Shift to Public Projects Puts Webcor's Focus on Infrastructure Projects

Webcor's Profitable Growth initiative aims for the company to independently bid on water and wastewater projects by 2027 and secure two transit projects within three years.

February 2, 2024

Strategy / Planning

Infrastructure is an integral part of Webcor's Strategic Plan. The Profitable Growth initiative calls for Webcor to be a standalone bidder in water and wastewater by the end of 2027 and to win two transit projects in the next three years.

The term "infrastructure" can mean a lot, from bridges and highways to power generation and telecommunications networks -- none of which Webcor currently plans to pursue. What is Webcor's infrastructure focus? Why are we looking to grow an infrastructure group when our reputation is squarely in the high-rise category? And how will we get from where we are today to the goals established in the second Strategic Plan base camp?

"Our infrastructure plans are part of Webcor maturing as a company," says Builders Executive Vice President Jit Pahilajani. "Our edict has always been, 'If it's made out of concrete, steel, drywall, glass, etc. in the state of California, we'll build it. Infrastructure fits, and it's a huge business opportunity. There is big money flowing into infrastructure."

With multiple conditions stalling private development, public projects represent Webcor's current best growth opportunities (although the company will be ready when private construction comes back). Water treatment plants are built because the public needs them, and the agencies that fund them are unaffected by the high interest rates that plague private developers.

Webcor's experience is key to defining the infrastructure project categories we will pursue. "We're not going to start building tunnels tomorrow, or roads and bridges," Jit says. "What are we good at?"

Jit points to Webcor projects at Mission Rock Horizontal and 1548 Maple Street. "These were horizontal projects that involved infrastructure work for private clients," he says. Add to that our resume in water with the Silver Lake project in Los Angeles and the Biosolid Fuel Digester Project (BDFP) in San Francisco, and the three infrastructure categories that comprise Webcor's efforts are clear: water, transportation (like the Transbay Transit Terminal and the Metro Gold Line Foothill Extension in Los Angeles), and horizontal.

"We've identified the holes in our resume, and we're trying to target those types of jobs so we can fill those holes," says John Reynolds, the Webcor Sr. VP leading the infrastructure effort.

How We'll Get There

Growing a robust infrastructure group begins with developing capabilities, Jit says. "What technical and contractual knowledge do we need? These capabilities need to be baked into the company, which requires Webcor to develop a team of people with this expertise.

Jit says, "With the infrastructure work we're doing now, the expertise will broaden, so we're timing this move correctly. Our first need will come in preconstruction. We will look to hire an estimator with infrastructure experience because estimating for buildings is very different from estimating for infrastructure.

1548 Maple (Horizontal)

"Overall," Jit says, "we'll look to hire strategically from outside as well as develop people from within Webcor."

According to Vice President Ron Probert, transitioning from buildings to infrastructure isn't as much of a stretch as it may seem. "Webcor Concrete undertook the mass timber job at 1510 Webster in Oakland," Ron says. "Their take on it was that it was different from concrete, but the same. That's how a lot of our people will see infrastructure. We have a lot of long-tenured craft workers here who have done a lot of complicated work that's consistent with infrastructure projects. And, we have the engineers that can support that work"

Combined with strategic external hires, Ron envisions Webcor building a solid infrastructure team. "Construction is about people more than anything," he says.

From a project perspective, Jit likens the path to that which Webcor took on its healthcare journey. "Ten years ago, we were looking to build our first hospital, Zuckerberg San Francisco General Hospital. Today, we have three healthcare projects in progress. It's the same with infrastructure. By 2029, 2030, we will have developed a robust portfolio of infrastructure projects in our pipeline."

Bringing in Work

Filling that pipeline begins with the core infrastructure team of two: Ron Probert and John Reynolds. The duo's Webcor roles reunite the pair: They worked together at Walsh Construction earlier in their careers. For Ron, that experience came after years of infrastructure work at various companies, including leading the project to rehabilitate the Oakland-San Francisco Bay Bridge after the Loma Prieta earthquake.

