Construction Law Signal - Insights & Information on Current & Emerging Developments affecting the Construction Industry

By: Jennifer M. Horn

On September 14th, Lancaster General Health (LGH) is set to break ground on the new Ann B. Barshinger Cancer Center.

According to the press release from the LGH, the 70,000 square foot, $44 million center will, “bring medical oncologists, radiation oncologists, surgeons and other cancer specialists together in one location…The Suzanne H. Arnold Center for Breast Health will be integrated into the two-story cancer center.”

Stand out features of the new cancer center include:

• A new radiation wing, considered the “hub of technology,” with the latest diagnostic and treatment technologies available;
• Infusion therapy/chemotherapy suites configured with patient comfort in mind;
• A conference and education center with the most advanced technology and connectivity; and
• A tranquil Healing Garden with a natural landscape where patients, families and friends can find a quiet space between treatments.

Philadelphia based architecture firm Ballinger designed the center and Benchmark Construction Co. Inc. is set to manage the project.

Jennifer M. Horn is Senior Counsel at Cohen Seglias and a member of the Construction Group. She concentrates her practice in the areas of construction litigation and real estate.

Is construction picking up throughout the Mid-Atlantic region? Here are just a few summaries of headlines for Maryland, Delaware and Pennsylvania

Maryland:

As of March 2011, construction projects in several Maryland counties continue to increase, and construction contracts “were up 55% when compared to the same month in 2010.” For the first quarter, future construction contracts reached $272M.

These statistics include Anne Arundel, Baltimore, Carroll, Harford, Howard and Queen Anne’s,counties in Maryland . The commercial projects included, but were not limited to, the construction of commercial, manufacturing, educational, religious, administrative, recreational, hotel, and dormitory buildings.

Delaware:

Delaware Governor Jack Markell spoke to Delaware business leaders on May 4, 2011 proposing how to spend the projected surplus above the $3.4 billion operating budget he proposed in January.

Ideally, Markell wants to spend $135 million of a projected $320 million budget surplus “on one-time construction projects to stimulate the economy” through a new initiative, the Building Delaware’s Future Now fund.

Some of the projects Markell suggests committing funds to include:

• $40 million for a new jobs infrastructure fund to pay for road and sewer improvements for getting new companies to relocate to Delaware;
• $40 million for the state’s Transportation Trust Fund;
• $35 million for the preservation of historic buildings, the capital complex in Dover and state parks facilities;
• $10 million for investing in affordable housing projects; and
• $10 million for open space preservation.

Pennsylvania:

Pennsylvania has been awarded $40M, from the US Department of Transportation, for additional rail lines, leading from Philadelphia to Harrisburg. The funds come as part of the $2.4B that Florida Governor Rick Scott declined. Erin Waters, spokesperson for the Pennsylvania Department of Transportation (PennDOT) said the “upgrade would shave another 7 to 9 minutes from the travel time between Harrisburg and Philadelphia,” by improving the switch and signal network in Harrisburg.

No timeline has currently been released for this project.

Also in Pennsylvania, the Commonwealth Financing Authority approved $172M to fund 160 water infrastructure projects, in 51 counties, through the H2O PA program.

The H2O PA program provides “grants for flood control projects, construction of drinking water, sanitary sewer and storm sewer projects and high hazard or unsafe dam projects.”

For a complete list of projects and their descriptions please visit www.newpa.com.

Update: Christie Signs NJ Power Plant Bill

New Jersey Governor Chris Christie signed into law last Friday the controversial power plant bill (S-2381) that, among other things, is aimed to lower energy rates by increasing the energy generated in-state and create construction jobs.

The new law enables LS Power Systems to build a power plant in West Deptford, NJ, and provides an incentive for companies such as Competitive Power Ventures to build at least three additional plants in the state, with long-term, ratepayer subsidized energy contracts. Proponents of the bill believe that the long term capacity agreements (LCAPP) will reduce the cost of energy for ratepayers, thereby reducing the state’s reliance on out-of-sate generation and will create jobs in the construction and energy industries.

