New construction in many areas of the country has slowed or nearly stopped in the last few years. However, as they remain focused on the future, contractors in the Midwest are continuing to look for ways to expand their business. Heartland Real Estate Business recently spoke with several of these contractors about how they plan to be successful as the economy attempts to regain momentum.

Graycor Construction Company

Graycor Construction Company was founded by Edward Gray in Chicago in 1921. The company soon earned its reputation for taking on particularly difficult projects when it removed a section of a railroad retaining wall in downtown Chicago without interrupting train traffic. Its slogan — one that rings true today — became “Wanted: a hard job.”

“We’re particularly known as a go-to firm for projects with challenging aspects,” says Matt Gray, president of Graycor Construction Company. He says these aspects can include projects with tough schedules, sensitive work environments and budget issues.

For example, the company recently renovated Chicago’s Water Tower Place on Michigan Avenue. The $15 million project — which included expanding the lobby and storefront, installing stainless-steel cladding and 42-foot-tall light fixtures on the façade, and creating a new lobby water feature — had to be done without closing down the mall, Gray says.

Another challenging project for Graycor was the expansion of St. Alexius Medical Center in Hoffman Estates, Illinois. In May, Graycor completed a 36,000-square-foot vertical expansion to the medical center’s west wing. The addition was built on top of three existing and fully operational stories of the building. “You can imagine the sensitivity involved with erecting steel, pouring concrete and enclosing these additional stories above an existing three-story operating hospital,” Gray says.

“I think our proven track record of making good on challenging projects is what has earned us the loyalty of our clients, which in turn, has been the key to our company’s success,” Gray explains. Gray says that, so far this year, 90 percent of Graycor’s projects are for repeat customers, which is evidence of their satisfaction with the company’s work.

Currently, Gray sees a trend in the Midwest toward more in-fill development, expansions and redevelopment projects. He says the market has become mature enough that large-scale new construction is becoming less common. In addition, there is an increasing sophistication in city planning departments and more scrutiny of new projects. “Towns and cities are becoming more involved with the design of projects,” Gray says. “There used to be few towns known for taking this kind of stance, but now it is more often the norm.”

As for his outlook on the economy, Gray says, “I am an optimist, so I see it improving. The cycle will begin again, as it always has.”

Taylor Construction Group

Taylor Construction Group, based in Des Moines, Iowa, has completed work on a 1 million-square-foot parking garage and two, seven-story office buildings, which total 544,000 square feet, for Allied Insurance.

Since 1946, Taylor Construction Group has provided building construction services throughout the United States. Founded in Des Moines, Iowa, by John Ringland and Carroll Johnson, the company has seven full-service offices in key cities throughout the country.

According to Terry Gilland, president of Taylor Construction Group, the company has extensive experience in constructing office buildings, stadiums and parking ramps. He says the key to his company’s success is building high-quality projects within a given budget. “We also spread our risk to various locations so that if one geographic area slows, it does not hurt us company-wide.”

Recent construction projects for Taylor Construction Group include the Allied Insurance corporate headquarters and parking structure in Des Moines. This $115 million project includes two, seven-story office buildings totaling 544,000 square feet with a 1 million-square-foot parking ramp structure. The company also recently completed a $20 million parking structure for the Ameristar Casino in Kansas City, Missouri.

According to Gilland, a current trend in the industry is more emphasis on design/build projects. He also points out that despite the current economic conditions, two of the company’s offices — San Diego and Las Vegas — have seen very little slowdown in construction. “In San Diego, you would never have noticed it, and Las Vegas continues to have an influx of people moving in, so construction has stayed strong,” he says.

“The Midwest has been somewhat slow, but it looks like things are starting to pick up in most of our offices right now,” Gilland explains. “I think the second half of this year should be more like it has been in the past.”

Duke Construction

Duke Construction, based in Indianapolis, has several projects in the works, including a five-story, Class A office building for Blue Cross & Blue Shield in Cincinnati, and a 60,000-square-foot headquarters facility for American Chrome Company in Bolingbrook, Illinois. The company is best known for building large distribution centers and suburban office buildings.

