Ellerbe Becket

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Ellerbe Becket

800 LaSalle Avenue
Minneapolis, Minnesota 55402-2014
U.S.A.
Telephone: (612)376-2000
Fax: (612)376-2271
Web site: http://www.ellerbebecket.com

Private Company
Incorporated: 1909 as Ellerbe Architects
Employees: 800
Sales: $118 million
NAIC: 54131 Architectural Services; 54133 Engineering Services; 23332 Commercial and Institutional Building Construction

Ellerbe Becket is one of the leading architecture and design firms in the United States. The company provides integrated services that begin with an initial design concept, continue on through the engineering process, and end with management of a building’s construction. The firm’s many successes include the unique, round Capitol Records tower in Los Angeles, the retractable-roofed Bank One Ballpark in Arizona, and the Kingdom Centre in Riyadh, Saudi Arabia, a multipurpose facility that is the tallest structure in the Middle East or Europe. Ellerbe Becket has long specialized in designing a variety of institutional and healthcare facilities, including many built over an 80-year relationship with the Mayo Clinic. A stadium design group, started in 1988, also has become a major source of revenue. Ellerbe Becket has 12 offices around the United States and in England, South Korea, the United Arab Emirates, Russia, and Egypt. The company has been employee-owned since the late 1960s, when Thomas Ellerbe, the founder’s son, retired.

Early Years

Ellerbe Becket began life as Ellerbe Architects in 1909, when the design firm was founded by Franklin Ellerbe. One of the St. Paul, Minnesota-based company’s first projects was the Old Fireside Inn, a combined dance hall, retail store, and apartment complex. The Mayo Clinic, based in Rochester, Minnesota, soon contracted with Ellerbe for the design of its first group practice building, and the Minnesota Mining and Manufacturing Company (later known as 3M) called on the architect for its first structure as well. In 1911 Ellerbe took a partner, Olin Round, and the growing firm counted 18 employees by the end of the following year. Round left in 1914, but Ellerbe’s son Thomas signed on following service in World War I. When Franklin Ellerbe died in 1921, Thomas Ellerbe took control of the company.

A creative architect in his own right, Thomas Ellerbe presided over the firm’s growth for the next several decades. During these years Ellerbe Architects came to specialize in designing healthcare facilities. In 1922 Thomas Ellerbe proposed the then-new idea of adding a private bathroom to each hospital room, and the firm later developed a number of new floor plans for hospitals in the 1940s including the cross, radial, cloverleaf, Y-plan, penta, and others. World War II saw the company working with Northwest Airlines at St. Paul Municipal Airport to build new hangars, which featured the largest laminated pine-arch trusses used to that time. The 170-foot-wide structures these helped support were built without metal components because of wartime steel rationing.

Thomas Ellerbe was a strong believer in cooperative values, both in regard to his staff and in the design process. His firm was the first of its size to pay salaries and offer benefits to its employees, and the first to experiment with a four-day work-week. The company’s approach to design was also a cooperative one, featuring an integrated set of services that offered design, engineering, and construction management, with the client given significant input into the process.

By 1966, when Thomas Ellerbe decided to retire, the firm he had run for nearly half a century had more than 300 employees. At this time Ellerbe, who already had shown considerable concern for his staff’s welfare, gave ownership of the company to his employees. He remained involved as a consultant until his death at 94 some 20 years later.

In 1971 the firm formed a subsidiary to provide construction management, facility maintenance, and other building services. The 1970s and 1980s saw continuing growth for the company, but also a series of internal power struggles, which one former executive attributed to the employee-ownership structure and its lack of an ultimate controlling hand. In 1983 the firm hit an especially low point, losing $3.6 million. Within a year it had experienced a complete change in top management and layoffs of a third of its staff. Despite these troubles, Ellerbe Associates (as the firm was now known) was ranked among the top ten design firms in the country and was still receiving important commissions, such as the renovation of Mount Sinai Hospital in New York in collaboration with I.M. Pei Architects. In 1986 a new CEO, John Labosky, began to more aggressively expand the company’s operations. He sought to improve profitability by better managing the hours staff worked on each project, automating various functions of the process, and by merging with complementary firms to offer a more complete range of services.

Merger with Welton Becket in 1988

In July 1987 Labosky proved true to his word and announced plans to merge with Welton Becket of Los Angeles, the 13th-ranked U.S. architecture and design firm. Welton Becket had a storied history of its own, having been formed in 1933 in Los Angeles by its namesake, with major projects over the years, including the Moscow World Trade Center, Los Angeles International Airport, and the Capitol Records building, a round tower that looked like a stack of record discs. Welton Becket also designed some residential structures, including the home of movie star James Cagney. The company specialized in high-rise offices and hotels, as well as corporate facilities.