Opposition to the bill remains strong. Critics say that it locks ratepayers into 15 years of subsidies for some power suppliers and that the new bill does not guarantee lower tax rates for the public.

We will continue to monitor the controversial law, and report on its effectiveness.

$261 million tax reimbursement for Revel casino

Governor Chris Christie announced on February 1 that the half finished Revel Casino project can resume construction, beginning as early as next week. Through the Economic Development Authority, and the Atlantic City Rescue Package, Christie has authorized the state to provide $261 million to the casino. With this agreement, Revel will share 20 percent of its profits (up to $261 million) with the state and the state will hold a minority ownership in the casino. Revel lined up an additional $1.5 billion in private financing needed to complete the project. Christie’s administration cited the prospect of thousands of jobs and billions in future tax revenue as an incentive to back the project.

The project is on schedule to be completed in June 2012 and will create about 2,000 construction jobs. When fully operational, Revel will employ 5,500 people. Additionally, the casino plans to build 1,100 hotel rooms, as opposed to the 1,800 rooms originally planned.

Christie commented on the renewed project by saying that, “This is a landmark day for Atlantic City, and the beginning of its transformation”.

On September 6, 2010, President Barack Obama proposed a six-year, $50 billion plan to rebuild the nation’s highways, railways and airport runways. Obama’s plan includes rebuilding 150,000 miles of roads, construction and maintenance of 4,000 miles of railway – enough tracks to span the continent — and rehabilitation or reconstruction of 150 miles of airport runways. He also called for an “infrastructure bank” that would focus on paying for national and regional transportation projects.

It seems that Pennsylvania and New Jersey are heeding Obama’s call by making transportation a priority in the Keystone and Garden States.

New 5-Year Plan for New Jersey

New Jersey Governor Chris Christie announced this past Thursday a 5-year, $8 billion plan to renew the State’s Transportation Trust Fund (TTF) and provide funding for New Jersey road and bridge projects. The annual $1.6 billion program will provide approximately $200 million for local government projects, $672 million for New Jersey Transit (NJ Transit) projects and $728 for New Jersey Department of Transportation (NJ DOT) projects. The plan significantly increases cash contributions to the program, as compared to prior years, and relies less on borrowing bonds. Christie’s proposal will change the type of debt New Jersey will use to fund future transportation projects, and will include no toll or tax increases. In addition to the $1.6 billion program for local government projects, NJ Transit and NJDOT, the plan includes approximately $363 million average per year for projects that will be funded by the New York/New Jersey Port Authority in conjunction with NJDOT.

State projects slated to be funded through the Port Authority monies include a plan to renovate the Pulaski Skyway, the Route 7 Whitpenn Bridge and a new roadway in the Portway District of New Jersey.

Christie said that, “this is a significant commitment from the Port Authority to make our roadways and bridges safer as we travel through the port district.”

Want to Learn More about the TTF Plan?

NJDOT Commissioner James Simpson will review Gov. Christie’s TTF renewal plan at the Utility & Transportation Contractors Association’s (UTCA) upcoming membership meeting. The meeting is scheduled for January 13, 2011 at the Crowne Plaza in Jamesburg, New Jersey. Please contact the UTCA office at (732) 292-4300 for more information.

Smart Transportation Projects in Pennsylvania

The winners of the second round of the Pennsylvania Community Transportation Initiative have been announced, according to Pennsylvania Department of Transportation (PennDOT) secretary Allen D. Biehler, P.E. Forty-one communities across the state will get a portion of a $24.7 million fund to help boost “Smart Transportation” projects.

“Smart Transportation means partnering to build great communities for future generations of Pennsylvanians by linking transpiration investments and land-use planning and decision making,” said Biehler.

Smart Transportation projects are initiatives that support local economic development; encourage walkable, multimodal mixed-use development; improve regional connectivity or enhance the existing transportation network.

