Neenans march to different construction drum

David and Jim Neenan in charge of inventive Fort Collins company

FORT COLLINS — If it were not already in existence, David Neenan might have invented the box just so he could step out of it.

Neenan purchased a struggling general contracting firm in 1973 and built it into a full-service development, architectural and construction firm earning $200 million by 2001.

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Much of that success he attributes to a different way of thinking that’s led to a different way of doing business.

Traditionally, Neenan said, the construction industry is so segmented that it becomes inefficient.

So, about five years into his venture, Neenan took inspiration from technology companies that place research and development teams alongside manufacturing engineers to collaborate on projects. Today, the company provides everything from design and development to construction, all under the same roof.

“We don’t just build buildings,” Neenan said. “We develop plans, secure financing and we build.”

Coined “archistruction”

The company coined the term “archi-struction” to describe the full range of services it provides. Archi-struction integrates all aspects of development, financing, design and construction as a bundled offer.

“You have to have input in the first 20 percent of a project or you’re forever fighting the budget,” Neenan said, adding that 80 percent of costs are determined in the first 20 percent of design.

And it seems to be working. The archistruction concept cuts costs 15 percent to 20 percent compared to traditional methods, and projects are completed about 20 percent to 30 percent faster, he said.

“Anybody can spend a lot of money on a building,” Neenan said. “The key is to get as much value out of that building as you can.”

The archistruction concept is not the only unique attribute at The Neenan Co. Employees are also its owners and the company invests not only in professional development but personal development as well. There are weekly meetings with the “champions,” as project managers are called, and a fast-track program for young employees called the “Jedi” program.

Neenan said the Jedi program teaches young professionals the basics of how to do their jobs and works on developing emotional intelligence and taking responsibility for one’s career. “We understand that you know how to design,” Neenan said. “But when you get in a dispute, do you know how to get it out on the table and be able to move on?”

Hard-times survivor

Business in Neenan’s world is a continual learning process, and he says — as in life — the best lessons are learned by surviving the hard times.

“Last year was a very painful year for us,” Neenan said. Within a week’s time the company lost at least five major projects and revenues plummeted by half.

“To go from $200 million to $100 million is a real jolt to the system,” Neenan said.

The firm had established its niche in technology, manufacturing and office projects.

“High-tech stopped building two years ago,” Neenan said. “There’s no manufacturing going on and the office market is over-built.”

The company was forced to slash staff levels.

“At our largest we were over 300 people,” Neenan said. Today, the company employs about 150.

“We were absolutely, totally sick with where we were,” Neenan said. “It’s traumatic not only for the person getting laid off but the person doing the laying off as well. But those kinds of decisions allow you to live for another day. You have to protect the resources of the organization or you’ll have no organization at all.”

So the company regrouped and repositioned itself, moving into markets that were still active.

“We shifted into the medical, municipal and school markets,´ said Jim Neenan, David’s cousin and president of the company. “Previously, we had a lot of very large projects that generated a lot of revenue but weren’t very profitable. We were delivering construction like it was a commodity.”

The company now looks for a larger mix of different-sized projects and tries to secure the design, development and construction components. “We decided not to go into the hard-bid approach and concentrated on the design-build-delivery model,” he said.

Unlimited opportunities

Some of the company’s latest projects include the Dry Creek Medical Center in southeast Denver, the Panorama Medical Center in Golden, the Larimer County Fairgrounds, expansions at Atrix Laboratories and New Belgium Breweries, and a new ice rink at Fort Collins Epic Center.

While volume and staff levels are nowhere near the peak levels reached in 2001, revenues have returned to a growth pattern over the last eight months and the company expects to grow 30 percent to 40 percent in 2003.

The company is preparing itself for another big change when David Neenan steps away from the day-to-day operations, allowing his cousin to take over the helm in the next two years.

“I see the opportunities before us as unlimited,” Jim Neenan said. While nearly 75 percent of The Neenan Co.’s business is done in Colorado, the company is poised to expand its national reach and has projects under way in Utah, Arizona, Washington, Illinois and Georgia. “We’ll continue to grow the health-care side of the business and expand the municipal and school work,” Jim Neenan said.

“We’re continually looking for areas where we can add value for our companies,” he said. “In principle, it’s not unique at all, but in practice it’s very unique.”