Thriving Thanks to a Strong Reputation
In February of 2018, I spoke with McDonald Excavating’s President, Ryan McDonald. We talked about the challenges that come with being a minority-owned business, a strong partnership with Hoffman Construction, and steady growth within the construction industry. On the cusp of the company’s fortieth anniversary, I once again had the privilege of talking with Ryan and learned how the company’s success is steering it to new ventures.
One of the ways McDonald Excavating has been able to build its reputation is through its association with several Hoffman Construction projects, like a large project that was performed for a multi-national corporation. “We completed that job and it was another success before moving on to other projects, such as more work for the Bonneville Power Administration at their West Coast facilities. Currently, we are still working closely with Hoffman,” says Ryan.
Back in 2018, we talked of a $7 million road project with Clark County, and Ryan was happy to report that it was completed ahead of schedule and within budget. McDonald Excavating is now doing a host of projects with local municipalities and Clark County.
Ryan explained the perils of being minority-owned and how that affected the company’s ability to garner business. “It can provide good opportunities, but there is also a stigma that comes with it. It can serve to limit what people think you are able to do. That said, I feel we have done a good job of proving to our clients that we can do the larger jobs. Our project size is continuing to increase,” says Ryan.
The current feature project is known as Block 216. This will eventually be a Ritz Carleton Hotel in downtown Portland that will encompass a full city block with six stories of underground parking. McDonald Excavating is digging a hole that will be two hundred by two hundred by sixty-five feet deep, with a contract value near $4 million in one of the largest excavations the city has seen. This is a big metropolitan area, so that is saying something.
“This is a unique project that utilizes different skill sets. The means and methods of getting the material out of a hole that deep are different than on your average job,” says Ryan.
McDonald Excavating invested close to $500,000 in a special conveyor system that takes the excavated material FROM the bottom of a hole and directly loads it in trucks. This serves to reduce congestion in the downtown area and allows for large volumes of material from such a deep excavation. It is quite the process, and as of mid-January, the excavation was halfway accomplished.
“We will be completing that facet of the work by the end of February, and then the building will go up, which will be a two-year process,” says Ryan. The thirty-five-story tall building will be constructed by general contractor Howard S. Wright.
McDonald Excavating was not chosen for this job due to minority status. “They chose us based on our qualifications, rather than minority status. We are fighting our way through the label, proving to our clients that we can compete with the big boys. This is one of those moments where we sink or swim. If successful, the sky is the limit!” says Ryan.
Together with a Portland company called Raimore Construction McDonald Excavating is getting ready to start a $60 million rapid bus transit project that will add sixty-six new bus stations and shelters from downtown Portland to Gresham. The civil construction company will tackle a third of the Division Transit Project, on the easternmost portion of the work, and McDonald will be involved from start to finish as a key partner of Raimore Construction.
“This is another unique project for a different reason. Raimore is another company in Portland that is a DBE contractor,” says Ryan. DBE, or disadvantaged business enterprise, is similar to the minority business certification. One of the aims is to provide Raimore with total DBE participation on that project. This will also go a long way to prove that McDonald Excavating can undertake large projects.
For forty years, McDonald Excavating has been working from its current office space, but as it has grown, this is simply not enough. A piece of property has been purchased for the new headquarters which will include a roughly 10,000-square-foot office and shop with a conference room on a three-acre, heavy-industrial-zoned property in the Port of Camas-Washougal Industrial Park, not far from where the company is currently located.
Ryan has gone through the gamut of a year and a half of permitting and building design. Most final approvals have been accomplished, so now the company must wait for better weather before the build begins. “We own the property and were able to buy in lieu of leasing from the port, so it was a good deal. The overall value of the land and building comes to about $4 million. It was necessary because we are simply out of space,” he says. Ryan would not take on this kind of investment for the new facility if he was not confident in the people at the company or its ability to grow.
McDonald Excavating has equipment all over the county, so this new facility will allow it to centralize everything and give it a state-of-the-art facility. Staff will have a nicer environment compared to the job trailer from which they recently worked. There are approximately fifty-five people working for McDonald Excavating, but with this new facility, the expectation is that the number will increase.
“There will also be 7,500 square feet of shop space with two pull-through bays, overhead cranes, and other items to maintain our equipment and keep the fleet up to snuff,” says Ryan.
While some may be worried about things starting to slow down, there is more opportunity than ever before. “We all think about the possibility of a recession coming, so I am also trying to put ourselves in a position where we are not deep in debt and try to be smart about our investments,” says Ryan. In fact, as of the end of 2019, the backlog of upcoming work is twice as long as the company’s previous maximum.
With all this activity and opportunity, it must be acknowledged that the company faces a big challenge in finding a qualified labor force in this economy. Several staff members will be retiring within the next four to five years and it is difficult to attract young people into the trades. McDonald Excavating has created a system to work with young recruits through apprenticeships that give them an understanding of the needed technical skills.
The new facility may help attract recruits. It will employ the newest equipment including GPS-guided machinery. “These are the kinds of investments I make. Having good leaders on our team who will invest the necessary time with new potential recruits. That’s really what it boils down to: having the right people in the right seats and giving them the opportunity to grow,” says Ryan.