Diversification Drive Keeps Webcor Healthy

Originally published in ENR,

Founded in San Mateo in 1971—the same year that “Silicon Valley” was coined—Webcor lives by its corporate ethos of boldness, innovation and collaboration. The work ethic is more commonly associated with Silicon Valley’s high-tech firms than with contractors.

Achieving a regional speed record for concrete work on the 605-ft-tall One Rincon Hill in seismic San Francisco. Managing the slippery slopes of the $488-million California Academy of Sciences to substantially complete the one-of-a-kind project on time in just over two years. Value engineering the structure of the over-budget San Francisco Public Utilities Commission headquarters, which resulted in construction of the nation’s tallest seismically resilient post-tensioned concrete core that slashed more than $5 million off the cost. Diving into the first private-sector test at FLEXLAB—the world’s first rotatable research “sandbox” for full-scale energy performance tests on building envelopes and energy systems.

These are just a few accomplishments that have established Webcor Builders as the go-to firm for daring owners looking for a contractor unafraid to join their forays into the unknown.

Webcor is “focused on bringing innovation to lower cost and shorten the project schedules,” says Edgar Lopez, city architect and deputy director at the San Francisco Dept. of Public Works. “Webcor’s staff is strategic in putting together schedules to optimize performance from their subcontractors and other key partners in ways that are not common in the industry.”

Founded in San Mateo in 1971—the same year that “Silicon Valley” was coined—Webcor lives by its corporate ethos of boldness, innovation and collaboration. The work ethic is more commonly associated with Silicon Valley’s high-tech firms than with contractors.

The contractor also excels “at identifying project risks and recommending solutions to mitigate their impact on budget and schedule,” he adds.

Founded in San Mateo in 1971—the same year that “Silicon Valley” was coined—Webcor lives by its corporate ethos of boldness, innovation and collaboration. The work ethic is more commonly associated with Silicon Valley’s high-tech firms than with contractors.

“We grew up here in the tech world and we’ve always been a part of the innovation,” says Jes Pedersen, president and CEO of Webcor, which relocated to San Francisco in 2011. “People who want to find a better way to do things are attracted to our company.”

For many years, Webcor worked almost entirely in the private commercial and residential markets. Revenue peaked in 2007, but Webcor’s fortunes fell along with the rest of the industry during the recession.

“We weren’t really well-prepared for it,” Pedersen says. “We’ve had to really retool ourselves into a lot more diversity in order to sustain ourselves.”

Since the recession, Webcor has diversified its market areas. “We developed 11 different market sectors,” each with a leader, says Len Vetrone, a senior vice president. New sectors include education, government and infrastructure.

Webcor has also deepened collaborations with other contractors and designers. The joint ventures helped the firm penetrate new market sectors quickly. “To try and do it organically would have taken years,” says Vetrone.

The strategy helped boost last year’s California revenue by nearly 15% to $821 million and helped the firm win multiple large-scale projects, such as the $1.59-billion Transbay Transit Center, the $690-million San Francisco General Hospital and the $500-million Moscone Convention Center expansion, all in San Francisco.

Close Partnerships

Even before the recession, in 2007, Japanese firm Obayashi Corp. acquired a majority stake in Webcor. Obayashi provided access to a new portfolio of heavy civil work and “an incredible wealth of bonding capacity,” Pedersen says.

Through a joint venture on the Transbay project, Webcor and Obayashi are fully bonding the project and maintaining a balance sheet for cash flow and credit lines. “Obayashi continues to be a strong partner that financially is able to help us go into markets we couldn’t have gone into if we weren’t teaming with them,” Pedersen adds.

Webcor’s many years of experience in the commercial markets honed its preconstruction abilities. As a result, the firm has been an advocate of alternative project delivery, which includes the contractor in the early stages of development.

The firm ranks among the top five construction managers at-risk in ENR California’s Top Contractors ranking. “Preconstruction and collaboration with owners and subcontractors brings a ton of value, and that’s one of our biggest strengths,” says Tony Rango, senior vice president, operations.

The city and county of San Francisco selected a similar delivery approach—called construction management-general contracting—for its General Hospital and Moscone projects with Webcor. Webcor is involved in the design phase as a CM and in the construction phase as a GC, which gives the owner more control.

When Los Angeles wanted to make inroads into a similar CM-GC arrangement, Webcor teamed with Obayashi and W.M. Lyles Co., Temecula, to win the $140-million Silver Lake Reservoir Replacement.

“The word spreads,” Pedersen says. “We get to help other public entities foray into a much more teaming methodology for delivery projects than they have in the past.” In return, Webcor gains valuable experience in water treatment, another recent market area.

The firm’s emphasis on preconstruction places it in close proximity with design firms, where it aims to be a collaborator rather than an adversary. “We don’t think twice about collocating on a project—there are no secrets,” says Shelley Doran, a senior vice president.

“Getting everyone into the room to collaborate avoids the down-the-line finger-pointing,” she adds.

Using this approach on the 27-story 350 Mission office tower in San Francisco, Webcor worked with architect Skidmore, Owings & Merrill (SOM) on design iterations before selecting the most cost-effective and efficient approach for the elevated concrete decks, says Jitendra Pahilajani, preconstruction director for Webcor Concrete.

The team elected to use a thin post-tensioned concrete slab that allows 40-ft clear spans. SOM worked closely with Webcor to develop and test the approach to ensure constructibility, says Craig Hartman, SOM’s partner in charge of design for the West Coast.

Having worked with Webcor for 20 years on multiple projects, Hartman says he appreciates the firm’s “spirit of collaboration and willingness to be open and transparent in their constructibility and costing issues.”

Hartman says Webcor also aided in efforts to reduce the use of materials and increase sustainability on the LEED-Platinum-targeted tower.

Webcor is ranked among the top five firms based on green-building revenue in California. By percentage of total revenue, the firm ranks at the top with nearly 92% of its 2013 revenue originating from sustainable projects. “We don’t just want [buildings] to be green or efficient; they also need to be functional, smart and healthy places for people to work,” Pedersen says.

On 350 Mission and other structures, Webcor self-performs concrete and finish carpentry. “We think there is a huge value brought to the client by self-performing, because you can drive the schedule and quality, and you know the pricing because you are doing it on a daily basis,” Rango says. “We like taking that risk because the reward exceeds the risk.”

Community Involvement

Webcor participates in a number of philanthropic efforts, including Helmets to Hardhats and charities aimed at children and families. It also works to develop interest in engineering and technology among underserved Bay Area middle-school girls.

The firm also strives to affect communities in a much deeper way, says Doran. Executives and other employees engage with community groups and political leaders to help shape policies affecting Webcor’s key markets, from land use to transportation funding. “We don’t want to just take profits from building, we want to understand what the issues are for each one of these communities and help to shape those,” she says.

Webcor’s understanding of local market forces led to a joint venture with Hunt Construction Group, Scottsdale, Ariz., on the planned Golden State Warriors arena, sited in San Francisco’s Mission Bay district. The joint venture is working with the design team under a preconstruction agreement.

“We understand how things get built and the politics behind it, and we have the deep relationships that attract other great companies to want to team with us,” Pedersen says.