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AECOM’s acquisition of Hunt Construction Group has formed a blockbuster operation in sports facility development that can now pitch an integrated design-build model that seeks to minimize financial risk for potential clients.
Last week’s announcement of the acquisition surprised some in the industry, but it was no surprise to those who knew the Hunt family had been seeking a buyer during the past decade. AECOM is the world’s largest provider of architectural services and already owns firms tied to research, consulting, construction and design. Buying Indianapolis-based Hunt and pairing it with AECOM’s Kansas City-based sports architecture practice brings together two of the top names in sports facility development.
While the purchase price was not disclosed, AECOM said the deal expands its annual revenue to $20 billion and its workforce to 95,000 employees across 150 countries.
Prior to the acquisition, AECOM and Hunt Construction Group had worked together on multiple sports facility projects, including Barclays Center in Brooklyn.
Photo by:PATRICK E. MCCARTHY
Hunt Construction, a 70-year-old family-owned firm with 700 workers, generated $1.2 billion in revenue last year. Over the past 45 years, Hunt has built multiple big league arenas and stadiums (see chart).
But while AECOM and Hunt officials tout their combined efficiencies, competitors floated concerns over potential conflicts of interest and wondered whether the merger could result in architects straying from Hunt as a construction resource now that the company is a partner with a chief competitor.
The merger will result in the largest combined operation in the sports facility space. Five years ago, AECOM bought Ellerbe Becket and its Kansas City sports design group. Hunt has been the top sports builder 10 of the past 16 years, according to data compiled by Engineering News-Record.
“It looks like whales swallowing whales,” said Allen Johnson, executive director of Orlando Venues, the city of Orlando’s group currently working with Hunt to build a $175 million renovation of Citrus Bowl Stadium.
The genesis for the merger started a year ago when Dan McQuade, AECOM’s chief executive of construction services, reached out to Hunt’s CEO, Robert G. Hunt, about a potential acquisition. Hunt is the grandson of the company’s founder, Paul Hunt.
It was no secret that Hunt was looking for a succession plan, industry sources said. About nine years ago, after Hunt’s father, Robert C. Hunt, died, Hunt shopped the company to competitors, sources said. A deal was never consummated, though, for reasons unclear. But when talks with AECOM started, Hunt was poised to sell the business. Sources from inside the company said Hunt’s family was not interested in remaining in the construction industry.
The deal is set to close in October, but the Hunt name, unlike the Ellerbe Becket moniker, will remain, as will its key executives, McQuade said. Moving forward, AECOM’s vision is to jointly pursue sports projects with Hunt, including an even bigger focus overseas in Europe, the Middle East and China, he said. To date, Hunt has not done much business internationally, but that will change with new ownership, said Ken Johnson, Hunt’s executive vice president and division manager in Indianapolis.
AECOM and Hunt will aggressively market the design-build model, a business strategy where the architect and the general contractor are formed as a single entity with the builder taking the lead role for development. It is a different method for delivering a project, and some say more cost-effective, compared with the architect designing a project separately before handing those plans to a contractor for construction. Most design-builds, though, involve separate companies forming a joint venture, sources said.
Bill Hanway, AECOM’s executive vice president and leader for global architecture and global sports, said more big league teams and colleges are considering design-builds to keep costs under control, and now that Hunt is in the fold, AECOM can push the model with a higher degree of confidence. “We can talk to owners about a consolidated offer … a package that relieves risks at the ownership level and allows us to deliver what we think would be a great facility for a price everyone agrees to early on in the process,” Hanway said.
It doesn’t mean AECOM will pitch design-build for every sports project it pursues. There will still be situations where a client has a strong relationship with another architect and prefers to have Hunt build a facility without using AECOM’s designers, Hanway said. And vice versa.
“Hunt is completely free and allowed to go ahead and deal with [certain projects] independently,” he said. “Equally, we’ll be in a situation where a team will come to us and want to use a local builder. We won’t change the nature of those relationships, although our preference is to work together.”
