Construction leads growth in Top 150 St. Louis Privately Held Companies - St. Louis Business Journal:

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Business Journal research on the area's largest private companiee found the five that recorded the largest percentage gainsz in revenue are all involved in real estate construction and related building Thosecompanies -- The , , and -- each generated between 56 percent and 81 perceng growth last year for a combined $1.48 billion in totalp revenue. Each firm has a different but most sharesimilar themes. Company executive s attribute their success tolarge projects, diversified client basez and hard-working employees. Most acknowledge they have been benefitinhg recently from jobs and investments whose origins date back a few yeards when credit was easyto access.
while many are enjoying continued prosperittthis year, most are taking a more cautiouss view of the future. With the financiap markets tight and the nationaloeconomy slowing, there is greater risk that upcomingb jobs could be delayed or scaled down. The lag time betweej a project's proposal and its eventual completionn can stretch from monthzto years. That has managers planning aheaxd now for conditions that might not hit home forsome "I think 2008 and 2009 for PayneCrest will be very stronyg years, but I am a little bit concerned about wherde the market will be from 2010 and said David Payne, owner and president. "Normally we woulxd know of some big jobs comin g downthe road.
But beyond 2010, we don'tr see a lot in the pipeline." PayneCresgt surged with 61 percent revenue growth in 2007 thankws to a couple ofmammoth projects. The compan y posted record revenueof $100 million as it completede the electrical and communications wiring of 's new $507 million Lumierr Place casino complex downtown, as well as majofr electrical upgrades at 's two assembly plants in Fenton. Now PayneCresty is preparing to take on the lead electricalk contractor rolefor 's $905 million cementt plant in Ste. Genevieve County. Payne is staffinfg up to handlehis backlog, but also tryingg to anticipate economic conditions a few years out.
"Ws have to accomplish the work we have on the bookss while also looking at the future and trying to determine what that will mean for staffing levels," Payne said. Design-build firm ARCO Construction grew 73 percenyt last year thanks in larged part tothe company's geographic and marketg diversification, according to co-owner and Chief Executivre Jeff Cook. With nine offices nationwide and a larger staff to handle more jobs andbigger projects, ARCO boosted revenue to $402 million. The companhy takes on everything from office buildings and distributionn centersto health-care, retailp and commercial housing projects.
A new $5 millionh Lamborghini dealership in Chesterfield anda $10 millio n industrial building in Eureka for Chrysled supplier are among its recent locakl jobs. But Cook said some of ARCO'd recent growth came from a level of project backlog that mighrt not be replaced at such a vigorous pace in thecoming "Don't expect that growth every year from Cook said. "We're more of a controllefd growth kindof company. We're targeting 10 percengt this year." Close behind ARCO, Ben Hur Construction bumped itsrevenue 71.5 perceny in 2007 under the leadershiop of President and CEO Bill one of the firm'as owners. The company specializes in industrial, power plant and manufacturing jobs.
"The power work has been on thebookx forever, and they are just getting around to it all over the Brown said. "The coal power work is goin nuts with new plantswand retrofits." Ben Hur also builda churches, and Brown said with all the new housinv developed in recent years, it "seems like there's a churcg going up on every corner." "Our nichse markets have been pretty spectacular, and thers is a lot of strength in them througn 2008 and 2009 because many of these jobs have been in the workse for years in advance," Brown said. "We're struggling to find reasonds not tobe optimistic.
We think there is stillp enough strength in the economy right Sachs Electric, whose current projects include wiring 's new $80 millioj Chaifetz Arena, grew its revenue 56 percenty last year. Clayton Scharff, Sachs'' chairman, president and CEO, said the companyt also is working on three new buildingse atEdward Jones' St. Louis headquarters, ' new officse complex at the Universityof Missouri-St. Louis and ongoing improvementsat 's various "Looking at 2008 and early 2009, we're still very strong and beingh presented with several opportunities," said Pat Kriegshauser, Sachs'' chief financial officer.
"Fortunately we are well-diversifie and not dependent onone That's helped us ride out ups and I think it's fair, though, to take a cautioue outlook given the lack of liquidity in the market that coulds limit financing. Projects may be delayed if financing becomes a Len Toenjes, president of the Associatesd General Contractors of St. said power plant, infrastructure, health-car and industrial jobs remain among the hot spots withihn theconstruction industry.
But cold spote include retail andentertainment projects, such as the long-delayer Ballpark Village mixed-use development planned by the and "Those are projects that are more financing and tenant-occupant driven," Toenjess said. "You used to be able to get financinfg if you could get 10 percent to 15 percentoccupancuy pre-sold. Now you may need 50 percent to 60 percentg occupancy toget financing. The bar has moved significantlyy because of what has gone on in the financial Cost inflation of building materials suchas copper, steel and petroleum-basexd plastics is also a he said.
"In 2008 our guys are prettt positive we'll see growth in commercial construction of 5 percentr to7 percent," Toenjese said. "When we get to 2009, people start to wonder what's going to be out there as work on the Holcinm plant and Interstate 64wraps up, as we watch what may or may not happen with the (planned) South Count y casino, and with othet projects on hold. There is some concern." The view aheaxd also is difficult to predicgt for TheMichelson Organization, a real estatde investment and management company, which was the biggesy winner of the bunch in the past year as it grew revenuer nearly 81 percent from abouf $300 million in 2006 to $542 millioj in 2007.
The company, owned by President and Chiegf Executive Bruce Michelson andhis family, operates 41 multifamilty properties in 29 cities in 15 states throughout the Southeast and Southwest. By acquiring three propertiese and sellingtwo others, Michelson'es real estate fund wrapped up the year with better-than-expected investment returns. Bruced Michelson declined to discusshis long-term outlook, but valuation adjustments in the real estate market are undoubtedly on his radar.