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If You Come,
They Will Build It
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St.
Louis has an unusually large number of general contractor, and
the healthy competition bodes well for clients.
By Peter Downs
A number of St. Louis area general contractors placed in the annual
benchmark survey of the nation's leading general contractors compiled
by Engineering News-Record (ENR), an unusually large number for
a mid-sized metropolitan area. Only six other metropolitan areas
matched or exceeded the number of large general contractors based
in the St. Louis metropolis.
What makes St. Louis such a fertile site for general contractors?
McCarthy Building Companies was one of the top St. Louis GC on
the ENR list, with revenues in 1999 of $939.8 million, has one
of the highest employee retention rates in the construction industry.
The company's new CEO, Michael D. Bolen, says St. Louis has two
key strengths: its central location, and it "is an outstanding
place to raise a family, offering affordable housing and amenities
for our employees."
Founded in 1864 by an Irish immigrant named Timothy McCarthy,
McCarthy now has more than 2,500 employees nationwide. It is a
recognized leader in laboratory/R&D, biotech, and health care
construction, all of which are important segments in St. Louis,
and in industrial, clean manufacturing, office, parking, education,
and microelectronics construction. The average size of the projects
it takes on is $4 million.
"St. Louis' central location provides an ideal base from which
to secure construction work in other parts of the country - particularly
the Midwest," agrees Greg Fuller, Paric's vice president, corporate
business development.
Design/build general contractor Paric Corp. was the eighth largest
St. Louis company on ENR's list, with revenues of $175 million
in 1999. Founded in 1979 by Paul J. McKee Jr., chairman, and Richard
F. Jordan, president and CEO, the company currently employs 275
people. It recently opened a Dallas office to expand its reach
in the Southwest. Paric is divided into five business units: Commercial;
Interiors; Hospitality and Residential; Institutional; and Industrial,
Environment and Energy.
St Louis companies also benefit from location in another sense,
says Robert G. Clark, the founder and CEO of Clayco Construction
Co. "We are surrounded by great institutions of higher learning
related to the building business," he says.
Robert
G. Clark, CEO, Clayco
Construction Co. |
Clark highlights the contributions of Washington University and
the engineering school at University of Missouri-Rolla in turning
out top talent, while Robert Brinkmann, founder and president
of R.G. Brinkmann Construction Co., adds in the University of
Illinois at Champaign-Urbana.
Clayco Construction Co., the fifth largest St. Louis GC on the
ENR list, is the nation's largest tilt-up concrete contractor,
and one of its largest design/build and industrial contractors.
The firm posted revenues of $290 million in 1999 by delivering
more than 12 million square feet of new design/build space in
22 cities in the United States and Canada, and eight million square
feet of tilt-up concrete wall.
Clayco projects revenues of more than $450 million in 2000. It
has full-service regional offices in Chicago, Dallas and Detroit.
Robert
G. Brinkmann, president R.G.
Brinkmann Construction Co. |
R.G. Brinkmann Construction Co., founded in 1984, was the 11th
largest St. Louis company on ENR's list, with revenues of $125
million. This year the company anticipates completing approximately
$180 million of work.
Added to location and top quality professional talent is another
factor: labor.
"Labor in St Louis is second to none in the country," Clark says.
"Clayco is currently working in 25 cities across the United States
and the productivity in St Louis is the highest and best quality
anywhere. The outstanding quality of the workforce is a great
resource for promoting from within. Many of our most talented
managers have field experience."
Fuller agrees: "The unions have done a great job of training workers
for construction jobs and giving us the most productive workforce
in the country."
Jeff
Cook, president, ARCO
Construction Co. |
"St. Louis' skilled union labor market has contributed a great
deal to the growth of general contractors in the area," adds Jeff
Cook, president of ARCO Construction Co. "Their greatest assets-productivity,
safety and on-time performance-help contractors manage projects
more efficiently and are exceptional selling points to building
in this area."
ARCO, which did not participate in ENR's ranking, had the proportionally
largest one-year revenue increase of all of the large general
contractors in the St. Louis area in 1999, a jump of 115 percent
to $200 million, which makes it the seventh largest GC in St.
Louis.
Founded in 1992, ARCO is a design/build contractor that offers
complete turnkey services from site selection to construction.
In addition to ARCO Construction, company divisions include ARCO
Beverage Group of St. Louis, ARCO Design/Build of Atlanta and
The Murray Co. of Tampa.
"The St. Louis region has been one of the best kept secrets for
highly skilled employees, standard of living, and a central location
to anywhere," says Clayton M. Scharff, president and chief operating
officer of Sachs Electric Co. "That is now changing with the discovery
of the biotech and technology companies originating in or moving
to St. Louis. As a result, we are anticipating another 30 to 40
percent growth in our Technology and Systems groups within the
next 12 months."
