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December 2012
Building Better Relationships
By Jim Froneberger

     The test of a strong company is often not the way it performs when times are good, but how it responds to adversity. It’s sort of like the old saying, “When the going gets tough, the tough get going.” For Charlotte-based construction services firm Myers & Chapman, the recession of 2008-2009 served as a true test of that old axiom.

     The recession had a devastating impact on the retail developer business that had, for years, provided Myers & Chapman’s bread and butter construction projects. New shopping center and office projects ground to a halt as consumer spending dropped, businesses put expansion plans on hold, and the financial crisis caused banks to pull back on project financing.

     To make it through the tough times, Myers & Chapman refocused away from the developer-driven work that had suddenly evaporated, diversifying into a wider variety of construction projects supporting industrial, office, medical, and institutional clients. Building new relationships became just as important as building great buildings, and in the process, Myers & Chapman became an even stronger and better company.

 

Building the Carolinas

     In 2013, Myers & Chapman will mark 60 years serving the commercial construction needs of developers and business owners in the Carolinas and the Southeast. Founded in 1953 by Brevard Myers and John Chapman, the firm operated under their leadership until the late 1980s when they sold the company. A period of ownership transition culminated with Mike North assuming majority ownership in 1990.

     That same year, North hired Rick Handford as vice president of operations. A 1975 graduate of Furman University, Handford came to Myers & Chapman after 13 years at Metric Constructors working with estimating, purchasing, cost control, scheduling, superintendent and project manager duties. In 1996, Handford was promoted to president of Myers & Chapman.

     North and Handford ran the company until 2004 when North decided to sell his interest and step back from the business. Handford increased his ownership to become the majority shareholder, and Bob Webb joined the firm as CEO and second-largest shareholder.

     Webb, a 1974 graduate of Appalachian State, came to the company after 26 years in the construction business. He had joined the McDevitt & Street Company in 1978, continuing through that firm’s acquisition by Bovis in 1989 and the subsequent acquisition of Bovis by Australia-based Lend Lease in 1999. Today, Handford and Webb own close to 85 percent of Myers & Chapman, with the remainder spread amongst several other members of their management team.

     “We’ve had a fairly diverse portfolio of work over our 60 years,” says Webb. “It has probably been more retail construction than any other sector, but in recent years we’ve broadened our base to include more industrial, medical and institutional projects. We now describe our business as construction services because we can offer a variety of deliverables, from complete design-build projects to program management where we supplement the client’s staff to help them get things built, renovated, or up-fitted.”

     As CEO, Webb handles the overall leadership of the company, including strategy, sales and marketing, pre-construction services, and accounting. Handford runs the day-to-day operational aspects of getting buildings built, including managing their staff of project managers and project superintendents.

     The leadership team also includes Bo South, vice president of sales and marketing; Derek Carpenter, vice president of pre-construction; Marcus Rabun, senior project manager; and Mike Ussery, safety manager. As vice president of sales and marketing, South is responsible for finding new opportunities by networking with architects and engineers and empowering other team members to uncover new opportunities through their work on existing projects.

     Carpenter’s pre-construction function includes the myriad of things that need to take place in the early stages of a project to help clients budget and schedule, such as estimating, value engineering, and value analysis. Rabun manages several key client relationships and Ussery drives the overall safety strategy and makes sure a consistent safety discipline is employed across all projects.

     Myers & Chapman’s projects are concentrated in the Charlotte region, but stretch into South Carolina, Virginia, Tennessee, and Georgia. According to Webb, a significant percentage of their work is within 50 miles of Charlotte, with most of the remainder coming within a 200-mile radius.

 

Diverse Skills and Capabilities

     With 20 superintendents, seven project managers, and four pre-construction experts on staff, Myers & Chapman can call upon a diverse set of skills to complete a wide variety of projects for their clients. Whether it’s a retail, office, industrial, medical, or institutional project, and regardless of whether the project involves ground-up design-build, renovation, or just interior up-fit, Webb and Handford say their team has the knowledge and expertise to complete projects on time and on budget.

     While the average Myers & Chapman project is about $3.5 million, averages can be very misleading.

“We’ve done a $70 million job and we’ve done $20,000 jobs,” Webb explains. “Generally speaking, if a job gets below $100,000, or maybe even $200,000, it might not make sense for us unless it is part of a larger client relationship. We do a lot of projects under $2 million, but we also have a decent number of projects in excess of $10 million.”

