Top Contractors

by Tom Stabile and Katherine S. Robertson

The top contractors of New York, New Jersey, and Connecticut were slightly down in 2005. But the overall market appears healthy, and some contractors see this year as a breakout opportunity.

See our Top Contractor rankings

Contractors and construction managers in the New York region generally had high hopes for 2005, after a steady but unspectacular showing a year earlier. But a turbulent political scene managed to delay or cancel big-ticket projects, deferring some of those hopes.

Early last year, political wrangling led to delays in the funding of major capital programs for the New York City School Construction Authority and the Metropolitan Transportation Authority in New York, as well as for transportation projects in Connecticut and New Jersey. In addition, concerns over security in the design of the Freedom Tower set back redevelopment efforts for the World Trade Center in Manhattan, while the expansion of the Jacob K. Javits Convention Center further uptown also proceeded more slowly than expected.

And a new $2 billion football stadium for the New York Jets on Manhattan's West Side was scrapped altogether after opposition from state legislative leaders.

Still, construction was active in several sectors, such as residential, which remained red hot in all three states, while Midtown Manhattan saw a spurt of office projects and casino construction got under way in Connecticut, New Jersey, and Upstate New York.

That mix of activity shows in the 2006 ranking of top contractors and construction managers in New York, New Jersey, and Connecticut [see charts after story].

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Deferment of big projects may have dampened activity for the largest contractors. Of the top 10 companies in the 2005 rankings, only three reported higher volumes of work in the 2006 survey. The top firm of 2005 -Skanska USA of Parsippany, N.J. - reported a volume of $2.1 billion, while this year's top firm, Turner Construction of New York, reported $1.9 billion in work, which was down itself from $2 billion a year ago.

Further down the chart, however, the market fared better in 2006 than in 2005. For instance, the 10th-place dollar volume in 2005's ranking was nearly $350 million, while this year it tops $400 million. Similarly, last year's 25th spot was $154 million while 2006 is at $165 million. Last year's 50th place was $70 million, edged by $71 million in 2006.

Such data may signal that the underlying market is healthy for contractors, and that once big projects on the boards begin, all boats may rise. That's the view of Lou Coletti, president of the 1,500-member-strong Building Trades Employers' Association in New York, who sees a multiyear boom ahead.

"Over the past few years, there's been a lot of discussion about plans," Coletti said. "Now you're going to see an incredible amount of activity. I think this will probably give us the most consistent growth period in almost two decades."

Signs are already strong in many market sectors - retail, commercial, institutional, residential, and civil - in the view of Michael Gabbay, senior vice president of New York-based Plaza Construction. He ticked off the residential rebirth of Lower Manhattan, as well as mega projects downtown such as the $2.4 billion Goldman Sachs world headquarters, the $2 billion World Trade Center transportation hub for the Port Authority of New York and New Jersey, and the $12 billion Second Avenue subway project.

"It's adding up to an upbeat year," Gabbay said.

Plaza's $500 million backlog includes roles in projects such as the $400 million Bronx Terminal Market and a Queens cogeneration plant, he added.

The expected activity heightens the need for a bigger skilled workforce, said Coletti, who joked that the industry's prevalent hiring method is "stealing people from one company to another."

Coletti said a recent survey by his association found 86 percent of respondents reporting trouble hiring entry-level cost estimators, computer specialists, and construction managers. The association has programs aimed at recruiting more people to the industry, such as Construction Skills 2000, he added.

The boom in the region may not extend to Upstate New York, however, said Jeff Zogg, executive director of the General Contractors Association of New York, which is based in Albany.

"The Hudson Valley and Metropolitan New York area seem to be very strong for all types of construction activity," he added. "Eastern to central New York seem to have a reasonably good market. When we get to the western and southern tier, we see some real challenges. That market needs to get better."

Those upper regions are at least steady, said William Goodrich, president and COO of Rochester-based LeChase Construction Services. He estimated that current non-residential construction activity for Rochester was around $500 million, and pegged greater Albany's activity at $900 million.

"Pretty steady growth - controlled growth - over the past three or four years," he added.

LeChase reported a volume of $269 million in work for 2005 - below the $349 million it reported for 2004. Among its large efforts under way around Rochester are a $150 million retrofit for Eastman Kodak and a $50 million project for Xerox.

This year's survey results also reflected a slightly higher work volume for contractors in Connecticut, where this year's top firm, Turner Construction, reported $301 million in work, better than its $289 million figure for last year, when it also led the state. The dollar volume for the 15th spot in Connecticut's rankings hit $15 million this year, above last year's $10 million.

New Jersey's numbers by that same measure were slightly down at the higher end, where Skanska's chart-topping $360 million figure this year was below Turner's state-leading $438 million last year. But the 20th place in the rankings last year was at $49 million, while this year that spot hit $67 million.