Hoffman Corporation

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Hoffman Corporation

805 S.W. Broadway, Suite 2100
Portland, Oregon 97205
U.S.A.
Telephone: (503) 221-8811
Fax: (503) 221-8934
Web site: http://www.hoffmancorp.com

Private Company
Incorporated: 1954
Employees: 1,460
Operating Revenues: $1.38 billion (2005 est.)
NAIC: 236210 Industrial Building Construction; 236220 Commercial and Institutional Building Construction; 237990 Other Heavy and Civil Engineering Construction; 238210 Electrical Contractors; 238220 Plumbing, Heating, and Air-Conditioning Contractors; 541611 Administrative Management and General Management Consulting Services

One of the largest general contractors and construction managers in the United States, Hoffman Corporation, which does business as Hoffman Construction Company, has built some of the most well-known modern structures in Portland, Oregon, and Seattle, Washington. The company has in-house expertise in mechanical, electrical, structural, and architectural engineering. Hoffman is a privately held company, with all corporate stock owned by employees.

ORIGINS IN 1921

Lee Hawley (L. H.) Hoffman established Hoffman & Rasmussen, a construction company, in 1921. L. H.'s father, the first Lee Hoffman, had come west in 1870 to help build covered bridges on the Willamette River that runs through Portland, Oregon. He had built a successful career in construction, married, and had two children, a daughter, Margery, in 1888, and a son, L. H., in 1884. After Hoffman's untimely death in 1895, the family moved east to Boston.

L. H. Hoffman attended Harvard College where he earned a degree in architecture in 1906. Two years later, he joined a successful Portland-based architectural firm, where he discovered his true calling lay in contract management. After working as the firm's general inspector, he eventually left the firm. During World War I, Hoffman served as a land agent for the Warren Spruce Company, logging, hauling, and manufacturing "spruce clears" for airplane manufacture.

Hoffman & Rasmussen completed several apartment buildings, after which Hoffman went on to work as a sole proprietor. His company played a key role in Portland's building boom in the 1920s, as the city transformed itself from a riverbank town and shopping port to a modern metropolis with high-rise buildings, garages, theaters, and elegant retail stores. By 1927, Hoffman's company had more than 400 employees and a payroll of $30,000 a month. During this decade, the company built a steady succession of small projects, such as dance halls, service stations, grain storage facilities, and terminals. It also built Portland's then-tallest building, the Terminal Sales Building, in 1926, and such notable Portland landmarks as the Heathman Hotel, the Public Service Building, and the Portland Theater in 1927.

Hoffman & Rasmussen had 32 contracts in 1929. However, the Great Depression slowed investment in construction nationwide. Contracts numbered 30 in 1930, 13 in 1931, and ten in 1932. In order to remain successful, Hoffman moved his company in a new direction in the 1930s. While the firm's first decade had concentrated on private sector apartments, small factories, theaters, and high-rise buildings, the company now embarked on a series of cultural projects, such as the Portland Art Museum and the library of Willamette University in Salem, Oregon. It also undertook public projects for federal, state, and county governments, including courthouses and post offices and highway-related construction. This work took the company outside of Portland and earned it a reputation in the Northwest for constructing quality facilities.

During World War II, the company refocused its efforts again, working on several defense projects, including warehouses, barracks, and hospitals for the military, and civilian housing and urban facilities surrounding federal installations. The company also built facilities for the production of raw materials for manufacturing airplanes. From 1942 to about 1952, Hoffman worked on the Hanford Nuclear Reservation, part of the Department of Defense's Manhattan project, building shops, offices, schools, theaters, and houses in the new town of Richmond, Washington. All together, Hoffman carried out $49 million in wartime construction for the federal government, representing nine joint ventures and three solo projects.

POSTWAR ACTIVITIES

With the war over, L. H. Hoffman's company resumed commercial construction as the American economy made the shift back from war supplies. The company also provided support for the Northwest's growing wood products industry, taking on new clients and constructing or enlarging new facilities for repeat customers. Throughout the 1940s, clients represented a veritable who's who of important landmarks and players in Portland: Meier & Frank, Crown Mills, Irving Dock, the Portland Art Museum, Pacific Power & Light, Sears Roebuck and Company, the National Biscuit Company, and the Oregonian.

During the 1950s, Hoffman continued to work in commercial construction, building schools, department stores, and other office buildings, sometimes making use of the precast, tilt-up concrete panel construction the company had introduced to the Pacific Northwest in 1949. This building method entailed pouring concrete walls in forms that lay on top of an already poured concrete floor. Once the concrete had cured, special lift equipment raised the panel to position, and crews locked it in with welded steel dowels. However, the paper and pulp industry came to represent Hoffman's bread and butter business during the 1950s. The changing policies of the U.S. Forest Service created a thriving national publishing industry, and the mounting demand for pulp and paper products drove the region's pulp processors to upgrade and expand their plants. New projects in pulp, paper, and sawmill facilities ranged from small jobs, to massive, complex installations. The company also continued to work for the federal government at the Hanford Nuclear Works in Washington state as the Cold War drove a regular program of military preparedness.

