Modular construction drives DeSoto management firm's success desoto



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BUSINESS

Columnist

Cheryl Hall

Saturday, July 3, 2010


Modular construction drives DeSoto management firm's success
DESOTO – Gail Warrior wants people to think inside the box.


The 42-year-old owner and chief executive of the Warrior Group Inc. has built one of the largest woman/minority-owned construction management companies in the country by preaching the gospel of permanent modular construction.


Cheryl Hall

The first thing she has to do is dispel the notion that she's talking about the portable buildings used at schools and construction sites or the wide-load manufactured houses you see headed down the highway.


Instead, she means major structures – hotels, apartment buildings, hospitals, dorms, day care centers – that look normal inside and out once they're complete. But the rooms, or "boxes," are manufactured in plants and transported to a permanent foundation, where utilities are hooked up and exteriors are added.
There are fewer weather delays than with traditional construction, and about 85 percent of interior finish-out is done at the plant.
"You can imagine when I go to a university: The first thing they visualize is temporary classrooms," says Warrior in her offices in DeSoto, which, of course, are modular. "When I show them visuals, it piques their interest, and they'll say, 'Tell us more.' "
She must be doing some mighty fine talking.

Last year, Warrior Group brought in $124 million in revenue, almost all of that from huge military housing projects at Fort Sam Houston in San Antonio, Fort Bliss in El Paso, Fort Carson in Colorado Springs, Colo., and Fort Polk in Louisiana. This year, Warrior Group, which has 62 employees, added a four-story housing project at Fort Hood in Killeen to its construction management portfolio.


Her company contracts with modular construction manufacturers such as Trendsetter Homes in Belton, Texas, that build hundreds, even thousands, of identical units to very detailed specifications.
Warrior supervises construction in the plant, transportation to the site and installation on the foundation.
Warrior Group has a joint venture partnership with Colorado-based Hensel Phelps Construction Co. on these Army projects.
These are not your father's barracks.

At Fort Carson, for example, Warrior Group's four, four-story complexes have to meet anti-terrorism requirements, including progressive collapse.


Warrior Group and Hensel Phelps recently completed the first of four residential buildings at Fort Sam Houston.
The first floors are being traditionally built on site by Hensel. Warrior Group then installs modular apartments made by Trendsetter for floors two, three and four.
All told, there will be 3,000 apartments with pre-installed kitchens and bathrooms for medical trainees at the new Medical Education Training Center in San Antonio. Warrior Group's share of the multiphase project is $110 million and involves 1.16 million square feet of construction.
All this is remarkable because just five years ago, the U.S. Army Corps of Engineers wouldn't consider modular construction for permanent living quarters.
Warrior used the Base Realignment and Closure Act of 2005 to persuade the Army otherwise. The Army needed a lot of buildings pronto as operations were consolidated.
"We knew there was no way that the corps could do all of that by site-built construction and get it done within the budget that they had," she says.
She went to Hensel Phelps with the idea, and together, they won a barracks project at Fort Bliss in 2006. They've been joint-venture partners on hundreds of millions of dollars and millions of square feet of Army projects ever since.
Major player

Glen Miller, operations manager for Hensel Phelps' West Texas region, worked with Warrior from the outset.


"Back in the early days, it was, 'Help me out, help me out,' " Miller says. "The construction we do is big league construction. To play in this arena, you have to step it up. And they've done it. They haven't leaned on: 'Hey I'm a woman-owned, minority-owned company, and I deserve all of this.' They've participated in a major way. That's the greatest success."
Warrior has no intention of being "a face company."
"We're not a company that says, 'Throw us a 2 percent fee just so you can meet your minority/female participation goals,' says Warrior, who lives up to her name when it comes to physical fitness and daily workouts. "The general contracting world has watched us over the past several years and knows that we're a business that's going to be here for a while and add economic impact to this region.
"That's the reason the 60-year-old white man takes me seriously. The fact that we're minority and that we're woman-owned is just icing on the cake."
Dreaming big

Gail Warrior has always marched to her own drummer.


The Dallas native worked every summer as a go-fer for her dad, who was one of the Dallas-Fort Worth's first black independent insurance agents.
"That's where I got my first taste for being in business for yourself," she says.
Warrior balked at going to Hillcrest High School because her older sister was head of the drill team and her 10-month-younger brother was destined to be a star soccer player when he showed up the following year.
Instead of going to Hillcrest, she went to DISD's Talented and Gifted Program at Skyline High School, where she studied Russian.
"I had this big dream that I was going to be a CPA and work for one of the huge accounting firms in Russia and make tons of money," says Warrior, who has a degree in accounting from Clark Atlanta University and an MBA from the University of Dallas.
Turned out Moscow wasn't in the cards, but Dallas and Mobil Oil Co. were. "It worked wonderfully because they relocated me from Atlanta back home," she says.
Even though she loved what she was doing, Warrior always had a nagging desire to run her own business.
In 1997, she founded the company with Wayne Lawrence (her soon-to-be-ex, who recently left the company). She's always owned 100 percent of the company. The idea was to take advantage of set-aside programs for women/minority-owned companies. They borrowed space in a DeSoto manufacturing plant, and total revenue that first year was about $31,000.
On Sept. 25, 2000, while celebrating Lawrence's 40th birthday, the couple got a present: their first $3 million government set-aside contract. "We were on the phone negotiating the deal while the party was going on because we had to sign it before midnight," she says. "We've been blowing and going ever since."
But in 2004, the winds were hurricane force.
One of her senior project managers working on a job in Chicago took kickbacks from a subcontractor doing shoddy work and missing deadlines.
Warrior lost more than a million bucks making good on the contract.
The cash drain came at a devastating time.
Warrior and Hensel Phelps were trying to land that first project at Fort Bliss. Manufacturers require money upfront and the rest as soon as the last unit leaves the plant. And Warrior was dead broke.
She cut her staff of 32 in half and borrowed $3 million, primarily from the Texas Women Ventures Fund, an organization in Dallas that invests in women-owned businesses.
That launched her on an upward sales trajectory. She paid back the loans early.
What's ahead?

Although Warrior expects revenue to fall about $95 million in 2010 – because of one military project being delayed and a second canceled – she still expects double-digit percentage profit growth. She predicts that 2011 and 2012 will be much stronger as she expands into medical and educational buildings – both modular and traditional construction.


Chris Peck, vice president of the Texas division of McCarthy Building Cos., is working with Warrior Group on school renovation projects in Dallas and Wilmer-Hutchins that are traditional construction. He's impressed and wants to do more with the company.
"There are public-sector clients interested in seeing small businesses like Warrior Group grow capacity. DISD, for example, has a formal mentor/protégé joint-venture scenario where the team gets extra points in the technical evaluation if you have a joint venture. It makes good business sense for us to build a relationship."
Warrior Group is also building a three-story learning center on site at the University of North Texas in partnership with Beck Group.
But her fame is still as the queen of boxes.
Now that she has the Army indoctrinated, she's trying to enlist other divisions of the Armed Forces, which remain steadfastly cold to the idea of modular living quarters.
Warrior recently took an Air Force general through the San Antonio complex. She says he was stunned. "When he was done, he said, 'Don't call this modular. Call it hybrid construction or something.' Because he could not believe that it was modular."




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