The merger was finalized early in 1988 with an exchange of stock. The firm would henceforth be known as Ellerbe Becket, Inc., while formally remaining a subsidiary of parent entity The Ellerbe Group. John Labosky was named CEO of both. Offices were located in the Minneapolis-St. Paul area, and in Los Angeles, New York, Washington, D.C., Chicago, and Tampa, Florida. Following the merger the combined firm became one of the top three companies of its kind in the United States, with a total of 800 employees and revenues of more than $70 million. During this period the company also acquired the design firm SGE West of Los Angeles.

Ellerbe Becket continued to grow following the merger, with a new sports facility design office opened in Kansas City, Missouri during the summer of 1988. It was formed by several defectors from Kansas City-based Howard Needles Tammen & Bergendoff. The new unit soon won a major commission to renovate New York’s famed Madison Square Garden. In August of 1988 Ellerbe Becket’s board decided to oust CEO Labosky, whose program of rapid change had clashed with the company’s more conservative corporate culture. He was replaced by a five-member executive committee, headed by President John Gaunt.

The late 1980s saw the company receive numerous high-profile commissions, including the interior of the plush Star Princess cruise ship, twin 20-story office towers in Toronto, Canada, and the $665 million International Cultural and Trade Center and Federal Office Complex in Washington, D.C., which was that city’s biggest project since the 1930s. For the latter, Ellerbe Becket would work with lead designer Pei Cobb Freed & Partners to prepare construction documents and engineer the heating, cooling, and plumbing systems. In 1990 the firm opened its first overseas office, in Tokyo, Japan, where work already had begun on designing an 800-room hospital and a resort hotel.

After just a short time in operation, Ellerbe Becket’s sports facility design group was blossoming into a major success story, and it grew to employ 100 by the early 1990s. In 1991 a merger with Kansas City-based Jaramillo and Associates further enlarged the office. Its projects now included the design of the New Boston Garden, renovations of several existing stadiums, and the Minnesota Twins’ spring training center in Fort Myers, Florida. In 1992 a major commission was won for a new stadium to be built in Atlanta for the 1996 Olympic Games. The 85,000-seat arena would be converted into a 48,000-seat baseball stadium following the two-week games, and would then become the new home of the Atlanta Braves.

Downsizing in the Early 1990s

At the same time that it was enjoying these successes, the weakening U.S. economy and fierce competition for work among architecture firms were putting the squeeze on Ellerbe Becket. The company, which had hit peaks of 1,100 employees and revenues of $114 million in 1991, began to downsize once again, letting nearly 250 of its workers go by 1993. John Gaunt, who was now serving as CEO, was reassigned in the late fall of the year by the company’s board. Refusing to accept a reduced role at the firm he had led for four years, he quit. His replacement was President Robert Degenhardt, who had been with the company since 1978.

In 1994 Ellerbe Becket’s Kansas City office won a commission for a new major league baseball stadium to be built in Arizona. The 46,350-seat ballpark would feature a retractable roof that could open or close in just five minutes. This permitted use of air conditioning during events, but also would allow the growth of natural turf on the field by admitting sunshine when the field was not occupied.

Company Perspectives:

Philosophy: To work for our clients’ success in an environment that DEMANDS worldwide collaboration, creativity and innovation: Continual investment in process and knowledge allows us to offer our customers superior solutions; the delivery of architecture, engineering and construction services is an integrated process; our integrity and dependability make us a firm of breadth, depth and history. Values by which the firm operates: We focus on our clients and endeavor to be their trusted advisors; we are innovative and creative problem solvers.

Restructuring continued into 1995, when further staff reductions brought the company’s total number of employees down to 669. The Los Angeles office was particularly hard hit, dropping in size from 50 to ten. It was later closed. During the spring of the year an attempt by a group of Kansas City staffers to buy out the firm’s lucrative sports design practice was rejected, leading to the departure of three of those involved. The three, all shareholders in Ellerbe Becket, subsequently were sued by the company for violating the terms of their shareholder agreement. They had quickly joined competing sports design firms, and the company alleged that they were trying to recruit other key staffers. The suit was later dropped. The company also was involved in litigation with the Atlanta Committee for the Olympic Games, which allegedly had refused to pay the firm and its three design partners for some 46,700 hours of overtime work.

