Utah Contractors Mark Another Profitable Year, Launch a New Training Facility
Against the backdrop of a city and a state humming with construction activity, the 98th annual meeting of the Utah Chapter of the Associated General Contractors took place in Salt Lake City Jan. 23 – 25. The opening day awards presentation took place in the Grand Hall of the historic Union Pacific train station, which will soon undergo a transformation to become part of a new boutique hotel.
Within less than a mile radius of the station, six new high-rise residential or office projects have broken ground in the last two months, including a long-waited hotel for the city’s convention center. The Church of Jesus Christ of Latter-day Saints’ iconic Temple Square and the temple at its center are closed for major renovations and seismic upgrades.
This spring, the city will launch the first phase of a six-year effort to repair and upgrade streets in the capital, while a multitude of new public and private projects emerge across the state.
“It has been another good year to be a contractor in Utah,” says Rick Thorn, president of AGC of Utah. “We approved 81 new members last year, putting us at just under 600.”
Thorn notes that while some members are newly formed companies, others are established firms from outside the state seeking to enter the busy Utah market.
“We’ve got M.A. Mortensen (headquartered in Minneapolis) building the Facebook data center here. PCL from Denver and Sundt from Arizona are all doing projects here,” he says.
Darin Zwick of Zwick Construction was sworn in as the chapter’s 2020 chairman at the annual banquet, assuming the post from Thom Morgan, CEO of Morgan Asphalt, who served as 2019 chairman.
In the last year, Morgan oversaw the launch of the long-awaited AGC training center, being built on property adjacent to the chapter’s headquarters. The 16,000-sq-ft building will house classrooms, an auditorium and a three-story-tall area to train students in building gang forms for concrete and working on lifts.
Thorn says the project will be built by members and includes much-needed parking at the site. The completion date is yet to be determined.
Infrastructure Spending on Tap?
The AGC convention took place the week before the start of the 45-day Utah Legislative session.
“There are going to be a lot of bills introduced this year as usual, but right now it doesn’t look like anything crazy that will affect our industry,” Thorn says.
A major change to the state’s tax code, passed in a special legislative session in December, did not affect local construction and design firms as much as expected. But after a swell of voter resentment, Gov. Gary Herbert repealed the entire tax reform package in the opening days of the legislature, sending reforms back to the drawing board.
In addition to efforts to recraft the tax package, Thorn says infrastructure spending had been a topic among legislators for some time. “We’ve been hearing rumblings about the possibility of a billion-dollar bond for state infrastructure this year, so we’ll be watching that,” he says.
Mergers Fuel Growth
Utah contractors are not only growing revenues in a strong market, some are also looking to grow through mergers and acquisitions. In the past year, Salt Lake City-based Big-D Construction acquired McAlvain Construction of Boise. Large civil and underground contractor Whitaker, based in Brigham City, acquired DAS-CO also of Boise.
Corey Moore, president of Big-D, says looking for opportunities to grow outside the state has been part of the company’s strategy for the last few years.
“We want to do acquisitions when they make sense and in markets where we can be a top player. Those can be hard to find because we want companies with good leadership that wants to stay. We can bring more bonding capacity and a bigger portfolio,” he says.
Big-D was honored with a Contractor of the Year award from the Utah Division of Facilities Construction and Management and recently completed an extensive renovation of a building that will provide new offices for the DFCM.
Mike Whitaker, operations manager for Whitaker Construction, says the company had been looking for opportunities in Idaho, so the purchase of DAS-CO , which also specializes in underground utility work, made sense. “We’ve wanted to be in that market and to be able to do business with people who live and work in that market, with a similar company culture was a win-win for us,” he says.
In addition to the expansion, Whitaker says his company opened a new office in Midvale last year to manage the many projects underway in the Salt Lake City metro area.
Salt Lake City-based Jacobsen Construction also broke ground on a new headquarters in the International Center near the Salt Lake International Airport.
“Our current offices kind of grew organically as we grew, but we’ve gotten to the point where it just doesn’t work for us,” says John Fortuna, Jacobsen’s chief operating officer.
Jacobsen was honored with the Project of the Year award from AGC for the $430-million replacement of the Utah Valley Hospital in Provo for Intermountain Healthcare.
Jacobsen is the general contractor for the remodel and upgrades of the LDS Temple and has also been selected to build the new Lehi location of Primary Children’s Hospital, Intermountain Healthcare’s regional pediatric hospital.
“It was a record year for us last year, and we’re excited to be part of these meaningful and inspirational projects,” Fortuna says. “We have our biggest backlog ever, and things are looking good going forward.”
Dave Hogan, president of Ogden-based Wadman Corp., says the company has been more occupied with projects in Utah than ever before and he expects it to continue.
“We’ve had multifamily projects along 400 South and a big retail remodel there. Soon, we’re going to break ground on the Layton Temple for the LDS Church,” he says.
While much of the company’s recent work will continue close to home, Hogan notes the largest completed project in the last year was the Baton Rouge Temple for the LDS Church, and the company is continuing work on the church’s temple in the U.S. territory of Guam.