How it all shakes out for competing interests in sports development remains to be seen.
The AECOM-Hunt merger could lead to hesitation for building designers seeking preliminary cost estimates from Hunt officials for projects that have not been made public, said Dale Koger, Legends Global Planning’s senior vice president and managing director for project development. The thinking is Hunt could then share information on a confidential project with AECOM, which in turn could come knocking on the client’s door looking to do business with them, Koger said.
Tom Tingle, senior vice president for Skanska, a sports builder and Hunt competitor, also noted a potential challenge of the pairing. “Typically, the architect is selected first, and this could preclude AECOM/Hunt from being considered for a project,” he said. “It’s a dilemma that has to sort itself out.”
Earl Santee, senior principal at Populous, a top sports architect, has concerns about the deal potentially taking Hunt “out of the market” as a construction resource. Populous and Hunt are working together to build a $350 million arena in Las Vegas that is expected to open in 2017. Hunt officials, according to Santee, have assured Populous it’s business as usual and that Hunt is not required to work with AECOM on every project.
Hunt has teamed with Populous alone on more than 50 projects over the years, and Hunt’s Ken Johnson, who has worked with Santee to develop MLB parks in St. Louis, Kansas City and Miami, said he would never compromise the strong relationships his firm has with all sports architects. In fact, Hunt keeps confidential projects under wraps internally by using code names to prevent details from leaking outside the office. “We will certainly keep that dynamic in place,” Johnson said.
Said Santee, “Right now, that’s the case, but in a year or two if it turns out to be different, we would rethink how we move forward with construction managers. If it goes south, we will make an adjustment.”
Spanning the industry
Hunt Construction Group has been involved with more than $10 billion of big league sports work and 30 high-profile projects from those leagues over the past two decades. Hunt has worked on more than $1 billion worth of minor league and college construction projects during that span as well. Following is a sampling of the company’s work.
Venue (year opened) Architect(s) Contract value (in millions) AT&T Park (2000) HOK Sport $330^ Busch Stadium (2006) HOK Sport $287 Citi Field (2009) HOK Sport $600 Citizens Bank Park (2004) Ewing Cole Cherry Brott, HOK Sport $458^ Comerica Field (2000) HOK Sport, SHG $300^ Dodger Stadium (2013*) DAIQ Architects $100^ Great American Ball Park (2003) HOK Sport, GBBN Architects $346 Kauffman Stadium (2009*) Populous $234 Marlins Park (2012) Populous $422 Miller Park (2001) HKS $392^ Nationals Park (2008) HOK Sport/Devrouax & Purnell joint venture< $443 Progressive Field (1994) HOK Sport $169^ Safeco Field (1999) NBBJ $534^ Tropicana Field (1998*) HOK Sport $70^
Venue (year opened) Architect(s) Contract value (in millions) New Atlanta Falcons stadium (projected 2017) 360 Architecture $1,200^ EverBank Field (2014*) Haskell Architects and Engineers $63^ Ford Field (2002) SmithGroup $400^ Heinz Field (2001) HOK Sport $281^ Lucas Oil Stadium (2008) HKS $598 Mercedes-Benz Superdome (1975; 2006*) Curtis and Davis Associated (1975); AECOM (2006) $163^; $193^ Raymond James Stadium (1998) HOK Sport $190^ University of Phoenix Stadium (2006) Eisenman Architects/HOK Sport joint venture $419
Venue (year opened) Architect(s) Contract value (in millions) Amway Center (2010) Populous $380 AT&T Center (2002; projected 2015*) Ellerbe Becket, Kell Munoz, Lake/Flato Architects (2002); 360 Architecture (2015) $193^; $75^ Barclays Center (2012) AECOM, Shop Architects $485 Consol Energy Center (2010) Populous $243 First Niagara Center (1996) Ellerbe Becket, M&H Sports Group, Acoustic Dimensions $128^ New Detroit Red Wings arena (projected 2016) 360 Architecture $450^ Tampa Bay Times Forum (1996) Ellerbe Becket $139^ Time Warner Cable Arena (2005) Ellerbe Becket $181
* Renovation project
^ Indicates estimated cost to build or renovate the venue. Values not footnoted as such were listed as “contract value” on HuntConstructionGroup.com.
