Construction Firms Get Aggressive To Ward Off Recession
Faced with an excruciatingly slow building market, several Central Massachusetts construction firms are looking outside the Bay State to help take them through the recession.
In the last few months, Milford-based Consigli Construction, Holden-based Woodmeister Master Builders and Maynard-based J. M. Coull have all announced new ventures in surrounding states. Woodmeister opened its newest office in Newport, R.I., a lucrative and almost recession-proof market. But even Newport, as well as the rest of the tony south shore of Rhode Island, poses risks to companies that seek to locate there.
Meanwhile, Consigli Construction of Milford made its move into the Upstate New York market by partnering with Kirchoff Construction Management of Pleasant Valley, N.Y.
The new resulting firm, Kirchoff-Consigli Construction Management, offers each firm the most bang for its merger buck and puts the Consigli name in an area of the country where competition among contractors is less fierce than it is in Massachusetts.
Dan Paquette, director of development and chief sustainability officer at Woodmeister, said opening an office near the south shore of Rhode Island has been one of the company’s goals for a number of years. The location offers Woodmeister opportunities with the client base it already has. That is, rich folks.
The custom homebuilder and cabinetmaker serves the Boston suburbs from its main office in Holden and it’s had an office on Nantucket for more than a decade.
If You Build It
Still, the move isn’t without risk and it’s based on management philosophy as much as it is on hard numbers. “Even in slow economic times, you have opportunities. Those who react and take advantage of opportunities will come out better on the other side,” Paquette said.
The beaten down economy also provided Woodmeister with a very concrete opportunity, Paquette explained. “The office that we have never would have been available in better economic times,” he said.
“At the upper end of the marketplace, there’s still activity. This is giving us a foothold in the Southern New England coastline. When you’re in a company that’s been growing, you’re constantly trying to grow your market area, and this was as much about positioning as it was a growth strategy,” he said.
Guy Webb, executive director of the Builders Association of Central Massachusetts, said the homebuilders’ organization hasn’t seen geographic expansion as an industry-wide trend, but said the move to Newport makes perfect sense for Woodmeister.
Also to Woodmeister’s advantage is the fact that the company does a fair amount of restoration and repair work, Webb said.
Most firms that are beginning to see “a little light at the end of the tunnel” are doing home improvements rather than new construction, Webb said. “There’s been an increase in activity. Whether that translates into dollars remains to be seen, but most of those folks are in home improvement. Builders are doing marginally better, it’s picked up seasonally a bit, but I don’t think that’s a long-term trend.”
The way Andy Coull, president of J.M. Coull, sees it, Paquette is right. Companies are constantly trying to grow geographically, but they should also be willing to grow into new lines of business.
Coull has worked in Connecticut for a decade, but usually when the firm was brought in by other contractors on a job. “We said, ‘Let’s do this on purpose,’ and we made the decision prior to the big economic downturn.”
But the Shelton, Conn. outpost isn’t just a replication of the company’s Maynard operation. Coull said he chose the New Haven area because the firm wants to do more construction jobs for health care and education clients. And while that is new territory for Coull, it’s not completely foreign. The company specializes in work for technology manufacturers and biotech firms and is known for building laboratory clean rooms.
When the economy hit the skids, the Shelton office was in the planning stages, Coull said. It wasn’t too late to put the project on hold.
“But we had made the commitment. We had made the decision and we were going to stick with that commitment despite the economy,” Coull said.
Be Aggressive
In early July, Consigli and Kirchoff Construction Management formed Kirchoff-Consigli Construction Management, giving Consigli a presence in Upstate New York to go along with its headquarters in Milford and offices in Portland, Maine and Enfield, Conn.
The firm will focus on the management of corporate, academic and health care construction projects. These are the same industries that Consigli focuses on outside of its partnership with Kirchoff, and Anthony Consigli, the company’s president, said the time was right to make a move.
“To get through the recession, however long it might last, you have to be creative and somewhat aggressive,” Consigli said. He said forming a new company with Kirchoff gave the company the opportunity to tackle larger projects in a new area that is nevertheless contiguous with New England and the ability to share overhead costs.
The Kirchoff-Consigli partnership was initiated by Kirchoff. The two companies are working together on the restoration of the New York State Capitol in Albany, a $45 million project.
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