From his Portland office, Hoffman Construction Vice President Bart Eberwein has watched the glass curtain walls going up at Park Avenue West.

“It started out as a hole over a decade ago and construction was halted, but it came back,” Eberwein said about the downtown Portland project where Hoffman is serving as general contractor. “That’s kind of what happened to the industry.”

Eberwein’s company also seems to have emerged from the past recession in fine form. The company reports annual revenue of $1.8 billion. In addition to Park Avenue West, its current project list includes projects for Nike in Beaverton; the Daimler North American Headquarters building on Swan Island; and educational facility projects at schools that include the University of Oregon, Oregon State University and Washington State University.

The company also has joined with ZGF Architects to emerge as one of the leading contenders to handle Oregon Health and Science University’s $340 million Center for Health and Healing South project in Portland’s South Waterfront area.

The building industry, including general contractors, emerged from the past recession to find that a new normal had taken hold. Lessons learned during the recession mean companies are more competitive than ever when it comes to winning contracts. Projects also come with higher degrees of difficulty.

“Projects are increasingly more complicated and data-driven,” Eberwein said. “Wiring for data is a primary utility like plumbing or electricity.”

Hoffman has risen to the challenge by continually tracking the changing needs and expectations of both clients and the market. The company, for example, has established a strong expertise in laboratory projects for both medical and educational clients.

“It’s a kind of commitment to including bio-sciences as part of a broader education,” Eberwein said. “It’s where people will work to find solutions to problems created by a crowded planet.

“I’m excited for this year … everything points towards growth,” he added. “Do we have a leg up? We like to think so, but it’s really about staying on top of the market. We’re growing, too.”

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Oregon Health & Science University officials are close to hiring architect and contractor teams for two new buildings in Portland’s South Waterfront District.

Contracts should be finalized by the end of January with design and build teams for the $340 million Center for Health and Healing South and the $160 million Knight Cancer Research Building (also referred to by some as the Schnitzer Campus Building Three), OHSU spokeswoman Tamara Hargens-Bradley said.

According to industry sources, OHSU has selected Portland-based firms SRG Partnership and Andersen Construction along with St. Louis-based McCarthy Building Companies to design and build the Schnitzer Campus building and Portland-based firms ZGF Architects with Hoffman Construction for the CHH South.

Hargens-Bradley declined to confirm these selections, however. The university is not releasing any details until final contracts are signed, she said.

Andersen spokesman Phil Kennedy confirmed that the general contractor is a finalist to build the new Schnitzer Campus building in partnership with SRG and McCarthy, but said no contract has been signed.

SRG Partnership spokeswoman Bonnie Duncan said the firm had no news to report yet about the OHSU project. Bart Eberwein, a spokesman for Hoffman Construction, and Amy Columbo, a spokeswoman for ZGF, referred questions to OHSU.

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It’s no secret that the past few years have been tough for the construction industry.

Since 2008, construction spending in the United States decreased nearly $300 billion and resulted in a 2 percent reduction in the nation’s economy, according to the .

From all accounts, this past year wasn’t much different.

“I think most of 2011 looked a lot like 2010, which was for Oregon, definitely the worst year for construction in memory, if not history,” said John Killin, president of .

During the first 10 months of 2011, construction spending dropped 2.9 percent below the same period in 2010 to $655.5 billion, according to the United States Department of Commerce.

But in addition to its gloomy statistics, 2011 was also year of endurance, efficiency, competition and creativity as companies fought to eke out a profit.

“One of the things you do during a recession is you polish your ammo, you sharpen your swords, you mend your fishing net,” said Bart Eberwein, executive vice president for in Portland. “You don’t just sit around. You stay focused and make your organization stronger.”

Eberwein said the regionally based, Pacific Northwest company was on track to do approximately $800 million in sales for 2011. While that’s not quite as profitable as the company would have liked – last year Hoffman did approximately $1 billion – Eberwein said it was still a successful year and that the company had found a couple bright spots in the medical and higher-education sectors.

Hoffman is currently punching out a new $250 million tower for Children’s Hospital in North East Portland.

The company also is finishing construction of a new 620-bed state psychiatric hospital in Salem, and has started work on a second 340-bed psychiatric facility in Junction City. Together, those two projects are expected to cost the state $458 million.

Eberwein said Hoffman also found some hefty work in the form of dormitory and living-area construction from local universities and community colleges as they rush to meet the needs and desires of the now-college-age offspring of the Baby Boom generation.

“That’s kind of a bright spot in the galaxy, if you will,” he said.

