Diversion project construction will fuel massive economic boom in Fargo-Moorhead
Steps are being taken to increase participation of the local workforce in construction of the $2.75 billion metro flood diversion project — the more local workers involved, the greater the economic benefit during construction, a study shows.
FARGO — The massive diversion project to protect the metro area from severe flooding will create a prolonged construction boom that will employ up to 7,700 construction workers and fuel an economic bonanza.
During the six years expected for major construction, economic activity generated from spending by workers on the project is estimated to range from $1.4 billion to $3.8 billion — with local labor seen as a key to higher economic benefits.
Local workers spend much more than outside workers who tend to spend most of their money back home, according to an analysis presented to the Metro Flood Diversion Authority.
To maximize the economic impact of the $2.75 billion project, and to help develop the local building trades workforce, diversion officials have adopted a goal of having workers from a 400-mile radius of Fargo-Moorhead make up at least 50% of the project’s workforce.
“We’ll be monitoring the goal of a 50% utilization of local workforce,” said Joel Paulsen, the Diversion Authority’s executive director. Also, at least 15% of the workers must be enrolled in registered apprenticeship programs, which labor leaders say are an important way to develop a skilled local workforce.
“That is something the developers are going to have to utilize,” Paulsen said, adding that diversion officials are working with training programs including those offered by the North Dakota State College of Science and Minnesota State Community and Technical College.
“The board feels it’s important that we maximize the benefits of local workforce development,” he said.
If the 50% goal is reached, economic activity generated by the workers’ spending would pump $2.5 billion into the area’s economy, a study by the North Dakota Building Trades Unions and the Laborers’ International Union of America estimated.
If all workers were local — a scenario viewed as unrealistic — the economic boost from worker spending would be $3.8 billion, but as low as $1.4 billion if only 10% of the construction workers were local, according to the union analysis.
“There is no guarantee, however, that the majority of this work will go to local workers,” the union study said. “Failure to maximize employment of local workers on the project could cost the Fargo-Moorhead region as much as $1 billion in lost economic activity.”
Traveling construction workers try to limit their local spending, often limited to their daily per diem allowance, which typically ranges from $75 to $100 for food and lodging, according to the union analysis.
Business leaders support the effort to maximize local workforce participation in construction, and are beginning to plan and prepare for the construction boom.
Fargo-Moorhead diversion takes major step forward with key permit approval The permit by the Minnesota Department of Natural Resources means the likely dismissal of a federal lawsuit and will enable construction on the $2.75 billion metro flood control project to take off next year.
“We definitely know that we’ll need a strategy to help get the local workforce involved,” said Katie Mastel, government affairs and advocacy manager for the Fargo Moorhead West Fargo Chamber of Commerce.
Many in the community don’t realize the magnitude of what’s coming — both the opportunities for business and what the project will do to the local construction climate, she said.
“I think it’s going to surprise some of the local community, she said. “There is a ton of opportunity for our local community.”
Competition for construction labor and materials could increase local costs during the six years of major construction, Paulsen said. Recognizing that, the Diversion Authority accelerated construction on $40 million of in-town flood protection to get ahead of the boom, he said.
“There’s definitely maybe growing pains along the way,” Mastel said. “We need to be prepared for what that looks like.”
Assuming 7,000 laborers work on the project over six years, that translates into 1,166 workers per year; 15% of that would mean 175 building trades apprentices — trained workers who later would be available for other building projects, Paulsen said.
“That’s going to help bolster those industries,” he said. “What a great opportunity for a young person going into construction.”
Union leaders say their members in trades as diverse as bricklayers, carpenters, concrete masons, electrical workers and ironworkers are eager for major construction to begin in the spring of 2022.
“We see this as a way to train the next generation of workers on a project of this scale,” said Jason Ehlert, president of the North Dakota Building Trades Unions, and an author of the analysis. “We’ve been chomping at the bit to get at this project for a while now. This is a once-in-a-lifetime project. It’s massive in scope. It’s highly engineered.”
Work already is underway on the inlet for the diversion and the Wild Rice control structure, both near Horace, but the tempo on the project will jump into high gear next year when work begins on the 30-mile diversion channel, 22-mile embankment, Red River control structure, raising a section of Interstate 29 and building 18 bridges and four aqueducts.
The project is believed to be the region’s biggest public works project since the interstate highways and Garrison Dam were built, Paulsen said.
“It’s a super huge project that we’re all excited for,” said Nathan Brandt, a former crane operator who is an official with the local International Union of Operating engineers, which represents heavy equipment operators.
Local union leaders have been pushing to increase the amount of work that will be done by workers from the area.
“We’ve done a lot of organizing here to get local workers,” Brandt said.
The average construction worker earns three to four times more than a typical retail or food service worker, the union study said. An experienced union heavy equipment operator can earn $30 an hour in wages, with total compensation including health care and pension ranging from $45 to $50 per hour, Brandt said.
“You can make a career in construction,” he said. “This is something you can make a nice living doing. There’s no shame to it. That’s a narrative we’re trying to change.”
The city saw spinoff benefits from construction of the new $494 million Sanford Medical Center, which opened in 2017, Paulsen said.
“We’re going to see those same sorts of benefits,” he said. “2022 is going to be some major construction for the Fargo-Moorhead area. That’s something our community has to be prepared for.”
Economic benefits of the flood diversion project
The metro flood diversion project will protect Fargo-Moorhead against catastrophic flooding.
Here are some of the economic benefits the project will provide, according to the Metro Flood Diversion Authority:
- Without the diversion, more than 1,000 homes in Moorhead and more than 11,000 homes in Fargo are at risk of being mandated to carry federal flood insurance. The owner of a $200,000 home could expect to pay $4,000 per year for subsidized flood insurance.
- Flooding, which requires significant temporary protections including levees and sandbag barriers, generates an average annual direct loss of $1 billion in business output.
- The diversion will protect $19 billion in property value.
- The diversion will protect a metro economy that generates $5.4 billion in wages and more than $3.5 billion in taxable sales.
- Directly and indirectly, flooding generates more than $1.6 billion in business output losses and affects almost 16,000 jobs and decreases tax collections by about $114 million.