CONSTRUCTION GAINS
Big Builders Eked out a 2% Gain in 12-month Revenue; Government Work Helped
By MATHEW PADILLA
The top 25 construction companies working from Orange County generated revenue of $5.6 billion in the past 12 months.
That’s according to the Business Journal’s list of builders. The list ranks companies by how much revenue their OC offices produced in their most recent year. Some 12-month periods ended in December and others in March or May.
The $5.6 billion total is marginally higher,2%,than what the same companies did a year prior.
Generally, companies that saw a gain in revenue were those that focus on government projects. While the down economy put the brakes on large commercial projects last year, government agencies continued to demand new facilities.
But there were some bright spots among commercial construction companies, such as Irvine-based Snyder Langston, No. 7 on the list, whose OC-produced revenue jumped 30% to $210 million in 2002. The biggest slice of Snyder’s business,about 40%,comes from office projects.
Stephen Jones, Snyder’s president, credits his company’s upswing in a down market to the relationship Snyder has with developers and its diversified strategy.
He said all the office projects Snyder did were the result of a developer first signing a major tenant, such as when Snyder built Aliso Viejo-based Shea Properties’ five-story Vantis building.
Shea first signed Seattle-based Safeco Corp. to lease 70% of the 177,000-square-foot building.
Snyder did not build any fully speculative projects for developers last year, Jones said.
One thing to note when comparing builders’ performances is that revenue can swing wildly from year-to-year, depending on when projects are completed. Companies that have a down year often manage to land some big contracts a year later.
As with past years, No. 1 Aliso Viejo-based Fluor Daniel dominates the list with $1.98 billion in revenue generated from its OC operations. That’s equal to about 35% of the revenue generated by all companies listed.
Fluor last year made sales gains on strength in its energy, chemicals and infrastructure businesses. Power plant work suffered. The company has shed businesses unrelated to its core engineering works and cut 28% of its OC workers to 2,241.
A big OC project: construction manager of the Orange County Performing Arts Center’s $200 million expansion.
No. 2 Bethesda, Md.-based Clark Construction Group Inc., with offices in Costa Mesa, posted a 3% decline in revenue to $633.7 million. But Clark could see improved results next year. The company said it signed $752 million in contracts last year, up 13% from 2001.
Rounding out the top trio is No. 3 Lake Forest-based ARB Inc., with a 5% decline in revenue to $346 million for the 12 months through March. The value of contracts awarded to ARB last year rose 11% to $421 million.
No. 4 Greeley, Colo.-based Hensel Phelps Construction Co. had a down year through May. The company’s OC-generated revenue fell 22% to $265 million. But the company saw an upswing in contracts signed, reaching $328 million, 53% higher than the prior year’s $215 million.
Hensel built what is likely to become one of OC’s more notable buildings,a new laboratory for the Food and Drug Administration in Irvine. The agency spent $36 million for a two-story regional lab and district office on 10 acres next to the University of California, Irvine.
Among the biggest revenue gainers on the list was the Costa Mesa office of No. 6 S.J. Amoroso Construction Co. The builder’s revenue jumped 42% to $222 million for the year ended March 31.
S.J. Amoroso focuses almost exclusively on public works.
“We don’t chase the private market,” said Richard Armsworthy, vice president with S.J. Amoroso.
He said the gain last year will be balanced by less work this year. Last year the company signed $137 million worth of contracts, down 42% from the prior year.
Speculation Absent
As for the future of commercial development, don’t expect to see too much speculative building, according to Dennis Katovsich, senior vice president with No. 9 McCarthy Building Cos.
He expects speculative projects to be “few and far between.”
Katovsich is bullish on the future of commercial construction on land formerly part of the Tustin Marine Base and El Toro. He is a proponent of such mixed-use, infill developments.
“Once you throw people in there, you have to support those people with services,” he said.
The company’s Newport Beach operation, a unit of St. Louis-based McCarthy, posted $191 million in revenue last year. Projects include Hoag Hospital Women’s Pavilion in Newport Beach.
One big name dropping off the list was former No. 9 Koll Construction Co. The company was acquired in a management-led buyout last year. It now does business as Arris Builders Inc. with about 35 workers, down from 60 a year before.
