R&O Construction: From a Financial Crisis Pivot to One of Utah’s Largest Contractors
With headquarters in Ogden, along with offices in Las Vegas (opened in 1994) and Salt Lake (opened in 2010) R&O Construction has perennially ranked as a Top 10 general builder in Utah per annual revenues, dating back to before the beginning of this century.
R&O Construction President Slade Opheikens said they stick to the idea of being “big enough.” He refers to a statement on their website to sum that up that idea: “When we look to the future, we don’t aim to be the biggest general contractor. We aim to be the general contractor that is big enough to handle the needs of any project. The secret to our success is that we do not differentiate between large and small. We believe every client and every project deserves the same level of service and attention to detail,” the site says.
R&O currently has around 185 employees and three divisions: retail construction, which is about 45 to 50 percent of their projects; office buildings, which includes warehouse projects and multi-family housing and small projects, which includes smaller retail shops like CVS pharmacies and Maverick gas stations, mini stores.
The Genesis of R&O Construction
As the decade of the 1970s drew to a close, Slade Opheikens’ father, Orluff Opheikens, was riding high – or at least he thought he was as the owner of Opheikens and Company, a profitable, up-and-coming residential construction company. He was happily married with a young family, living in a big house and seemed destined to keep riding the wave to financial independence.
It all changed on October 6, 1979 when the Federal Reserve adopted new, stricter policy procedures that led to massive hikes in interest rates virtually overnight, kicking off two back-to-back recessions and igniting the infamous Savings and Loan Crisis that saw the failure of nearly one-third of U.S. savings and loan associations.
Opheikens’ firm had 11 houses under construction at the time, and only one had been sold. With rates skyrocketing to a jaw-dropping 20%, he was faced with the grim reality of switching gears on the fly for his career. It’s a feeling Orluff admits he’ll never forget, regardless of R&O’s current lofty position as a respected and highly sought-after regional general contractor. “One month I’m sitting fat and have the world by the tail,” he recalled, his voice trailing off. “Interest rates shot up to 20%. It was just horrible.”
Opheikens quickly pivoted, selling his car and liquidating other assets while also turning to long-time friend Les Randall for $65,000, which, along with some of his own money, was used to create Randall and Opheikens Construction Company (R&O Construction) on January 17, 1980—just over three months from that fateful October date.
Trying to land work and muster up whatever jobs they could, Orluff worked out of his basement with other executives, Lynn Wright and Frank McDonough, while utilizing Dale Campbell’s abilities during those initial years. It was daunting trying to convince owners that the firm’s past residential experience could seamlessly transition into the commercial construction world, but they kept at it.
Orluff recalled he and Campbell doing whatever they could to get work with Hill Air Force Base and Thiokol; cold-calling an operations’ front gate wasn’t out of the realm of options. “Dale and I would try and just get through the gate, try to do work for Thiokol, put up a fence… we told them we’ll do anything to get through the gate,” he said. “Now, these guys are building Northrop Grumman’s headquarters! That blows my mind! Isn’t that cool?”
Opheikens said he’ll also never forget how hard every single top executive and project manager worked, how they committed to owners to always delivering the optimum final product. “We’d go out and make a promise [to owners], that if you want the heart and soul of R&O, it’s in the field,” he said. “That’s Lynn Wright and guys like Rick Zampedri and Will Haymond. That’s the hardest part of our business.”
Retail Gain: To Get the Work Done
It’s no secret that R&O Construction’s rise from a virtually unknown commodity to a major player in the commercial arena was initially fueled by its work in the retail sector. Its first major retail client was Salt Lake City-based Smith’s Food and Drug, beginning in the mid-80s.
Orluff Opheikens had a relationship with Tom Welch, then legal counsel for Smith’s, and it led to a first project in 1985—a brand-new store in West Valley City. Two other key Smith’s projects in that early time were remodels of existing stores in Sandy and Salt Lake, which helped crews better understand the nuances of having a store stay operational during a major construction remodel, with an emphasis on keeping the public—and its workers—safe.
“We did [both stores] at the same time—doubled the size of both of them,” said Wright, adding that they were able to negotiate with Smith’s for the firm to “celebrate” Thanksgiving in the actual bakery so that their crews could work through the holidays. “It was mind-boggling… I don’t think I got four hours of sleep for three months.”
Those early projects kicked off a relationship with the grocery giant now spanning 35 years and 171 total projects in the Western U.S., the most recent of which include a new store in Las Vegas, a remodel in Columbia Falls, Mont. and several small remodel projects in Utah.
Slade Opheikens credits Wright for setting the tone on those early Smith’s projects, as he worked on a couple of Smith’s projects, learning how to frame, pour foundations, etc. He also remembers the top-shelf expectations set by Fred Urbanek of Smith’s, who set the bar high as the owner’s rep/ project manager for years.
“It was Fred Urbanek, years ago, that always reminded us ‘You’re only as good as the last two weeks of your last project.’ He didn’t mean it as an insult—he meant it. It was a great lesson. Lynn Wright would always remind us, ‘You have to finish strong.’”
Slade Opheikens recalled a young project manager who didn’t fully comprehend Wright’s version of “done” who reported to Wright and was then asked if the project was truly done. He replied yes, they were done, except for some doorknobs and light fixtures.
“And then they would get to hear the Lynn Wright-what-is-done with some flavor,” he laughed. “Done is you don’t go back; the owner is 100% satisfied. Done is done.
