JE Dunn Construction Group, Inc.

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JE Dunn Construction Group, Inc.

929 Holmes
Kansas City, Missouri 64106
U.S.A.
Telephone: (816) 474-8600
Fax: (816) 391-2510
Web site: http://www.jedunn.com

Private Company
Incorporated: 1981 as Dunn Industries, Inc.
Employees: 3,000
Sales: $2.3 billion (2005 est.)
NAIC: 236210 Industrial Building Construction; 236220 Commercial and Institutional Building Construction

JE Dunn Construction Group, Inc., is the Missouri-based holding company for a group of construction companies involved in the construction of multiunit residential, commercial office, healthcare, education, correctional, religious and cultural, data center, sports, and government buildings. Dunn also offers preconstruction, design-build, and construction management services. In addition to the flagship unit, JE Dunn Construction, Dunn's holdings include Atlanta-based RJ Griffin & Company. The acquisition of other construction companies has also allowed Dunn to establish Eden Prairie, Minnesota-based JE Dunn North Central; JE Dunn Northwest, with offices in Portland and Seattle; the Colorado-based Rocky Mountain unit with offices in Denver and Colorado Springs; and JE Dunn South Central, operating out of Dallas, Fort Worth, and Houston, Texas. Other offices maintained by Dunn are located in Charlotte, North Carolina; Myrtle Beach, South Carolina; Orlando, Florida; Nashville, Tennessee; Des Moines, Iowa; Topeka, Kansas; and Phoenix, Arizona. One of the largest contractors in the United States, Dunn is family owned and operated by the third generation of the Dunn family.

COMPANY FOUNDED: 1924

The company was founded in 1924 by John Ernest Dunn, Sr. He was born in 1893 in Kansas City, the son of an Irish railroad carpenter. An aspiring baseball player, Dunn scraped together a living in his early 20s as a semiprofessional pitcher. During the off-season he worked as a salesman for a Kansas City lighting supply company, Magee Electric. He bought into the business, then sold his interest to launch Dunn Electric in 1921. In the meantime, the young man had built a house for his family and sold it at a profit to satisfy his mother-inlaw, who did not like to see them living so far from her. After starting his own electric supply company, Dunn built two more houses for sale, and quickly decided to leave the electric business and devote himself to construction.

Dunn first made his mark by constructing the three-story Belleview Hotel to serve Kansas City's black community. A larger, second hotel followed, called the Booker T. Washington. These were speculative ventures, but he was soon building houses for clients. Disenchanted with homebuilding after some clients failed to make their payments in a timely manner, Dunn turned his attention to other types of work. He built a pair of Kansas City fire stations and remodeled three others. When the Great Depression of the 1930s dried up most private construction projects, Dunn managed to survive by landing government and churchrelated projects, such as an addition to Kansas City's General Hospital, employee housing at Leavenworth Federal Penitentiary, a chapel and dormitory for a women's college (Mount St. Scholastica), and a classroom building for Rockhurst College. The most important project of the 1930s, however, was the Police Municipal Courts building, which cost nearly $1 million. With its successful completion in 1938, it established JE Dunn as a firm capable of tackling large public projects, a number of which were being put up for bid as the government funded projects in an attempt to stimulate the economy. These jobs included new schools and public housing. During this period a second generation of the Dunn family joined their father. In 1938, after two years of college, Ernie, Jr., went to work for the company as a timekeeper, and after about two years he became his father's right-hand man.

Even before the December 7, 1941 attacks on Pearl Harbor brought the country into World War II, the United States was building up the military and the infrastructure needed to support a war effort. JE Dunn was already building housing for defense workers but with the United States' entry into the war, the amount of available work quickly escalated. With so many men called into the service, the company struggled to find workers. Ernie, Jr., was one of the men who joined the military, becoming a Navy aviator and flying more than 100 combat missions in the Pacific. A second son, William, also became a Navy aviator. While Ernie, Jr., was earning medals overseas, the elder Dunn was winning acclaim for his refusal to take a profit on an Army depot his firm constructed.

After the war the economy boomed and returning veterans began to marry and raise the baby boom generation. JE Dunn took advantage of a soaring demand for housing to build apartment buildings. It also continued to benefit from a continued stream of government and Catholic church–funded projects. In addition, the firm tried its hand at highway building in the postwar years, but in the early 1950s soured on the work, which offered slim profits, and ceased making bids.