     In 2007, retail construction made up a significant portion of Myers & Chapman’s projects, but with retail expansion slowing in recent years, the company has diversified their project mix.

     Some of the projects currently underway include the City of Charlotte Fire Headquarters building, a medical office building in Rock Hill for Carolinas Healthcare System, and a major project for Cato Corporation that includes a new 60,000 square foot office building on their south Charlotte campus plus a 75,000-square-foot office space renovation coupled with a new exterior façade.

     But while large retail project volume is down, Handford and Webb say retail is far from dead due to continued activity in smaller retail projects such as new stores they are building for CVS and PetSmart.

     Shopping center renovations are also becoming more common, an example of which is the complete renovation of Quail Corners Shopping Center located on Park Road in south Charlotte. That center’s developer, Crosland, happens to be one of Myers & Chapman’s longest standing client relationships, the two firms having worked together for 25 years or so.

     “A recent project we’re very proud of is the new Huntersville police station,” beams Webb. “The city was having trouble figuring out where to get the $18 million they needed for a new police station, but someone had the idea to buy an empty building in the depressed marketplace and renovate it. They ended up buying a building in a prime location and we came in and did an interior renovation which gave them everything they wanted for a total cost of less than a third of the original $18 million price tag.”

     “We’re also building a textile mill in Hamlet for Knit Rite out of Kansas City,” he continues. “We’re going into an old mill that has been sitting empty for years, completely gutting it, and re-up-fitting 80,000 square feet. They make specialty medical fabrics. It’s another example of putting a resource back into use.”

     Another noteworthy project for Myers & Chapman is a large manufacturing facility in Concord. It started out as a 150,000-square-foot new build project, but halfway through construction the client increased the space to make room for additional manufacturing capacity.

     “The original plan had a large warehouse component, but they decided to convert that to production space,” says Handford. “It started small and became very big, and is an example of a satisfied client bringing us repeat business because of our ability to satisfy their unique needs.”

     Myers & Chapman is also a leader in green and sustainable building services, including LEED Certified projects, Energy Star buildings, and the latest green building principles and practices. LEED is an internationally recognized green building program developed by the United States Green Building Council that provides a framework for practical and measurable green building design, construction, operation, and maintenance. With seven LEED Accredited Professionals on staff, Myers & Chapman has completed a number of LEED Certified projects, including their own LEED Gold headquarters office.

 

Stronger and More Diversified

     The last four years have not been kind to the construction business, but Myers & Chapman has made it through the storm and emerged a much stronger and more diversified firm in the process.

     “In the 2005 to 2007 period, the vast majority of our work was for developers,” admits Webb. “But that industry fell off a cliff. The volume of new permits was down 75 percent from 2008 to 2009 and our developer work came to a screeching halt.”

     “In September of 2008 we had 23 project awards just waiting for a notice to proceed,” remembers Handford. “Only one of those 23 actually ended up starting and that one didn’t start until this year. So 22 completely vanished. We went from $95 million to $38 million in top line revenue from 2008 to 2009.”

     To make it through the downturn, Myers & Chapman shifted their focus away from developer-driven work to the kind of work that was still out there—projects for end users such as Carolinas Healthcare System, Cato, and Knit Rite that own their own buildings. The new strategy paid off as revenues recovered to $73 million by 2011. They expect to finish 2012 with about $75 million of revenue on the books.

     “The economy forced us to put a new emphasis on relationships,” explains South. “Referrals, networking, and relationships with architects became much more important to help identify new opportunities.”

     Another key to their success has been an unrelenting focus on the client and making sure they are always looking out for the customer’s best interests from start to finish. To accomplish that goal, everybody in the organization is empowered to do what is necessary to take care of the client.

     “You don’t have to ask the next guy up the ladder whether you can do something to make the client happy,” says Handford. “As long as it complies with our values, the company stands behind whatever you do. Our one restriction is to do the right thing.”

     The leadership team continues to look warily at the direction of the economy, but based on the current book of business and the potential project pipeline, they are cautiously optimistic about the future.

     “We know that whatever happens two years from now or five years from now is going to be different from what is happening today,” concedes Handford. “But people are always going to need construction. As long as people are moving into and out of business locations, they’re going to need to reconfigure the space, they’re going to need new space, or they’re going to need to prepare for new capabilities.

     “Our job becomes to identify what that market is at any given time and help that market learn who we are so that we can service it. We have diverse talent in this building, so whatever the change calls for, we’re going to be in a position to provide it.”

Jim Froneberger is a Greater Charlotte Biz freelance writer.
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