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Commercial Construction Companies Post Modest Sales Bump

The top 25 construction companies working from Orange County generated revenue of $11 billion in the past 12 months, up 5% from a year earlier.

That’s according to the Business Journal’s list of top builders. The list ranks companies by how much revenue their OC offices produced in their most recent year.

At No. 1 is Fluor Daniel, a unit of Aliso Viejo-based Fluor Corp. The construction and engineering services provider dominates the list with an estimated $7.2 billion in revenue, up 7% from the prior year.

Fluor’s result is a Business Journal estimate,based on its companywide revenue gain. The company doesn’t break out revenue from construction.

Locally, Fluor’s big project is at the Orange County Performing Arts Center, where it is construction manager for the center’s expansion.

It’s won some big contracts in Iraq, including restoring the country’s power grid, and early last year won $244 million worth of work at Canadian refineries of Royal Dutch/Shell Group of Cos.

Excluding Fluor, the other 24 companies upped revenue 1% to $3.7 billion in the past year.

One big shift could play out on next year’s list. In May, Fluor detailed plans to move its headquarters to the Dallas/Ft. Worth area to be closer to customers in the central and eastern part of the country. That likely would eliminate Fluor from the list.

Construction companies kept busy here with government and healthcare work, building everything from university buildings to hospital wings.

Healthcare facilities must be up to current seismic codes. Rather than update older buildings, many hospitals have decided to build new ones.

While the office market is tightening in OC and elsewhere, commercial construction last year was limited mainly to smaller buildings under 10,000 square feet and some midsize buildings in the range of 20,000 to 50,000 square feet.

Construction should pick up on larger commercial buildings, including office towers, if the economy stays on track, sources said. In OC, there are about 10 office towers in the planning stages in Irvine and Santa Ana, with a few set to break ground this year.

In any case, the future looks bright based on backlog: OC’s top construction companies logged a 28% rise in the value of contracts awarded during the past year to $6 billion.

They haven’t started hiring yet, though. Employee rosters dipped 1% to 4,246 workers in the past year. Excluding Fluor, the next 24 top companies expanded payrolls by 1% to 2,867 workers.

Construction companies dealt with heavy and persistent rains in the fall and winter. They said they were able to regain some lost time in later months, more or less meeting their deadlines.

They also faced higher prices for steel, concrete and lumber last year. Material price hikes ultimately are passed on to the developer or owner of each project.

No. 2 Bethesda, Md.-based Clark Construction Group Inc., with an office in Costa Mesa, held its spot despite a 26% drop in revenue to $505 million.

The decline was due to the completion of some large projects in 2003 and early 2004, said Richard Heim, president of Clark’s Western Region.

Clark worked on San Diego’s 46,000-seat baseball stadium, dubbed Petco Park, which opened in April 2004. Clark also finished the expansion of Seattle’s Sea-Tac International Airport and built a large office building in Sacramento.

“We have replaced those (projects) but a lot of our new work is more design build,” Heim said.

Construction should start later on those projects, he said.

The value of contracts awarded to Clark in the most recent 12 months was just a little more than the prior year at $406 million.

Revenue at No. 3 St. Louis-based McCarthy Building Cos., which has offices in Newport Beach, shot up 28% to $436 million from a year earlier. It held its spot from last year’s list.

Hospital construction was key, according to Dennis Katovsich, senior vice president.

He said the company recently wrapped up construction on Hoag Memorial Hospital Presbyterian’s Women’s Pavilion in Newport Beach.

Next month the builder should put the last steal beam in place at St. Joseph Health System’s new medical center in Orange, he said.

Katovsich said his company is looking to diversify.

“Now we are seeing the commercial market starting to really come back to life just in the last four or five months,” he said.

McCarthy is going after some commercial projects now, he said.

No. 4 Lake Forest-based ARB Inc. and No. 5 Greeley, Colo.-based Hensel Phelps Construction Co., with offices in Irvine, round out the top five. ARB’s revenue rose 9% to $350 million, and Hensel moved up one spot based on a 26% jump in revenue to $251 million.

Three companies dropped off the list this year because they didn’t make the $42 million cutoff.

Seattle-based Bayley Construction, which has an office in Santa Ana, was No. 23 on last year’s list. It dropped off this year with an 11% decline in revenue to $40 million.

The Newport Beach office of Redwood Shores-based Wentz Group Construction Services, formerly No. 24, dropped off the list on a 17% decline in revenue to $35 million. And Brea’s Peterson Brothers Construction Inc., No. 25 last year, saw revenue decline 8% to $33 million.

Newcomers were No. 12 C.W. Driver Contractors in Irvine, with a 13% increase in revenue to $126 million; No. 24 Magnum Enterprises Inc. in Anaheim, which reported a 1% decline to $54 million; and No. 25 Valley Commercial Contractors LP in Irvine, which posted a 133% revenue increase to $42 million.

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