ASSOCIATED GENERAL CONTRACTORS OF OHIO

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Reflections:  Thru the Years 1970-2010
"Excerpt from the article  "Building From the Ground Up"  in the AGC of Ohio "BUILDING OHIO" Magazine, 2010

Despite their best efforts, AGC of Ohio’s attempts in the 1970s to bring about statewide collective bargaining with the carpenter and laborer unions fell apart. They would, however, be able to reach a statewide contract with the operating engineers. These contracts provided a more consistent labor pool across the state and were revolutionary for the building trades.

Legislatively, significant progress was made. AGC of Ohio activities would evolve from following legislation in an advisory capacity into encouraging legislators to sponsor bills, endorsing or combating legislation, and drafting laws. Donn Ellerbrock, retired Vice President of Government Affairs for AGC of Ohio who served the association for 32 years, was instrumental in helping the association achieve some of the association’s key legislative victories in the 1970s.

These included reducing the employers' worker compensation premium bond; burdensome state EEO submittals were reduced to just signing the bid envelope; and hold harmless provisions in contracts were voided.

The association also established an industry fund to promote the building industry and provide support for AGC of Ohio activities, and established a Political Action committee that is still active today.

Since its establishment in 1970, AGC of Ohio has played an important role for commercial contractors. By offering a common voice for the industry, the opportunity to interact with peers both professionally and in more relaxed atmospheres, and by serving as a vehicle for legislative change, our association is well-positioned to continue to have a positive impact on the evolution of our industry in Ohio.

“AGC of Ohio pulls all the state's regions into one common good for the majority of its members," said John Arsena. “That has always been our focus and remains that even today. The promotion of unity, whether union or open shop, and the political support for the state are very important.”

J.D. Flaherty echoed Arsena’s comments : “The opportunity to rub shoulders with the best and the brightest in our industry continually opens up new horizons and raises the bar and provides a perspective I can take back and apply to our business,” Flaherty said. “AGC of Ohio’s motto, ‘Quality People. Quality Projects.’ is simple and straight forward.  It is a formula for success. Putting quality people in a position to perform with a structure to back them up is the key to quality projects. AGC has helped Construction Systems Inc. understand and embrace those concepts.”  

True to the association’s original mission, Bob Moyer noted that legislative action would be a key activity for AGC of Ohio for many years to come. “I see the most important job for AGC of Ohio is to keep an eye on the legislature,” Moyer said. “We need to know what they are cooking up that will negatively affect our industry and keep it from happening. I don’t think we should look to the politicians to solve our problems.” 

“AGC has played a key role in creating a political climate friendly to construction in the state of Ohio,” said Gary Haas. “We got the retainage laws updated. And we will continue to focus on legislation to lift the mandate on multi-prime contracting.” 

 Joe Kovaleski accurately summed up the sentiment of all of AGC of Ohio’s members. “We feel an obligation to play an active part in our society. And we’re proud to be a part of quality building in Ohio,” Kovaleski said. “As an industry, we’re proud to build hospitals, office buildings, and other facilities. The last 40 years has seen many successes, but we understand that out biggest challenges are yet to come, and AGC of Ohio is prepared to meet them.”

Emerging Industry Trends

As Ohio’s commercial construction industry moves forward into the future, new trends are underway and contractors are adapting to them.

“Alternative energy is certainly emerging. There are wind farm, solar and hydro projects in the planning phase and/or in progress," said Mark Corna. “There is also a big push toward new technologies in materials, like polymers, and methods for the high tech industries. While these new trends are emerging, it is also interesting to note some resurgence in old technologies.  The third phase of the Sun Coke plant in Middletown is under construction, there is some work in the steel industry and Honda and its satellite parts plants continue to play a very important role in the economy of Ohio.”

Bob Moyer noted that open shop contractors are doing a bigger percentage of the construction every year. “Also, more work is being constructed using CMs,” he added. “And many large contractors are being purchased by foreign companies.” 

Kurt Schmitt pointed to the rise of “superregional, national contractors” and efforts by big retailers to commoditize construction. “To be successful (in business), it requires more education as to what value is being delivered,” Schmitt said.

John Arsena provided a subcontractor’s perspective on the future.  “Projects demand more from a subcontractor, which we are,” said Arsena . “In the past, the architect and CM or general, really directed all trades.  Now there is more required by the subcontractor to coordinate with other subcontractors.”

J.D. Flaherty offered some interesting thoughts.

“New construction trends such as sustainable building requirements and new regulations such as lead abatement, storm water regulations, and new crane standards are coming at the industry at a faster and faster pace,” Flaherty said. “AGC must monitor all such developments, understand them, and speak to them on behalf of the industry on the local, state and national scenes. It will be a continual challenge to monitor this.”

1990s An Expansion of Activities

Despite a brief dip in construction activity in Ohio in the early 1990s, the industry continued to thrive throughout the decade due to a strong economy. The membership roster of AGC of Ohio grew and the association began in earnest to push their key legislative objective: elimination of Ohio’s 133-year mandate for multi-prime contracting. AGC of Ohio would also expand the association’s activities in other areas.

