Ewell Plaza

This April photo shows Ewell Plaza in the 100 block of North Queen Street. A new Lancaster Public Library and parking garage will be constructed at the rear of the open space.

The COVID-19 pandemic has slowed the pace of economic development in Lancaster County significantly over the past two months, applying the brakes in both obvious and not-so-obvious ways.

Developers of some two dozen projects who’ve been working with Lancaster-based EDC Finance for help with obtaining state or federal support say their ventures have stalled, according to Lyle Hosler, the nonprofit’s director of finance.

“We don’t feel that many of them have been canceled, just put on hold,” he said in an email earlier this week.

These two-dozen projects represent “$50 (million) to $100 million in investment or more.”

Some have been postponed because these projects would serve industries that have been “heavily impacted” by COVID-19, such as hospitality, said Hosler. That’s forcing the developers to re-evaluate the feasibility not only of their project but of their existing operation, he said.

Cautious clients

But sometimes the pause button has been pushed indirectly. For instance, the state had shut down construction (with some exceptions) until May 1, meaning developers “could not move ahead if they wanted to,” he said.

Sometimes delays are due to bottlenecks in the loan approval or project approval process, according to Hosler. Financing professionals, for instance, might be tied up handling the applications of other companies for state or federal relief. Municipalities might have been slow to process permit or plan approvals, because of curtailed hours or staffing.

“We have a handful of projects still advancing and the majority of them, not surprisingly, focus on agriculture and/or food processing,” said Hosler. Those industries were not impeded by COVID-19 shutdowns.

Hosler said those half-dozen projects still progressing are smaller ventures representing a total investment of $10 million or less.

Executives of several Lancaster County construction companies echoed Hosler’s assessment, saying they’ve seen some projects being pushed back, but few canceled.

Yet, with clients being cautious, the executives worry that a quick uptick in activity following the May 1 lifting of the construction ban could prove to be a short-lived boom.

Long-term concerns

“In six months it could be, unfortunately, a very different situation,” said Mike Callahan, CEO of Benchmark Construction. “Some folks are taking a little bit of a wait-and-see attitude as far as other projects and whether there is going to be a second wave (of COVID-19 infections).”

Callahan said some of Benchmark’s health care clients didn’t resume their projects right away May 1, but other jobs — including a hotel in Ephrata and a parking garage in downtown Lancaster — restarted quickly enough to allow furloughed Benchmark workers to return.

Even in normal times, Callahan said there are many factors can upend a project; now the risk is magnified because of the lingering uncertainty about COVID-19.

“I’m just hoping they find a vaccine for this damn thing,” he said.

Mike Funck, senior vice president of Wohlsen Construction, said a $15-million office building project off Fruitville Pike was recently canceled, while at least four others have been put on hold. Some of the delays have been due to sudden trouble with bank financing, he said.

Those delays, coupled with a suddenly shaky economy, have Funck worried about the long-term outlook. He wonders about where the work will be next year, even though there's a lot to build at the moment.

“We’re busy now with a lot of projects that we had under construction (before the shutdown), but by the end of the summer they will be finished up,” he said. “There really are not a lot of new projects coming out.”

DJ Risk, president of Paul Risk Construction, says the company is back working on the eight jobs it had going before the March 19 closures, all but one of which had been shut down.

Yet Risk is also worried about the future.

“My biggest concern is this time next year,” he said. “Are the civil engineers and architectural firms moving forward with project designs in 2020, or do the designs get put on hold and construction feels the trickle down next year?”

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