During the economic recession, specialty contractors are being forced to do what they can to be more competitive and attractive to contractors. For some, that has meant upgrading skills, learning the latest about building information modeling and sustainability. For others, it has meant spreading out geographically. But all agree that surviving in this climate is about embracing change while still doggedly pursuing traditional jobs.
“There continues to be abundant opportunities for specialty contractors, even in this economic climate,” says Henry L. Goldberg, an attorney with Goldberg & Connolly of Rockville Centre, N.Y., which represents subcontractor firms. “The federal stimulus program, primarily with its emphasis on public works jobs, enables contractors already entrenched in this marketplace to readily take advantage of these opportunities, while contractors first expanding into public works must do so only with careful planning and guided by seasoned counsel.”
Diversifying for longevity “The key word is diversification,” says Gary Segal, chairman of GreenStar Services Corp. of New York. “A construction company is all about the talented people within the company, and if you have the people to diversify, do an apartment building and the next year do a school or a Department of Environmental Protection plant, that’s huge.”
GreenStar’s Five Star Electric Corp. and WDF divisions are working on more than $250 million in electrical and plumbing work, respectively, at One World TradeCenter for Tishman Construction of New York. Five Star recently completed the electrical work on The Visionaire, a 40-story, LEED-platinum condominium building in New York for Turner Construction Co. of New York. In addition to private projects, the firm provides mechanical, electrical, plumbing and specialty general construction for infrastructure jobs, such as transit and water treatment facilities.
GreenStar recently received more than $370 million in construction, electrical, heating and plumbing work at a New York City DEP project at the Newtown Creek Wastewater Treatment Plant in Brooklyn. WDF and Five Star are completing $150 million in plumbing and electrical work on eight transit stations for the Metropolitan Transit Authority in New York.
“That type of work ranges from two to four years [duration] and gives you a solid base of revenue and profits where you can keep your key people,” adds Joe LoCurto, president and COO of GreenStar. “When times change in the private sector, it [will] allow us to mix private work in with our public sector work.”
Another company leveraging its public sector experience to buffer a decline in private projects is EMCOR Group of Norwalk, Conn., which performs work in refineries, power plants and water treatment facilities. Its Welsbach Electric subsidiary is completing an electrical installation at a new clean-water treatment plant in Westchester County for the New York City Department of Environmental Protection and a system at the Newtown Creek water treatment plant.
“That allows us to have more earnings stability than your typical one-trade contractor working in one area,” says Tony Guzzi, EMCOR Group president and COO. Guzzi says EMCOR is focusing on core operations and cutting excess people and cost. The company also has reduced workweeks and frozen salary increases.
Innovating and finding a unique niche Nunez Electric of Long Island City, which historically has performed mainline, low-voltage work, recently began looking at electrical high-voltage work and performing projects for DEP and the transit authority.
“As the economy changes, we are becoming more diversified, specifically in terms of looking into energy conservation construction, and are diligently training our personnel to estimate and install this new industry,” Raquel Nunez, president of Nunez Electric, says in an e-mail.