2008 Top General Contractors of Utah & Idaho

Despite the recent ills of the residential construction market, commercial construction remains strong in the two-state Intermountain region of Utah and Idaho, as reflected in our annual 2008 Top General Contractors rankings, which is based on overall revenues from the 2007 fiscal year of companies with headquarters in the region.

By Brad Fullmer

“We’re optimistic and enthusiastic about the commercial construction landscape in this region.” – Alan Rindlisbacher, corporate marketing director, The Layton Companies.

A little more than half of the 49 general contractors who disclosed financial earnings from last year – including general building, heavy/highway and civil/utility contractors –increased their respective annual revenues from the previous fiscal year. Information was gathered through a survey we sent out via email and fax.

Intermountain Contractor made every effort to contact commercial general contractors in Utah and Idaho, and to ensure that the information they submit is accurate. Firms who submitted surveys, but did not disclose revenue information, were not included in the rankings (McAlvain Construction of Boise; CK Construction & Services Corp. of West Haven, Utah; Knight Construction Group, Inc. of Salt Lake City).

Of the 49 firms who participated in this year’s survey, 13 reported revenues over $100 million, led by The Layton Companies of Sandy, Utah at $748 million – a $171 million increase (almost 30%) over its reported 2006 revenues of $577 million.

In addition to its Sandy headquarters, Layton has had an office in Phoenix for more than 20 years, and the firm was set to establish a “permanent” office in Boise in March, according to Alan Rindlisbacher, corporate marketing director.

“We’re optimistic and enthusiastic about the commercial construction landscape in this region,” says Rindlisbacher, “despite the challenges we see on the horizon with the national concern of a recession and residential construction woes.”

Rindlisbacher says Layton performed work in 15 states last year, and has established a strong presence throughout the west, including Hawaii.

“We have a good contingent of construction professionals over there,” he says of the Aloha State, including senior project managers, project engineers, and estimators. “We’ve invested in a lot of resources in Hawaii and we’re pursuing work that would keep them there.”

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Some of Layton’s most significant projects currently under construction in the region include the $110 million University of Utah Hospital expansion, the $110 million Real Soccer Stadium in Sandy, and the $32 million Boise State University stadium expansion.

Second-ranked Okland Construction Company of Salt Lake City saw its revenues also take a significant leap, from $579 million in 2006 to $699 million in 2007 – a roughly 20% increase. Okland business development director Jeremy Blanck says his firm’s growth from ’06 to ’07 is attributed to an increase of work in neighboring states, along with the completion of Intermountain Medical Center in Murray last fall.

“We’ve grown over the years out of state,” says Blanck. “A lot of that work is in Arizona and Idaho. In Idaho, there has been a lot of work for us between Sun Valley and Rexburg – that’s helped us out quite a bit. Also, we completed Intermountain Medical Center, so a lot of the numbers you’re seeing is from the final year of that project.”

Blanck says Okland has several notable projects under construction, including a portion of the multi-billion dollar City Creek Center in Salt Lake, the $140 million St. Regis Resort project in Deer Valley, and the $100 million-plus 222 South Main office building project in Salt Lake. In addition, he says Okland was recently awarded the new U.S. District Federal Courthouse, an estimated $170-$200 million project that will break ground in the spring of ’09.

Blanck says his firm would like to maintain consistent revenue growth, but that will depend on how various commercial markets in the west perform, in addition to how the residential construction rebounds from its recent sharp decline.

“I think everyone is a little nervous with mid-size and smaller projects that are our bread and butter,” Blanck says. “In the past, when residential slows down, commercial is not far behind.”

Work remains plentiful in the heavy/highway and utility/civil markets in the Intermountain region and several contractors expect that it will continue to be robust in the coming years.

“There is a wide variety of good work opportunities in the market,” says Dave Hales, executive vice president of W.W. Clyde, a division of The Clyde Companies of Orem, Utah, which does heavy/highway and civil/utility work and saw an increase in annual revenues from $258 million in ’06 to $369 million in ’07, a $111 million increase (43%).

“UDOT has done a very good job of securing funding from the legislature and performing on that work,” Hales says. “(Our success) is partly by design, but really it’s a function of having the capabilities to take on the diverse projects we do. We’ve been doing this for 85 years, so we’ve established a strong presence in these markets. I think the outlook is strong in the transportation sector, as well as the water treatment sector.”