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In terms of solar power, New Jersey is very progressive. New Jersey is a frontrunner in renewable energy production, and currently has the second highest capacity of solar power in the country - California is first. The Garden State’s successful implementation of rebate and incentive programs, as well as its commitment to renewable energy, have enabled it to reach this point.

Below are just a few of the solar projects happening in New Jersey.

Sheraton Hotels

The Sheraton Meadowlands Hotel & Conference Center has contracted with Distributed Sun, a solar power company, to bring solar power to the Hotel & Conference Center. The project will include a 1.1-megawatt solar panel system that will produce enough clean energy to offset a portion of the hotel's energy bills.

Cedar Solar Farm

The Mannington Township Planning Board unanimously approved a 10-megawatt Cedar Solar farm that will be built in Salem County. The project, set to begin in early 2011, is spearheaded by Lincoln Renewable Energy (LRE). . LRE will build the solar power facility on a 129-acre site. The $60 million construction project, said to take six months, will create approximately 100 jobs. LRE's chief executive, Declan Flanagan, thanked "the Planning Board and the community of Mannington for recognizing the benefits that solar farms can bring to rural communities."

Pilesgrove Solar Park

On October 20, 2010, developers broke ground on a $90 million South Jersey solar-energy farm, which will be the largest of its kind in the Northeast. Con Edison Development and Panda Power Funds are partnering to build the 71,400 panel solar farm in Pilesgrove Township, Salem County. The Pilesgrove Solar Farm will take about 6 months to complete, sit on about 100 acres of agricultural land, and is expected to create 100 construction jobs. The power produced by the solar farm will be purchased by Atlantic City Electric and is expected to provide power to 5,100 homes. The renewable power created by the solar farm equates to the removal of more then 3,500 cars from the road for each year of operation.

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A new trend in sports stadiums becoming environmentally friendly has begun to take off. The new Meadowlands Stadium, home to the New York Jets and New York Giants, was built “green” using 40,000 tons of recycled steel and features solar panels and energy-efficient light bulbs. The Consol Energy Center , home of the Pittsburgh Penguins, became the first National Hockey League arena to achieve Gold LEED certification. Most recently, Lincoln Financial Field, home to the Philadelphia Eagles, has unveiled plans to upgrade their stadium to be the, “first major sports stadium in the world to convert to self-generated renewable energy using a combination of onsite wind, solar and dual-fuel generated electricity.”

Jeffrey Lurie, Philadelphia Eagles team owner and CEO said:

The Philadelphia Eagles are proud to take this vital step towards energy independence from fossil fuels by powering Lincoln Financial Field with wind, solar and dual-fuel energy sources. This commitment builds upon our comprehensive environmental sustainability program, which includes energy and water conservation, waste reduction, recycling, composting, toxic chemical avoidance and reforestation.

The Eagles have teamed up with Solar Blue to complete the project. With a completion goal of September, 2011, Solar Blue will “build, install, maintain and operate this new power system that will include approximately 80 spiral-shaped wind turbines, 2,500 solar panels and an onsite dual-fuel cogeneration plant.” The project is estimated to cost $30 million, and will create about 200 local jobs. Additionally, the Eagles stand to save an estimated $60 million in energy costs, as Solar Blue will maintain and operate the stadium’s power system for the next 20 years at a fixed annual price increase in electricity.

Contractors should be on the lookout for job opportunities as other stadiums and arenas around the country renovate to incorporate renewable energy.

Pennsylvania Governor Ed Rendell recently announced that the state is awarding close to $8 million in state alternative energy grants. The grants will be used to fund 21 projects that will encourage the use of biofuels and technological developments to cultivate the further development of electric cars and vehicles that run on natural gas. These projects are expected to create 221 jobs and to cut carbon dioxide emissions by 14.5 million pounds.During a press conference where the grants were unveiled, Rendell stated that:

Two weeks ago, the Natural Resources Defense Council named Pennsylvania as the 7th least vulnerable state in the nation to oil price spikes because of our work to build a green economy here…That’s a very accurate assessment and it’s what we’ve been saying for the past eight years, which is why we’ve worked so hard to create a green economy here. That work has paid off…These projects will build upon that work and will transform the way we power our vehicles.

