VCC Adjusts to Post-Recession Construction Market

by George Waldon  on Monday, May. 28, 2012 12:00 am  

The VCC staff numbers 220 now after a 10 percent increase in hires during the past six months. Offices in Tampa, Fla., and McAllen, Texas, have joined the company's lineup of regional locations that include Atlanta, Dallas, Phoenix and Irvine, Calif.

"We're seeing things turning," Alley said. "We want to position ourselves so we're ready to go."

He said upstream activity in the construction pipeline was casting a favorable light on future business prospects.

"A lot of architects, engineers and land surveyors are busy," Alley said. "That's a good sign around the country. You have to look at a project before you build it."

Higher equity requirements from lenders have made it tougher for developers to borrow money and start projects. To help make deals happen, Alley has brought additional money to the table through Bedrock Commercial Partners LLC of Irving, Texas, where his son Derek is acquisition manager.

"Some clients ask us to be an equity partner," he said. "We don't want to compete with our customers, and we're very conservative in what deals we do [as a family]."

While VCC is overseeing the construction of Autumn Woods Apartments in west Little Rock, the Alleys are investors in the project with Prescott Realty Group of Dallas through Bedrock.

Bedrock also is an investment conduit to convert Fayetteville's Cosmopolitan Hotel into The Chancellor, with Ike Thrash, president of Dawn Properties Inc. of Hattiesburg, Miss.

Sam Alley is well aware of the risks posed by a construction company investing in its own book of projects. Sizable equity stakes in Georgia, Florida and Texas projects that blew up during the S&L crisis caused the demise of Little Rock's Pickens-Bond Construction Co., where the founders of VCC all once worked.

Pickens-Bond was the 71st-largest contracting firm in the nation in 1985, and Forbes ranked it the 365th-largest private company with revenue of $300 million and 1,000 employees. When it filed for bankruptcy in the spring of 1987, Pickens-Bond listed $80 million of debt and $15.9 million in assets.

"Our construction is purely construction," Alley said. "We learned what can happen from the Pickens-Bond days."



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