Although construction activity is beginning to pick up in the Milwaukee area, the market remains extremely competitive for area contractors. Several well-established major construction firms compete for market share in the area.
Since the Great Recession construction pricing by those firms has become so competitive to the point that some contractors say it is difficult to make money, even on the jobs they are getting.
Meanwhile, a major Chicago area construction firm is entering the Milwaukee market.
The construction division of Milwaukee-based real estate firm Siegel-Gallagher and Hoffman Estates, Ill.-based construction firm Leopardo Companies Inc. have formed a new Milwaukee-based construction firm, Leopardo-Wisconsin LLC.
Leopardo has about 400 employees and $300 million in annual revenue. The firm has done a wide variety of construction projects for commercial, multi-family residential and health care developments. It has done most of its work in the Midwest, but recently has branched out beyond the Midwest, doing projects for the U.S. Defense Department.
“Leopardo is excited about expanding our full-range of construction services to the great city of Milwaukee,” said Leopardo president Rick Mattioda. “By collaborating with the principals of Siegel-Gallagher Construction, we have the ability to instantly utilize a wealth of subcontractor and supplier resources to work successfully throughout a region with diverse market opportunities.”
“We’ve taken Leopardo’s skill sets and construction expertise and combined it with our local relationships and construction expertise to create something that is unique,” said David Behnke, a principal of Leopardo-Wisconsin. “We’re thrilled about the opportunity this new venture presents, and we are looking forward to building the best, most customer-centric construction company in Wisconsin.”
In addition to Behnke, who is also president of Siegel-Gallagher Management Company, the other principals of Leopardo-Wisconsin are Patrick Gallagher, the president and chief executive officer of Siegel-Gallagher, and Jeffrey Scheidt, who was executive vice president and principal of Siegel-Gallagher Construction Company.
Leopardo-Wisconsin is an independent company and will have no involvement with Siegel-Gallagher, Behnke said.
Leopardo is well respected by many Milwaukee area construction industry executives. Some in the area’s construction industry say they are surprised to see the company make a move into Milwaukee, considering how highly competitive this market is right now.
“It came as a little bit of a surprise to industry watchers that that occurred,” said John Hunzinger, president of Brookfield-based Hunzinger Construction Co.
“That is surprising to me as well,” said Mark Sherry, vice president and general manager of the Milwaukee office of Mortenson Construction. “The marketplace does not appear that there’s a lot of opportunity right now.”
“We understand the competitive nature of the industry,” Mattioda said. “We’re certainly experienced and prepared to compete. We focus on value-added services that we provide our clients.”
Leopardo has noticed early signs of improvement in the Milwaukee area construction market, especially as several major projects are in the planning stages in the region.
“The market has started to get active again,” Mattioda said. “In all of our markets the activity level is up and in some cases (up) pretty significantly.”
Siegel-Gallagher launched its construction company in 2006 and has built projects for Children’s Hospital, the Association of Equipment Manufacturers, Alterra Health, MCI and the Hays Company.
However, Behnke said he reached out to Leopardo in search of a partnership because Siegel-Gallagher was unable to grow the construction division the way it wanted to.
“We couldn’t really grow it here in Milwaukee,” he said. “We didn’t have the resources. We were small and wanted to grow.”
“Siegegl Gallagher has for the last several years dabbled in construction,” Hunzinger said. “I think what they were trying to do is establish a construction delivery arm. I don’t think they were having much success doing that.”
Prior to joining Siegel-Gallagher in 1999, Behnke worked with Jones Lang LaSalle and COMPASS Management & Leasing Inc., where he was responsible for a variety of high-profile Midwest office buildings. He also worked with Jacobs Brothers Group, the second-largest shopping mall developer in the United States, as part of the company’s development team. During his career, Behnke worked with Leopardo on several building projects and says he developed a tremendous level of respect for the quality of the firm’s work. Behnke says that is why he reached out to Leopardo in hopes of forming a partnership.
“I have worked with Leopardo for 20 years and built more than a million square feet of office interior space with them,” he said. “I’ve worked with hundreds of construction companies in the Midwest, and they are hands down the best in terms of personnel, service, and quality. Leopardo has an incredible track record. It’s like hooking up with a Mercedes Benz. First class.”
Area construction executives believe that the move by Leopardo to establish a Milwaukee construction company with Siegel-Gallagher is an attempt on its part to gain a foothold in the Milwaukee area, where the firm has done little work.
“Leopardo is a good company,” said Craig Jorgensen of Pewaukee-based VJS. “They do work all over the Midwest, but not in Milwaukee. They haven’t done much in Wisconsin.”
Siegel-Gallagher’s local ties will be key to enabling Leopardo-Wisconsin to establish itself in the Milwaukee area, Mattioda said.
“They are well established and connected in the community,” he said.
Leopardo-Wisconsin currently has an office in the Summit Place complex in West Allis. However, the firm plans to move the office to the Blatz complex in downtown Milwaukee, Behnke said. The company’s web site already lists its address as 260 E. Highland Ave. in the Blatz complex.
Leopardo-Wisconsin currently has five employees. The goal is to have 150 employees in Milwaukee in five to 10 years, Behnke said.
“We go at it every day with the intention of growing the organization and adding to the team that we have,” Mattioda said.
In the meantime, Leopardo-Wisconsin will be able to take advantage of the size and experience of Leopardo’s Chicago area operations, Behnke said.
“We have resources available to us that most companies don’t have,” he said. “They have a lot of bench strength to help us provide services to our clients.”
However, it remains to be seen what Leopardo’s impact will be on the Milwaukee area construction industry.
“Time will tell,” Hunzinger said.