The majority of the money for these grants comes from the Alternative Fuels Incentive Grant Program (AFIG), which aims to promote and build markets for advanced or renewable energy technologies. The purpose of the program is to provide a stimulus for opportunities that better manage fuel resources in a way that also improves the environment, supports economic development and enhances quality of life. Since 2004, Pennsylvania has invested approximately $39 million in 114 projects through the AFIG. These investments have resulted in $216 million in additional investments from other sources.

The grants will be matched by $22.1 million of private funds. The $30 million investment will solidify Pennsylvania’s reputation as a leader in the development and implementation of clean energy.

Rendell’s announcement about the grants comes on the heels of the news of the Governor’s $32.5 million investment for 38 rail projects in 28 counties throughout Pennsylvania.

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The project to expand Graterford Prison (Project) which was previously cancelled by the Pennsylvania Department of General Services (DGS) is now expected to move forward. According to an 10-8-10 Notice to Proposers, the proposal submission deadline was November 5, 2010, and the lowest bidder will be selected to complete the Project.

The purpose of the Project is to replace the existing facility which was built in 1929. According to Susan McNaughton, spokeswoman at the Department of Corrections (DOC), once the Project is complete, the old building will be uninhabited but “will be maintained in case [the DOC] need[s] to use it.”

Since its unveiling in January 2009, the Project has been hampered by litigation, but DGS believes that any outstanding issues have been resolved by the reissued bid. According to Troy Thompson, a spokesman for DGS, “[i]t was litigated and continues to be litigated, but we feel we have resolved those issues and our current bid package reflects that.” The Project is expected to take 3 years to complete and Thompson reported that it will generate approximately 625 construction-related jobs once ground is broken. The exact start date of the $365 million, 4,100-bed facility depends upon factors such as weather conditions and/or if the bid process is contested. Once underway, the Project will be one of the largest correctional projects in the country.

Pennsylvania Gov. Ed Rendell is currently reviewing a new state capital budget that is calling for numerous new development projects across the state. Within this budget, through the Redevelopment Assistance Capital Program (RACP) Philadelphia developer Bart Blatstein is poised to receive $100 million. If granted the money, these are just some of the projects that Blatstein is planning:

• Rehabilitation of the State Office Building at Broad and Spring Garden Street - $25 million
• Opening a 45-room hotel with a banquet hall near the Piazza at Schmidts - $45 million
• Opening a 86-suite hotel with a banquet hall at 2nd and Poplar St. - $25 million

Blatstein says his projects “would create jobs, generate tax revenue, and help sustain revitalization in many city neighborhoods.”

While these projects are praised by some city officials, others are wary of the fact that the money would be going to a private developer. Representative Michael O’Brian says, “I’m deeply disturbed by the state’s recent trend of financing for-profit entities.” One reason behind this concern is the nature of RACP - nominating parties are kept anonymous - creating a system with very limited accountability.

RACP began in 1986 and has funded many projects throughout Pennsylvania. Blatstein is not the only developer on the list to receive RACP funds this year.

Other projects that are awaiting approval under the new budget include:

• Sen. Arlen Specter’s library at Philadelphia University - $20 million
• Ardmore Transit Center - $9 million
• A golf course in Chester County - $20 million

Although it is unclear which state representative is backing Blatstein, it is plausible that not all of his projects will be approved by Rendell. Rendell will be reviewing Blatstein’s projects along with others that were green-lit by the Pennsylvania House of Representatives this summer.

Sen. Larry Farnese would like to see Blatstein’s projects approved because of his “proven track record of success,” and because of the potential “economic boost to the city.”

Rendell is expected to decide what projects will get the green light this month, and we will continue to update you on any developments.

