Reference Publications

Hensel Phelps Construction Company

International Directory of Company Histories, Volume 72 (2001) by Bruce Montgomery

420 Sixth Avenue Greeley, Colorado 80632 U.S.A. Telephone: (970) 352-6565 Fax: (970) 352-9311 Web site: http://www.henselphelps.com

Private Company Incorporated: 1937 Employees: 2,600 Sales: $1.83 billion (2004 est.) NAIC: 236220 Commercial and Institutional Building Construction; 237310 Highway, Street, and Bridge Construction

Hensel Phelps Construction Company operates as one of the largest private construction companies in the United States. The company, which is employee owned, pursues a broad variety of projects, including the construction and renovation of industrial and residential spaces, commercial offices, airports, sports facilities, healthcare and educational institutions, public assembly areas, and retail space. The company provides a broad range of pre-construction and post-construction services, including scheduling, estimating, budgeting, zoning and code compliance, bid packaging, engineering and status reporting, as well as certificates of occupancy, warranty programs, moving services, and as-built documentation. Hensel Phelps also offers development services, such as land acquisition, feasibility studies, financing, and leasing.

Beginnings

Hensel Phelps Construction Company was founded in 1937 by Hensel Phelps of Greeley, Colorado. The success of Hensel Phelps, however, lay in the extraordinary business odyssey of Hensel Phelps's son, Joseph. Following his graduation from Colorado State University in 1951 with a bachelor's degree in construction management, Joseph Phelps spent four years as a naval reserve officer during the Korean War. Upon his return in 1955, Joseph joined his father as a partner in the Hensel Phelps Construction Company, a modest commercial enterprise that specialized in supplying remodeling and construction services. Joseph was the company's second full-time employee. When Hensel Phelps retired two years later, the younger Phelps bought his father's share in the business and proceeded to develop it into one of the nation's preeminent construction firms.

After becoming president in 1957, Joseph Hensel introduced the idea of making equity interests available to managers and employees of the company. By doing so, he created a uniquely successful incentive program that he and others later credited with playing a major role in the company's remarkable growth. In 1963, Joseph Phelps hired field engineer Bob Tointon, who was promoted to vice-president one year later and then to president of Hensel Phelps in 1975, with Joseph remaining as chairman of the board. Together, Phelps and Tointon built the company into one of the nation's leading construction firms by opening a series of regional offices around the country and successfully competing for major construction projects.

National Expansion

In 1967, Hensel Phelps opened its first branch office in Burlingame, California, to coordinate and oversee the growing number of construction projects in California. The company then expanded into the Southwest with the opening of an office in Austin, Texas in 1972. The Southwest office focused on construction projects in central and southern Texas and New Mexico. With the real estate boom in the 1980s, the company experience rapid growth and expansion. New offices were opened in both Santa Clara, California, in 1983 and Little Rock, Arkansas, in 1987. The company's national growth was spurred by large projects for such technology companies as IBM, as well as Wal-Mart. Hensel Phelps expanded its presence in Southern California with the opening of its Irvine office in 1990.

By the later 1980s, however, Joseph Phelps and Bob Tointon began to phase out their ownership of Hensel Phelps. Joseph Phelps's day-to-day involvement in the company already began to decline beginning in the late 1970s as he pursued his interests as a wine maker and merchant. In 1973, he bought a ranch in the Napa Valley and launched a second business in the wine industry. By 1982, he was devoting himself full-time to his business interests in the wine industry and had become a resident of California. He later produced one of the top ten red wines of the world, Insignia.

New Ownership and Continued Growth

In 1989, ownership of Hensel Phelps passed to twenty-eight employee stockholders, none of whom held more than a 10 percent stake. The buyout represented the culmination of 25 years of the employee ownership program developed by Joseph Phelps. At the same time, Phelps Inc., the parent company of Hensel Phelps, was reorganized under company president Jerry Morgensen and other long term managers, who assumed control over Phelps Inc.'s general contracting business. After selling his shares in the firm, Joseph Phelps continued his business partnership with Tointon by forming another company, Phelps-Tointon, Inc., which took over the diversified real estate and non-general contracting activities of Phelps Inc. Thereafter, Phelps-Tointon owned and operated several manufacturing companies, including Armor Safe Technologies, Southern Steel Company, and Rocky Mountain Prestress, Inc.