Graham buying Sheas assets
Canadian contractor starts new construction concern, hires former Shea workersNovember 9th, 2001
Graham Group Ltd., a large Calgary, Alberta-based construction company, is buying the assets of the former Shea Construction Inc., a longtime Spokane general contractor that went out of business last month, and the Canadian concern has started a new construction company here called Shea Graham Construction Inc.
Shea Graham has hired all 45 employees that still were with Shea Construction in its final days of operations, which wound down late last month. David Shea, founder and president of the former Shea operation, is president of Shea Graham and holds an ownership interest in the new concern.
Shea says Graham Group started Shea Graham on Sept. 1 and is scheduled to complete its purchase of the former Shea Constructions equipment and facilities this week. He says the new company is buying those assets from XL Specialty Insurance, a Philadelphia-based bonding company that took possession of them earlier this year. Shea says Graham Group declines to disclose the terms of that transaction.
Shea Graham will operate as a subsidiary of Graham Contracting Ltd., a Seattle-based construction company that handles Graham Groups U.S. operations.
The long-term hope is that Graham will expand its operations in the U.S., Shea says. Shea Graham is just one leg of that plan.
Doug Sherrow, Graham Contractings Seattle-based president, says the company expects that within five years Shea Graham Construction consistently will be taking on jobs in a broad geographic areaincluding Eastern Washington, Eastern Oregon, North Idaho, and Western Montana.
Graham opted to integrate the Shea name into the name of its Spokane operation because David Shea has an outstanding reputation in the Spokane market, Sherrow says.
He adds that Graham is considering starting operations in Alaska and Western Oregon as well.
Shea says Shea Graham Construction has begun to bring in new work and hopes to land some major jobs soon.
He says the company is pursuing jobs similar in nature to those that Shea Construction sought, including some with clients for which Shea had worked regularly.
Shea Construction, which Shea started in 1986, was the general contractor on many large commercial and educational projects in this region and consistently was among the largest-volume contractors in the Spokane area through the 1990s.
Last year, the company posted revenues of about $50 million, and at peak times, it employed as many as 200 people, Shea says.
Some large projects on which Shea Construction was the general contractor include Washington State University at Spokanes $39 million Health Sciences Building, in the Riverpoint Higher Education Park; the $28.6 million Lewis & Clark High School expansion and remodel; and the $22 million John F. Kennedy Library expansion and renovation at Eastern Washington Universitys Cheney campus.
Shea says the company suffered debilitating financial setbacks in the last couple of years when separate major subcontractors on three large projects, including the Lewis & Clark High School job, went out of business, leaving Shea Construction to complete their work and pay for their labor, supplies, and taxes. In each case, the general contractor incurred substantial costs, and we exhausted our resources in picking up those tabs, Shea says.
In May, Shea Construction cut staff, and Shea said at that time that the company would complete construction projects that were under way and reassess its options this fall. He said then that he expected the company to stay in business. It turned out that it was unable to do so.
Regardless, Shea says, the construction company was able to complete all of the jobs it had on the books when it began to struggle. The company wrapped up its final job, a $2.3 million expansion and renovation of a Rosauers Supermarkets Inc. store in Hood River, Ore., late last month.
As a subsidiary of Graham Group, the new company is backed by sizable financial holdings and experience in a number of construction fields, Shea says. Graham, a 75-year-old company that has eight offices in three Canadian provinces, posted $300 million (Canadian) in annual revenues last year and expects to post $400 million (Canadian) in revenues this year, Shea says.