Sachs Electric Co., the area's largest electrical contractor,
was ranked 55th in the country among all specialty contractors,
and was the nation's 17th largest electrical contractor according
to a 1999 survey by Electrical Contractor Magazine.
Like other large local specialty contractors, it has benefited
from the national growth of St. Louis-based GCs. This year Sachs
has a record backlog of more than $200 million in electrical work.
Its fastest growing sectors are in the telecommunications/teledata
and technology fields, where business has grown from $3.6 million
in 1995 to $23 million today.
"Speed to market for the rapidly increasing number of technology
companies that have chosen St. Louis as their headquarters, necessitates
strong partnerships and established relationships between general
contractors and their subcontractors. By forming a reliable and
experienced project team among the participating trades, the generals
are able to deliver high-quality construction within the confines
of a demanding schedule," Scharff says.
"I also think the Midwest work ethic cannot be underestimated,
especially when the economy is booming and opportunities abound.
We don't mind hustling to deliver on what we've promised," Brinkmann
says.
Keith Myers agrees. Myers left Pioneer Pipe Inc. and Viking Fabricators
in Marietta, Ohio last year to come to St. Louis to become vice
president of business development for Condaire, Inc., a mechanical
contracting firm.
"What impresses me about the St. Louis construction industry is
the high level of trust and ethics in this market," he says. "It
is everything you've heard about the Midwest work ethic. In a
nutshell, we do what we say-we're not slick. No matter how many
bells and whistles you invest in a web site, this is a people
business and nowhere is that better expressed than in the St.
Louis construction market."
Condaire has been able to build key partnerships with larger builders
as they work outside St. Louis, such as one with J.S. Alberici
Construction Co., Inc. on a $7 million design/build wastewater
treatment plant in Louisville, Ky. As a result, it is on track
to more than double its revenue this year. The company anticipates
earning $30 million this year after doing $13 million in business
in 1999.
Location, professional talent, highly skilled tradespeople, and
strong ethics make for a strong competitive hand, but St. Louis-based
GCs have three more things working in their favor: tradition,
innovation and growth.
Established general contractors in St. Louis have spawned a new
generation of general contractors. For example, ARCO can trace
its lineage to R.W. Murray Co. "Murray allowed Dick Arnoldy and
me to develop the leadership skills that led to the founding of
ARCO in 1992," Cook says. "In the same fashion, ARCO believes
in fostering an environment that allows talented people to grow.
We anticipate that some of our best employees will one day own
their own companies-companies that will benefit from the business
acumen developed at ARCO."
Paric's Fuller cites the same construction heritage. "The older
established firms have been training grounds for today's leaders
in the construction industry-many of whom, like Paul McKee Jr.,
help found their own general contracting companies. We expect
that some of Paric's best and brightest will continue that tradition
and become the next generation of construction leadership in St.
Louis."
Don't forget, however, that part of that heritage is competition.
"With a number of contractors here, you really have to hone your
skills and deliver a quality product on schedule and within or
under budget to be competitive in this market," says Ron Capek,
director of corporate affairs at The Korte Company. With revenues
last year of $135 million dollars, Korte was the 10th St. Louis
company to make the ENR list.
Despite the area's conservative reputation, both St. Louis GCs
and the St. Louis market are open to innovation.
"What we have found is that St. Louis has been able to keep pace
with and in some cases lead the trends in demand," Fuller says.
"For example, national players in the development of luxury retirement
communities have descended on St. Louis-offering upscale accommodations
to seniors that speak to the transitions of age and retirement
wealth. Our hospitality and residential business unit has been
able to capture this emerging demand to the tune of more than
$175 million worth of work in the past two years."
Bolstering it all has been the start of an incredible new period
of growth, Capek says. "St. Louis is a growing area, and there
is such a tremendous potential on the Illinois side for growth,
that we're just at tip of the iceberg," he says. "We look for
greater growth in the next few years with the type of industry
we are attracting to this area."
Other St. Louis companies on ENR's top 400 list, not already mentioned
were: Jacobs Engineering Group with revenues of $2.9 billion;
J.S. Alberici Construction Company, which reported revenues of
$672.9 million; Fru-Con Construction Co., at $473.7 million; health
care and financial facility design/build contractor HBE Corp.,
reporting revenues of $265.8 million; S.M. Wilson & Co., at $175.5
million; and Fred Weber, Inc., a highway specialist, reporting
revenues of $139 million.
Peter Downs is a free-lance writer and editor of Construction
News & Review.
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