On September 27, 2010, President Obama signed into law the Small Business Jobs and Credit Act of 2010 (Act). The Act was designed to provide immediate relief and is expected to provide critical resources to help small businesses continue to drive economic recovery and create jobs. Significantly, the Act authorizes the creation of a $30 billion fund to encourage lending by community banks to small businesses. The Act also contains a series of tax incentives and revenue changes to the Internal Revenue Code.

$30 Billion Small Business Lending Fund

The Act establishes a new $30 billion Small Business Lending Fund which will be administered by the Treasury. The Fund will be available to community banks, which could use the money to leverage billions more in loans. The Act will provide smaller community banks with low cost capital - as low as 1% - if they go above and beyond 2009 small business lending levels.

Impact on SBA Programs

The Act increases the maximum loan size for U.S. Small Business Administration (SBA) Loan Programs. Among other provisions, the Act permanently raises the maximum size for SBA’s two largest loan programs, increasing the maximum 7(a) and 504 loans from $2 million to $5 million, and the maximum 504 manufacturing-related loan from $4 million to $5.5 million. In addition, the Act increases the maximum loan size for SBA Express Loans from $350,000 to $1 million. The desired effect is to provide greater access for small businesses to working capital that, in turn, could be used to purchase new inventory and to obtain new orders with the ultimate goal of creating new jobs.

In addition to the lending expansion, an incentive is being offered to strengthen innovative state small business programs, supplying at least $1.5 billion in small business lending through a new State Small Business Credit Initiative. This initiative is designed to encourage private-sector lenders to extend additional credit.

Significant Tax Provisions

The following tax cuts go into effect immediately:

• Extension and expansion of small businesses’ ability to immediately expense capital investments: The previous expensing limitation of $250,000 was increased to $500,000 and expanded to include certain qualified real property. This benefit is available to property placed in service after January 1, 2010, and tax years beginning on or after January 1, 2010. This provision applies only in 2010 and 2011 tax years.

• Extension of bonus depreciation: This tax cut benefits businesses acquiring property that meets the requirements of Internal Revenue Code Section 168(k) for property purchased and placed in service in 2010. This is a temporary one year extension of bonus depreciation and generally applies only to property placed in service in 2010.

• A new deduction of health insurance costs for the self-employed: This benefit applies to self-employed individuals for the 2010 tax year only.

• Tax relief and simplification for cell phone deductions: Businesses that provide employees with cell phones or other communication devices can permanently deduct expenses associated therewith for tax years beginning after December 31, 2009.

• An increase in the deduction for entrepreneurs' start-up expenses: The Act temporarily increases the amount of start-up expenditures that entrepreneurs can deduct from their taxes for the 2010 tax year from $5,000 to $10,000.

• Five-year carryback of general business credits: The Act will allow certain small business to “carry back” their general business credits to offset five years of taxes. This benefit applies only in the 2010 tax year.

• Limitations on penalties for errors in tax reporting: Beginning this year, the penalty for failing to report certain tax transactions changes from a fixed dollar amount to a percentage of the tax benefits from the misreported transaction.

• Elimination of 100% of gain on sale of certain small business stock: There is a limitation of one-year on stock acquired after the date of enactment and before January 1, 2011, but the 100% exclusion for sale of stock is permanent if the stock meets requirements for qualified small business stock.

• Reporting of rental property: Beginning in 2011, taxpayers who receive rental income from leasing real property will be required to file information returns (generally, Form 1099) with the IRS and with service providers (e.g., plumbers, painters, accountants) to report payments of $600 or more to that service provider in any tax year. There will be exemptions from these requirements, but those are to be determined under forthcoming IRS regulations.

Federal Contracting Implications

The desired effect of the Act is to create more opportunities for small businesses. The Act provides grants to enable small businesses to team up with each other to compete for larger and more complex federal government contracts. In order to create a more level playing field for small businesses, greater accountability will be required from large business prime contractors to promptly pay small business subcontractors. Moreover, levy rules for federal contractors with federal tax liabilities have been permanently changed by the Act. Additionally, the Act makes it harder for agencies to “bundle” contracts, a practice that commonly eliminates opportunities for small businesses. The Act adds teeth to the current regulations, making agencies more accountable for reaching small business goals.