Notes: HOK changed its name to Populous in 2009. Ellerbe Becket was acquired by AECOM in 2009 and adopted its new parent company’s name.
Compiled by David Broughton and Brandon McClung
Sources: Hunt Construction Group, SportsBusiness Journal archives
The theory behind the project: Addition by subtraction at a sold-out facility with a waiting list of 10,000 for season tickets, according to
The Timbers Army, Portland’s supporters group, is situated in the stadium’s north end. As most supporters groups do in North America as well as overseas, the group’s members stand throughout home games cheering and waving banners, Golub said. As a result, the Timbers Army does not have much use for fixed seats — so the group has asked team officials to get rid of the seats to provide them more room, in large part, to execute its choreographed chants, which are led by individuals who are perched in elevated structures called “capo stands,” with their backs to the field.
The plan would eliminate fixed seats tied to a supporters group in the north end of Providence Park and reconfigure the space.
Photo by:DON MURET / STAFF
The Timbers listened to the group’s request and have developed a plan to remove those seats and reconfigure the space as a tiered, standing terrace with protective railings. The project, estimated to cost in the mid-six figures, would be funded by the Timbers but must be approved by the city and MLS officials before construction starts. Pending those approvals, the Timbers would complete the project in time for the 2015 season.
“Our biggest challenge for a stadium built in 1926 is to find new areas to build new seats for people to enjoy one of the most special live-event experiences in the country,” Golub said.
AECOM, the architect for the original retrofit of the 88-year-old facility, is doing the redesign to fill the spaces that held single seats two-deep with standing patrons. It effectively would double capacity in most of the north end of the building. The facility currently holds about 20,800 fans.
The plan includes installing a smaller seating product in the north end to meet the needs of the National Women’s Soccer League’s Portland Thorns, the stadium’s other tenant, and other events. The mini-seats, common in European stadiums, fold up and would not interfere with the supporters’ actions at Timbers games, Golub said.
Turner Construction, the firm that built the retrofit of the former minor league ballpark, a project completed in 2011, is teaming once again with AECOM for the seat-removal job. It would be the first time an MLS team has removed permanent seats to accommodate supporters groups, league officials confirmed.
> ROSY OUTLOOK: The Portland Trail Blazers have seen a resurgence in the restaurant next to Moda Center after taking it over in tandem with Levy Restaurants, the arena’s concessionaire.
Dr. Jack’s, named for the late Jack Ramsay, the coach who led the Blazers to the 1977 NBA title, opened in early March after undergoing a $1.4 million facelift. It used to be Cucina Cucina, an Italian restaurant, part of a building that also houses the Blazers’ team offices, the arena’s box office and a small microbrewery.
The Dr. Jack’s restaurant next to Portland’s Moda Center has been a hit.
Photo by:RYAN PROUTY / PORTLAND TRAIL BLAZERS
The old restaurant was open year-round at the Rose Quarter, a district incorporating the arena and Veterans Memorial Coliseum, the Blazers’ old home before they moved to their new arena in 1995. But it suffered for lack of business on nonevent days, and the Blazers decided to take over the space and give it a boost by rebranding it for the community’s beloved coach.
Dr. Jack’s is open only on event nights at Moda Center but it’s been a big hit. Through the end of June, the 10,000-square-foot restaurant run by Levy drew 46,000 people through its doors, producing gross revenue on a Blazers game night 10 times more than what the previous establishment posted, said Chris Oxley, general manager of Rose Quarter operations.
