It's more than a game

The 2002 Olympic Winter Games have created multiple business opportunities for Salt Lake City distributors and contractors

By -- Industrial Distribution, 11/1/2000

Long before the first bobsledders speed down Utah Olympic Park's 15-curve bobsled run during the 2002 Olympic Winter Games, the local distributors and contractors working to build Olympic venues and strengthen Salt Lake City's infrastructure will have already completed their performances.

Salt Lake City is just reaching the peak of permanent Olympic venue construction, but the official projects are only the tip of the iceberg. Due to both the Olympics and the general prosperity of the region, Salt Lake is a veritable beehive of construction activity. New roads, office buildings, condos and hotels are all under construction. The initial line of the city's first-ever light rail system was completed in late 1999 and construction of the second line began in August.

Olympic enthusiasts or not, Salt Lake residents are still coping with traffic snarls created by the massive $1.59 billion project to reconstruct 17 miles of Interstate 15, which was launched in April 1997 and accelerated in anticipation of the Games.

While all of this progress may be frustrating for Salt Lake commuters negotiating multiple construction sites on their daily trek home from work, for area distributors serving the construction industry it's meant just one thing: business.

Three decades and 17 days

The 2002 Winter Olympics will last just 17 days, starting with the Opening Ceremony on Feb. 8 and ending with the Closing Ceremony on Feb. 24, both at the new Rice-Eccles Olympic Stadium. Together with the Paralympic Winter Games in March 2002, for a grand total of just 27 days, world-class athletes will race to both personal and professional triumph in a quest for Olympic gold.

And when those drama-filled days are over, Salt Lake City will be left with a legacy of sports facilities and a greatly improved infrastructure to be used by the people of Utah.

Salt Lake City's quest to host the Olympic Winter Games spanned three decades, beginning with its first bid in 1966. The city won on its fourth bid, and in 1995 the International Olympic Committee named it the stage for the first Olympic Winter Games of the 21st century.

The uniqueness of the opportunity to contribute to the construction of this legacy is not lost on distributors like Phil Thompson of Industrial Supply Co., Mike Stavros of Acme Construction Supply Co., Inc., and Vic Little and Paul Hill of White Cap Industries' Salt Lake City branch. All three companies have sold varying amounts of product to contractors working on Olympic venues and other construction projects.

"It's a real honor to have the Olympics in Salt Lake; it's one of the great events in the world," says Stavros, "and to have been able to take part in it and watch the development of things like the bobsled run and the new ski jumps-and some of the facilities that have been built-has been great."

"I really believe that the leadership who brought the Olympics to Salt Lake had a dream that we'd have not only a chance to host the world here, but a chance to create a legacy of venues of sports facilities for the people of Utah. It was a long-term vision," says Thompson, who also serves as volunteer chairman for Deer Valley Resort, an Olympic venue that will host the slalom, freestyle moguls, and aerials competitions.

The business-to-Olympics connection

Millions of dollars in construction projects have swept through the Salt Lake area during the past four to five years. The Salt Lake Organizing Committee's budget for staging the Olympic and Paralympic Winter Games of 2002 is $1.34 billion. That includes a venue development budget in the neighborhood of $325 million, the majority of which is for design or construction costs directly related to venue construction, according to Grant C. Thomas, SLOC's senior vice president of venue development.

In addition to that, Thomas says, the overall budget includes another $250 million worth of transportation expenditures specific to the Olympics-such as building new access roads and improving key interchanges near venues-but which does not include any of the work being done on I-15. And those are just figures directly attributable to the Olympics. The value of nonresidential construction projects in Utah is reported to have peaked at $1.4 billion in 1997 and averaged just under $1.2 billion in 1998 and 1999.

Thomas says SLOC has made a point to keep much of the business opportunity local.

"We started by doing a review of the local design and construction industry and we looked at architectural engineers and constructors to see if the management skills and the workforce were here in the community, and we were fortunate that they are," Thomas says.

The official Olympics projects were bid competitively and the winning contractors were then responsible for subcontracting and sourcing their own tools and materials, Thomas says.

"The industry that's really gotten a boost from the Olympics is anyone who's selling concrete or steel structures for buildings and stadiums as well as highway construction, asphalt subcontractors and their suppliers who are feeding the transportation industry, and the engineers, architectural firms and designers," Industrial Supply's Phil Thompson says.

The business created by construction projects directly and indirectly related to the Olympics generated nearly 20 percent of Industrial Supply's overall revenues during the past three years, says Thompson.

And for White Cap-which moved into the Salt Lake area in late 1998-the Olympics-related business has helped the company get established and grow to the point that it can support its 20,000-sq.-ft. branch, Hill says.

Building the legacy

Industrial Supply, Acme Construction Supply and White Cap have all captured various pieces of Olympics-related construction projects during the past few years, and will continue to do so right up until the Games as final projects are completed.

Industrial Supply Co.

For Industrial Supply-which sells safety equipment, power tools, hand tools, concrete-related fasteners and other products to commercial contractors-the I-15 construction project has generated a significant amount of business. Industrial Supply also did work with construction of the light rail, which now runs 120 blocks north-south through Salt Lake. In addition, the company sold product to the Grand America Hotel project that is scheduled to be completed this fall, to the Utah Winter Sports Park project, and to the rebuilding of the University of Utah football stadium, now known as the Rice-Eccles Olympic Stadium.

