Many of northern Nevada's largest general contractors are seeking smaller projects in order to keep revenues flowing and staffs busy in the face of a severe slowdown of new construction projects.
Instead of building large warehouses, quarter-billion-dollar hospitals or new facilities for expanding businesses, general contractors take on re-roofing projects, small tenant improvements and any number of modest jobs.
Mark Beauchamp, co-owner of Shaheen Beauchamp Builders in Carson City, says pursuit of little jobs isn't something the company would have done during boom years, but any job that keeps revenue coming in keeps key employees working and drawing paychecks.
"I absolutely do think it's a trend," Beauchamp says.
BJ Sullivan, President of Clark and Sullivan Construction in Sparks, says the company was forced to change its business model due to lack of vertical construction in the area. Clark and Sullivan, which also has offices in Las Vegas and Sacramento, has slashed its staff 66 percent from two years ago.
That reduction in overhead, Sullivan says, allows the company to bid on smaller jobs it previously wouldn't have been able to pursue. Case in point: Clark and Sullivan's recent contract for a $15,000 re-roof in Wingfield Hills for an existing client.
"In this economy we are looking at any job," Sullivan says. "The only way for people to survive is to change the ways they do business, and we have done that. We are very thankful for every job we get. We will do those $15,000 jobs every day, and we are happy to do them."
In the past, the company erected many of the largest buildings in the Truckee Meadows, including the $275 million tower addition at Renown Regional Medical Center.
Matt Clafton, senior vice president with Panattoni Construction, says the local construction arm of Panattoni averaged jobs in the $5 million to $6 million range just a few years ago and had at least one project per year in the $10 million to $20 million range.
Now, says Clafton, running through his list of current construction projects, the largest jobs on the books are small- and medium-sized tenant improvements. But Panattoni Construction also will do small-scale jobs, such as moving a door or changing out a window, in order to keep its core employees working and keep clients happy, Clafton adds.
"In this day and age, it is all about survival, and that is what it takes," he says. "We are down to a barebones team, and I have to keep those people busy. If small jobs come along, or we are referred by clients, by all means we are doing it and I am appreciative to have those jobs."
Keeping current clients happy is the name of the game, says United Construction president and chief executive officer Craig Willcut. United has a tenant improvement division that does smaller jobs, Willcut says, but the company doesn't actively seek out smaller construction work. However, if the job is to service an existing client, no job is too small.
"'We service our clients' has always been our philosophy," Willcut says. "They are important because of the client relationship and satisfaction. If a client says, 'We want you to take care of this,' we will go out and do it."
Adds Panattoni's Clafton: "Truth be told, our business really is about people and service; we are a service entity."
Cary Richardson, vice president and co-owner of Miles Construction in Carson City, says the company has always pursued projects of any size with the intent of building its client base. The smallest job Miles ever did, Richardson says, was construction of 3 feet of wall for an existing client.
"One of our strengths is that we have got the horsepower to do large projects, but we don't have high overhead, so we can still be efficient on small projects," Richardson says.
Miles Construction has picked up some work in small tenant improvements that erase the footprint left by vacating businesses and other work in preparing retail shells for the next tenant. It's also begun closely looking at repair and renovation work it might not have considered in previous years. For example, the company currently is repairing a parking structure at Tahoe Seasons Resort at Heavenly Valley in South Lake Tahoe.
"It probably would not be so exciting two or three years ago, but we went after it," Richardson says.
Some smaller projects landed by large general contractors most likely will take work from the region's smaller contractors. But the increased competition will serve to strengthen the area's construction pool, says Panattoni's Clafton.
"Unfortunately, a good part of this recession is weeding out the field. A small independently run contractor should still be able to win those jobs because his overhead should be cheaper than the bigger guys. We are all in same boat, but if you are that little guy you should have a competitive advantage," he says.
Clark and Sullivan's top executive says drawing work away from smaller companies is unfortunate, but today's construction environment is all about survival.
"We have been in business for 30 years in Reno, and everybody has to compete that is the American way," Sullivan says. "I am not going to roll over and play dead."