The gastro-pub, as Oxley best describes it, opened on a Monday, March 3, a night when the Blazers played host to the Los Angeles Lakers. It was pouring rain outside, and 900 people still showed up at Dr. Jack’s despite no advertising or promotions.
Business has only gone up from there, and most important, Dr. Jack’s has not cannibalized food and beverage sales inside the arena. It’s been 100 percent incremental revenue for the team, Oxley said.
“We wanted people to be able to come in here and spend two hours if they wanted to, or if it’s just meeting a friend and heading into the game, they could be in and out of here — grab a bite to eat and a beer — in 20 minutes,” he said.
The eatery’s design touches provide some connections to the arena, including a Portland Trail Blazers sign that once stood atop the center-hung scoreboard and an illuminated capital letter R from the old Rose Garden sign that now points patrons to the restaurant’s restrooms.
Garage-style glass doors tie the interior space to an outdoor patio equipped with picnic tables for al fresco dining. The roll-up doors are similar to other restaurants in Portland, said Michael Lewellen, the Blazers’ vice president of corporate communications and public engagement.
The list of microbrews in a market that pioneered the craft beer trend expands well beyond the flavors served inside the arena and those tied to the Blazers’ beer sponsors.
Bottom line, it was time for a refresh to give fans a new place to get excited about as the arena turns 20 years old next year, Oxley said.
“I’d love to say it was a brilliant concept and we executed it flawlessly … but it was something that people just wanted,” he said.
> OVERHEARD: Ohio State University will aggressively pursue stadium concerts after installing permanent lights at The Shoe. School officials are already talking to promoters about booking one to two shows next summer, said Xen Riggs, OSU’s associate vice president for student life. Riggs was among the attendees at VenueConnect 2014, the International Association of Venue Managers’ annual conference and trade show, July 25-29. Back in Columbus, concerts fit well with OSU Athletic Director Gene Smith’s objective for making greater use of the 102,329-seat Ohio Stadium, Riggs said. The last time the stadium played host to a concert was in 2003, a heavy metal extravaganza featuring Metallica, Limp Bizkit, Linkin Park, Mudvayne and the Deftones. … Veteran architect Ron Turner, head of Gensler’s sports practice, sees an easier path for the Oakland Raiders to find a site to build a new stadium and remain in the Bay Area than options that have been heard publicly. Instead of fighting with multiple interests at current home O.Co Coliseum, he thinks the Raiders should make a beeline for Candlestick Park in San Francisco after the facility is torn down in 2015. Turner points out the city already has its environmental impact review in hand, a requirement and a major hurdle for new construction in California. The EIR was completed in 2010 as part of San Francisco’s attempt to keep the 49ers in town before they went 40 miles south to Santa Clara to build Levi’s Stadium. After The Stick is leveled, developer Lennar Urban plans to build a mix of retail, housing and entertainment venues on the property. The EIR originally was tied to building a new stadium and a 10,000-seat arena. Of course, for the Raiders, there’s the sticky issue of funding a new stadium. … Trail Blazers television announcers are still getting used to the name Moda Center, almost one full year after the team’s arena was renamed. During an IAVM Q&A session, Chris McGowan, the Blazers’ president and CEO, said he heard one of his TV guys mention “Rose Garden” at a recent NBA Summer League game. “We’re going to have to talk to him,” McGowan joked. The arena was called the Rose Garden for about 18 years before Moda, a health and dental insurance provider, bought its naming rights in August 2013. … The Audubon Society recently issued a press release stating the translucent glass roof covering the Minnesota Vikings’ new stadium would be a “death trap” for birds unwittingly flying into the facility’s outer walls. Tom Scarangello, chairman and CEO of Thornton Tomasetti, the stadium’s structural engineer, said those claims are nonsense based on other projects he has worked on over the years, including a glass atrium at the Hudson Yards complex in New York. “Birds are a lot smarter than people give them credit for,” Scarangello said.
Don Muret can be reached at email@example.com. Follow him on Twitter @breakground.