Spokane Journal of Business

Walker Construction keeps busy with negotiated projects

General contractor says repeat, referral customers help balance work flow

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Walker Construction Inc., of Spokane, remains busy with work this year as it did through the recession, despite an overall industry slowdown, mainly by securing a number of projects through contracts negotiated directly with clients.

While the general contractor also regularly submits competitive bids in attempts to win construction projects, it frequently works with repeat and referral clients who select the company before project design work even begins, Walker's owners say.

Walker's portfolio includes a mix of commercial, education, affordable housing, retirement community, historical renovation, and nonprofit structures.

"Across the board, 86 percent of our projects fell under the negotiated contract system in the past 20 to 25 years; we've kept track," says Ed Walker, who owns the company with Justin Paine and the company's president, Tom Hansen.

Walker adds, "For 2012, our revenues are down but we're still profitable for the year. For 2009, 2010, and 2011, we rode the wave pretty well. This is the first year of any downturn of significance, but we've remained profitable."

The company had $46 million in contract revenue last year, which was a huge jump from its $26 million in contract revenue for 2010.

"The negotiated contract system has allowed us to continue to sustain our business," Hansen says. "Because of the relationships we've established, we're not fully reliant on the competitive bid market, but we're still competitive in the bid process."

Today, the company, located east of downtown in about 16,200 square feet of floor space at 1803 E. Springfield, has 50 employees who mostly work full time. They include estimators, project managers, office and accounting staff, project superintendents, carpenters, and apprentices.

Many of its employees have been with Walker for 10 to 20 years, Hansen says. He has worked at the company 25 years.

"For our staff, we've held steady the last five years," Hansen adds.

Walker Construction was founded in 1983 by Ed Walker's father, Rod Walker, as well as an uncle, Lee Walker, cousin Phil Walker, and brother Steve Walker. About three years from its start, Hansen says Steve Walker took over full control and ran the company for about 17 years. In 2000, Steve Walker started selling his shares in the company to current owners, a process that was completed in 2006.

Ed Walker, who has worked at the company for 20 years, says his family roots in construction reach back three generations to the former Hazen & Clark Inc., a contractor that operated here for more than 60 years with founders that included his grandfather and great-grandfather. The assets of Hazen & Clark were sold to two employees, who formed a new Spokane company, Leone & Keeble Inc.

For Walker Construction, Hansen says, "We have a little lull right now, but we'll be picking up early next year."

Walker has been named the contractor for a big proposed multistory retirement housing complex called The Summit, an expansion project for Rockwood Retirement Communities, on Spokane's South Hill, that's expected to begin next year.

"There's some new energy behind that project and forecast in the marketing campaign for sales," Walker says. "There's hope for that project to come onto the horizon in 2013."

Also on the horizon, the owners say the company is seeking some design-build projects that will involve submitting bids in partnership with architectural firms, and it expects to be the contractor for a church project next year. The owners say they're starting to see some new negotiated projects emerge, which usually take one or two years before construction begins.

The company also has built a strong portfolio of historical restoration projects, including the Martin Woldson Theater at The Fox, at 1001 W. Sprague; the Holley Mason office building, at 157 S. Howard; and the Patsy Clark Mansion, at 2208 W. Second, which houses the law firm of Eymann, Allison, Hunter, Jones PS and has space that can be rented for private receptions and weddings.

"We've been doing historic renovation work for probably 22 years now, and it all started with the courthouse in Pend Oreille County," Hansen says. "You learn something each time."

The challenge of doing such work is preserving elements such as ornamental wood and plaster, exterior windows, and intricate finishes while updating the buildings to meet regulatory requirements for modern use, Hansen says.

Adds Walker, "There's a lot of care that goes into those buildings to protect and preserve them. It's like replacing the skeleton and circulatory system, without damaging your skin."

This year, though, the company has a number of new-construction projects that are well under way or that it completed recently. They include the Spokane Teachers Credit Union's Moran Prairie branch, which is nearly finished at 5711 S. Hailee Lane on the South Hill, and The Sprague Union Terrace, a four-story, 37-unit workforce-housing apartment structure it's erecting at 1420 E. Sprague.

Walker just finished a handful of Seattle-area Red Lobster remodeling projects for Florida-based Darden Restaurants Inc., the parent company of Red Lobster and Olive Garden outlets. The company also built the Red Lobster restaurant on Spokane's North Side in 2009. In recent years, it also built 10 Olive Garden restaurants in Washington, Oregon, Idaho, Utah, and South Dakota.

This month, Walker is just wrapping up a job that it undertook jointly with Leone & Keeble to modernize a building shared by the Wellpinit School District's high school and middle school, located on the Spokane Indian Reservation about 45 miles northwest of Spokane.

In October, Walker finished an $11.6 million job to build a Coeur d'Alene Tribe outpatient clinic, called the Benewah Medical Center, near Plummer, Idaho, about 30 miles south of Coeur d'Alene. Earlier this year, it also completed an expansion of Whitworth University's dining hall, inside the Hixson Union Building.

"Usually, we have a mix of a church, school projects, and restaurants on our books," Hansen says.

In recent years, Hansen says the company also has completed some projects for the Spokane Housing Authority, a nonprofit provider of affordable housing that has purchased historic buildings here for apartment units. The projects include the Agnes Kehoe Place, with 51 units of low-income housing in the Hillyard district, and the 33-unit Pearl on Adams at 173 S. Adams.

Hansen adds that the company is able to remain flexible in gaining jobs because of its expertise in some niche areas.

"Good examples are historic renovation and higher-education projects," Hansen says. "We do a lot with health care, senior centers, and nonprofits. With all these emphases, one year something is stronger than the next. It ebbs and flows, but we're diversified enough, we can ebb and flow."

Paine, who joined the company in 1998, adds that another example of the company's flexibility is its ability to do a lot of the work itself, from completing structural concrete work to finished woodwork, rather than having to hire subcontractors.

"Our employees can be supervisors on a project, or work as part of a crew of five to complete work," he says.

Adds Walker, "Our employees are flexible in the field, and their skill sets run the gamut."

Looking ahead, Hansen says the company expects to remain about the same size it is now so that it can continue working closely with project owners.

"We're comfortable with our size now, and we want still to work directly with the owners of properties," Hansen says. "We love to build. If we got big for big's sake, the duties of running a big organization pull you away from the hands-on work directly with clients."

He adds, "We enjoy working through the issues. It's been a deliberate decision we made six or seven years ago, when there were opportunities to get large, and we didn't."

Treva Lind
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