“I love that Lynn instilled that in us,” he adds. “And now it’s on us—how do we instill that culture and expectation into the current and next generation?”
There have been dozens of other retail clients through the years—Slade said he took Orluff to a ribbon-cutting of a new Maverik convenience store in North Ogden last year, the firm’s 87th Maverik— in addition to successful projects across virtually every major building market, including multi-family, sports/recreation, government/institutional, historical renovation, resort/hospitality, and others. The firm has garnered dozens of awards for its projects during its history and was named “Contractor of the Year” in 2018 by the Associated General Contractors of Utah, an honor Slade called “cool, and humbling” as it came from peers in the industry.
Strategy to Growth: Diversification
Diversifying from the retail market— and having the ability to successfully complete projects on time and on budget across multiple markets—didn’t come easily, as work was plentiful in retail when the firm started surging in the late 90s/early 2000s.
R&O’s strong bond with Smith’s was paying dividends to its overall bottom line, but starting 15 years ago, company brass started to worry that maybe the firm was too invested in the retail market. The need to deliberately diversify became a top priority for developing and maintaining growth. In 2001, for example, Slade said 80% of R&O’s work was in retail, with 70% being just Smith’s projects. “You don’t want all your eggs in one client’s basket,” he said. “We’re seeing glimpses of what we can be. It’s been cool to see in the last 10–15 years how much we’ve accomplished by way of diversifying.”
Retail remains one of the firm’s top markets, accounting for just under 30% of its total projects from 2019, with multi-family growing to be the largest generator of top-line revenue.
Major inroads have been made into other busy markets such as key public sectors including municipal and institutional/higher education projects for government clients. While much of the company’s work is negotiated directly with long-time, repeat clients—the bread and butter of many successful contractors— R&O’s success the past 15 years in a low-bid, public environment is equally impressive.
Opening an office in Las Vegas has proved equally prudent, and after more than a quarter-century in Nevada’s most populous city, R&O’s name and reputation now span most of the Western U.S. The firm opened the office in 1994—last year marked its 26th anniversary—with significant progress being made since 2012. Chet Opheikens moved down to work full-time in 2002—“a decision,” his father said, “that shows how dedicated he was to the cause, uprooting his family and taking on the challenge of growing revenues in that office.”
“We opened the office in 1994 and Chet was a young guy, just married, and he makes the leap,” said Orluff. “I’ve often thought that was hard on him. I remember going down with Dale and banging on doors like we did at Thiokol. We’d get a little nibble here and there. Chet goes down and five years later he’s walking me into board rooms of people I couldn’t even get in the door with! It’s pretty cool, pretty amazing to have these guys following the efforts we put in.”
“The office had been up and going before I got there,” said Chet, who was six when his father, Wright and McDonough all worked in the family basement, more-or-less learning the ins-and-outs of the industry by just observing those men and asking them prudent questions. “I committed to 10 years and that was 17 years ago. I like Henderson, where I live, but I miss home, I miss family. But it’s been great for our family and we have ample opportunity to get back [to Utah].”
Learning through osmosis was as good of an education he could have asked for.
“My father is the most subtle salesman you’ll ever meet—he’ll definitely make it your idea,” Chet Opheikens laughs. “It’s in a great way. I was very blessed to be raised by my father and to work in this office. My office used to be there” he said, pointing to the next room in R&O’s Odgen office. “When I ran our residential division. Every day I had my door opened and I learned a lot. How they engaged with clients, how they always made sure the client was taken care of, that the project was completed on time, no matter what.”
Revenues from the Las Vegas office have been strong since 2013, with a peak of $144 million in 2014 and a six-year average (2013–18) of $110 million.
“There are a lot of great opportunities that we’ve seen in Las Vegas,” he added. “Las Vegas is a market that has a lot of developers out of California. We’re almost a suburb of California. Most regional developers, if they’re doing business in California, they’re doing business in Nevada. It’s opened opportunities for us to not only build beautiful projects, but create relationships with people on a national level.”
Eyeing the Next Generation of Leaders
With Slade and Chet firmly entrenched as the second generation leaders of R&O Construction, they’re quick to note that the firm is keenly invested in making sure a strong succession plan is in place for the next generation.
“I’m proud of the team we have, at every position,” said Slade, recanting various people who have been working at the firm as long as he has and quipping that his father’s true passion was “Watching people grow. “Orluff’s vision was to give some people an opportunity, but give them a lot of rope. Hire attitude. If someone has a good attitude, the sky is the limit.” – he added.
On a familial level, Slade’s oldest son, Jaden, is a 23-year-old laborer and one of six student-workers at R&O slated to graduate from Weber State University’s Construction Management program in the fall. Slade is excited about what these young folks bring to the table, and he’s optimistic that Jaden could indeed prove himself—well into the future—to be worthy of being among the third generation leaders of R&O.
Slade said his son has expressed frustration at times with the rigors of “grunt work”—for instance, shoveling snow all day, every day, for three straight months on a project in Logan last winter, with temperatures well below zero on some days. He had to drive up and tell the crew to go home. It reminded Slade of when he was in a similar position three decades ago, digging trenches on a Park City job with two feet of frost on the ground to build camaraderie and respect, and helping him remember that is as important to me as anything. “The name is not a blessing, it is from what we’ve been blessed with, but the expectation, it is not. I don’t mean that in a negative way, you have to rise up to meet what is expected.” – recalled Slade Opheikens.