To take advantage of those opportunities, Eberwein said, Hoffman has put a large focus on identifying “lean practices,” or those building processes that allow them to do more with less. He said successful subcontractors were following suit.

“I would say that the good subs have also responded to the recession by becoming a little more automated, a little more prefabrication, a little more reliance on computer-generated shop drawings like 3D CAD, or BIM (Building Information Modeling),” he said.

That is, companies are getting lean and mean, and those that don’t are facing the consequences.

Matt Paine, senior project manager with in Portland, sees it every time he emails a request for proposal to subcontractors.

“Every time I do, for the past three years, I get back bounces and not just a few but a lot,” Paine said. “Every time I send out a notice, I get responses that so-and-so is no longer with the company.”

From October 2008 to October 2011, contractor licenses in Oregon dropped 17 percent to 38,165, according to the Construction Contractors Board.

That’s a telling sign about the state of the industry, Paine said, and one that makes him feel fortunate about the amount of work they’re seeing at J.R. Abbot.

With established offices in Seattle and Arcadia, Calif., the company opened its Portland location in 2008 at the onset of the economic recession. While that may seem like bad timing, Paine said the decision was a calculated move to increase the company’s client list as owners with tightening budgets shopped around for new, more cost-efficient general contractors.

“Doors have opened for us that perhaps would not have been open to us before,” he said.

But the price of admission has also been high as owners with shrinking budgets increased their expectations for quality and delivery, Paine said. One example was the $20 million remodel this year of the Burlingame Fred Meyer – a 13-week project that the company delivered in 5 weeks.

“It was so aggressive that many in the industry were betting it couldn’t be done,” he said. “It’s that kind of opportunity – to show clients there is a different way, there is a better way, at a lower cost and at a more aggressive schedule.”

Paine said sales from their Portland office, which deals primarily in medical and grocery store construction, were up from last year at approximately $15 million. Company-wide, J.R. Abbot does around $100 million in sales a year.

Jim McKune, chief operating officer for in Happy Valley, said competition for work has been fierce and that owner-developers stand to gain a lot.

“The owners are getting a very good deal at this point,” he said. “The contractors are taking all the risk, or the majority of the risk, and the owner is getting a good turn on their construction dollar.”

McKune said Emerick has been identifying ways to make its operations more cost efficient the past few years. This year, the 68-year-old company is budgeting approximately $45 million in sales – up from roughly $42 million last year – but it has done as much as $60 million in annual sales in years past.

He said a key ingredient to that has been staying diverse. While the majority of the company’s work has historically come from the public sector in the way of school construction, this year that dynamic flipped as the majority of the company’s back log came from private sector medical and high tech buildings.

He said one challenge that contractors face in today’s economy is that fees have shrunk from more than 4 percent during the boom years to less than 2 percent today. With that kind of a profit margin, the recipe for success has become finding large projects with short time frames.

“That’s the name of the game we’re in,” McKune said. “We work hard to find work and then we work even harder to get rid of it, as fast as we possibly can.”

And while the game has changed, this is not McKune’s first recession. He went through similar situations in the ’70s,’ 80s, ‘90s and the early 2000s and, like before, he expects there to be a light at the end of the tunnel – perhaps in 2013 or 2014.

“The trouble is the tunnel is a little bit longer this time than it has been in the past,” he said.

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An effort to ensure that ailing Oregonians receive the appropriate type of health care has changed plans for the new state psychiatric hospital in Junction City.

this week is wrapping up construction in Salem on a 620-bed psychiatric hospital – the first of two that are replacing a 128-year-old facility. But after reassessing what the state’s needs were, members of the Oregon Health Authority decided to cut the number of beds in the second hospital, which will be built in Junction City, in half.

“We took a step back to see what the needs actually were,” said Patricia Feeny, communications manager for the Oregon State Hospital replacement project. “We decided that if we could reduce the geriatric population by getting them into more appropriate settings for dementia or Alzheimer’s rather than a psychiatric facility, we would come up with a different formula.”

Reducing the number of beds from 360 to 174 could mean a smaller contract for Hoffman and the subcontractors in Junction City. St. Louis-based architecture firm  and Portland-based are still working on the schematic design, though, so the impact on the budget and square-footage is still unclear, according to project administrator Linda Hammond.

She added that the team is working to stay as close as possible to the original $458.1 million budget that the Legislature allocated for the hospital replacements.

The infrastructure to support the site has not been changed, according to Parrish Van Wert, project liaison for the state. The 90-acre site in Junction City will also hold two state prisons, so the decision to downsize had less of an impact on the total infrastructure, which cost the state approximately $27 million.