Indianapolis-based Duke Construction has 30 years of experience in general contracting, construction management and design/build services. Best known for building large distribution centers and suburban office buildings, this division of Duke Realty Corporation (DRC) has seven full-service offices in the Midwest: Minneapolis; Chicago; Indianapolis; St. Louis; Cleveland; Columbus; and Cincinnati.

According to Kevin Rogus, senior vice president at Duke Construction, although the company’s initial purpose was to support DRC’s development effort, it also has the ability to provide design and construction services on an independent basis.

Rogus believes the company’s success is partly due to how it spends money from a project’s budget. “We are conditioned to watch the dollars as if we are spending our company’s own money,” he says. “That is a perspective that a lot of general contractors do not have because they are typically not building for their own accounts, and they are not always looking for opportunities to do things the most economical or practical way.”

One of the company’s short-term goals is to take advantage of the recent downturn in volume to make sure that it keeps its best people, maintains its personnel and upgrades its systems — so that when the economy improves, it will have put the economic lull to good use. Long-term, Rogus says the company would like to do more business directly for customers instead of relying on its development division to provide construction opportunities.

Duke Construction currently has several buildings either under construction or in the planning stages. For example, the company will soon serve as the design/build contractor for a 223,533-square-foot, five-story, Class A office building for Anthem Blue Cross and Blue Shield in Cincinnati. As part of the same project, DRC is developing the building on Anthem’s Mason campus at 4361 Irwin Simpson Rd., which is scheduled for completion in November.

Duke also is constructing a 60,000-square-foot headquarters facility for American Chrome Company at the Crossroads Business Park in Bolingbrook, Illinois. The facility is set for completion in September.

In Aurora, Illinois, Duke is building the 2-story, 40,000-square-foot Rush Copley Heart Institute medical building. Also in Aurora, Duke is constructing a Staybridge Suites hotel at 4320 Meridian Pkwy., in the Meridian Business Campus. Duke will serve as the general contractor for this five-story, 101,000-square-foot, 148-room hotel.

A current trend that Rogus sees in the industry is an increase in retail sector activity. As people have begun to build more homes — and as cities have grown — retail has followed. Specifically, he is seeing more lifestyle centers being built.

According to Rogus, there are more opportunities to do business and to build now than there were one year ago. “It is a good time to buy construction services,” he says. “The prices are low, and people are pricing projects aggressively. So, if you have a project that you are thinking about doing, this is a good time to talk to a contractor.”

Clayco Construction Company

Clayco Construction Company is building the new 200,000-square-foot corporate headquarters and indoor training facilities for the Baltimore Ravens in Baltimore County. The project will be complete by the end of the 2003-2004 football season.

Founded in 1984, Clayco Construction Company is a nationwide provider of commercial design/build construction services with offices in St. Louis, Chicago, Dallas and Detroit. According to Bob Clark, chairman and CEO at Clayco, the company specializes in turnkey and fast-track project delivery using the latest construction technologies, including tilt-up concrete. The company builds for commercial, office, distribution, high-tech, manufacturing and sports/entertainment markets, and it is the country’s leading site-cast architectural concrete contractor, according to Clark. In the past year, Clayco delivered more than 16 million square feet of new construction.

“We love what we do, and we have fun doing it,” Clark says. “We always deliver what we promise, and we strive to deliver on time and on budget.”

Clayco has recently been selected as the project manager, and cost and constructability consultant for the new St. Louis Cardinals’ ballpark project, as well as the program manager for the Edward Jones Dome, home of the St. Louis Rams. The Baltimore Ravens selected Clayco to design/build the team’s new corporate headquarters and indoor training facilities to total 200,000 square feet. The corporate headquarters, located in Baltimore County, Maryland, is slated for completion at the end of the 2003-2004 football season, and the indoor practice facility is scheduled for completion this winter.

Clayco also is providing design/build services for CitiMortgage, a 515,000-square-foot office building and processing center in O’Fallon, Missouri. The facility is scheduled for its grand opening in September.

In Taunton, Massachusetts, Clayco is providing design/build services for a 945,000-square-foot facility with warehouse and office space for Jordan’s Furniture at Liberty and Union Industrial Park. Completion is planned for early 2004.

