Choate Construction Grows For The Future
To fully appreciate the selection of Atlanta-based Choate Construction Co. as ENR Southeast’s Contractor of the Year, consider the events of 2016—likely the most eventful year since Millard Choate, chairman and CEO, started the firm in the basement of his home in 1989.
Topping the list was the company’s bottom line. With total revenue of just over $1 billion, most of which came from projects in the Southeast U.S., Choate enjoyed a 35% increase from 2015, enough to vault 16 spots to 75th in ENR’s national Top Contractors ranking.
Choate Construction also collected its second consecutive ENR Best of the Best Projects award in the interiors/tenant improvements category with the 113,000-sq-ft conversion of an occupied office building into the high-energy Atlanta Tech Village to support technology-based start-ups.
And in December, Choate’s leadership surprised its 424-person staff with the implementation of an employee stock ownership program (ESOP), providing what the company says is a foundation for preserving its independent, innovative culture for the long term.
An integral part of that culture, says Millard Choate, is a long-standing willingness to take on virtually any project. That includes everything from churches and college housing to larger efforts such as the $95-million Jackson Healthcare corporate headquarters in Alpharetta, Ga., or the $50-million Wild Dunes Resort Hotel on Isle of Palms, S.C.
“With our numbers, people think of us as a big contractor,” Choate says. “Actually, it’s more the result of volume. Our average project cost is $10 million.”
Even so, he adds, “We really prefer the more complex jobs, as that’s when we’re at our best.”
President and COO Dave Priester, who joined Choate in 1993 to lead its expansion into North Carolina, adds that while the company’s portfolio is diverse, its client roster has remained relatively stable. Over the last nine years, he says, 84% of the company’s work has been repeat business.
“We’ve hooked up with some good clients,” Priester says. “They’re all growing, which means we’re able to grow with them.”
Clients include technology sales and marketing specialist Red Ventures, for which Choate has delivered nine projects, including the company’s four-building, 380,000-sq-ft headquarters in Fort Mill, S.C. Choate has also been active in the senior-living market, with projects such as the $31-million Aspire at Bridgemill in Canton, Ga.
And working with California-based Niagara Bottling, Choate has built 14 water bottling facilities measuring up to 600,000 sq ft across the U.S., the latest being a $36-million plant underway in Chesterfield, Va.
But even newcomers to Choate are impressed with the company’s capabilities. David Zimmerman, vice president of design and construction for Phoenix-based developer The Athens Group, says Choate ably handled the multiple logistical challenges associated with their first project together—the 158,000-sq-ft expansion of the Montage Palmetto Bluff resort in Bluffton, S.C.
The recently completed project called for integrating a 150-room hotel addition, a 16,000-sq-ft central services building and support buildings in and around an existing waterfront community.
“They readily adapted their schedule to ours, including changing the sequence so we could start using buildings ahead of original schedule,” he says. “They embraced whatever we asked of them, including fostering good relations with residents and figuring out an environmentally safe way to move material and activity around sensitive areas.”
Because many of the contractor’s clients must likewise demonstrate project value that will appeal to their own prospective customers, Choate’s proficiency in design-build, design-assist and other construction practices has proven invaluable in recent years.
“Phenomenal” is how Ken Beuley, director of development and CFO for the Keith Corp., Charlotte, calls Choate’s preconstruction services, which have been utilized for more than 10 million sq ft worth of projects over the past 20 years.
“They do a great job coming to a conceptual price that helps guide design and gets us to that target price,” Beuley adds.
Priester notes that the recent increase in lagged construction starts has added an extra degree of intricacy to the preconstruction process.
“It can be a challenge to reach the best number that gets the project going, then maintain those numbers until it actually starts,” he says.
Beuley also praised the accessibility of Choate’s leadership, recalling an urgent New Year’s Day call to Priester’s home to discuss a weather-related project scheduling issue.
“The issue had to be resolved within a week or else we’d miss our delivery,” Beuley explains. “Dave put the resources to it, and we got it done in time.”
Priester says the rapid response is indicative of the firm’s flat management style. “Our guys will dive in and help, but it starts with me and Millard,” he says. “If we aren’t willing to do it, it won’t happen. All levels of our firm are engaged.”
That sense of collaboration extends to the company’s subcontractors as well.
“They’ve always been good at communicating,” says Ron Sherrill, CEO of Charlotte-based fabricator SteelFab, who has worked with Millard Choate for more than 30 years. “Their approach is that everybody’s on the team, and let’s get to work. If something comes up, let’s fix it, keep going and work it out later. They are very fair to the owner, subs and A/Es.”
Although Choate’s expansion into the general construction market underlies the company’s growth, it has also maintained the interior/tenant improvement specialty practice that helped fuel the firm during the early 1990s.
“It allows us to offer more depth beyond base construction services, yet maintain our standing as an interior specialist,” says Steve Soteres, who heads Choate’s interior construction work. With many of the assignments focused on creating elaborate interiors for corporate clients, Soteres’ group relies extensively on Choate’s in-house virtual construction group to apply technology to fine-tune both costs and specifications.
Soteres cites one retail client that utilizes Choate’s laser scans and BIM point clouds to refine specifications for furnishing its interiors down to the most minute variances in floor levels. Utilizing that data, he says, “their fixture manufacturer can build display cases that fit perfectly.”
Choate’s early adoption of design and construction technology is the result of Millard Choate being “an ROI guy,” says Mike Hampton, chief administrative officer. “He committed to investment because he knew it would pay off in the end, and it has.”
Choate also enjoys a ready pipeline to other ideas through its involvement in The Citadel National Construction Group, a consortium of seven regional construction firms that shares best practices and other perspectives. Hampton characterizes the group as “a building advisory board of similarly-sized like-minded companies” that aren’t in direct competition with each other.
“Because we share the same cultures, we would refer a prospective client to any one of the other firms without hesitation,” he adds.
The Firm as Family
Choate Construction achieved numerous other accomplishments in 2016. The companywide EMR of 1.040 was complemented by a variety of safety awards, including recognition from the North Carolina Dept. of Labor for 1 million staff hours without a lost-time incident. Choate also continued its longtime support of the Cystic Fibrosis Foundation with three major events in its Atlanta, Charlotte and Savannah offices that raised nearly $360,000.
But the landmark 2016 event that will likely have the most lasting influence at Choate was the creation of the stock plan that makes the company 100% employee-owned. Priester says that while the plan wasn’t the easiest of the considered alternatives to put together, it was the only one that ensures long-term preservation of the company’s culture.
“We’ve seen other examples where a company is sold to a third party and becomes totally different in a few years,” he says. “We didn’t want that.”
Millard Choate is particularly heartened by the enthusiastic response to the new program among the company’s employees, particularly since they’ll now have a more direct stake in shaping its future direction and success.
“They’ve all become businesspeople,” he says.