JC Beal performs new construction, historical renovations, tenant improvements and complex facility projects, among other projects.

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As the United States continues to scuffle through what some experts describe as a recession, Michigan’s economy has taken one of the toughest hits. This has encouraged the contractors in the state – like JC Beal Construction Inc. in Ann Arbor – to look at geographic expansion to remain profitable.

“The market is pretty weak generally,” President Fred J. Beal says. “We have had some discussion about broadening our scale to states with different economics than Michigan. It might be better now, but it might be worse next, and then we’d still have Michigan when it came back.”

Eugene Kurtz founded JC Beal in 1962 and Jim Beal, one of the company’s original employees, took over when Kurtz retired in 1978. Today, the company is in its third generation of Beal family ownership and performs historical renovations, tenant improvements, new construction, complex facility projects, downtown rehabilitations and preconstruction services.

JC Beal has a satellite office in Detroit. The company is now under the umbrella of The Beal Group, which includes Beal Properties property management, Beal Inc. demolition contracting, Burns Lawn Care and Landscaping, Burns Janitorial Services, and the Historic Equities Fund.

Beal took time to speak with Construction Today recently about JC Beal’s pre-development services, the company’s relationships with subcontractors and the work it has performed for Google Inc.

Construction Today: When did the Beal Group get involved in so many other services beyond construction management?
Fred J. Beal: That’s actually accelerated since 2002. A lot of the impetus for that initially was some development projects my brother and I own outside of the construction company. Separately from our own work, my son Stewart started a landscaping business in middle school by starting to mow neighbor’s lawns and never quit until he had 250 customers. From there, we have diversified into different activities. We are active in property development and management, mostly historic office product and small apartment buildings, and Stewart started a demolition and abatement company in January 2006.

CT: Are there any recent company developments you can discuss?
FJB: One of the areas that we talk about as an expertise here is our participation in pre-development and preconstruction services for urban projects. We’ve combined services in our organization – with one person dedicated to this – to do things like historic tax credits, Michigan business tax credit and brownfield tax credits. We’ve been active on this level for about four years.

We started to do this kind of work to support projects already under contract, but we do provide them as separate services to some of our clients.

From the perspective of a fee-based service, it creates minimal volume. But it does support 25 to 30 percent of the construction that we end up doing.

CT: How would you describe your company’s relationships with subcontractors?
FJB: Most of our work is done under [a] construction management format, and we’ve also entered into owners’ representative agreements for about 15 or so buildings. This is an unusual scenario, under which we essentially become an extension of the owner’s staff, providing advice to the owner and negotiating on their behalf.

In either case, however, we’ve been able to establish a great subcontractor base, and work with a lot of the same people over and over again.

Once we’re established in a new area, we use the same people regularly. When we are a little further away, we start over. We’ll advertise our projects early and promote them so people are aware of the projects before we need their bids and so we can make sure they are a good fit for the project.

Currently, our geographic area is not that great, though, so we’ll usually know someone in the transaction. As such, we will ask the folks we know if they can identify contractors we can check out in a new area.

CT: What distinguishes JC Beal’s work from the competition?
FJB: In the redevelopment market, we are not getting the traditional competition we get elsewhere. Partly it’s that a lot of the clients need more services than our competitors offer. If we help the client’s on the path to their redevelopment with our early predevelopment and preconstruction services, it usually turns out that there is no competition for the construction work itself. It also helps that we are well known in this area of work, so we often get the first call. One of the things that’s happening in the industry though is that a lot of non-construction business like accounting and property management firms are starting to offer construction services. Most of these firms don’t run construction on the ground like we can, so in many cases we work with them to do the same job anyway, with them as an owner’s representative.

CT: Please describe a recent project.

FJB: We’ve done two significant projects for Google in Ann Arbor. For the first project, we had to get them in 100 days from the day that they called. We assembled a design build team and met their deadline. For the second, larger project we renovated 84,000 square feet in an older downtown bank building for Google in a short period of time. We ran it in three phases that were 10 weeks each, and it took from January to September in 2007.

CT: What set this apart from other jobs?
FJB: The pace of the project didn’t start with construction. We compressed everything. Creating a multi-tenant building out of a single tenant building created some additional headaches related to sprinklers (there were none), fire separation and multiple code update issues.

CT: What were any challenges of the project, expected or unexpected?
FJB: The time compression issue and the intensity of the management required surprised us. We added personnel to the job to make sure things were smooth for the other tenants because it was a little more intense project than we expected going in.