United Construction, a prominent Nevada general contractor, recently shuttered its 21-year-old Las Vegas division in response to the deepening recession. The Reno-based company notified employees of the decision on Feb. 10. United's local offices had been located at 5130 S. Valley View Blvd., Suite 100, in Las Vegas. The three remaining division staff members were laid off.
“It was a surprise move, although we had been biting our nails for some time because it's really hard to find new work,” says former division manager John Woods. “The Las Vegas division experienced the most profitable year on record in 2009.”
United had recently finished construction of the $33-million, 412,000-sq-ft headquarters for Freeman, the trade show and exposition company, at Sunset Road and Torrey Pines Drive in southwest Las Vegas. The concrete tilt-wall building on 31.83 acres features a three-story 100,000-sq-ft office area with a 312,000-sq-ft warehouse. It houses Freeman's Las Vegas office and manufacturing facilities.
The contractor additionally built a new $16-million northeast operations center for Southwest Gas Co. last year at Centennial Parkway and Shatz Street in North Las Vegas. The 101,981-sq-ft complex, on 10.43 acres, consists of two concrete tilt-wall buildings, including a two-story, 73,000-sq-ft office building with 21,000 sq ft of warehouse and mezzanine space and a 7,049-sq-ft vehicle maintenance building. The facility houses approximately 400 Southwest Gas employees.
“In this economy, it made no sense to spend the money needlessly,” says United President and CEO Craig Willcut. “We're just doing a short term pullout.”
United is still doing a $3.5 million, 7,000-sq-ft Child Development Center at Nellis Air Force Base. The design-build project is expected to break ground in August, and finish April 2011. The company will continue overseeing operations from its Reno headquarters.
United Construction President and CEO Craig Willcut
recently shuttered the company's 21-year-old Las Vegas division.
Founded in 1978, United Construction has been a prominent fixture on the building scene in Southern Nevada. It is active in organizations like the Associated General Contractors and NAIOP, which named United Construction its Contactor of the Year for 2009. The firm had previously recorded $100 million in revenue annually before the recession. It had been routinely ranked by Southwest Contractor as one of Nevada's top general contractors.
In 2007, United completed a 513,240-sq-ft warehouse inside the ProLogis Park North master-planned business complex in North Las Vegas that earned the company numerous accolades. It was recognized by Southwest Contractor's “Best of 2007 Award” for Best Industrial project.
But the recession and a credit crunch have more contractors competing for less work, and increasingly struggling to stay afloat as developers halt, postpone and scale back building plans. Southern Nevada's construction industry currently has a 25% unemployment rate. Last year, there was a 21.7% decrease in contractor applications from the previous year, reports the Nevada State Contractors Board.
The recession increased local contractor availability, resulting in a flooded marketplace, as opposed to a few years ago when Southern Nevada was a hotbed of construction activity and help was scarce. It has resulted in lengthy bid lists, increased competition and narrow profit margins, with firms accepting jobs at cost in order to stay afloat. Subcontractors can default midway through a project, placing a hardship upon on the general contractor who must still fulfill their obligation for the same price and within the same timeframe. The contractor must also perform any warranty work on behalf of defunct subcontractors.
"It cost our company in the mid to high six figures replacing subs last year,” says Willcut, a National AGC director. “When you start taking work cheap, it's going to catch up with you. It's not benefiting anyone, including the owner or the contractor.”