Cobb County projects hit roadblocks from high construction costs

ATLANTA, Ga. (Atlanta News First) - High construction costs have put roadblocks on Cobb County construction projects.

A major renovation to Gritters Library in Shaw Park stopped before shovels hit the ground after construction prices put the project $2.5 million over budget. The estimate topped $10 million, explained Cobb County Commissioner JoAnn Birrell.

“The cost to do the same project a year ago, the materials, are up a 30% increase,” said Birrell.

The renovation on the library, which is nearly 50 years old, would include a new community center. Leaders must find new methods of funding or significant changes.

“We’re looking at possibly revising the design and maybe not making it as big,” said Birrell. “We have a lot of critical issues we have to look at.”

Gritters Library is at least the second construction conundrum in Cobb County. A police precinct renovation was halted over the summer due to a half-million increase in cost. Work on the precinct eventually began months later once adequate funds had been secured.

Tom Smith, economist and professor at Emory Goizueta Business School, said commercial and residential projects are facing high construction costs due to wages, workers, supply chain, and federal loans.

“You’re going to see construction rates going up across the country,” said Smith.

Smith said the U.S. will likely experience significantly higher-than-normal increases in rates for the next year.

“When those costs start escalating, there’s not a whole lot of wiggle room governments have at their disposal. It’s likely they’ll be delayed for a time being until they can find the money to pay or costs go back down,” he explained.

While several factors play a role in construction prices hitting every industry, federal loans play the biggest factor in rising costs.

“As the federal reserves keep increasing interest rates, bank rates are going to increase,” said Smith.

Commercial real estate group CBRE projects a 14.1% year-over-year increase in construction costs in 2022.

Commissioner Birrell maintains the Gritters Library project will be completed. Gritters Library receives funds from the County Special Purpose Local Option Sales Tax (SPLOST). The Georgia state library system has also allocated funding for the project.

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