The company itself underwent significant organizational changes beginning in the mid-1950s. In 1954, L. H. Hoffman, turned over his sole proprietorship to his sons, Eric and Burns. A year later, Hoffman Construction Company became an Oregon corporation owned by the Hoffman sons.

EXPANSION: 1965–89

Burns left the company in 1965 to pursue his own business and investments, at which time, Eric bought out his brother's interest. In 1967, Eric hired Cecil W. Drinkward, an engineer and graduate of the California Institute of Technology and former employee of Del E. Webb Company, to become general manager of Hoffman's construction operations. Also, in 1967, Eric Hoffman devised an employee stock ownership plan whereby key company officials could purchase shares, which they sold back to the company upon retirement or severance.

COMPANY PERSPECTIVES

Hoffman Construction Company has extensive experience in a wide variety of specialties. We thrive on challenges that call for innovative solutions, and we believe the key to our success lies in the extra measure of creativity we bring to the art of building.

During the late 1960s, Hoffman and Drinkward hired new management to expand the company's operations, and increased its number of estimators and superintendents. They also moved the company to embrace new technology. The paper and pulp industry had once again kept Hoffman Construction Company with contracts for retrofits, reconstruction, and new buildings during the first half of the 1960s. During the second half of the decade, as the Pacific Northwest stirred with economic vitality, and towns and cities grew, Hoffman Construction Company focused on the need for new commercial construction. Defense and federal contracts also continued into the 1960s, and HUICO, a division of the company, began to manufacture pipe for nuclear reactors.

Eric Hoffman became chairman of Hoffman Construction Company in 1975 and Drinkward its president. Throughout the 1970s, the two men established Hoffman's reputation for handling new and challenging contracts. A succession of large, industrial projects demonstrated the company's ability to handle buildings of extreme complexity and size, such as a submarine base for the government and the Northwest's largest cement plant. In the 1970s, Hoffman also became a primary builder of nuclear power plants in the Northwest. The company entered the oil industry during the oil boom of the late 1970s, when it began to provide oil field "service modules," along with schools and office buildings in Alaska. The company marked its entry into the high-tech industry in 1978 when it constructed a silicon wafer plant in north Portland for a German company.

The 1970s and 1980s also saw a return to commercial construction for Hoffman Construction Company with a focus on high-rise office buildings. In 1970, the company built the new Georgia-Pacific Building in Portland and moved its headquarters to occupy an entire floor of the building. There it remained until 1983, when it moved into its own new building, the Hoffman Columbia Plaza. Although the construction industry as a whole came upon hard times during the early 1980s, with unemployment in the industry averaging 20 percent, Hoffman's expertise put it in high demand in the Pacific Northwest.

By the end of the 1980s, Hoffman had completed several more important Portland buildings (the Justice Center and the Portland Center for the Performing Arts, among them) and its office buildings had established its presence along the eastern seaboard in the state of New York and in Washington, D.C. Hoffman also continued its involvement with the oil industry, and, by the early 1990s, the company had extended its reach north to the Arctic Circle, west to the Aleutian Islands, and south to the Gulf of New Mexico. It also expanded geographically with water purification facilities in California and Alaska in 1989.

BOOM AND BUST: 1990–2000

Rising markets pushed construction industry revenues to new heights during the first half of the 1990s. In 1994, a year of economic recovery for the United States, construction contracts nationwide increased 15 percent in volume for commercial buildings, 53 percent for government buildings, 27 percent for apartments, and six percent for educational buildings. "The Northwest," according to Hoffman's vice-president for development and marketing, Bart Eberwein, in a 1995 Engineering News-Record article, was "enjoying its day in the sun."

KEY DATES

1921:: L. H. Hoffman establishes Hoffman & Rasmussen.
1955:: L. H. Hoffman retires; Burns Hoffman becomes president of Hoffman Construction Company.
1959:: L. H. Hoffman dies.
1965:: Eric Hoffman becomes sole proprietor of the company.
1968:: The company initiates employee ownership.
1967:: Cecil W. Drinkward joins the company as vice-president and general manager.
1975:: Eric Hoffman becomes chairman, and Drinkward president of the company.
1985:: Wayne Drinkward joins the company.
1992:: Wayne Drinkward becomes president.
2000:: The company moves its headquarters to the Fox Tower in downtown Portland.

Certainly, the Hoffman Construction Company was flourishing. The favorable business climate encouraged businesses to expand their manufacturing capabilities; they invested in new structures and upgraded facilities to meet the needs of the Northwest's growing population. This, plus the increasing number of firms relocating to the Northwest, created a wave of work that made Hoffman the 13th largest general builder in the nation in 1994 with revenue of $539 million, up from 42nd the year before. By 1996, Hoffman was the second largest with revenues of $660 million. Wayne Drinkward replaced Cecil W. Drinkward, his father in 1992, as president of Hoffman, and throughout the 1990s, the company undertook a series of major projects that reshaped the Portland skyline, including the Portland Building and the Oregon Convention Center. It also undertook a $104 million expansion of the terminal at Portland International Airport that it completed in 2003 that included reconstruction of the 20-year old concourse and built a $6.4 million cargo facility for Delta airlines. Hoffman constructed a series of buildings for Intel in Oregon, New Mexico, and Arizona, as well as a number of facilities for other major high tech manufacturers who rushed to construct new computer chip and related plants to meet demand. The company also maintained its public sector contracts for prison facilities, educational buildings, and water treatment plants.