As Clark looks to the future, he sees design/build gaining in popularity. “A few years ago, only 10 percent of construction was design/build,” he explains. “Today that number is above 25 percent, and it continues to rise.”

Bovis Lend Lease

Originally founded in 1885 by Charles William Bovis, Bovis Lend Lease is a construction and project management company with 7,500 employees worldwide. According to Jeffrey Arfsten, president of central operations at the company’s Chicago office, Bovis Lend Lease has representation in 23 states accross the country.

Bovis Lend Lease has had a presence in Chicago for more than 27 years — during which time, it has constructed or otherwise been involved with more than 500 projects in excess of $15 billion. Some flagship projects include the Harold Washington Library and the reconstruction of Navy Pier. Arfsten says that Bovis Lend Lease is known for its high-rise construction and some of the more complicated projects in the Chicago area — such as the Sears Merchandise Group headquarters, 100 North Riverside (now home of Boeing), the Chicago Public Schools construction program and BP’s global retail construction program.

Bovis currently is constructing 111 South Wacker, a 50-story, Class A office building and parking structure. This 1.4 million-square-foot building is located at the southeast corner of Wacker Drive and Monroe Street and is being developed by The John Buck Company. Deloitte & Touche will be an anchor tenant.

In addition, Bovis Lend Lease is the general contractor for the Hyatt Center at 71 South Wacker. Currently under construction, this 50-story, 1.7 million-square-foot, Class A office building will house tenants such as the Hyatt Corporation and the law firm of Mayer Brown Rowe & Maw.

Bovis is also constructing a 25-story, 300-room Marriott hotel at 165 E. Ontario St. and a 332,000-square-foot, 18-story condominium development and parking garage known as 2 River Place that will be located on the Chicago River.

According to Arfsten, the company is successful first and foremost because of its people. “I think we have the best people in the industry,” he says.

In this tough economy, Arfsten says the company is staying focused on its clients and relationships. Another focus, he says, is on continuing to train, develop and provide growth opportunities for the company’s employees.

As for the future, Arfsten says that people have adopted a wait-and-see mentality in regard to what is happening on the world scene. “I think the worst may be behind us, but the economy is still weak,” he says. “Business sectors are cautious, and we have not really seen an increase in capital spending.” Despite these factors, Arfsten remains hopeful. “We are optimistic that in another 12 to 18 months, we will start to see the economy — and related construction activity — coming back.”

Witcher Construction Co.

Minneapolis-based Witcher Construction Co. recently completed 301 Kenwood Parkway Condominiums in Minneapolis. Witcher is currently constructing Rock Island Lofts, a 240,000-square-foot, 64-unit condominium project, in downtown Minneapolis.

Minneapolis-based Witcher Construction Co. was founded in 1945 — initially as a concrete and masonry subcontractor — but it quickly evolved into a leading commercial general contractor, according to Doug Loeffler, vice president at Witcher Construction Co. Last year, Witcher had revenues of $110 million.

The company specializes in retail, housing, and non-profit/cultural and religious projects, and it also has experience in historical renovations. Loeffler says the company is best known for its retail work. “We have constructed, expanded or remodeled retail facilities in over 40 states,” Loeffler says. Witcher’s national retail clients include Target, Kohl’s and Best Buy.

Witcher recently completed 301 Kenwood Parkway Condominiums located just west of the Guthrie Theater and Walker Art Center in Minneapolis. This eight-story project was developed by The Lander Group/UrbanLand.

Also in downtown Minneapolis, Witcher is currently constructing Rock Island Lofts at 329 First Street North. This 240,000-square-foot, 64-unit, eight-story upscale condominium project is being developed by Shamrock Development.

Witcher will break ground this fall on a 117,000-square-foot addition to The Minneapolis Institute of Arts with an expected completion date in late 2005. On the same campus, Witcher is providing pre-construction services for a 45,000-square-foot expansion to the existing facility at Children’s Theatre Company.

Loeffler says that a trend in the Minneapolis/St. Paul area — as well as around the country — is the continued strength of owner-occupied housing. “This trend, coupled with the interest rates at a 40-year low, has influenced our market with an abundance of new condominium projects in the metropolitan area,” he says.

©2003 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.