Bob Moyer, Chairman of the Board for Mosser Construction, Inc., President of AGC of Ohio in 1996, and first recipient of the association’s Pinnacle Award for Lifetime Achievement, recalled the legislative struggle the association faced – and continues to face to this day. “Our key issue was and is the elimination of the mandate for multi-prime contracting in Ohio.  All it takes is removing one line in the Ohio revised code,” Moyer said. “This has apparently been done in most other states years ago.”

Ohio Governors George Voinovich and Bob Taft had given the construction industry assurances that the antiquated Multiple Prime Delivery system would be modernized and other delivery systems would be included in the state’s tool box. This would ultimately never happen – including under the current term of Governor Ted Strickland.

Rich Hobbs became AGC of Ohio’s Executive Vice President in 1991. Previously the head of the Central Ohio AGC office, Hobbs would assume his new position when both the AGC of Ohio Board and the Central Ohio AGC Board decided to combine the two organizations to avoid redundancy and excessive costs. “This has proven to be a very beneficial marriage for both groups,” Hobbs said.  “The message and representation became common and less confusing for not only our membership but for governmental and legislative interests as well.”

In 1992, AGC of Ohio established its Build Ohio building awards competition to recognize the commercial building industry for excellence in construction. Pete Strange, CEO and Chairman of the Board of Messer Construction Co., and AGC of Ohio President in 1994, was a driving force behind the establishment of Build Ohio. Member companies entered projects into the competition in four different categories and winners were awarded a custom-made bronze and green marble Build Ohio statue.

The first Build Ohio award recipients were Lincoln Construction Inc., Peterson Construction Co., Shook Inc. and Welty Building Co., Ltd. Build Ohio would evolve over time into the biggest highlight of the year. There are now seven project categories and a popular Build Ohio Celebration gala is held in Columbus in November. Build Ohio has grown into one of the most prestigious statewide construction events and awards programs in the nation.

Gary Haas, Vice President of Contracts Administration, Labor Relations and Inclusion Coordinator for Rudolph/Libbe, Inc., in Walbridge, who served as AGC of Ohio’s President in 2006, spoke highly of the Build Ohio awards program. “AGC of Ohio’s Build Ohio awards program has been a great tool for promoting the great construction capabilities and successes of our Ohio-based contractors,” said Haas.

Another significant milestone for the association was the establishment of the AGC of Ohio Education Foundation, which awards scholarship to students pursuing education in a construction-related field.

“Workforce development has always been a major issue within our industry,” said J.D. Flaherty, President of Construction Systems, Inc. in Columbus and AGC of Ohio President in 1999. “The establishment of the Ohio Education Foundation under AGC of Ohio was a significant component of our organization’s commitment to our industry and its future leaders.  It proved a vehicle for our seven divisions and member organizations to sponsor scholarships that would not only benefit worthy and needed candidates but also ensure that AGC would continue to be the voice of the industry long into the future,” he added.

The 1980s: Boom Town

The early 1980s brought initial struggles for Ohio’s commercial construction industry, but by the mid-1980s things turned around and builders enjoyed a very positive economic climate that lasted for the rest of the decade. 

Mark Corna, President of Corna Kokosing Constructon, Inc. in Westerville, and  AGC of Ohio President in 2002, remembers the time well. “We were coming strongly out of a period of stagflation and double digit interest rates that led to the severe recession of the early 80’s,” Corna said. ”Construction was booming as high rises were being built in downtowns across the country.  In addition, development of the suburbs was going strong and churches, hospitals, offices, schools and retail establishments were all being built in the areas surrounding core cities in great numbers.”

Always driven by the needs of its members, AGC of Ohio began focusing its attention on the rise of open shop contractors during this time and what impact that might have on commercial construction in Ohio.   “The 1980’s saw the beginning of open shop contractors working on major projects in the state,” Corna said. “Major government and institutional projects were always built with union labor prior to this time.”

Open shop organizations would become a significant factor within the industry, particularly in southern Ohio.  By the late 1980s, they controlled 80% of the private work and approximately 40% of the public work in terms of projects, if not dollar volume, in southern Ohio.  AGC of Ohio evolved with this trend and welcomed high quality professional construction companies irrespective of their labor policies.

Kurt Schmitt, President of Lincoln Construction, Inc. and President of AGC of Ohio in 1990, was the first open-shop contractor to join the association in 1985.  “AGC of Ohio stood up for open shop as a responsible management approach,” Schmitt said. “We advocated allowing both union and non-union choices between management and employees.”

Legislatively, the association had significant involvement in several key victories for the construction industry.  Schools became covered by the state's statutory construction laws, and contractors were allowed to pass through sales tax increases that affect construction projects. Contractors were allowed to pass through certain unemployment compensation and workers' compensation premium increases. Contractors could now have the owner certify the nature of property for sales tax purposes shifting tax liability for mistakes in property classification. And contractor liability for asbestos abatement was limited.

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