By 1997, however, the Northwest's building boom of the mid-1990s had begun to drop off as the Asian crisis led to a slowdown throughout the high tech industry. Still, a healthy Portland economy kept local contractors busy. In fact, finding skilled labor proved more of a challenge for them than finding work. With the "city of bridges'" healthy business environment and rising rents, office buildings and suburban housing starts were on the increase—along with cultural projects. Hoffman Construction Company took part in the construction of Portland's new light rail in 1997. In 1998, it began work on Doernbecher Children's Hospital, part of the Oregon Health Sciences University's medical complex. In 1997, Hoffman was second among builders in Washington, Oregon, and Alaska, with $535 million in total revenue and about 350 salaried and 500 hourly employees.

With these projects, Hoffman consolidated its reputation in the construction industry for its willingness to tackle almost anything. In building the Fox Tower skyscraper, beginning in 1999 in downtown Portland, Hoffman employed a "jump form" construction system to create the building's reinforced concrete elevator core. This system, which it had earlier perfected in working on the city's light rail system, entailed casting the base of the tower from a rectilinear mold into which workers poured a liquid concrete mix. Hoffman also undertook the city's deepest excavation ever in building the tower's parking garage—60 feet, or to within inches of Portland's water table. After finishing the Fox Tower in 2000, Hoffman moved its headquarters into the building's 21st floor.

The Experience Music Project (EMP), an undulating, metal-clad structure at the base of the Space Needle in Seattle, Washington, represented a second innovative project for Hoffman in 1999. Hoffman brought on several local collaborators for the project, which was designed entirely with three-dimensional computer models rather than two dimensional plans and elevations: Angle Detailing Inc. for the detailed construction documents; Columbia Wire and Iron Works for the structural steel; and Benson Industries, Inc. to design and build the building's glass systems. "We've done gunite, metal panels and curved beams," said the project manager in a 1999 Oregonian article, adding "But we've never done it like they are being done in this recipe. We are applying technology from the manufacturing industry to construction."

Such construction challenges were paralleled by accounting challenges in 1999 when Hoffman garnered headlines for a state auditor's report detailing $4 million in questionable payments received while working on the Snake River Correctional Institution in eastern Oregon. The company protested that it was within its contract rights and that it had completed the project on time and within budget. However, it returned a sum of money to its client to lay the issue to rest.

2000 AND BEYOND

As America's economic expansion began to slow around the turn of the century, general builders surprised everyone by continuing to shatter revenue records with double digit growth. Hoffman ranked 21st with its revenue of $826 million in 2000. It employed 275 full-time and 1,000 part-time employees. When the need for new microchip manufacturing plants brought about a resurgence in high-tech markets from 1999 to 2001, Hoffman became the nation's second fastest growing firm among top general builders.

However, the years 2001 to 2003 were dismal ones for the Northwest construction industry and challenging for Hoffman. The general and commercial building market stalled during the early 2000s as the economy floundered—falling 31 percent from 2000–2003. Hoffman's yearly revenue topped $1 billion in 2001, then fell to $486 million in 2003. But by 2002, revenue had increased again to $842.5 million, and Hoffman, the largest general contractor in the Pacific Northwest, was back on a growth track, taking advantage of the shift to a health care building market. "Part of this is that the baby boomers are aging. They are demanding single rooms in lodge-like settings, and they have the money and the medical coverage to get it," explained Bart Eberwein, Hoffman's vice-president of development and marketing in a 2003 Engineering News-Record article. Another area of growth that Hoffman exploited was the need for housing in Portland's downtown as people began a reverse commute to work in its suburbs.

In fact, Hoffman continued to focus on region rather than a type of construction. "You can be a niche player, but that's a risk," said Drinkward in a 2005 Oregonian article. He added: "We seek to be wide-ranging." The company's unofficial motto at the time was "Semper Gumby: Always be flexible." Hoffman also had a policy of never abandoning its core, longer-term clients, even when that meant passing up work, and, as a result, when the technology building boom ended, the company had other work to turn to.

In the early 2000s, the company continued its focus on public buildings with the construction of Seattle's Central Library and Justice Center and the city's new City Hall. The library was composed of five platforms, each positioned off center, and encased by a lattice work of glass and aluminum. In 2005, it partnered with Andersen Construction Company to build Biomedical Research Building and new Patient Care Facility for Oregon Health Sciences University. And, as always, Hoffman kept its eye out for the next construction trend. As Drinkward put it in the 2005 Oregonian : "We're nomads in a desert, always looking for what's coming next."

PRINCIPAL COMPETITORS

Bechtel Group Inc.; Black & Veatch Holding Company; Fluor Corporation; Hensel Phelps Construction Company; McCarthy Building Companies Inc.; Foster Wheeler Ltd.; Skanska USA Building Inc.; Turner Corporation.