Minnesota Company Cleans Up by Cleaning Up Old Military Bases
In 1989, the U.S. government launched a program to close excess military bases and realign assets to reduce spending and improve efficiency. Cleaning up those old bases and other military sites has become a lucrative business for Bay West, a St. Paul firm that originally focused on public-sector jobs such as dredging harbors and rivers.
In 2004, three Bay West managers bought the 30-year-old firm from its founder. (The company’s name refers to a western bay in Duluth, where the company originally operated.) Since then, President Lon Larson (a CPA), Vice President Edward Bacig (a geo-logist), and Vice President Gene Kuppenbender (a hazardous-materials manager) have built a national client base.
One of the “new” company’s first big federal contracts was helping clean up the former, 2,370-acre Twin Cities Army Ammunition Plant in Arden Hills, a 10-year, $7 million endeavor that concluded in 2006. Bay West also performed toxic waste cleanup after hurricanes Katrina and Rita in 2005, and health and safety monitoring after the 2007 collapse of the I-35W bridge in Minneapolis.
Another major project: a $12.1 million contract to mitigate nine of the 16 hazardous waste sites on the 3,200-acre Seymour Johnson Air Force Base in North Carolina. Among the hazardous materials in abundance on the old base was jet fuel stored in underground tanks.
The company’s sales grew from $8.7 million in 2004 to $25.7 million in 2007—up nearly 300 percent over the four-year period. The partners have expanded Bay West’s work force from 45 to about 115 employees. Outside of Minnesota, the firm has project offices in eight other states. Federal government contracts make up about 60 percent of its workload; the rest comprises state, municipal, and private-sector projects.
One advantage Bay West has in bidding on federal projects is that as a small business with fewer than 500 employees, it’s eligible to compete for contracts that aren’t available to larger firms doing similar work.
Bacig says the future looks bright, given the federal government’s focus on cleaning up old bases—in some cases, for sale to private developers—and the influx of federal stimulus dollars. The push to clean up decommissioned military bases has been driven by the proliferation of federal environmental regulations, Kuppenbender notes: “The government recognized the need to make sure they are a leader in that regard.”
The company projects revenues in the mid-$20 millions again this year. “We expect to reach the mid-50s in the next five years,” Larson says.