The stadium was rebuilt by Layton Construction Co., basically between the 1998 and 1999 football seasons. The speed with which the new stadium was erected is symptomatic of the work done on all Olympics-related projects, says Alan Layton, CEO of Layton Construction.

"The uniqueness of building for the Olympics is that there isn't a lot of time, which means that we need tools and materials instantly," Layton says. "And that's why a company like Industrial Supply is such a great partner. In our business, particularly on a project with an accelerated, compressed schedule, the quality of the service of those collateral organizations that work around us, is far and away as important as price. ... We're only as good as our partners, which are our subcontractors and our suppliers."

Working on the I-15 construction project has been significant in several ways for Industrial Supply. On one hand, I-15 divides the city and the construction has meant that the exits closest to Industrial Supply's headquarters have been closed for nearly a year, effectively limiting customer access to the building. On the other hand, it is a project that has not only created revenue but also has been interesting to work on.

"The freeway project has been fun-seeing how well controlled it's been. A lot of people thought it would shut the city down, but they've done a fantastic job with it," says Debbie Goodrich, an outside sales representative for Industrial Supply.

Acme Construction Supply Co., Inc.

With only 13 bobsled runs in the world, it's not every day a distributor gets to collaborate on such a project. Acme Construction Supply sold products like epoxy and anchors, as well as expendables like saw blades and drill bits, to the bobsled project.

"Because of the [bobsled run's] high banks, they had to figure out how to get concrete to stay up there on those banks," Stavros says. "So they had to make a special mix of concrete and basically shoot it on with some special guns to make those banks stay. And everything underneath the run is refrigerated. When you look at the bobsled run, what you see doesn't even begin to show you how elaborate it really is."

Acme Construction also sold products to contractors working on building the Olympic Village, housing for Olympic athletes that will be used later as student housing for the University of Utah. In addition, the company sold product for the construction of the terminal building for the light rail system and to various hotel projects in town.

White Cap Industries

When White Cap Industries entered the Salt Lake market in late 1998, many of the Olympics-related projects in town were already underway, but the share of business they have been able to capture has contributed to the new branch's growth.

White Cap has sold some general construction supplies to the Olympic Village project, and has done a significant amount of work supplying mechanical and concrete accessories to the Layton Construction project at the speed-skating venue, the Utah Olympic Oval (see sidebar), which is scheduled to be complete by January.

In addition, White Cap has sold concrete accessories to the accelerated I-15 project. Senior account manager Paul Hill says the I-15 project has been interesting to work on, and was long overdue.

"I-15 had to go in. It was really falling apart, but the Olympics just kind of prompted [the state] to make it happen. Instead of doing one bridge a year or whatever, they did the whole thing," Hill says. White Cap works with contractors on the project as they work to build 142 new bridges reinforced with seismic upgrades to safeguard against any activity along the parallel Wasatch Fault.

"I've enjoyed working on the bridges and the big girders for I-15," Hill says. "We've put out some of the most beautiful girders that I've ever seen on that project, and a lot of it has to do with a product I sold to them."

After the party

When the last nail is hammered into the final Olympic venue, and all of the transportation construction underway is completed, and the new hotels and condos are ready to receive guests, you might think that construction in Salt Lake City would come to a screeching halt. "Not so," say the locals.

For starters, the Olympics has been only one factor contributing to a decade of prosperity and growth in the Salt Lake region. Just last year The Church of Jesus Christ of Latter-day Saints finished building a $250 million Assembly Hall. And the region has recently welcomed a stream of corporate relocations and expansions, including Dannon Yogurt, Intel Corp., 3Com Corp. and Gateway Inc., which shows no signs of stopping.

"If we just had those Olympics venues and very little residential or industrial construction projects, then I'd worry about that," says Little. "But we're doing a lot of commercial buildings, like the Gateway project downtown [a multi-use retail, commercial and residential facility], which isn't Olympics related."

Indeed, while some sources predict that the construction market may flatten somewhat, no one is predicting an extreme downturn.

"We think there will be some modest cooling, we've already experienced some of it. But frankly, we were in such a hyper-drive that we'd welcome the throttling down a little bit," says Layton.

"I think we're going to have a slowdown, but it's not going to be a hard slowdown," Hill says. "I think we're going to continue growing, providing that our interest rates don't go too high because that kills construction regardless. ... We've got so many businesses moving in, it can't slow down."

Both Little and Stavros predict that another growth spurt will follow after the Salt Lake area attracts the world's attention and bolsters its image during the Games.

Thompson-in his dual role as area businessman and key Olympics volunteer-is confident that Salt Lake City will step up to the opportunity to shine in the world's spotlight.

"My belief and instinct tell me that we'll host a very successful party for the world here," Thompson says. "We've had a lot of practice events-U.S. figure skating, World Cup bobsled and ski events, National Basketball Assn. finals-here. If it's not very, very successful, I'll be disappointed."

"It's a once-in-a-lifetime event. Based on my previous attendance in Lillehammer [Norway], it's an event you can't explain in advance," Thompson says. "You have to wait until it happens-until you have people from 80 countries all over the world gathered for a huge party that's driven by international fellowship. The energy level of being on Main Street in Park City in a year and a half will be indescribable."

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