"We're on a good trajectory," Ron says of Webcor's infrastructure roadmap. "Compared to some of the other companies I've worked for, Webcor has been perfecting the non-traditional delivery model of GMP (Guaranteed Maximum Price). Alternative delivery models are the way the infrastructure industry is going," he says, adding that P3 (Public-Private Partnership) is another delivery model with which Webcor has experience, notably with the UC Merced project, the most successful in Webcor's 50-plus-year history.

Biosolids Digester Facilities Project

"Far and away, our preferred method would be Constrution Manager at Risk (CMAR) or Construction Manager/General Contractor (CMGC) type deliveries," John says. "Design-Build (DB) and Progressive Design Build also fit nicely."

Consequently, even though some of our competitors have lengthy infrastructure resumes, Webcor is well-positioned to compete in the new infrastructure market. Ron says, "Understanding the delivery models and getting the projects efficiently through design and into construction is just as important as being able to show a long list of projects in your resume."

One approach to fleshing out Webcor's infrastructure resume will include taking on some smaller projects, Jit explains. In general, though, infrastructure projects have ballooned in size over the last several years. "Once, a $20-million project was a big project," Ron recalls. "Caltrans, for example, would put out packages that broke the projects down into bite-sized pieces. But over time, with the shift to alternative delivery models, the projects have gotten bigger and bigger."

As a result, three or four large infrastructure projects could amount to more money than Webcor's entire current capacity. The Diridon Station connector project in San Jose, the first phase of which is already underway with Webcor's involvement, is just such a project; it would also be a significant addition to the company's infrastructure resume.

Waterworks, Transportation, and Horizontal

The water-based infrastructure projects Webcor will pursue fall into two categories, John says: drinking water and wastewater. The Silver Lake reservoir project in Los Angeles is an example of a drinking water project, while the Biosolids Digester Facilities Project represents a wastewater project.

The BDFP project is a joint venture with MWH, a partnership initiated to help win the project; MWH brought the water resume to the table. But by 2027, John says, Webcor should be able to win a wastewater project without the need for a partner.

Silver Lake Reservoir in Los Angeles

In the transportation bucket, Webcor already has an impressive resume, from work for BART to the Transbay Terminal, and the Diridon connector project in San Jose -- a joint venture with Obayashi -- is a good example of the scale of project the team wants to pursue, along with station work. "These large transportation contracts are often broken into packages, so one company will do the tunnel or the rail, and another will build the stations. When we talk about Webcor's transportation ambitions, we're talking about the stations."

As for horizontal work, Webcor is currently pursuing several opportunities, including a facility in Mojave. While the company's resume in this category is thin (despite the successful Mission Rock Horizontal project, pictured at the top of the article), the requirements are not much different from the other horizontal work Webcor has already completed. "We're looking at central utility plants, which are typically built on large campuses," John explains, adding that Webcor is in talks with several private owners about the need for CUPs on their campuses. "All things start with a CUP," he says. "You need to be able to put power, heat, and water out to the various facilities on your campus. This is an area where there's a lot of opportunity right now."

One such opportunity in Webcor's sights is at the Presidio in San Francisco, an entirely horizontal project.

John says water is the biggest of the three categories for Webcor. "The state of California is tightening restrictions on the quality of water discharged. Coupled with the drought conditions we've been experiencing, which lead to stricter discharge requirements due to less water to dilute, a flood of work is coming up." The same is true of drinking water. Consider Los Angeles, where a plan is in place for 75 percent of the water used in the city to be reclaimed water by 2050. That project alone is worth nearly $8 billion.

"Across the state, $50 billion of work is probably coming (pardon the pun) down the pipeline," John says.

Opportunities for Employees

With current infrastructure projects and some other work that features infrastructure-adjacent components, Webcor is developing the skillset and field technology required to run the bigger projects the team is planning to win. "We have a lot of really talented builders who can build a lot of things," John says. "There's quite a bit of crossover in the skill sets."  ”And, it’s just as important for our employees to diversify their resumes as it is for Webcor because infrastructure work is always present in good and bad economies.”

As Webcor brings infrastructure projects online, there will be opportunities for employees seeking to gain new skills. "Particularly on these larger, longer-duration projects, we'll be looking for people interested in working with the team." John points out that Webcor has been working on the Silver Lake project for 13 years, with the Los Angeles Department of Water and Power looking to extend the work through 2027. "Longer jobs provide great opportunities," he says.