2 min read September 2021 — Technology, adaptability and strong community involvement: David Mortenson, chairman of Mortenson Construction, spoke with Invest: and shared how these three aspects will be key for the sustainable growth of the Twin Cities’ construction industry.
What measures implemented by Mortenson Construction throughout this atypical time will remain integral to your long-term operations?
The diversity of our business is what allowed us to continue to thrive in a time of turmoil and uncertainty. Our core customers here in Minnesota – healthcare, higher education, corporate – put most of their capital planning on hold when covid hit, but we were able to pivot because we are also the largest builder of renewable energy in the country. Our renewable energy businesses and our data center business were expanding. We’ve been in the wind business
since 1995. When aggregating wind, solar and battery storage, nobody does more design build work in North America than we do. We were able to reallocate resources to parts of our business that were growing and growing fast. Renewable energy was one. The other was-large scale data centers. Our sports business is going strong and also has needs. We built every stadium in the Twin Cities and we just finished Allegiant Stadium in Las Vegas. We are also building the MLS stadiums in St. Louis and in Nashville and we’re finishing the new Climate Pledge Arena in Seattle. These projects made us the largest sports builder in the US. Diversity in a time of disruption and uncertainty was key for our success last year. The agility of our team and our team members enabled us to pivot and find new opportunities in new places much faster than most of us would have ever thought possible.
What are the main pillars of the post-pandemic economy for your industry and in general?
If there is one thing that we are most excited about in our industry, it’s the process revolution. It used to be that almost everything got cut and built on-site. We’re undergoing a transformation to more offsite subassemblies and more efficiency on-site. Being able to leverage technology tools in order to “design for manufacturing” is not only allowing us to deliver faster and more cost effectively, it is also enabling us to address labor shortages in our craft work force.
In terms of areas of markets, data centers are certainly top of mind as technology became a strong focal point for how all of us were going to work. We have nearly tripled the amount of data center work that we have done historically in the last 24 months. Cloud provider heavyweights — Google, Microsoft, Amazon — are all building up their data center capacity for their cloud computing businesses while video, AR and VR are driving other internet behemoths like Facebook to expand capacity as quickly as possible. Computing power and data storage needs will remain on a steep upward trajectory.
How is subassembly and modular construction development poised to change the game for the construction industry?
We have a 100,000-square-foot manufacturing facility in St. Paul in which we are manufacturing sub components that get delivered just in time to the job site. We have started small by focusing on large exterior wall panels with the windows and final waterproofing installed on flat packed interior walls. But we have also built full scale mockups of entire apartment rooms, complete with shower tile and kitchen equipment. As we hone our manufacturing capability we expect we’ll be building 250 unit apartments within six months.
As far as leveraging technological innovation, we were among the first to coin the phrase virtual designing construction, using building information models to completely build a building virtually in a 3D computer model before we ever step on site. That ability to leverage three-dimensional information from our fabricators, put it in a coordinated model and tie it to the schedule has allowed us to finish projects like US Bank Stadium and Target Field, weeks early. Technology is so ubiquitous on our job sites that you will have a hard time finding a set of paper plans.
What steps is Mortenson Construction taking to make the company and the industry more accessible and inclusive?
The most damaged area in the Twin Cities due to civil unrest after George Floyd’s murder is an area called East Lake Street, where thirty-two buildings were burned to the ground. Cities that go through that kind of damage, almost never recover. One of the things that we are really proud of is that we lead an effort, with the support of a broad range of business leaders in the Twin Cities, to set the construct of a three-pronged approach to quick recovery: restore, rebuild and reimagine. Because these corridors are made up of mostly small, minority and immigrant businesses, they needed help getting back on their feet. That meant help with everything from their insurance claims to restoring their physical space. And while we are confident these corridors are now on a foundation to come back stronger than ever, the physical work has been the easy part. Like nearly all of the 18 Fortune 500 companies in the Twin Cities we have made decisive commitments to significantly improve the diversity of the team member base and to expand the diversity of our supplier and subcontractor partners. The reality is that George Floyd was a wake up call that we were not moving fast enough or doing enough to build equity and inclusive environments in our industry.
What is your overall outlook for the next three to five years?
The economic fundamentals for our industry look really strong for the next several years. Not only are our customers that put projects on hold at the start of COVID starting to plan for capital investments again, but there is still an enormous amount of consumer spending that is still sitting on the sidelines. Those two things along with the federal government’s infrastructure plans means that there will be a lot of opportunity in the marketplace.
But while we are preparing to serve our customer’s growing needs and leverage new technologies to continue to produce higher quality buildings faster and more cost competitively, we are also leaning into how we can address the climate crisis that the world is facing.
This is more than just expanding our renewable energy business, it also includes a focus on the built environment too. We need to both find ways to build buildings that are more energy and water efficient at the same time we are focused on taking carbon out of our supply chain. Ultimately that is going to mean we are part of creating significantly lower carbon alternatives to the way concrete and steel are produced today. Stewardship and sustainability are an integral part of our core values, so we know we have to lean into these big challenges.
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