Clayco

Source: Construction Digital

Date :31/10/2007 04:56:01

The fuller service

The Mid-West may be its home base but Clayco, Inc., provides full construction, architecture, interior design and real estate services to clients across the country

Written by Ruari McCallion and Produced by Chris Culkeen

When Bob Clark founded Clayco, Inc., about a quarter of a century ago, he didn’t have much direct experience in construction. That lack of background proved to be beneficial to his clients, because he wasn’t burdened with the perceived wisdom of the industry – the ‘that’s the way it’s always been done’ style. As a result, he developed ideas and an approach that set Clayco apart.

“Bob Clark began out of a trailer, getting into any work he could. After a year or two, he realized how cutthroat the business was and determined to offer services in a more comfortable, open way,” said Kirk Warden, Clayco vice-president. “He wanted to provide clients with a single point of response and, through being open, to remove any worries of corruption or dishonesty. That approach was rare at the time.”

The approach was effective. Clayco developed into a design-build provider, based around finding the best fit, rather than going for every development offer, and staffing each project with the right people. It may seem obvious now but it wasn’t widespread back then, when the tendency would be more ‘win the contract and we’ll sort the problems out later’.

“Over the past 10 years, the Clayco philosophy has helped us to blossom into a true, full service design-build company,” Warden said. The full service includes architecture and both interior and graphic design, through Forum Studio; real estate services, through Clayco Realty Group; and Concrete Strategies, itself a full service structural concrete provider.

Those are the resources that have built the company into one of the nation’s largest, privately owned real estate, architecture and engineering, design-build and construction firms. Its organization is structured to deliver qualified and knowledgeable staff and resources, effectively, quickly and responsively.

Divisions rule

“Clayco has five business units: Institutional; Industrial; Residential; Corporate; and Financial,” he explained. “The Institutional division, of which I’m vice-president, specializes in healthcare, higher education, and life science clients. It deals with healthcare, laboratory, scientific and technical and university buildings. The Financial division has niche clients, like small banks and credit unions. It is a specific market strategy that the group has followed for years.

The Corporate division caters to Fortune 500 companies, that may want a campus environment, for example – something that reflects their corporate culture and image.” The Residential division is focused on condominiums and multi-use developments, rather than individual homes. The Industrial division does what it says on the label – it works with industrial clients including manufacturing and distribution. One thing the divisions of Clayco are not is silos. Clayco embraces a free flow of information, resources and know-how from one business unit to the others. “Our approach is client-driven. The Institutional division may get involved with a development for a corporate client if, for example, it needs a laboratory; such work lends itself more to the Institutional group.”

Full spectrum offering

Clayco is a national company that originated in St Louis and now also has major offices in Detroit and Chicago. Driven by client need, it established Clayco Realty, which brings the expertise and resources of all of its divisions together and extends them, into financial solutions and development, in providing a full-spectrum offering.

“Clayco’s real estate development activities started some 10 years ago,” said Tom Schroyer, principal of Clayco Realty. “We had to structure ourselves with care, in order to avoid perceived competition in certain markets with our clients. We undertook a lot of joint ventures and continue to work in that way, as well as providing a number of other services. We’ve been involved in the development of over 4,000 acres of land over the past decade, representing over 15 million square feet of space and in excess of $1 billion in volume.

We have land developments in Missouri, Illinois, South Carolina, Chicago, New Mexico and develop-design-build-lease projects all over the country. We’re just finishing a deal in NE Pennsylvania for Johnson & Johnson, covering 1.3 million square feet and are building a 600,000 sq ft facility for Payless ShoeSource in Dayton, Ohio. We’re actively developing around 3,000 acres of land currently and are generally working on 5 to 6 million square feet of development deals at any given time.” As a design and build developer, one would expect the company to have a large order book and to have a portfolio of impressive projects behind it. But Clayco Realty brings something more to the table. For starters, it’s a different type of design-build developer from the mainstream.

“A lot of competitors are real estate investment trusts and are, in effect, pure developers. Many don’t have the in-house resources of design that we have, in the shape of Forum Studio. Nor do they have full construction, engineering and site selection, plus all the other services modern developments need, all under one roof. There are other companies that do what we do but I can’t think of many that have the structure and the machinery to provide all these services on a large scale,” said Schroyer.

Whatever you want, wherever you want it

One area that has developed into an important service arm is site selection. Businesses looking for new facilities have, essentially, three choices: they can find something someone’s already built and move in; they can ask a developer to build something for them; or they can come to Clayco and ask them to come up with the best solution. It will research location, incentives and tax regimes – and advise on the best structure to optimize gains, including structuring sales, acquisitions and disposals to minimize or eliminate tax liabilities.

“With our national capabilities, we’re able to negotiate incentives, advise on where to locate and we have credibility with state and local governments. They know we do a professional job and they know we’re bringing investment and employment,” he explained. “Our clients have different needs and we can create the right financial package for them.

We have access to a lot of different capital sources, for different transactions – outright purchase, permanent debt or equity structures. We can develop a building and lease it to our clients for an appropriate length of time, prior to purchase – the timing of which will be the best to gain tax-free exchanges on disposal of previous locations.”

Each state has its own nuances, its own legislative framework and its particular agendas for attracting investment. Clayco knows what they are – which will save a lot of time in research. It knows how to structure financing and tax planning. It can design the building, both exterior and interior, lease it and dispose of your old property – or find a pre-built and fit it out to your purposes.

And, lest we forget, they’ll even build it for you, if you want! “We look upon ourselves as partners to our clients. We put great effort into understanding their needs and priorities and work together, in an open way, to provide the ideal development and accommodation solutions.”