March 8, 2019

Compass Construction sets its sights on the future with new management

Image from Urbal Architecture [enlarge]

Compass will break ground this month on Auburn Town Center, a 226-unit apartment building next to Auburn Transit Station.

New management at Compass Construction will stick to its founder's bearings: integrity, collaboration, employee opportunities, value, innovation and making work fun.

That's what the late Ken Coleman followed when he started the company in 1998 in Seattle, according to new President Frank Stauff.

Coleman grew the company to over 120 employees before handing the reins to longtime employees Dan Selin and Pete Anderson in 2014. Selin and Anderson retired at the end of 2017, leaving Bob Strum in charge until he left last December.

Stauff, a former vice president, has been at Compass for about three years. Before that, he owned a construction and development consulting firm coming out of the Great Recession.

Stauff was a project manager for Opus Northwest going into the recession. In his five years at Opus, he learned about the development side of construction. Out of college, he spent nine years at McCarthy, leaving as a project manager.

Stauff said he left general contracting after the recession and swore he wouldn't return. But he later met Selin and Anderson. “I was really impressed in how they ran their projects,” he said.

Ryan Ames and Steve Ulrich round out the new management at Compass, which relocated to Kirkland a few years ago.

Ames is senior vice president, overseeing project management, training and professional development. He has been with the company for seven years.

Ulrich is vice president and general superintendent, in charge of scheduling, safety, quality control and field personnel. “He's the guy that brings reality to the team,” Stauff said about the 11-year employee.

Challenges

The recession was tough on Compass, which saw its staff shrink to eight in 2008. Stauff said the company was hit hard because it was mostly building private and multifamily projects, which dried up during that time.

But Compass grew quickly coming out of the recession, with Selin and Anderson bringing in a cadre of young project managers and later Stauff to add experience. The company now has 125 office/management staff and 75 in the field.

Stauff said they have been training and promoting the young workers from within the company. “They may lack experience but you know what you've got,” he said.

Photo from Compass Construction [enlarge]

New leaders at Compass, from left: Ryan Ames, Frank Stauff and Steve Ulrich.

Selin and Anderson established a new shareholder group in 2016 that included Stauff, Ames and Ulrich, as well as 14 junior shareholders. Selin and Anderson remain on the board and own much of the company. The 17 new stakeholders come from all departments — estimating, accounting, project management and field supervision — and should own the entire company by early 2021.

Stauff said the mix of shareholder ages will ensure a gradual turnover of stock as leaders retire and younger owners step into leadership roles. And projects now have an extra level of commitment because clients are working with teams that have two or three shareholders on them, he said.

Compass is still doing a lot of multifamily projects, with a focus on market-rate apartments and senior housing. Stauff said demand for high-end apartments in downtown Seattle and South Lake Union may have softened, but it's still strong for market-rate and senior projects.

Stauff said the flight to affordability has led to more multifamily projects on larger and cheaper parcels near light rail spurs that are easier to build on and have less-restrictive building codes. An example he gave is most projects in the Seattle core have more expensive below-grade parking while projects in the outskirts have surface or above-grade parking.

Compass will break ground this month on Auburn Town Center — a 226-unit market-rate apartment building next to Auburn Transit Station for Pillar Properties and Teutsch Partners. The 297,078-square-foot, seven-level building will have 253 parking stalls on the first and second floors, some retail and live/work on the ground floor, a landscaped courtyard and rooftop deck. Opening is set for March 2021.

Compass is also close to starting a 214-unit apartment building off Fauntleroy in West Seattle for Legacy Partners.

In Redmond, the contractor has two multifamily projects underway and another starting in May, all close to future light rail lines.

New markets

Compass is branching out into hospitality and will soon start a 125-room Cambria hotel in Sound West Group's Marina Square waterfront development in Bremerton. It also is looking at low-income housing and has picked up some work in student housing.

Stauff said the company had $215 million in volume last year and will have about $200 million this year. It has been averaging $225 million over the past three years and has 12 to 14 projects going at a time.

“Our goal is to stay in the $200 million to $225 million range,” he said. “More doesn't necessarily mean more.”

The company also is expanding its reach in the Puget Sound region as far north as Marysville and as far south as Puyallup.

In 2017, Compass had two incidents with lines snapping on tower cranes and a third incident where it was fined by the state for getting a crane too close to power lines without proper safety precautions.

No one was hurt in those incidents, which motivated management 18 months ago to hire two safety directors and staff work crews with safety representatives. The result? An EMR of .533, which Stauff said is the lowest in Western Washington and second lowest in the state.