Classic Construction specializes in building and developing high-quality and affordable communities.

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Although some may see Classic Construction Ltd. as merely a home developer, co-owner Murray Prokosch says the company also makes substantial contributions to its communities. “We’re a company that likes to help people get into housing,” he says.

Based in Medicine Hat, Alberta, Canada, Classic Construction focuses on building and developing high-quality and affordable communities locally and in High River, Alberta.

Prokosch founded Classic Construction with co-owner and longtime friend Gerald Pahl in 2002. The two met while working for a developer of senior housing and had gained 50 years of combined experience in the construction industry. After five years, Prokosch and Pahl struck out on their own and started Classic Construction.

Today, the company says it is the No. 1 homebuilder in Medicine Hat, and operates from its 24,000-square-foot facility, which features offices and granite and cabinet shops. Prokosch and Pahl share ownership in Classic Construction with their wives, Margaret Prokosch and Rose Pahl.

Lending a Hand
Classic Construction began focusing on further helping homeowners when one of the company’s initial projects sold quickly and the homeowners were so happy, Murray Prokosch says.

Classic Construction has strived to help its customers overcome the obstacles in buying homes, Prokosch says. He explains that these are:

• The cost of housing
• Down payments
• Monthly payments
• Qualifying for mortgages

 To help its owners cope with the cost of housing, Classic Construction strives to provide homes that are both creative and cost-effective. “When people think ‘a housing,’ they usually think small units [that are] poorly built,” he says.

Instead, Classic Construction provides units that have the same level of features as a high-end home, Prokosch asserts. For instance, the company’s two- and three-bedroom units are sold complete with granite countertops and fine appliances. “We put the same quality in,” he states.

The company, by maintaining many trades in-house, manufacturing its own cabinets and granite countertops, and as sourcing products from around the world, is able to control costs in a hot economy that is subject to escalating costs for all industries.

To aid its customers with their down payments, Classic Construction will give its owners a portion of their payments back. When it comes to the monthly payments, “We take part of our profits and put it aside, and we pay it back to the people over a monthly basis,” Prokosch says.

In addition, Classic Construction helps its clients qualify for their mortgages by getting “the banks and lending institutions to recognize the monthly subsidy when they qualify the monthly incomes,” he says.

“[On] one of our projects, the normal [qualifying] income would be $72,000 per year. [We] bring that down so it would be $42,000 per year.”

Setting Itself Apart
Many builders of affordable housing maintain their profit margins by offering low-quality homes, but Classic Construction’s approach sets it apart, Prokosch says. “We’re the only guys in Canada doing these types of programs,” he declares.

Most developers are not anxious to give back their profits, he explains. However, Classic Construction manages to do so “through volume,” Prokosch says. “We’ll figure out what’s our cost, how much profit do we need, and what’s the appraised value on that product in the market.”

“The difference between what the appraised value of the home [is] and what we need to cover the cost of construction plus a reasonable profit margin is what we give back,” Prokosch states. “We just take a very reduced margin.”

Gratifying Work
Prokosch says his work at Classic Construction has been gratifying, as he has helped many people move into homes where they can raise their families.

“We’re seeing people buying these houses that normally wouldn’t be able to own a home,” he says. “We want to help people into ownership so they can gain equity.”

He notes that Classic Construction has witnessed several emotional reactions from clients, who are grateful for the company’s work. “[We have] seen a lot of tears shed,” Prokosch says.

Despite the fact that the company does very little of its own marketing or advertising, Classic Construction has enjoyed recognition for its work, Prokosch says.

For instance, the Canada Mortgage and Housing Corp. (CMHC), a federal mortgage insurance agency, has recognized the company’s Classic Attainable Ownership Initiative model as a best practice to be used elsewhere.

In 2005, the Alberta government honored Classic Construction for providing sustainable housing initiatives in Medicine Hat. Former Minister of Alberta Seniors and Community Supports Yvonne Fritz and Municipal Affairs Minister Rob Renner gave the company a chrome shovel to commemorate this recognition.

Additionally, Prokosch himself has received offers to speak at numerous conferences. He has addressed to representatives of the cities of Edmonton, Alberta and Lethbridge, Alberta, as well as the Alberta Housing Coalition, the Alberta Municipalities Association and the CMHC National Conference on Affordable Home Ownership.

This January, the company also reported that it made Alberta Venture magazine’s Fast 50 List and was named one of the province’s Growth Champions for 2008.

The list divides companies into two ranked categories: those with sales under $20 million and those with sales over $20 million.

“While Classic Construction reached the No. 8 spot in last year’s under $20 million list, this [year’s] ranking marks a significant jump to the over $20 million category in the No. 10 spot,” the company reports. “A spot which has the additional honor of being the highest rank achieved by any company outside of the major centers of Edmonton and Calgary, and the only company in Medicine Hat to make either list.