Because the project team is the same for Junction City as in Salem, Bart Eberwein, Hoffman vice president, expects construction to begin smoothly next spring, even if there are changes to the site plans.

“We’re planning on moving a lot of personnel from one site to the other, so there are a lot of lessons learned in terms of constructing for a fragile population,” Eberwein said. “(In Salem) there were a lot of things that were figured out in preconstruction through a lot of collaboration.”

Because some of the work in Salem was next to buildings that still housed patients, Eberwein said the construction team became more aware of the patients’ needs. Unlike the old hospital, which had a ward-based floor plan and employed a stricter model for psychiatric care, the new facilities encourage patients to participate in activities and move around.

“You really want to build something with as much light and civility and potential for social interaction and healing as possible,” he said. “These are easy things to say, but it’s really different when you start to analyze the fixtures and room layouts, and we worked closely with the architects and nursing staff to put together a long list of what we’ve learned.”

The focus on a rehabilitative design is also part of the reason the Oregon Health Authority advised a reduction in the number of beds in Junction City, according to Hammond.

“The design is in line with the plan for continuous patient improvement,” she said. “The bed numbers came down in part because we want to focus on treatment and recovery and getting to the lowest level of care so individuals can be as independent as possible.”

Geriatric patients with Alzheimer’s or dementia will be diverted to community facilities rather than the secure psychiatric hospital.

Hoffman will start wetland mitigation on the greenfield site before construction begins on the facility. Crews next summer will begin to upgrade the intersection of Oregon Route 99 and Mill Iron Road, which will serve as an access point to the facilities, according to Van Wert.

“We only get the chance to do this every 100 years,” Hammond said. “As we look holistically at how we serve this vulnerable population, it’s important to take a step back, ask questions and make changes to get it right.”

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“It feels like the thawing of a long winter.”

Executive Vice President Bart Eberwein and others expressed relief today, when announced that in late 2013 work will resume at Park Avenue West, a downtown Portland high-rise project that stalled more than two years ago.

The scheduled restart date for the project, considered by some people to be a symbol of the recession’s impacts, is based purely on an expectation that large tenants will seek space in late 2015 and early 2016, TMT Development President Vanessa Sturgeon said.

Complete construction financing for the project was procured within the last 90 days, Sturgeon said.

Park Avenue West is planned as a 27-story office and retail building in a prominent location, on a block bounded by Eighth and Ninth avenues and Yamhill and Morrison streets. TMT Development halted the project, estimated to cost more than $100 million, in April 2009 because of financing problems. The big “hole in the ground” has since generated no work except for occasional adjustments of a towering crane that occasionally blows over the neighboring Nordstrom store.

“It’s a symbolic hole in our downtown, and getting this tower under way is a positive sign for everyone,” said Scott Andrews, chairman of the Portland Development Commission’s board and president of . “And alternatives (for leasing) are good for the marketplace.”

Activity is scheduled to take place at the site soon. To make the work-free zone more attractive, crews will soon take down the crane and install an 8-foot-high wall around the site. TMT has partnered with New Avenues for Youth for homeless and at-risk youth, under the direction of an artist, to create a mural.

Meanwhile, the project team will actively seek tenants for the building planned to offer more than 500,000 square feet of Class-A office space. Presently, no lease agreements are signed and no discussions are under way with prospective tenants, according to Sturgeon, but the team believes its opening date is on target because some large corporations and law firms are expected to shop for office space around that time.

“If we target toward that date, we’ll have exactly what they’re looking for,” said principal Scott Madsen, who is marketing Park Avenue West to potential tenants.

Madsen said the project could move forward earlier if tenant interest was to surge at the right time. The project did generate interest from prospective tenants, including law firms and , looking to lease space beginning in 2013 or 2014, but timing for construction didn’t work out for those tenants, and they stayed where they were.

Madsen said he doesn’t expect a big, local tenant to sign before 2015. The team wants to be prepared for that wave, however.

“When we look into our crystal ball … the next wave is happening in the 2015-2016 range. It makes a lot of sense just to prepare for that timeline,” Madsen said.

And in the fourth quarter of 2013, the team will be ready, said founder and principal Robert Thompson, who designed the building.

“There is steel sitting here in Portland, and curtain wall systems in Korea ready to erect,” he said. “The building is ready to go.”

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Nothing official yet, but there are “lots of rumblings out there” about new or growing technology businesses spurring construction projects in the state, said Bart Eberwein, vice president for business development and a spokesman for Hoffman Construction.