After 25 years in business, JE Dunn moved into a new 7,000-square-foot headquarters-warehouse located in a less than desirable section of Kansas City because the frugal Ernie Dunn was able to buy the land cheap at a clearance sale. To gain some level of safety he leased a nearby building he had constructed to Brinks Inc., offering it to the armored car company at a cut-rate rent. It was around this time that Dunn's sons, Ernie, Jr., and Bill, took charge of the construction business, leaving him more time to develop and manage real estate projects, most of which proved successful. Moreover these ventures provided JE Dunn with plenty of construction work. Also in the 1950s the company continued to thrive on the building of schools, Catholic churches, hospital additions, and public housing projects.

In the early 1960s JE Dunn ventured farther and farther from the Kansas City area, mainly through jobs at colleges and universities, such as a new electrical engineering building on the campus of the University of Missouri–Columbia and a dormitory at Central Missouri State College in Warrensburg. More work came from Central Missouri State over the course of the decade as the school underwent a period of expansion.

DEATH OF FOUNDER: 1964

On the final day of 1964 Ernie, Sr., died, leaving a construction company worth about $1.4 million and various real estate investments. His estate was divided equally among his wife and four children, and Ernie, Jr., and Bill subsequently bought out the business interests of their mother and sisters. Bill focused almost all of his attention on the construction business, while Ernie, Jr., devoted a good portion of his time to real estate management. Regardless, they had been well groomed by their father to assume control, having been given increasing levels of responsibility in the previous 15 years.

COMPANY PERSPECTIVES

How do you explain a culture? Especially without sounding pretentious. Well, put simply, we live by the Golden Rule—in the way we treat each other, our clients and the communities in which we serve. We are fair and equitable in our dealings and respect the rights of others. We strive for error-free workmanship and continually look for ways to improve results. It may sound a little old-fashioned, but this approach is the cornerstone of the JE Dunn legacy.

The Dunn brothers were not always in complete agreement on how to do business, however. In the early 1970s they had a falling out over the building of a Kansas City amusement park, Worlds of Fun. The company was able to save $100,000 on the project. When Bill returned money to the clients, money which JE Dunn had every legal reason to keep, Ernie, Jr., was furious. By this point, the brothers had also grown apart on a number of issues, so that in 1973 they each hired attorneys to determine the best way to make a split, a problem made difficult because both were interested in running JE Dunn. Ultimately Bill set a price and gave Ernie, Jr., the option of either buying or selling. He opted to sell and in 1974 Bill Dunn became the sole owner. His brother then took some of the company's superintendents and launched a new construction firm, JE Dunn Jr. and Associates, which went on to enjoy success.

Following the buyout, JE Dunn was in debt, resulting in a negative worth of $1.1 million. To make matters worse, the United States was mired in a recession and many construction projects were shelved. JE Dunn managed to carry on, due in large part to three major, high-profile contracts it won: The Truman Medical Center, the San Francisco Towers Condominiums and Santa Fe Apartments, and Corporate Woods, an office park in Johnson County, Kansas. Major hospital projects followed, so that by the end of 1977 Bill was able to pay off his brother two years early. With the construction company enjoying success, Bill had been able to raise some of the money needed by selling off real estate investments, which also allowed him to focus all of his attention on the construction business. In the final year of the 1970s JE Dunn enjoyed revenues of $69.1 million, an amount that made it the 250th largest U.S. contractor.

FORMATION OF DUNN INDUSTRIES: 1981

Dunn Industries was established in 1981 as a holding company for JE Dunn, the Dunn Family Foundation, Dunn Realty, and Dunn Equities. The country was again mired in a recession, creating difficult conditions for the construction industry. Not only did Dunn work its way through these challenging times, it also took steps to become a regional contractor, an idea that grew out of an opportunity to build a Tulsa, Oklahoma, office park, which in addition to office buildings would include a luxury hotel and several garages. In order to become a regional player, JE Dunn officials began searching out a third market. St. Louis would have been a natural choice for a Missouri-based firm, but business conditions appeared too difficult. Instead, JE Dunn looked to Denver, a booming market and an area where some of its clients did business as well.