“With a three-year revenue increase of 206 percent and assets totaling more than $27 million, Classic Construction created their unprecedented growth by offering individuals a means of affording their own home with costs that are comparable to renting,” the company says.

In addition, the company earned praise when the Canadian Housing & Renewal Association celebrated its 39th Annual Congress at its convention in Calgary, Alberta, in May 2007.

At the event, Minister of Human Resources and Social Development Monte Solberg cited Classic Communities “as an example of what a successful private sector company is capable of accomplishing for attainable ownership in Canada,” the company says.

Project Pride
Although affordable housing accounts for 70 percent of Classic Construction’s business, “I’m proud of everything we’re doing right now,” Prokosch says, noting that the company’s work also includes high-end condominiums. “It’s so head and shoulders above anything that’s been done.”

The company is now developing Norwood Grande, a four-story condominium building for seniors in Medicine Hat, Prokosch says. He notes that the $45 million project will feature 179 units and is located in a stunning location, overlooking a golf course.

In addition, “We’re doing a project in Canmore, [Alberta,] in the Canadian Rocky Mountains,” Prokosch continues.

While the average price for a house in Canmore is expected to reach $1 million in 2008, Classic Construction is working in concert with the town to provide affordable and perpetually attainable units to residents.

For the town, “We’re doing about 218 units in the Canadian Rockies,” he says. “That’s a project that the town has been working towards for the past six years, [but] is now coming to fruition with our involvement over the last six months.”

The Canmore project will also see the company’s first entry into green building. At the moment, “We’re having ongoing meetings to go green totally,” he says. “We’re going to try to put together what areas are best [for us] when going green.

“There’s lots of different things you can do,” he continues. “We’re looking at starting our own plants for structural insulated panels.”

Strong Loyalty
Classic Construction nurtures strong relationships with its subcontractors, Prokosch says. “Most of our subtrades have been with us since the day we started,” he declares.

In addition, “We have a mandate in our company; we pay every bill in 30 days,” he continues. “When others have had trouble getting subtrades, we haven’t had a problem.”

Classic Construction says it also enjoys staff loyalty.

While the company originally started with five people, “We’re at 100 [now],” he says, noting that it has very little employee turnover.

The company nurtures this loyalty by paying “a little on the higher end within the marketplace,” Prokosch says. “We [also] give our staff a lot of flexibility in their own departments.”

He explains that its staff often is allowed to make their own decisions, while “we’re there to help them when needed,” Prokosch says. “[We] give them a lot of freedom to do their own thing.”

The company’s staff includes CFO Kirk Wright, a former banker, and Construction Manager Darcy Stone. “[Stone] has 25 years of experience in multifamily [housing],” Prokosch says.

Prokosch also names Vice President of Operations Trevor Lind, who has 20 years in construction, and Vice President of Corporate Development Jace Anderson.         The company also employs several members of Prokosch and Pahl families, including Prokosch’s daughter, Sales Associate Trisha Prokosch, and his son Jason Prokosch, who is the company’s marketing manager.

In addition, Prokosch’s niece, Laura Prokosch, assists in the company’s sales department, while Rose Pahl is the manager of the design center, and her daughter, Stephanie, is the operations manager of the cabinet shop. Margaret Prokosch also designs many of Classic Construction’s floor plans.

Having family members involved at Classic Construction has been a benefit, Prokosch says. “Family members tend to take ownership of what they’re doing,” Prokosch says.

Growing Strong
Classic Construction intends to expand its reach. While the company has primarily focused on the towns of Medicine Hat and High River, it also wants to bring its services to residents of Brooks, Alberta. “Classic wants to do this for people throughout western Canada,” the company says.

In addition, “We’re going to be expanding into Saskatchewan,” Prokosch predicts, adding that the need for attainable housing in the province has grown.

“The government has been talking to us about coming in there. The house prices have jumped out of reach for a big percentage of the population.”

Classic Construction also has acquired a new 40,000-square-foot facility that will expand on its current location in Medicine Hat, Prokosch says.

“We’re looking to be able to shorten up our time frames for construction,” Prokosch says. “[By doing so,] we should be able to increase our volumes.”

Classic Contributions
Classic Construction benefits charitable organizations, with its Classic Communities Charitable Foundation. The foundation manages the subsidies that are provided to the purchasers with interest income earned on these funds to benefit various charities and other worthwhile organizations, such as minor sports teams.

It also participates in fundraising, with  recent efforts benefiting the local Crime Stoppers organization. “Through the hard work of our employees and support from some of our suppliers, we ran a couple ‘Chuck-A-Puck’ events at the local major junior hockey games that raised over $7,000,” Prokosch says.