Despite these problems and the ongoing downsizing, the company was working at expanding its overseas business. An office was opened in Russia to facilitate the construction of a new headquarters for the Bank of Moscow. This project was particularly complicated, given the often chaotic and corruption-rife conditions of post-Communist Russia. Other offices were opened in the Middle East, where a major commission had been won in early 1997 for the Kingdom Center in Riyadh, Saudi Arabia. The structure, estimated to cost $500 million, would be a twin-towered multipurpose facility that incorporated a luxury hotel and conference center, offices, condominiums, and retail space. The 983-foot building, dubbed “The Eiffel Tower of the Middle East” by observers, would be the tallest structure in the region or in Europe when finished.

In April of 1998 a lawsuit that had been brought against Ellerbe Becket for alleged violations of the Americans with Disabilities Act in its stadium designs was settled. The firm, which was not penalized, agreed to design future projects so that wheelchair-bound spectators could see the action even when those standing in front of them stood up, as often happened during exciting moments in games. Ellerbe Becket claimed that the government’s overly vague original guidelines led to the problem and that the revised designs would need to be modified only slightly from the ones cited in the suit.

A Growing Demand for High-Tech Buildings in the Late 1990s

During the summer of 1998 a major new commission was received from State Farm Mutual Automobile Insurance Company for a 900,000-square-foot building in Bloomington, Illinois. The $200 million project would feature a special electrical service and extra structural strength to enable it to withstand severe weather conditions. The facility would be in use 24 hours a day, seven days a week, and would house 2,400 employees charged with responding quickly to insurance claims. Ellerbe Becket, which had enjoyed a long-standing relationship with State Farm, had become known for its expertise in designing high-tech facilities, including a number built for Internet companies. These buildings typically required extra security features and redundant power systems to minimize the possibility of a blackout. The company also was making use of the Internet for its own purposes, in particular for improving staff access to information by putting a project’s technical drawings and specifications online. This enabled the firm to maintain a single central office for generating blueprint drawings, which could then be distributed electronically to its offices around the world.

Ellerbe Becket also was strengthening its focus on providing a “turnkey” service for clients. This was a consciously integrated approach to design that began with a concept and carried it through the engineering process, then ended with overseeing the actual construction. It contrasted with the less seamless path often encountered by clients who had to deal with separate companies for each of these steps. Ellerbe Becket customers reportedly found the integrated approach to be much less complicated and one that gave them more input into the end result.

At this time new stadium projects were continuing to come in steadily, with such work now accounting for 20 percent of Ellerbe Becket’s billings. Healthcare design was the top revenue generator with 30 percent, and college building projects brought in a quarter and government and corporate designs made up the rest. In 2000 the firm received a commission to renovate and expand the Green Bay Packers’ historic Lambeau Field. The $296 million project would add 20,000 seats and many amenities. The Packers had been impressed by the firm’s renovation of the stadium at Notre Dame University, which was another longtime Ellerbe client. Other stadium projects were also under way in China, Japan, and South America.

In early 2001 Robert Degenhardt stepped back from his CEO duties, retaining the job of president while company veteran Rick Lincicome took over the top role. The firm had recently opened a new office in Greenville, South Carolina, bringing its total to 12 worldwide. These included locations in Cairo, Egypt; Dubai, United Arab Emirates; Moscow, Russia; Seoul, South Korea; Wakefield, England (as a joint venture with David Lyons Associates); and U.S. offices in Phoenix, San Francisco, Washington, D.C., Seattle, Kansas City, and Greenville. The company’s headquarters remained in Minneapolis, in a 30-floor building of its own design.

Key Dates:

1909:: Ellerbe Architects is founded in St. Paul, Minnesota by Franklin Ellerbe.
1921:: Thomas Ellerbe assumes control of company upon his father’s death.
1940s:: A steel-conserving, pine-trussed hangar is developed for Northwest Airlines.
1966:: Thomas Ellerbe retires and gives ownership of company to his employees.
1971:: Construction services subsidiary is formed.
1983–84:: Mounting losses lead to management changes and layoffs of one-third of staff.
1988:: The company merges with Welton Becket of Los Angeles; a sports facility design group is formed.
1992:: The company wins competition to design an 85,000-seat stadium for the 1996 Olympics.
1994:: The firm is chosen to design retractable-roofed baseball stadium in Phoenix, the first in the United States.
1997:: The commission for 983 feet tall Kingdom Centre in Saudi Arabia is won.

After more than 90 years, Ellerbe Becket had grown to become one of the leading architectural firms in the United States. Its reputation for well-designed structures and its established specializations in healthcare facility, stadium, college, hotel, and office design were well known. It would no doubt continue creating well-built, innovative new structures around the world for many years to come.