That’s good news, and could help pull the construction economy out of the doldrums, he said.

“The advanced technology sector that we follow around the country is showing signs of life,” Eberwein said.

Much of that growth – at least in Oregon – is likely because of Intel Corp’s announced $6 billion to $8 billion expansion at its Hillsboro facilities, which will include construction of a new research fabrication facility called D1X.

Hoffman is the general contractor on the project, but Eberwein declined to comment further on that specific project.

Still, he noted that “when a large chip maker announces an expansion, then a lot of suppliers have to expand as well.”

Suppliers for the high tech sector, large tool makers and manufacturers of blank silicon wafers for the microchip industry, which are smaller business types that feed into larger companies like Intel, could be a good source of work for companies like Hoffman in the coming year, Eberwein added.

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Nothing official yet, but there are “lots of rumblings out there” about new or growing technology businesses spurring construction projects in the state, said Bart Eberwein, vice president for business development and a spokesman for Hoffman Construction.

That’s good news, and could help pull the construction economy out of the doldrums, he said.

“The advanced technology sector that we follow around the country is showing signs of life,” Eberwein said.

Much of that growth – at least in Oregon – is likely because of Intel Corp’s announced $6 billion to $8 billion expansion at its Hillsboro facilities, which will include construction of a new research fabrication facility called D1X.

Hoffman is the general contractor on the project, but Eberwein declined to comment further on that specific project.

Still, he noted that “when a large chip maker announces an expansion, then a lot of suppliers have to expand as well.”

Suppliers for the high tech sector, large tool makers and manufacturers of blank silicon wafers for the microchip industry, which are smaller business types that feed into larger companies like Intel, could be a good source of work for companies like Hoffman in the coming year, Eberwein added.

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In the Great Recession, project owners can become even more cost-sensitive. Such awareness by Hoffman Construction contributed to it receiving the contract to manage the construction of a new Oregon State Hospital psychiatric facility in Junction City.

The building will be one of two state psychiatric facilities that replace the existing 127-year-old Oregon State Hospital in Salem. Hoffman, in 2008, was awarded the contract to replace a psychiatric hospital in Salem.

Linda Hammond, project administrator for the Oregon Department of Human Services, said the project is a result of an analysis of Oregon’s mental hospital system in 2005, when San Francisco-based KMD Architects found an increased demand for beds at the psychiatric facility. There will be 620 beds at the new Salem facility and 340 at the one in Junction City. The present hospital has 600 beds, she said.

Hammond said seven firms vied for the Junction City project, but Hoffman’s proposal included the best strategies for cost savings and the lowest overall cost.

“We did an open request-for-proposal process because we didn’t want to weigh the process in favor of the firm doing the Salem project,” she said. “But when it was all said and done the committee felt that Hoffman did the best job marrying all the elements of the project together into one proposal.”

Bart Eberwein, vice president of Hoffman Construction, said the firm focused its cost savings strategy on efficient earth management. The firm presented six options that would reduce costs in the import and export of soil, he said.

The firm was then able to focus on features that accommodate the treatment and care of the patients and the safety of the employees, Eberwein said.

“We felt lucky to get this project because our work is going to help the curing of the mentally ill,” he said. “We want to add more light and more color than you would see in a normal hospital. The design and materials can be very beneficial to both the patients and the staff.”

The Junction City facility will be about 370,000 square feet. It will be on 90 acres of a 250-acre lot owned by the Oregon Department of Corrections. The ODC is planning a new medium security prison on the additional acreage. The facilities will share landscaping and security services.

Hoffman will be working with St. Louis-based architecture firm Hellmuth, Obata & Kassabaum on the design and its implementation. HOK also is the architect for the Salem project.

While the Salem and Junction City projects are intrinsically connected, distinct design processes are being used. In Salem, the design called for restoring approximately 25 percent of the current facilities in a historically accurate manner because the original hospital is designated a historic property. In Junction City, the site is undeveloped farmland and wetland.

“The greenfield site in Junction City offers more flexibility and opportunity than a historic site does,” Hammond said. “But the site also brings about its own set of challenges. There will be a significant amount of wetland mitigation to deal with.”

Hammond said the Junction City facility will be like a secure college campus and include housing units, recreation areas, staff offices and various treatment facilities.

The 2007 Oregon Legislature authorized $458 million for the facility projects and installation of a computerized data system. Construction is slated to begin in spring 2011. The facility is scheduled to be ready by fall 2013.

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