American Executive - Where Business Leadership Begins

AP Construction Company was founded in 1981 to service The Ashforth Company, a diversified commercial real estate firm, as an interior contractor. By 1991, the company had grown out of its original focus and ventured into school construction.

A similar diversification strategy has paid handsomely for Connecticut-based AP Construction as the economy has taken a downturn. Nick Everett, AP Construction’s senior vice president, said a varied portfolio and a partnership approach to market have made it possible for the company to maintain a balance.

“We look for long-term relationships, and we’re team oriented,” Everett said. “Even when we’re hired as a general contractor, we tend to act like a construction manager, helping clients get through the process rather than just getting in and getting out.”

After the move into schoolwork, AP Construction began working in the healthcare industry and with municipalities, such as police stations and libraries. The company also handles private club work, but Everett said it’s never lost touch with the interiors core it began with 28 years ago. By sticking to its core strength while also expanding its service offering, the company’s seen a 50% repeat ratio of its clientele—a sure indication the company is doing something right.

“It’s not unusual for us to do a major project and then help the same client on a smaller one,” said Everett. “I’m currently working with a client whose company is having financial problems. The company wants to balance ideas about how it can shrink its space. It’s a former client, so I’m helping the company out.”

Everett said the kind of follow-up relationship he has with that particular client is more the rule than the exception. After completing a larger job, clients often come back for smaller jobs, such as a series of retrofits or planning for the next big project, because of the success of the first interaction. Private Greens Farms Academy is a perfect example.

The Westport, Conn.-based academy initially hired AP Construction as a general contractor for its athletic facility. After changing architects, the school hired AP Construction as its construction manager to do a renovation, changed architects again, and hired AP Construction back as the construction manager to do additional projects in its upper-level school.

Now, the company is doing planning with the academy for minor projects this summer and setting the stage for a larger project to be initiated when the funds are raised. “Private schools are more dependent on donations and/or their ability to borrow money,” Everett said. “Right now, they’re seeing their enrollment and donations shrink.”

Balanced books
A number the company’s projects scheduled for the end of 2008 or the beginning of 2009 have been put on hold because of the unstable economy, but schools aren’t the only sector of AP Construction’s clientele feeling the change in the economy. Everett said hedge funds and financial institutions are hurting the most, and public schoolwork projects are either going ahead full steam or if towns aren’t passing referendums, are being put on hold.

“Public schools have a more positive outlook because the plans are shelf-ready,” he said. “If there were stimulus dollars coming from Washington, they could continue as they had in the past.”

For AP Construction, diversity has saved the day in light of such economic turmoil. Five years ago, the company decided to move into healthcare and has since worked on a number of assisted living facilities, outpatient facilities, and two hospitals in Bridgeport and Stamford, Conn. Healthcare is also one area the company has continued to expand on in the past few years as other industries have slowed or even stopped.

“Hospitals are more careful with how they spend their money today,” Everett said. “They’re looking to improve their facilities and be more competitive in their market, so there is still activity there. Healthcare has been the least impacted by the economy.”

Everett said the company has talked about further diversifying its service offering to handle the economic challenges, but there is a concern about encroaching into the territories of other business partners. “Some of the areas we might go to would force us to compete against people who help get us jobs. We have to be careful. You don’t want to bite the hand that feeds you.”

Niche player
AP Construction touts itself as a niche player in the construction industry. The company’s business plan focuses on the southwestern quadrant of Connecticut, from New Haven to Hartford down to the New York line. In addition to geographic boundaries, the company limits itself to commercial work but considers high-end residential projects.

“We focus on an area we feel we have experience with, can add value to, and can help our clients on as opposed to picking up anything,” Everett said. “We don’t do a lot of hard government bidding, for example.”

These direct focuses come, in part, from the expertise AP Construction has on its executive team. Andrew Ashforth, the company’s CEO, has been with AP Construction since the beginning. Tom Walsh, senior vice president, has years of expertise in managing large projects and handles the company’s estimating and purchasing departments. David Breidenbach, vice president of operations, brings expertise gathered from working around the country. Sharon Bone, vice president of financial reporting and administration, has worked in the industry for more than 25 years, and Everett, who has been with the company for 15 years, has a background in design and development.

“The average tenure for our executives is 14 years, estimators is nine, project managers is five, and superintendents is eight,” he said. “There is a lot of longevity here, and a lot of people have worked with each other before, so it helps when we put project teams together that people are familiar with each other.”

Over the years, the company has continued to invest in its people by offering classes, helping employees earn their LEED certification, and training on safety. Everett said the company’s philosophy is to keep employees for a long time and continually train as opposed to churning people in and out like the competition.

“We’re not in there trying to squeeze an ounce of blood out of every stone,” he said. “We’re a well-financed, mid-sized company focused on geographic and market type, and we provide a high level of executive involvement with a deep level of expertise.”