By the mid-1980s, JE Dunn became the 108th largest general contractor with $185 million in revenues. To contend with a slump in both Tulsa and Denver in the mid-1980s, the company was fortunate to win Kansas City school contracts, during a period of expansion that lasted into the early 1990s. It was the result of a court order that forced desegregation on the community and called for busing. Faced with the mass exodus of children to private schools, Kansas City school officials elected to spend money to improve the public schools in the hope of curtailing the loss of students. The Tulsa office, in the meantime, was closed after just four years, and although the Colorado operation hung on a bit longer, it too ultimately closed. Unable to find new opportunities in other cities, the firm looked instead to new types of construction projects, in particular, correctional facilities. Even this new source of revenue, however, could not make up for the loss of business from the drop-off in commercial building caused by 1986 changes in tax laws that put an end to the abuse of certain tax shelters that had created an oversupply of buildings, essentially funded by investors looking to lose money in order to save more money on their taxes. JE Dunn also had to contend with a recession of the early 1990s. Revenues fell to $155 million in 1990, as JE Dunn slipped down the rankings to 247 among U.S. general contractors. Nevertheless, the company was more diversified than it had been during previous downturns in the economy and was able to bounce back stronger and faster than before.

KEY DATES

1924:: Company is founded by John Ernest Dunn, Sr.
1964:: Dunn dies.
1974:: William Dunn buys out brother.
1981:: Dunn Industries, Inc., is formed as a holding company.
1992:: Dean L. Wichter Construction Company is acquired.
1999:: William Dunn retires as Dunn's chairman.
2000:: R.J. Griffin & Co. is acquired.
2006:: Company changes its name to JE Dunn Construction Group, Inc.

Dunn was soon ready once again to try expansion. Instead of opening an office in a new market, it elected to gain entrance by buying into an established company. In 1992 it bought a 51 percent stake in a Minneapolis firm, Dean L. Wichter Construction Company, a general contractor that had been in business since World War II. In 1994 Dunn acquired the rest of the company, which later took the name JE Dunn–North Central. In between these transactions, Dunn established itself in the Pacific Northwest by acquiring Portland, Oregon-based Drake Construction Company, a general contractor as old as JE Dunn, generating some $90 million in revenues each year. In 1999 it took the name JE Dunn–Northwest and two years later opened a Seattle office.

With the economy picking up steam in the mid-1990s, JE Dunn's revenues grew at a sharp clip to more than $400 million in 1995. Business continued to prosper in the second half of the decade, setting the stage for further expansion through acquisitions. In the late 1990s the company acquired Houston-based C.E. Ward Constructors, which later became known as JE Dunn–Southwest. Next, Dunn returned to Colorado by acquiring a Colorado Springs-based general contractor, Hughes/Smith, Inc.

Dunn ended the 1990s with annual sales of $1.1 billion in 1999. Expansion continued in the new century. Early in 2000 Dunn acquired Atlanta's R. J. Griffin & Co. Although a young venture, established in 1985, it brought with it offices in Charlotte, Nashville, and Orlando. As a result, Dunn operated 14 offices across the country, generating revenues of $1.6 billion, making it the 25th largest construction company in the United States. There were also changes taking place in the management ranks at this time. Bill Dunn retired as chairman of Dunn Industries in early 1999 and, in March of the following year, turned over the chairmanship to son Steve Dunn. Brother Terrence P. Dunn remained the firms' chief executive officer, and had served as president since 1986.

With the third generation firmly in place, Dunn continued to grow in the 2000s. More than just a regional player, Dunn was becoming a national construction company. In keeping with this transformation, the company launched a national marketing and branding effort to build up the Dunn name. Hence, Wichter Construction became JE Dunn North Central, C.E. Ward Constructors became JE Dunn–Southwest, and Hughes/Smith took the name JE Dunn Construction and became the Rocky Mountain division. By this time, a fourth generation of the Dunn family was also coming up through the ranks to continue the family leadership of the company. With construction volume totaling $2.3 billion in 2005, Dunn ranked 19th among the top 400 contractors in the United States; sixth among the top 50 general builders; 12th among the top 25 in commercial offices; fifth among the top 25 in healthcare; fifth among the top 25 in corrections; and third among the top 20 in religious and cultural. As part of the branding strategy the company changed its name to JE Dunn Construction Group, Inc., in 2006.

Ed Dinger