Back Garco sees big gains in volume Contractor here expects to post record revenue this year and in 2007 By Kim Crompton From the Spokane Veterans Memorial Arena to the Spokane Valley Mall to Spokane International Airport's Concourse C expansion, residents here hardly can go anywhere without seeing the work of Garco Construction Inc., one of Spokane's largest contractors. Based on the stream of large contracts the company has been picking up recently-both here and outside the Inland Northwest-that tendency appears likely to become even more pronounced. Garco says it expects to post record contract revenue of around $150 million for 2006, up 6 percent to 8 percent from last year, and already this year has picked up jobs worth more than $230 million, assuring a continued record pace in 2007. "Obviously, it will be up significantly," says James. T. "Tim" Welsh, the company's president. The company currently employs about 280 people, including 30 office staff and 250 field employees, and Welsh says he expects that total to rise. Major Spokane-area projects, under way or planned, for which Garco is the general contractor include a $59 million remodel and expansion of Rogers High School, a similar-sized modernization of Shadle Park High School, and a $30 million expansion and remodel of West Valley High School. Also, it began work earlier this year on a $34.1 million project to build and install two huge sewage-sludge processing tanks, called digesters, at the city of Spokane's waste-water treatment plant and late last year started work on a large expansion at Kaiser Aluminum Corp.'s Trentwood rolling mill in Spokane Valley. Welsh says he's particularly pleased about Garco's involvement in the rolling mill project because, "Kaiser, the first 20 years we were in business, was our best customer. Biggest and best. We have over 40 people working there right now. Kaiser's been real good to us recently." Outside the Spokane-area area, Garco recently picked up its largest single job ever, a $58 million contract to construct replacement family housing at Malmstrom Air Force Base, in Great Falls, Mont. That 2 1/2-year project will involve demolishing 58 buildings and constructing 43 buildings that will include a total of 206 living units. Garco also is well along on a $38 million expansion and remodel of Hanford High School, in Richland, Wash. In addition, it recently won a $16 million job to construct buildings, waste-water treatment facilities, and roads at the Buckhorn Mountain gold mine project near Republic, Wash. Farther away, it has been involved recently on several major projects in Alaska, including at the Pogo gold mine southeast of Fairbanks, Coeur d'Alene Mines Corp.'s Kensington gold mine north of Juneau, the Red Dog zinc mine in the remote northwest part of the state, and at Eielson Air Force Base near Fairbanks. The mine projects have a combined value of probably around $20 million and involve similar work to that planned at the mine near Republic, Welsh says. The Eielson project, which Garco completed last month, included demolishing three old fuel pump houses, replacing the fuel system there, and building a new ramp for a fleet of C-17 transport planes. At $40 million, it was the largest single military contract won by Garco, until it was surpassed by the Malmstrom job. "I don't think people realize how much work we do outside of the area that comes back to Spokane," in dollars added to the economy here, partly because Garco likes to take its own managers and experts along on distant jobs, Welsh says. "We have great people, and people who are challenged by the desire to do something different in some remote locations," which has been a big part of the reason for the company's recent growth, he says. A World War II bomber pilot named Wayne Garceau formed the predecessor to the current company in the early 1950s, initially building homes here and later transitioning into pre-engineered structures. Welsh, Bob Carter, and Welsh's longtime friend, Frank Etter, bought the company's assets in 1978, and Carter sold his interest in the company to Welsh and Etter in 1983. Garco's initial project mix was probably 90 percent privately owned projects and 10 percent public, but that mix now has flipped to about 25 percent private and 75 percent public, Welsh says. Garco builds a lot of Schools and military structures-it has been awarded many projects at Fairchild Air Force Base here, for example-but it also has pursued aggressively a range of other types of projects, such as churches, correctional facilities, industrial plants, and retirement communities. Its increased size and development of a seasoned staff have enabled it to land more projects in which it serves both as general contractor and contract manager, Welsh says. That development method allows the contractor to provide ideas and comments during a project's design phases, which is believed to improve the quality of the plans, shrink the contractor's learning curve, and reduce later problems. Many of the projects the company goes after now are initiated through qualification-based requests for proposals, rather than invitations seeking strictly the lowest responsible dollar bid, Welsh says. "Oftentimes, price is not the determining factor," he says. "It's your skills, the team you can put together." Looking back, Welsh says he never imagined the company would grow to the size it has in terms of sheer contract volume. "I wanted to do $10 million, then $25 million, and then I thought $50 million would be the number," he says. Despite that growth, Garco hasn't turned its back on small jobs, he says. "Historically, we do over 100 jobs a year less than $10,000," and that willingness to take on such comparatively tiny projects hasn't changed, Welsh says. The Garco contract-volume figures don't include the revenues of affiliate Acme Concrete Paving Inc., which Welsh formed four years ago after buying the concrete-paving assets of the former Acme Materials & Construction Co., of Spokane, from CPM Development Corp. Acme does concrete-paving projects throughout the Northwest and employs more than 100 people during peak seasons. Welsh and Etter, both now approaching retirement, are grooming two younger men-Welsh's 34-year-old son Clancy, and Hollis Barnett, a former Gonzaga University physics major-to succeed them. The two younger men, both of whom now are vice presidents at Garco, have begun buying stock in the company as the first step toward that eventual transition, Tim Welsh says. Contact Kim Crompton at (509) 344-1263 or via e-mail at kimc@spokanejournal.com. Back