Toughing it out allows contractor to build on hard times

Filed under: Real Estate |

The number of construction companies that survived Colorado Springs’ boom-bust cycles over the years are few. After 18 years in the Pikes Peak region, however, Copestone General Contractors has earned a secure place in the history books for its staying power and its steady growth.

Kurt Kaltenbacher, Copestone’s founder and president, arrived in Colorado Springs in 1985 – just in time for the 1987 real estate crunch. “My dad was stationed here in the military,” he said. “After I graduated from the University of Northern Colorado (with his bachelor’s and master’s degrees), I worked for seven years for an oil drilling outfit before moving to Colorado Springs. Two years after I got here, the savings and loan failures and Resolution Trust Commission (RTC) bailout/fallout forced most construction to a halt.”

Kaltenbacher’s pre-RTC memories were sweet. His company completed more than 250,000 square feet of tenant improvements on properties for The Schuck Corporation prior to the crackdown on runaway lenders.

“The future looked bright back then,” Kaltenbacher recalls. “Copestone also built the Tiffany Square Mall, which in the late 1980s was set to be one of Colorado Springs’ premiere shopping centers.” The economy proved too much for Tiffany Square’s owner, however, and the property sold with a number of liens attached. When Cardinal Federal Savings bought the shopping center in the early 1990s, Kaltenbacher says he received 95 cents on the dollar for his company’s work – far better than most general contractors fared. In fact, in 1990, he says, 75 percent of the builders in Colorado Springs left town. “We were ‘stayers’ and toughed it out,” he said, noting that he dropped to four full-time employees during that time.

Out of adversity, however, many positives did emerge. “Our relationships with city officials and the planning department strengthened. In an adverse economic climate, you have to demonstrate integrity or you’re flushed out.” In fact, belt-tightening in the early 1990s enabled the firm to compete more effectively as the market for new construction returned. “Low bids are often vital to winning a job. We were able to keep our overhead down during the lean times,” Kaltenbacher emphasizes, pointing to his firm’s financial stability. “Our subcontractors get paid when we get paid. Our payment reputation over the years is unblemished.”

Today, Copestone’s workload includes 40 percent tenant improvement jobs and 60 percent out-of-the-ground structures – 80 percent of which comes from El Paso County. The company’s newest projects include the 11,000-square-foot expansion of Country Club Shopping Center at Highway 115 and Cheyenne Mt. Blvd., a new $3 million Albertson’s grocery store at Union and Constitution, a $7.8 million town home project (56 units located east of Chapel Hills Mall), Pulpit Rock Church improvements, the new Colorado Springs Credit Union on Dublin, and five Diamond Shamrock remodels.

After more than six years of work to become an approved general contractor for Safeway stores, says Kaltenbacher, “They gave us a chance. Now we’re doing some of their new construction in in-line centers.” Copestone also partnered with K-Mart in early 2001 to gut a 78,000-square-foot Wal-Mart and remodeled it into the first regional prototype “Big K.” That project included a 17,000-square-foot addition and the new K-Café.

The company expects to continue to attract medical, retail, office and restaurant clients. Known for its medical projects, Copestone has completed 13,500 square feet of medical offices in Printers Park, a design/build office building for Colorado Springs Health Partners, and supervised the phased reconstruction of 8,000 square feet of interior hospital space in the Memorial Hospital Pediatric Intensive Care Unit.

Retail and office tenant improvements are another major Copestone focus – and have provided a solid revenue base for the operation. Kaltenbacher says he is proud to have remodeled office spaces for owners of the Plaza of the Rockies to accommodate the Drug Enforcement Agency, the FBI, and the former Dean Witter Colorado Springs headquarters. Copestone was also the general contractor for 8,300 square feet in the Social Security Building, Westar Media and for the former Holly Sugar corporate offices.

Copestone management watches changing commercial real estate trends carefully and regularly updates its business plan. “When tenant vacancies are low and occupancies are up, our tenant improvement business slows down,” he said. Conversely, when occupancies drop, movement in the market generates more need for remodeling office spaces. In this feast or famine environment, project diversification is vital.

With the recent closing of the Classic Companies’ commercial construction division, the CEO added three former Classic employees to his staff. One of the latest additions, Ron Davidson, now serves as a project manager for the firm – and brings a number of new business prospects to the table. The same is true of other real estate colleagues that Kaltenbacher has cultivated over the years. “All of our employees double as sales people,” he said. “We all work to make the business successful.”

His construction business isn’t the only thing that drives Kurt Kaltenbacher. His walls speak volumes about community service and dedication to his industry. In addition to awards for contributions to the St. Mary’s High School alumni association, Kaltenbacher sits on the Regional Building Department Board of Review which has regulatory oversight of the design and construction approval process.

The veteran commercial builder is also a past president (1999-2000) and current board member of the American Building Contractors Association (ABC) – as well as a member of ACCA, the Associated Commercial Construction Alliance (ACCA), which is comprised of architects, mechanical and professional engineers, mechanical subcontractors, interior designers, general contractors and other construction-related companies. “All of us – including our competitors – have a vested interest in the Pikes Peak region. Together we have the clout we need to get the city’s ear.” Kaltenbacher notes that through ACCA with help from members like Nor’Wood Development’s Fred Vietch, the organization has been able to assist the city in its recent revamp of the building approval process. “We’re working together, all of us, including the city and the Regional Building Department benefit.”

In his crystal ball, Kaltenbacher sees new construction tools emerging. “Technology has moved us forward like nothing else,” he says, referring to online construction news services and a proposed Regional Building Department online approval program that would streamline the approval process. “Our field employees are now linked to the office by telecommunications, and every job trailer has a phone, fax and computer,” he notes.

The builder does worry about the lack of trained craftsmen in the Pikes Peak region and about current insurance increases of 35 to 55 percent as future hurdles. Kaltenbacher and his son, Kory, who is learning to run a commercial construction company, face a growing shortage of skilled masons, carpenters, and millwork specialists, for example, as fewer high school graduates are entering the workforce. “The average age of a skilled craftsman is now in the middle to upper 40s,” he said, adding that Pikes Peak Community College stopped offering construction courses several years ago. “Trainees can make $10 to $15 per hour straight out of high school – and learn an ongoing trade. We often send employees to the Construction Industry Training Center in Denver to get the education they need.

“Whether we’re designing security and fire systems for a pediatric ward – or removing asbestos from an old building on a tenant improvement project, our clients rely on us to be on time, dependable and fair in our pricing,” Kaltenbacher says, referring to the Copestone mission statement. Perhaps that
‘s why, in an uncertain economy, this steady, customer service driven construction company is in an expansion mode, with plans to complete a headquarters office expansion later this year. After all, bolstered by financial stability, satisfied customers and an old-fashioned work ethic, Kurt Kaltenbacher knows there will always be new jobs.