While the job creation numbers are relatively modest, the secondary benefits of Tutor Perini Corp.’s surprising announcement last week to move its headquarters from suburban Boston to Sylmar are wide-ranging.
The move, announced Oct. 20, will likely result in more California business for the publicly traded civil and building construction company. It is also shot in the arm to a city that has seen its share of publicly traded companies bolt for other locales in recent times.
Hilton Worldwide, Computer Sciences Corp. and DaVita Inc. have all left Los Angeles in the last two years, strengthening a longstanding perception that the city is a place that big companies leave. That was at least part of the reason why Ron Tutor, chief executive of Tutor Perini, decided to make the opposite move.
“There have been so many people leaving and nobody coming. When I said I was going to move people were first in disbelief, like, ‘Why are you dong it?’” said Tutor, an L.A. native who built his family construction company here from the ground up. “And then it was a nice thing because this is still our home.”
The move follows the April 2008 merger of Tutor-Saliba Corp. with Perini Corp., a deal valued at $862 million. Tutor-Saliba’s predecessor company, A.G. Tutor Co. Inc., was founded by Tutor’s father, Albert, in 1949. The Sylmar company then partnered with another firm to form Tutor-Saliba Corp. in 1981. Last year’s merger with Perini Corp., an old-line Boston-area construction company, created one of the largest construction firms in the United States. Until last week’s announcement, Tutor Perini had retained the old Perini Corp. headquarters in Framingham, Mass., as its center of operations.
Robert “Bud” Ovrum, L.A.’s deputy mayor of economic development, said that the city played no formal role in facilitating the move and that Tutor Perini has not been given any economic incentives. He said the city plans to take advantage of the surprising decision.
“You use it for a marketing tool,” he said. “Every time one company moves to town other companies think, ‘I wonder why they did that?’”
With the company headquartering in Los Angeles, the city has gained one of the biggest construction firms in the United States. Tutor Perini reported net income of $38.8 million on revenue of $1.38 billion in the second quarter. Last year, the company reported annual revenue of $5.6 billion.
Perhaps more importantly, Tutor said that the relocation will likely result in more business in California, where the company is already a large player. The company was No. 11 on the Business Journal’s list this year of general contractors, ranked by the value of work in Los Angeles County.
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