INSIGHT ON – Engineering & Architecture – A boon for builders

Posted on Aug 1, 2013 :: Engineering & Architecture , Insight On
Margaret LeBrun
Posted by , Insight on Business Staff Writer

Olson Pavilion at the Lutheran Home campus in Arlington Heights, Ill., is under construction by Hoffman Planning, Design & Construction Inc., which has taken on numerous projects outside of Wisconsin in recent years. The project is scheduled to be completed in 2016.

Despite a wet spring that brought a slow start for many builders in Northeast Wisconsin, business has been going well this year for engineers and architects. Some say it’s the best year they’ve had since before the recession began. Others are cautiously optimistic.

“Without a doubt, this year in comparison to the last three years is just a world of difference for us, from a sales standpoint,” says John DeLeers, director of business development and co-owner of DeLeers Construction, Inc., Green Bay. “We should hit record sales as a company, ever, this year.”

“I’m not sure if the economy kind of has come around again or not,” says Tony LaShay, business development director for Excel Engineering in Fond du Lac. “But I think there’s been a renewed sense of things happening again.” Excel has several projects under way, including the expansion at Mercury Marine in Fond du Lac as well as the 300,000-square-foot addition at Green Bay Packaging.

“From an architecture and engineering standpoint, 2013 looks pretty good,” says Jon Bartz, president of Martinson & Eisele Inc., Menasha. “We’re seeing growth pick up in the commercial area, specifically, as we’re talking with developers about retail, office and hotel projects. Manufacturing, from our standpoint, continues to be steady. We personally don’t do a lot of manufacturing but people in our industry say it’s continuing to be steady with new plants and plant expansions.”

Among several interviewed in the regional engineering industry, there’s a sense that pent-up demand has finally prompted developers to move forward with projects. While public sector and non-profit projects such as schools and churches kept some firms in business through the recession, these days it’s all about commercial projects, along with some public-private partnerships.

“In the last four years or so, people were looking to see if there was going to be a change in administration within the country, and because we went in the same direction, the people just got tired of waiting around for a better economic climate,” says Trevor Frank, architect with Short Elliot Hendrickson (SEH). “Or, they just capitalized on the fact that the bond rates were as low as they are, and money is as cheap as it is, and they just decided, ‘You know what? We just can’t wait around any longer. We just have to jump off.’”

SEH has been working over the last 18 months with developer Stadtmueller & Associates on the historic Eagle Mill in Kaukauna, turning it into the Grand KaKalin development project, which will include commercial tenants, the city library, possibly a hotel and also senior housing.

For some engineering firms, projects that were started some time ago have finally seen the light of day.

“There are some projects we’ve been working on for a year to a year and a half that had been spinning their wheels, and now they’re coming to fruition,” DeLeers says. “Some are still skittish. Some of that doubting has not fully gone away. But people are pushing forward.”

One of the bigger projects for DeLeers this year is a new, private dormitory project to house students attending Fox Valley Technical College. DeLeers also recently completed a renovation and expansion project for the Door County Humane Society. The residential side of the company, which makes a little less than half its business, is bouncing back but DeLeers says it will “definitely do a lot more commercial this year.”

Public sector projects, for a while the mainstay keeping builders afloat, have slowed. Bartz surmises the heavy snowfall last winter depleted public works projects and put a dent in their budgets, causing them to put off new projects. Municipalities have also tightened their belts considerably since the recession, he says.

“In the go-go days of the early 2000s, time and money were not all that important, things kept going up and up in price. That’s changed,” Bartz says. “Clients are looking for projects to be done quickly, at the lowest cost possible. We are starting to work with contractors from the very beginning of a project and working in some feedback on design and construction from the very beginning, to reduce the time. The old process of designing a project and putting it out for bid is being shrunk now.”

For Hoffman Planning, Design & Construction, Inc., Appleton (which former owner Paul Hoffman sold to six members of the firm’s management team one year ago), an emphasis on niche markets begun several years ago kept business steady through the recession, says Miles Girouard, president and co-owner of the company.

“For us, business is going fairly well, which is somewhat surprising, in the sense that a lot of our competitors seem to be still struggling,” says Girouard. “With our niche markets, the last two years have been some of the best years of our company’s history. We’re ahead of budget this year.” When the market first began to slow in 2007, Hoffman tightened, kept a lean workforce, integrated technology and deliberately sought projects such as senior living facilities and women’s religious buildings. It also branched out to take on projects nationwide.

One challenge common to all those interviewed is finding skilled workers as they grow their businesses back to pre-recession levels.

“One of our bigger headaches has been hiring,” DeLeers says. “The challenge is trying to find good quality employees. In the last couple of years, with construction down, people have taken jobs in other industries. There are also not a lot of students looking at the construction fields for entry-level jobs.”

Hoffman, which hired five people in the last year, has also experienced a hiring challenge.

“It’s extremely hard to find good people,” Girouard says. “Everybody is trying to steal good talent.”

Margaret LeBrun

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