Contractor of the Year: Turner Construction

Tompkins acquisition adds final pieces of the puzzle

By Bruce Buckley

Turner Construction has been a dominate force in the Philadelphia construction community for years, and with the acquisition of Washington, D.C.-based Tompkins Builders, Turner is on the verge of taking the top spot in the District as well. With all of the major market sectors now on Turner's radar, company executives hope to finally land Turner on top in the Mid-Atlantic.

The team (left to right) of Bill Brennan, senior vice president at Turner Construction, Ed Small, president of Tompkins Builders, and Chris Jahrling, vice president and general manager at Turner Construction, are positioning Turner to become the Washington, D.C. area's largest contractor.

It's pretty easy to find corporate executives willing to boast about how they want their company to be number one. It's much harder to find ones who can make it happen.

Turner Construction has long dominated the Philadelphia market, and this year it is on the verge of taking the top spot in Washington, D.C., as well. With the $10 million acquisition in late 2003 of Tompkins Builders, one of the District's top contractors, Turner found a way to penetrate new markets and position itself to become the Mid-Atlantic's largest contractor.

"We're a competitive bunch," said Chris Jahrling, vice president and general manager at Turner in Arlington, Va. "The main goal is to be on top. When owners think of who they want to do their job, we want everyone in the room to know they should consider Turner."

Turner may be tough for owners to overlook. Tompkins, now a subsidiary of Turner, gives the firm a presence in market sectors that have eluded it in the D.C. area, notably federal government and downtown residential projects.

Tompkins' history of federal work for the U.S. General Services Administration brings skill sets in government contracting that Turner previously lacked.

"We are strong in all of the segments of this market now," said William Brennan, senior vice president at Turner. "We feel we can pursue any and all of those segments."

Turner Construction topped out the $525 million U.S. Patent and Trademark Office Headquarters consolidation project in 2004. The 15-acre site in Alexandria, Va., includes five buildings.

Same company, different sectors

Brennan said he knew the two companies focused on different market sectors, but that fact became more apparent as the two teams started working together. At a joint meeting of the Turner and Tompkins business development teams this spring, Brennan said the group discussed nearly 80 business leads in the area and the two teams only overlapped on four projects.

"It has continued to amaze us how infrequently we conflict with each other in such a tight market," Brennan added.

With both business development teams pursuing different deals, nearly every dollar that Tompkins brings in is one that Turner wouldn't have earned on its own.

After one full year with its new Tompkins subsidiary, Turner is already starting to reap the benefits, and executives see a real possibility of Turner becoming the leader in the region. Turner and Tompkins logged a combined $1.259 billion in Mid-Atlantic revenues during 2004, according to Mid-Atlantic Construction's recent Top Contractors survey.

advertisement

That tally edges out the Whiting-Turner Contracting Co. of Baltimore, at $1.239 billion, and Clark Construction Group of Bethesda, Md., at $1.209 billion.

And that's during what Tompkins executives consider a down year.

Tompkins saw revenues top $400 million in 2001. But when its former parent company, J.A. Jones Construction of Charlotte, N.C., suffered financial woes that eventually led to J.A. Jones filing for bankruptcy protection in fall 2003, Tompkins' future was in doubt and the company had trouble securing contracts. Tompkins' revenues dropped to $122.2 million in 2002 and bottomed out at $88.2 million in 2003.

After J.A. Jones' bankruptcy protection filing, Turner saw an opportunity and acquired Tompkins in November 2003.

Although Turner executives knew they were buying a company with a solid reputation, it was not an automatic slam dunk. Brennan said Turner presumed that Tompkins' clients would come back and the new subsidiary would get back on its feet quickly.

"In the first half of 2004, Tompkins had a tough time selling work," he added. "A lot of their clients wanted to wait and see what Turner would do with the company."

Tompkins' autonomy

As part of the acquisition, Brennan said Turner saw the value of the Tompkins brand and decided to keep the name as well as its existing staff.

Tompkins Builders' history with federal government work in Washington, D.C., including the recently-completed $56.1 million National World War II Memorial, made it an attractive acquisition for Turner Construction.

"Tompkins is on a lot of people's Rolodexes and I felt that was worth keeping in tact," Brennan added. "They have some strong and long-term client relationships, and the employees had a lot of loyalty and identification with the name. They take pride in having the Tompkins name on their business cards."

The message began to get through to Tompkins' clients, and by the end of 2004, Tompkins was signing big contracts again. In the fourth quarter of 2004 and the first quarter of 2005, Tompkins picked up in excess of $400 million in new work, said Ed Small, president of Tompkins.

"By the end of 2005, we should be back to the size we were at four years ago with a similar backlog," Small added.

Major project awards from 2004 include the $73.4 million U.S. Federal Courthouse in Richmond and the $41.4 million Food and Drug Administration Center for Devices and Radiological Health Laboratory in Silver Spring, Md.

Tompkins also brought in contracts with new clients, including the $82 million 45th Street Redevelopment project in Ocean City, Md., and the $35 million Bethesda View Condominiums in Bethesda.

With Tompkins holding its own, Jahrling said he is optimistic that everything is falling into place for Turner.

"The market is in a position now that plays to the strength of a company like Turner," he added. "We're the number one builder in health care in the country and that market is strong right now. Plus we now have the residential element and the federal government connections. The market seems to have aligned itself to our sweet spot."

At the forefront in Philly

Rising success in the D.C. market only adds to the continued success Turner has seen in the Philadelphia market. Turner ranked number one in eastern Pennsylvania in Mid-Atlantic Construction's recent survey of the region's top contractors.

Jim Devlin, business development manager for Turner in Philadelphia, said his office is also banking on the company's strength in the health-care market. In 2004, the company built a replacement facility for the Community Hospital of Lancaster in Lancaster, Pa., and broke ground on the new St. Joseph's Medical Center in Reading, Pa.

Education is also big in the Philly market. The company continues to find work with local higher-education facilities, completing the new Science Education and Technology Building at Cabrini College in Cabrini, Pa.

Turner is one of several firms selected by the Philadelphia school district as an agency construction manager, positioning Turner to take advantage of the city's ongoing $1.6 billion five-year capital improvement plan.

But the biggest splash for Turner in Philly in 2004 was the topping out of the new Cira Centre - the first high-rise office building added to the city's skyline in more than 12 years.

"It's been a great privilege to have our name associated with the Cira project and help change the skyline of Philadelphia," Devlin added.

And Philadelphia could also benefit from the Tompkins deal. Brennan said that in 2006 Turner will look to expand Tompkins' expertise in federal contracting to other markets, including Philadelphia.

"We'll try to chase federal work within a 250-mi. radius of Washington and see how it goes," Brennan added. "Tompkins could very well become our federal government arm."

Jahrling said that while he remains upbeat about the company's future in the Mid-Atlantic, he still eyes the market with guarded optimism. It's an approach that he said he hopes will not only take the company to the top of today's hot regional market, but also keep the company there when things cool down.

"When I look at this market, there is plenty of work and a lot can get done, but none of us can get complacent and think this market will last forever," Jahrling added. "We need to stay focused on bringing the best people in and training them to be creative and value-driven. At some point, owners will need people who can excel at solving cost and scheduling issues to get projects off the ground. We plan to be that company."