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VOL. 6 | NO. 20 | Saturday, May 11, 2013

 

Unique Projects Bolster Zellner in Rough Times

By Michael Waddell

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Zellner Construction Services LLC is a third-generation commercial construction company that has built a solid reputation for quality over quantity.

“We look for jobs that are outside the norm,” said company president Mark Zellner.

One prime example is building Libertyland in the mid-1970s and then also tearing it down in 2009 to build Tiger Lane in its place. Other notable local projects for the company include building the Northwest Passage section for the Memphis Zoo, several of the “Wonders” exhibits during the 1990s at the Cook Convention Center Downtown and the My Big Back Yard portion of Memphis Botanic Garden.

Jesse Zellner, right, is partner, and David Jacobs is senior project manager for Zellner Construction Services LLC, which is working on Beale Street Landing.

(Photo: Lance Murphey)

The business was founded by Jess Zellner in 1966, and his son, Mark, joined in 1978 after graduating from the University of Memphis in the mid-1970s and working for IBM for several years.

Once Jess retired from the business, Mark assumed the helm, and his son, Jesse, joined the company three years ago after graduating from the University of Alabama. Jesse is now a project manager and one of the company’s three partners, including long-time employees Mack Hill and Jerrell Rucker.

Zellner handles primarily commercial projects, along with some multifamily residential.

“Most of our projects now are institutional or government work. That’s the only thing that seems to be moving right now,” Mark Zellner said.

The company is currently deep into work on the fourth phase of the Beale Street Landing on the Mississippi River. That project began construction near the end of 2012, and completion is projected for October.

“The official opening is not scheduled until December, but the project is running a couple months ahead of schedule right now,” Zellner said.

Several projects are underway for the University of Mississippi in Oxford, including the renovation of Fraser Hall, which is nearing completion, as well as Johnson Commons, which is slated to be finished in 2014.

Zellner is also involved in the renovation of several elementary schools for the Oxford School District.

Locally, Zellner built the new campus for Southwest Tennessee Community College on Shelby Drive, and the company recently received several awards for the new MATA facility on the corner of Airways Boulevard and Brooks Road, which opened last year.

A lack of new projects has made for a challenging environment over the past few years.

“Up until about four years ago, we enjoyed pretty steady growth of roughly 5 to 10 percent each year. All of that went out the window when the recession hit. It cut our business in half,” said Zellner, who feels there is only 20 percent of the number of new projects hitting the market compared to five to 10 years ago. “Now we bid on everything that comes out.”

Zellner has maintained profitability during the past few years by retooling and making a good amount of layoffs.

“I think it’s a good thing to reorganize every so often because what you are left with are your very best people,” Mark said.

The company has reduced its work force from roughly 100 employees at its peak to approximately 35 employees today, and its revenues have dipped from $50 million annually to between $20 million and $30 million.

While he does not have to deal with financing directly, Zellner sees it as a major contributor to difficult market conditions.

“So much of the work is not being brought to fruition because the owners cannot get financing for new projects or for additions or renovations to their existing facilities,” he said.

He also sees many subcontractors experiencing grave financial difficulties during the past few years.

“We’ve had more subcontractors go broke on our projects in the past three years than we had in the previous 40 years combined,” he said. “There’s so little work that they panic and take work below their cost, and that eventually catches up with them.”

Zellner currently has six projects in various stages of completion, including a fire station in LaGrange, Tenn., as well as local endeavors like the renovation of the Dunn Building at the University of Tennessee College of Dentistry and the Greenlaw Community Center. The company just completed the construction of a new gym and renovation of the campus for Grandview Heights Elementary for the Memphis City Schools.

Zellner has also completed projects for its regular clients in Baltimore, Miami, Tulsa and parts of North Carolina.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 65 366 17,721
MORTGAGES 70 417 23,068
FORECLOSURE NOTICES 15 91 4,519
BUILDING PERMITS 210 932 42,157
BANKRUPTCIES 62 299 16,691
BUSINESS LICENSES 19 80 5,781
UTILITY CONNECTIONS 49 305 25,174
MARRIAGE LICENSES 16 96 5,381

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