Small business owners are encouraged to explore which provisions of the Act may apply to their business, when those provisions begin to apply and how long the relevant provisions will apply.

For further information about the impact of the Act on your business, please contact Marian A. Kornilowicz, Chair of the Business Transactions Group at Cohen Seglias.

After weeks of speculation, Governor Chris Christie announced his decision yesterday to cancel the $8.7 billion ARC Tunnel Project. This move came after the ARC Executive Steering Committee informed him that the project could cost New Jersey taxpayers an additional $2-5 million, recommending “immediate and orderly shutdown.” At a Trenton news conference, Governor Christie stated, “The only prudent move is to end this project. I can’t put taxpayers on a never-ending hook.” He ended the project despite urging from Department of Transportation Secretary Ray LaHood.

The cancellation of the project has disappointed many: Hudson County residents, legislators, environmental groups, transportation advocates, and long time supporters of the project-Senators Bob Menendez and Frank Lautenberg. Hudson County executive Tom DeGise stated, “[i]t's a devastating blow for our region.

Senator Menendez has claimed that Governor Christie has been “intent on killing the tunnel,” regardless of the consequences. According to Menendez:

The governor’s public statements portray surprise and uncertainty about cost estimates, but it’s hard to understand how he has so little control of and information about a project that is directed by his own administration. It would seem that a more sensible and level-headed approach on behalf of New Jersey workers, commuters and taxpayers would be to take a deep breath, work with all of the parties involved to identify ways to reign in the costs and get the tunnel built.

Senator Lautenberg’s sentiments mirrored those of Menendez:

Without increased transportation options into Manhattan, New Jersey’s economy will eventually be crippled. The Governor has sentenced New Jersey to a future of insufficient access to New York City, fewer job opportunities, and lower home values.

In discussing the impact on the thousands of citizens affected by the move, Senator Lautenberg also stated that the Governor, “should be talking to the people who are out there stuck in their cars in the morning wanting to go to work. Or the families who are worried about the air their kids breathe.”

Although supporters of the decision feel that it may save taxpayers money in the long-term, it will cost the state money now. The move will cause New Jersey to lose $3 billion in federal funding, and it may have to return the $300 million already invested in the project.

Governor Chris Christie’s decision to halt work on all projects funded by the New Jersey Department of Transportation (NJDOT) led to a total cessation of work on nearly 100 construction and 200 design projects today. Governor Christie stopped the work in response to the Legislature’s reluctance to approve a $1.25 billion sale of bonds to refinance up to $500 million for the nearly bankrupt Transportation Trust Fund (TTF).

A NJDOT press release issued Friday blamed inaction of the Legislature for the stoppage of work. According to NJDOT Commissioner James Simpson:

We have been forced to implement this work stoppage due to the Legislature’s failure to approve a routine bond transaction for the fifth and final year of a transportation program that was approved under the previous Administration. Because of the Legislature’s failure to act, thousands of engineers, planners, designers and construction workers will be put out of work and project schedules will be disrupted.

Earlier today, after a hearing that lasted almost two hours, members of the State Joint Budget Oversight Committee and representatives of the Office of the Governor finally reached an agreement and those projects previously put on hold will continue tomorrow, allowing thousands of contractors to get back to work. Four of the six committee members voted to approve the sale, Assemblyman Louis D. Greenwald (D-Camden), co-chairman, voted against the sale, while Senator Paul Sarlo (D-Bergen) abstained.

The stoppage stood to impact $1.7 billion of projects throughout New Jersey. In addition to the NJDOT construction projects and design projects, Local Aid county and municipal projects would have been affected as well. Projects funded solely with federal funds would not have been affected.

