An Interview With: Rick Wrieden
SMCI isn’t exactly the new kid in town, but the general contracting firm, which has more than $100 million in annual billings, has a recent history that’s a bit complicated. Founded in 1967 to “build out” the Charles E. Smith Companies’ portfolio, SMCI began working outside of the Smith portfolio in the ‘90s before Denver-based Archstone Communities acquired the Smith REIT, of which SMCI was a part, in 2001, says Rick Wrieden, president of SMCI. It became known as Archstone-Smith, but Wrieden was one of five partners who bought the SMCI part back from Archstone in 2003. Today SMCI ranks in the top 10 of interior contractors and in the top 15 of general contractors in the Washington region.
“The biggest challenge we have is establishing a credibility in our own right,” Wrieden says. “It’s going to be a lot of hard work, but Archstone in and of itself had not grown up in the construction industry, whereas the Charles E. Smith Company had, and specifically in DC. It became apparent in ’02 that Archstone wasn’t interested in general construction.”
Now, Wrieden and his team, who have worked with the Kennedy Center for the Performing Arts, the World Bank, the National Institutes of Health, Johns Hopkins, Andrews Air Force Base and the U.S. Naval Academy, face the unenviable task of reintroducing themselves to clients in one of the country’s most competitive industries.
“Even with the people we know, we have to take the time to meet and introduce ourselves in a whole new light,” says Wrieden, a graduate of Bradley University in Peoria, Ill., and a native of Baldwin, N.Y., 20 miles east of Manhattan. “It’s not a slam dunk.”
Wrieden came to Washington in 1973 to drop off his college bags at the home of his parents in Gaithersburg, where they had moved from Long Island. He thought he would get a backpack and go see some of the world for a while. But his father had arranged a job interview for him with the Charles E. Smith Company, and he has been here ever since.
Mary Westbrook spoke with Wrieden for Bisnow on Business.
Any regrets about taking SMCI private? No. The five of us who took it private had been working together for several years, and we looked around the room and felt there was something valuable there. Certainly the sweat equity we’d already invested, but also the fact that there were about 90 employees whose jobs were at risk.
How do you see the D.C. area changing in the next 10 to 15 years?
You still have the suburban bedroom communities growing exponentially because housing’s more affordable, but I think some of the growth in Tysons Corner could hurt downtown Washington because other industries might sprout up, like the tech corridor did years ago. With the Metro coming through Tysons, the area could double in size. That’s an enormous concentration of people and buildings. And the government’s spreading out for security reasons, so outer areas will benefit from that. Fort Belvoir will probably experience a tremendous amount of growth. And Prince George’s County has always been the forgotten area of this whole metro region. But think of all the available land that’s out there.
What projects excite you?
Several years ago, we did a visitors center near the Cambridge River in Maryland, for the state’s transportation department. It’s there as you travel out 50 toward Ocean City. We had never done anything like that since our history is largely apartment houses and office buildings in DC and Northern Virginia. We did that project not because of its size but because it was different, unique. The architect designed a large, triangular fabric sail for the building. The construction to do that was unique and different enough that we aggressively pursued it.
How about in DC?
Actually, we’re about to get started in Southeast DC on something quite exciting called the Amber Overlook project, out on 50th Street. It was a group of 11 buildings, apartments and townhouses, that were vacant and had fallen into disrepair. Two companies came together, Jair Lynch and Ameridream, to redevelop this and try to re-introduce it as the centerpiece of a community that could be made vibrant again. SMCI’s interest initially was as a contractor looking for a project to do, but the more we looked at it the more it seemed like an opportunity to be involved in meaningful construction for people who are attached to the area and want to stay with their roots if they can find affordable housing. It will be 80% affordable housing and 20 percent market rate. We’re expecting to break ground in two weeks and it should be a 14 month project. Nine buildings will be demolished to slab on grade and keep the same footprint, and two will be renovated.
So, are you looking only for highly individualized projects?
No. Sometimes our projects are as unique as that, and sometimes they’re as mundane as doing a renovation on the Dulles Toll Road administration building. We want a wide range. That keeps it fun.
How does your job change when you work on a historical landmark versus new construction?
You have totally different clients and end products. We have to match up the right talent within our own organization. We want to be a relationship-generated firm over a long period of time. We have to have people with personalities and abilities that blend well with the product, especially with very demanding clients.
We converted a mansion downtown on 16th Street for Taylor Company, and they were very particular about the level of service and how they wanted the product to look in the end. They wanted us to use real crown molding and wood and took a personal interest in a lot of that. They were very hands-on as owners.
Is that unusual? Which kind of owner do you prefer to work with?
A lot of clients aren’t hands-on, but when you get right down to it, I think we’d rather be dealing with the owner in a hands-on fashion, like we did with Taylor. The more direct contact we have with the clients, the stronger the project.
Some clients are particular.
That’s okay. We did a “catheterization lab” for Shore Medical where we could not be off an 1/8 of an inch or the $2.5M piece of equipment would not have fit into the space. As it turned out, we were less than 1/10,000 of an inch and the manufacturer, The Phillips Company, was in awe of the accuracy of the product.
What current trends affect your work?
Multi-family housing, rental housing and now condos are a big component of the DC skyline. It’s becoming a 24/7 city – people live and work there.
What challenges are you facing?
Getting people attracted to the business. In the past, computers and the tech industry were such a draw and much more attractive to kids then engineering or construction school. The “cool factor” wasn’t there. We lost a lot of potential people. Building a building is not easy. The industry in and of itself is a very, very competitive business. The margins are razor thin, and you have to be very good at what you do. Truth be known, everyone thinks construction must be a highly profitable business, but it’s a business with a lot of financial and physical risk. And, it’s all about volume. You can’t afford mistakes.
How do you create that “cool factor”?
We have to be more active in promoting our business – design, construction, planning, development, all those things. There’s a very distinct shortage of people in our industry. It’s growing tremendously, but the number of people coming in has declined. A building is still built by putting one brick on another, but at the same time, technology has made us more efficient and faster. It’s still considered a low-tech industry, but there’s a lot of technology in it.
How do higher material costs affect your work?
We’ve seen significant swings in materials cost. China sucked up most of the cement to be found in the world. They were buying enormous amounts of fabricated steel, creating shortages here. And, then there are oil prices! If you think of how many materials are affected by oil prices, not only is it just you and me filling our tanks, but there isn’t a plastic product out there that isn’t made without processing oil.
When do you think cost increases will level off?
I don’t know. We can’t even predict 90 days out. The best advice we give clients is to get from the planning process to the building process as soon as possible. You can’t avoid it.
How has the relationship between architects, contractors and clients changed?
Architects are coming to rely on contractors to give owners more information. There’s a lot more ability to provide pre-construction services, which affects the financial viability of each project. Redesigns are expensive and time-consuming. You want to try and achieve success quickly, without redoing your efforts. Architects are being more prudent now and teaming with contractors.
Are you handy around the house?
[Laughs.] In my opinion, very handy! I live in a house that’s almost 230 years old, so there’s no end to fixing and repairing things. When I do find the time to really get into a project, I enjoy it. It’s therapeutic.