When most people talk about business being an uphill battle, they mean it figuratively. Not so with Myron Sukut, founder and chairman of Sukut Construction Inc.
The Santa Ana-based company is one of the state’s pre-eminent construction grading firms and has cleared the way for some of Orange County’s most prominent projects, including Crystal Cove, Pelican Hill golf course and the Eastern (241) Toll Road.
With the proliferation of hilly subdivisions all over Orange County and the rest of Southern California,a function of tight demand for lots by homebuilders,Sukut has become especially adept at engineering some the steepest and most difficult jobs.
“The easy ground is gone,” said the 64-year-old Sukut, who now takes a more passive approach to the company as chairman, focusing instead on developing his own portfolio of properties, acquired during more than 30 years in real estate. “What’s left is higher into the hills and further away into the hills.”
But that isn’t necessarily a bad thing for the folks at Sukut, who regularly are called on to clear land by the area’s big land developers, including The Irvine Company, John Laing Homes and Standard Pacific Corp.
Still, after tough lessons learned during the recession, Sukut has spent the past few years diversifying away from residential real estate. During the early 1990s, the engineering and construction firm took on major jobs such as the toll road and other public works projects, golf courses, landfills and emergency landslide repairs.
Today the company counts 220 employees and expects to post revenue of more than $100 million this year. That’s a far cry from the six employees and $90,000 in revenue for its first year of operation in 1968, when Myron Sukut teamed up with Dick Coulson to start Sukut-Coulson Inc. with $20,000 in seed money.
Nonetheless, the $100 million in revenue figure also is illustrative of just how difficult the recession was on real estate firms and those companies dependent on them for business.
Sukut Construction saw steady growth up until 1990, when sales topped out at roughly $50 million. One year later, the firm’s revenue had plunged to $24.6 million, thanks to the prolonged recession, a dearth of jobs and the company’s heavy reliance on business from local real estate companies. It would be seven and a half long years before the firm saw revenue surpass the $50 million plateau again.
These days Sukut Construction is much more diversified, with 50% of its business coming from traditional residential and commercial grading, which includes stabilizing hills that have faltered. Another 30% comes from landfill cleanups, while public works projects such as roads, reservoirs and dams make up the remaining 20%.
In-state Expansion Under Way
The company also is making a push to diversify geographically, having opened a San Diego office in early 1999 that today accounts for 25% of the company’s sales.
These expansion efforts have occurred under the command of Mike Crawford, the firm’s youthful looking 42-year-old president and chief executive. Crawford assumed day-to-day control of the firm in 1988, when Myron Sukut decided to step aside from daily operations.
“I had run every facet of the business since 1968 and felt it was a young man’s business,” Sukut said in explaining his decision. “And we had talented young men in the company.”
The company now is looking to open an office in the San Fernando Valley, although as with San Diego prior to 1999, that market is currently being served out of Sukut’s Santa Ana headquarters.
“There’s large growth in the valley north of Los Angeles,” said Sukut, who adds that the firm is currently involved in six projects in the area.
But Sukut Construction won’t look to expand out of California, preferring to maintain a strong presence closer to its home base. Besides, said Marketing Director Michael Bobeczko, it is in California that the firm’s strength is most pronounced.
“Going to Phoenix and Las Vegas takes away our competitive advantage,” he said, referring to the relatively flat land in those hot real estate markets. “None of our unique qualities (would apply in those markets) in that we’re set up for hillside grading.”
That specialization includes an investment of roughly $60 million in equipment alone, including twin-engine 657 Scrapers, which are used against some of the steeper and more rugged hillsides.
“Those are very unique in Southern California,” Bobeczko said of the 657 Scrapers, which are designed to scoop up dirt and are mostly used in mining operations. “In Southern California we use them for earth moving because we move so much dirt. There’s not a place in the world where people move so much dirt as much as in Southern California.”
More Than Dirt-Movers
Despite its impressive arsenal of equipment, Crawford cautioned that it isn’t simply the company’s large investment in machines that is responsible for Sukut Construction’s prowess on hillside development. Over the years, the company’s personnel,including an on-staff geologist,have either developed special expertise and processes, or been among the first to adapt new technologies.
Bobeczko points to the company’s use of Geogrid, a specialized product that he described as “plastic rebar” used to stabilize earth slopes and keep soil in place.
“It was a technology we found in the Netherlands, where they used it in all the dykes,” Bobeczko said. “Now it’s used everywhere.”
The company has also used innovative techniques such as “ground freezing,” which is used to hold unsettled terrain and hillsides while Sukut Construction engineers and personnel work to stabilize the land.
Still, Sukut Construction doesn’t have the field to itself. The firm regularly competes with other top-notch construction and engineering firms for jobs in Southern California. Among the firm’s biggest rivals are Riverside-based E.L.Yeager Construction Inc., Agoura Hills-based Ebensteiner Co. and Corona-based ACI.
While Sukut Construction has had its share of successes, it has also felt the wrath of homeowners and customers who felt the grading was not up to par. Given the type of work the firm undertakes and the large number of jobs it has completed, Myron Sukut said it is not surprising that some slopes have failed.
“We haven’t had any spectacular failures,” he said. “(In fact), we have fixed most of the spectacular failures in Southern California in the last 10 years.”
Among the “spectacular failures” Sukut was called in on: the Niguel Summit, which gave way a few years ago and brought down several homes onto a condominium complex below, providing graphic TV footage. Although Sukut Construction didn’t do the initial grading on the project, it was brought in by the homeowners association to fix the problem. n
