 'Have you folks noticed any change in the team that you're working with over at FTA, and do you anticipate any of that occurring ?' Waters asked. In response, HART Deputy Executive Director and CFO Rick Keene said, 'We haven't heard anything, so we think that's good news.' 'We hope that this next $125 (million ) that's budgeted in fiscal 2025 for the completion of segment two will not come about until the end of the year, ' he said. 'We're hopeful that by then the dust will have settled a little bit.' Moreover, Keene alluded to talk 'in the media ' about the Republican-controlled Congress' possible defunding of California's long-planned high-speed rail system. 'And out of Washington, to us, there's been clear distinctions made between that situation and our situation. So at this point we haven't heard anything, ' he added. 'If we hear otherwise, we will let everyone know, but right now we still feel confident in the numbers.' Members of the public also spoke at the budget hearing. Donald Sakamoto, president of Citizens for a Fair Americans With Disabilities Act Ride, testified that he participated in the Office of the City Auditor's recent report over Honolulu's Skyline rail operations. That audit, in part, asserts Skyline has less than adequate features for the disabled around its stations. 'So I'm worried about construction of phase two and phase three of the rail stations, and the surrounding areas to be more accessible for our ADA persons like myself, who's blind, and others, ' he said, 'especially with the 35th anniversary of the ADA law this July 26, 2025.' 'So I look forward to the report from HART on the projection of their rail station, and the rail project and the ADA accessibility, ' Sakamoto added. Meanwhile, Kahikina noted city rail's second segment—from the old stadium, past the airport, to Kalihi—will not be open for public service by October, as was stated by the city during a Council budget hearing Monday. 'HART has consistently said we will transfer the assets to (the city Department of Transportation Services ) before the end of the year, ' she said. 'I'm trying to temper expectations with you folks and the public, so we are still saying 'before the end of the year.'' 'However, it is prudent for DTS and (city Department of Budget and Fiscal Services ) to budget ' for HART, Kahi kina added. 'The earliest we could possibly open is October, so we should budget for that, but just understand right now it's still the end of the year.' HART's latest operating and CIP budgets—to be introduced as Bills 26 and 27, respectively—are scheduled to be heard Wednesday as first-reading measures during the full Council's meeting.