Hales says W.W. Clyde will complete a number a large projects this year, including the SR-6 Reconstruction near Scofield, Utah, the final 13,000 lf of pipeline on the Central Utah Project, and a hydro-electric Power Plant at Jordanelle Reservoir.

Other large regional firms among the Top 20 GC’s who saw significant increases in revenues from ’06 to ’07 include Big-D Corporation of Salt Lake ($410 million to $472 million, 15%), Engineered Structures Inc. (ESI) of Boise ($261 million to $306 million, 17%), Ames Construction of West Valley City, Utah ($117 million to $186 million, 59%), Wadman Corporation of Ogden ($121 million to $151 million, 25%), Camco Construction of Salt Lake ($99 million to $143 million, 44%), Hughes General Contractors, Inc. of North Salt Lake ($72 million to $112 million, 55%), and Ascent Construction, Inc. of Centerville, Utah ($69 million to $89 million, 29%).

“ESI is proud to be ranked as the No. 1 general contractor in Idaho – a distinction made possible through our employees and their dedication to excellence, service and integrity,” says Thomas Hill, president of ESI. “We will continue to make targeted efforts to expand our client and project base while providing the consistent service for which we have become known.”

“We do believe in slow and steady growth normally, so last year was probably an anomaly for us,” says Dan Pratt, vice president of the Building Division for Hughes General Contractors, which does works in all three major construction markets. “Over the last 10 years we’ve averaged about 10% growth.”

Pratt says his firm doesn’t have any specific annual growth goals, other than to maintain good client relationships and provide clients the best customer service possible.

“It’s our goal to be tops in customer satisfaction and let the volume fall where it may,” Pratt says. “We don’t have any interest on being the biggest contractor on the block. But we want to be the contactor who does what we say we will. In some cases, that means turning some clients away once we get to the point where taking on work wouldn’t be good for the clients we already have.”

On the association level, executives of the Associated General Contractors of Utah, the Idaho Associated General Contractors, and the Associated Builders and Contractors of Utah remain optimistic that their members will remain active and profitable through this decade.

“My members are telling me that they are still busy,” says Mark Dunham, executive director of the Idaho AGC. “The winter slowdown was more significant in the Treasure Valley than in the past due to more harsh winter conditions this year, but in general my members are optimistic and staying busy.”

Dunham says transportation funding in the Gem State has been the No. 1 priority during this year’s legislative session of Idaho Governor Butch Otter, who is intent on getting more annual funding set aside for Idaho Transportation Department projects.

“Idaho is currently faced with around a $240 million annual shortfall in transportation funds just for maintenance,” Dunham says. “The governor is trying to craft a package of varied proposals that will address this maintenance issue.” Dunham adds that the Idaho AGC is continuing its strong support of the GARVEE program, and is expecting the legislature to approve $134 million in bonding this year for future highway projects.

In Utah, transportation funding is also a hot topic, with the Utah Department of Transportation having roughly $1 billion in projects either under construction, or slated to begin in ’08, including the $233 million I-15 NOW project in Weber County, the $110 million I-80 Reconstruction in Salt Lake, three segments of Legacy Highway that total more than $275 million, along with a host of other smaller projects.
 
“We’ve been one of the biggest proponents of transportation funding in the state,” says AGC of Utah president/CEO Rich Thorn. “We recognize and pay tribute to Governor Jon M. Huntsman and other legislators for their realizing how important a good, working transportation system is to our economy and quality of life.”

Thorn says the level of construction activity in the general building market should also remain brisk for another few years, especially given the size and scope of projects like City Creek Center, the Cottonwood Mall, and others.

“I anticipate the building, heavy/highway and utility/infrastructure markets to remain strong, at least through this year, and probably for another couple of years after that,” Thorn says. “There is a lot of construction work on the books right now, and there is a lot of speculation that Utah is a good economic market compared to other markets nationally that will attract attention from outside companies looking to expand.”

“I believe this year will remain prosperous for our members,” adds Ken Shulsen, president of ABC Utah. “Even though residential (construction) is off, the commercial market is still strong in most sectors, so we’re optimistic that things will stay good for awhile.”

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