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Callahan Construction and Velney Construction Team Up to Meet Twin Challenges

By Pat Callahan

The need for housing in Massachusetts and across the country is immense. As a general contractor and construction manager with a wealth of expertise in building housing of all types (i.e. market-rate, affordable, age-restricted) Callahan sees how critical it is to bring these projects online. However, especially in today’s market, it is extremely challenging.

One of the biggest challenges we see in the industry right now goes beyond simply financing the work at the state level.  The 2021 MBTA Communities law as well as the recently passed Affordable Homes Act, are major steps in the right direction, but we see some additional steps needed to truly maximize the impact of public dollars – which is why our company recently took the proactive step to form a strategic partnership with Somerville, -based contractor Velney Construction.

Right now, the construction industry faces tremendous change as generational shifts that are impacting every layer of society also alter how we do business. Many seasoned professionals are aging out of the industry, leaving voids we desperately need to fill to meet the ambitious goals of the housing bills.

Callahan Wins Too

It is essential to build the bench of the next-generation of Massachusetts general contractors to ensure our industry is future-proof. Recently, groups like the SouthCoast Workforce Housing Coalition have been created to address the need to create good-paying jobs and increase housing stock in order to future-proof our workforce, a goal that our company shares with state leaders.

As Callahan continues to grow both geographically and in the scope of the projects we manage, partnering with companies like Velney will enable us to provide more resources to our customers while also ensuring that smaller and historically disadvantaged business have access to the tools necessary to grow professionally.

We see Velney as an ideal partner for pursuing joint venture opportunities on new housing projects and for helping a next-generation company invest in the tools needed to grow and succeed.

Firms like Velney often find it difficult to afford the resources necessary to grow smart and manage risk appropriately. We have found that many startup construction organizations fail due to financial strains on their business, or because they have taken on work without the proper resources to manage it.

Callahan will be helping Velney train its own employees both in practical jobsite skills along with utilizing technology tools such as Building Information Modeling (BIM), Procore and estimating software, along with internal resources like legal, accounting, risk management and quality control.

We believe this partnership will let Velney build a track record for sustainable and manageable growth, with the goal of eventually competing on their own with other larger GCs. 

Higher Construction Costs Hurt WMBEs

New building codes, as well as changes to federal policy such as the 2023 overhaul of the Davis-Bacon Act, sharply increased construction costs. Massachusetts’ new Home Energy Rating System (HERS) program also increased costs to build while passing future savings from reduced energy expenses on to the consumer down the road.

While these programs ultimately aim to protect workers and consumers, they also make it increasingly difficult for young companies to enter into an already expensive industry. Simply getting a shovel in the ground doesn’t mean a business is instantly profitable, as the road is long and challenging from signing a contract to being financially stable – and we believe companies like Velney can get there with some strategic support.

For Callahan, this relationship helps us become more diverse, grow our MBE/WBE partner base, provides our customers with more options and gives us the pride of helping others. We also see it as a critical way to help address the state’s housing shortfall by bringing on resources to help us build faster and smarter, all the while training next-generation workers who will someday build these projects on their own long after the current crop of leaders age out of the business. Massachusetts has made great strides to address the housing gap. We at Callahan are excited that this partnership with Velney will not only support ambitious investment in this state and the Northeast but also in a company that is ready to rise to the next level.

This story originally appeared in Banker & Tradesman

Event attended by Lt. Governor Driscoll, Salem Mayor Dominick Pangallo, and leaders of Beacon Communities

BRIDGEWATER, MA – October 3, 2024 –  Callahan Construction Managers (Callahan),a full-service construction management company headquartered in Bridgewater, Mass., announced today that it has broken ground on Leefort Terrace in Salem, a new 124-unit affordable development on Salem Neck. Callahan is working in partnership with Beacon Communities, which is overseeing the redevelopment of this important residential community.

Numerous political dignitaries and local executives attended the ceremonial kick-off, including Lieutenant Governor Kim Driscoll; Massachusetts Secretary of Housing and Livable Communities Ed Augustus; Salem Mayor Dominick Pangallo; Salem Housing Authority Executive Director Cathy Hoog; Executive Director of Massachusetts Housing Partnership Clark Ziegler; Dara Kovel, CEO of Beacon Communities; and Patrick Callahan, president of Callahan Construction. 

