Hill Construction

Hill ConstructionHill Construction weathered the recession by broadening its projects and entering the public sector.

By Tim O’Connor

The Great Recession was a dry period for the construction industry, but when a rare project did emerge owners sought contractors that they were confident would not go under and would see the building through. In the Lowcountry region along South Carolina’s coast, that contractor was Hill Construction.

Prior to the recession, Hill Construction focused on commercial projects that were $2 million or more. But like many in the construction industry, the company had to diversify to remain profitable. It expanded its range to $50,000 to $20 million and took on new types of projects such as medical offices and multi-family complexes.Hill Construction info box

Although it broadened its range, the company stayed committed to the Lowcountry market. “Typically, you either have to expand your geographic region or you have to diversify,” President Bob Dunn says. “We chose to diversify within our region.”

Some of that diversification came in terms of a new kind of customer. Hill Construction made its name in the private market, but had to look elsewhere as bank lending ceased and the number of new projects fell off. “When we entered the recession we were forced really to pursue some projects in the public sectors,” Dunn explains. Hill Construction had been out of the public sector for 20 years but at various points during the Great Recession public projects made up nearly 100 percent of the company’s volume.

When the economy began to rebound and private projects came back, the company saw the value of keeping a presence in the public market. “We decided we were not totally going to get away from the public bid sector,” Dunn says. Today, about 30 percent of the company’s volume is public bid projects. Submitting a winning bid grants some security, as projects are almost guaranteed to start within 30 days. Dunn says the bidding process also keeps the company competitive with pricing and up to date on subcontractor activity.

Hill Construction gains insight into which subcontractors are getting jobs for other contractors, which can indicate whether a subcontractor’s backlog is getting too large and putting it in danger of being spread too thin.

Reputation for Service

Edwin Hill founded Hill Construction in 1956, later bringing in his son, Burrow Hill, as a partner in 1977. Dunn joined the firm in 1985 and became a partner five years later at the same time Edwin Hill retired. The company added Vice President of Operations Gene Garrett and Vice President of Business Development Chip Crane as partners in 2007. Burrow Hill retired in 2010, handing the president role off to Dunn that same year.

The company typically undertakes about 15 projects at any given time. Whenever possible, Hill Construction prefers to be involved with a project at or before the design phase. Dunn says that early involvement lends itself well to construction management and allows Hill Construction to have input in how the job develops. Sometimes the project design falls under Hill Construction’s purview, in which case it hires a third-party designer, and other times the company works in concert with a design team contracted by the owner.

Hill Construction often self-performs between 20 and 30 percent of a project and subcontracts out the rest. The company has a database of 5,200 suppliers and subcontractors it draws from on each job. The philosophy of early involvement extends to those contractors. Hill Construction looks for subcontractors that have expertise and can provide input and make pricing evaluations that help in decision-making.

Another important consideration in choosing subcontractors is whether they will follow Hill Construction’s lead in avoiding change-orders. “We’re also looking for that same level of commitment from subcontractors,” Dunn says. “We expect and ensure all subcontractor proposals include their complete scope of work. We want our focus to be on building and not on subcontractor originated changes. On the other hand, we stand ready to accommodate owner generated changes throughout the project.”

Serving Lowcountry

Hill Construction’s geographic focus is important to the company. South Carolina’s Lowcountry area stretches from the Atlantic coast to about 80 miles inland, and from the North Carolina border south to Georgia. Limiting itself to that region means that Hill Construction’s project managers and superintendents can do a daily commute from their homes to the job site. Because Hill Construction prides itself on being a family oriented business, Dunn wants his employees to be able to return to their loved ones each night.

South Carolina is an area rich with history and many of the projects Hill Construction undertakes are restorations. Those often require Hill Construction to complete work on a building that remains open for customers, a challenge that demands careful scheduling and coordination to avoid hampering the customer’s business.

Hill Construction is in the process of wrapping up one such challenge this year. The company is completing the renovation of 450 hotel rooms at the Belmond Charleston Place in Charleston’s historic district. The $18.5 million project began in August 2013 and is on pace to be finished by August 2016. In addition to the room renovations, Hill Construction remodeled the corridors and rooftop spa area and expanded the ground floor sports bar.

Throughout the project, Hill Construction has been cognizant of the hotel’s ballroom, around which much of the work is taking place. By working with the hotel, Hill Construction is avoiding conflicts with the ballroom and ensuring that the hotel can continue to cater to its conference and events business.

Another major project Hill Construction recently completed is located just a half-mile down the road from the Belmond. St. Matthew’s Lutheran Church was originally built in 1872 and was in need of an extensive structural overhaul when Hill Construction began work on the place of worship in September 2013. The $7 million project took a year-and-a-half as Hill Construction updated the sanctuary inside and out, replaced the aging HVAC system with modern, energy-efficient equipment, and shored up the structure’s century-old foundation.

Hill Construction also replaced the slate roof, reusing much of the existing material to be consistent with the rest of the building. On the exteriors, Hill Construction worked with the local historical preservation society to use a specialty stucco that matched the existing structure.

Just a few years removed from the recession, Hill Construction is more entwined in the Lowcountry market than ever before in its 60-year history. Thanks to its diversification, the company’s volume has returned to pre-recession levels, although the average job size is smaller than before. Dunn believes the company’s growth lies not in expanding its workforce or area of operations, but by growing the average size of the projects it undertakes.

Hill Construction is preparing for that growth by training its junior project managers and superintendents to handle larger projects and more complicated work. By pursuing fewer but larger jobs, the company believes it can avoid burnout and raise the level of its work. “We feel that’s the best way for us to grow,” Dunn says.

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