Although the NJDOT projects have been spared, the future of the ARC Tunnel project remains in limbo, pending the outcome of the review ordered by Governor Christie.

Background of the ARC Tunnel Project

Over the last two decades, New Jersey has focused intensely on how it can better meet the vastly growing demand for transportation to and from New York City. The situation was extensively studied by economists, geologists, planners, engineers, environmental and transportation experts, as well as government officials at the local, state, regional and federal levels. The collaboration of these great minds has resulted in a project known as Access to the Region’s Core (ARC) Tunnel project. Construction on the ARC Tunnel, also known as the Hudson Tunnel, began last summer, and the project is currently the largest public works project in the nation. Just a few weeks ago, advocates of the project were alarmed when Governor Christie ordered a review of the ARC Tunnel’s cost over concern that it could cost more than the latest estimate of $8.7 billion. Supporters of the project feared that Governor Christie would stop the project entirely to divert funds to the TTF.

Benefits of the ARC Tunnel Project

The ARC Tunnel project is expected to greatly benefit New Jersey. A report entitled the ARC Effect, released by the Regional Plan Association in July 2010, elaborates on these expected benefits. According to Arthur D. Silber, Project Chief:

The RPA study highlights how the ARC tunnel will create wealth and grow our economy. The tunnel creates more than 6,000 jobs in the short term and [will] ultimately boost a soft real estate market by increasing home values by billions of dollars.

According to a Fact Sheet about the ARC Tunnel Project the project will run nine miles from Kearny Yards, New Jersey to 34th Street in Manhattan, effectively breaking the trans-Hudson traffic bottleneck. The project will offer direct, transfer-free service to Manhattan for tens of thousands of residents of New Jersey and New York. In addition, the project will increase intrastate service. Proponents of the tunnel believe that, “[t]he economic and environmental benefits make this a project that will grow our economy, preserve our quality of life, and improve the environment.” Some other benefits expected from the ARC Tunnel project include:

• 6,000 construction jobs
• Reduced traffic congestion
• Reduced pollution
• Shorter commuting times
• Increased suburban property values

We will continue to closely monitor both the situation with the Hudson Tunnel, as well as the status of state-funded construction projects in New Jersey, and will provide updates accordingly.

During Laborfest, a union-sponsored Labor Day rally held in Milwaukee, Wisconsin, President Obama announced a plan to spur the American Economy by investing in the country’s crumbling infrastructure. President Obama called for Congress to approve what has been dubbed the Transit Plan, which focuses on much-needed upgrades to the nation’s roads, rails and runways. The Plan will cost $50 billion over 6 years, and establish a government-run bank to finance the transportation overhaul. President Obama and other White House officials are confident that the Plan could lead to job growth within a year.President Obama’s address to the Wisconsin crowd on Labor Day was part of the upcoming campaign season. Two days after the Milwaukee rally, President Obama delivered a follow-up speech at the Cuyahoga Community College West Campus in Parma, Ohio, just outside of Cleveland. During his address, President Obama explained why the Plan is imperative for America to remain competitive in the global economy:

Now, there are still thousands of miles of railroads and railways and runways left to repair and improve. And engineers, economists, governors, mayors of every political stripe believe that if we want to compete in this global economy, we need to rebuild this vital infrastructure. There is no reason Europe or China should have the fastest trains or the most modern airports -– we want to put people to work building them right here in America.

This piggybacks what he said at the Labor Day rally, “I want America to have the best infrastructure in the world. We used to have the best infrastructure in the world. We can have it again. We are going to make it happen.”

Transit Plan Details

Some of the major upgrades included in the Plan are the repair of 150,000 miles of road, laying 4,000 miles of rail track and the restoration of 150 miles of runways. The Plan also calls for modernization of the air traffic control system in order to reduce delays. According to a White House Fact Sheet about the Plan, if the Plan is approved by Congress, it is expected to create 2 million direct and indirect jobs as well as stimulate $35 billion per year in new economic activity.

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