The redevelopment will address several challenges with the current residences. In addition to simply being outdated, the garden-style apartment community is located in a coastal floodplain. When complete, the new Leefort Terrace will include a three-story and a four-story structure with a mix of one-, two-, and three-bedroom apartments, which will be all-electric and Passive House certified, and built to exceed the expected 2070 floodplain levels. All apartments will be affordable to households with incomes at or below 30% and 60% Area Median Income for 99 years.

“As an administration, we are dedicated to addressing two of our most pressing challenges: housing and climate change,” said Lieutenant Governor Kim Driscoll. “That’s why we’ve passed the Affordable Homes Act into law because it’ll help create thousands of new units of housing that we need and it invests $275 million exclusively to sustainable and green housing initiatives. Our administration has made strides in ensuring that people who say yes to building housing have the supports they need to make it happen. Last fall, we expanded the Low-Income Housing Tax Credits (LIHTC) program which helped make projects like this one come to life. As the former mayor of Salem, I know how impactful developments like Leefort Terrace are for the community and I’m excited to celebrate this groundbreaking.”

Amenities will include a fitness center, a community room, wellness office, computer stations, a private residential courtyard featuring a grilling area, a bocce court and victory gardens. Included in the site plan are 100 parking spots as well as 86 spaces for bicycle parking, 2 EV charging stations, and 25 EV-capable parking spaces. “We are grateful to our partners at the local, state and federal level, as well as to the Salem Housing Authority, for their collaboration and commitment to expanding housing opportunities that will reduce our carbon footprint and be affordable for generations to come,” said Dara Kovel, CEO of Beacon Communities. “We appreciate the patience and support of the residents and look forward to welcoming them into their new homes in early 2026.”

Sustainable housing for low-income older adults and disabled households to be re-imagined from the ground up

BRIDGEWATER, MA – July 23, 2024 –  Callahan Construction Managers (Callahan),a full-service construction management company headquartered in Bridgewater, Mass., announced today that it was selected to manage the ground-up reconstruction of the Leefort Terrace Affordable Housing complex in Salem, MA. When complete, Leefort will provide both existing and future residents with access to 124 eco-friendly, affordable apartments that will also be Passive House certified and 100% electric and solar powered. This is Callahan’s first project with Beacon Communities, who is overseeing the redevelopment of this important community.

Leefort Terrace has been a haven of refuge for elderly and disabled households following its completion in 1958 but required significant modernization after receiving virtually no updates since its original construction. Thus, Beacon and the Salem Housing Authority chose Callahan to oversee the project due to the company’s deep experience in the affordable housing space, along with its background in managing complex, multi-phase renovations in dense, urban locations. In addition to being outdated, all residences within the existing Leefort facility are on the ground floor in garden-style settings built on a coastal floodplain, and state and Federal regulations would not allow for renovation in the existing configuration.

The project consists of the demolition of all 8 existing buildings and the construction of a new, three and four-story Passive House structure that will house 124 affordable rental units. Amenities will include a fitness center, a community room, wellness office, computer stations, a Tenants’ Organization office, and property management suite, along with laundry rooms on each floor. Included in the site plan are 100 parking spots (83 basement garage spots and 17 surface-level parking spots), as well as 86 spaces for bicycle parking, 2 EV charging stations and 25 EV-capable parking spaces.  Beacon has relocated the Leefort Terrace residents offsite to allow for construction; the residents have the right to return to the new building when the new building is complete.

In addition to the impact Leefort Terrace will have on its residents, the project will also change the community of Salem. As such, the project team has taken into account extensive feedback from the community to ensure the final structure meets the needs of residents and neighbors alike. A smaller footprint, lower building height, and increased emphasis on open space were all considerations that impacted the final design, along with environmental concerns. With 30 Passive House employees on staff, Callahan also possessed the sustainable expertise necessary to create a space that ensured green-friendly features weren’t left on the cutting room floor.

“We understood from the moment we saw the first renderings of Leefort Terrace how invaluable this community is for the residents of  Leefort Terrace and of Salem,” said Steve Callahan, Jr., vice president – business development, Callahan. “As such, Callahan is committed to not only building a forward-looking affordable housing community, but one that is truly sustainable as well, thus combining two areas of significant expertise for Callahan. In addition, we’re excited to work with our partner Beacon Communities on a project that will transform the local housing landscape for the better.”