Stelter following in father’s footsteps
But new AGC-Milwaukee president sees challenges for construction industry his father did not
By Charles Rathmann, SBT Reporter
With his election as president of Associated General Contractors (AGC) of Greater Milwaukee, Robert Stelter, COO of The Bentley Co., Milwaukee, finds himself wishing his father were still alive.
That’s because Stelter’s dad occupied the post in 1980 while an officer at Siesel Construction Co., Milwaukee. Stelter’s picture will soon be on the wall, under glass, at the AGC chapter offices, not far from his father’s picture.
"When you look at the pictures, it is a list of who’s who in construction around here," Stelter said. "It is a real honor and I only wish my dad were here to see it.
Robert Stelter Sr. died in March of 1992 – just a month before his son started work at the Bentley Co. as a vice president.
Even more than his son’s role as AGC chapter president, the senior Stelter would probably nod with approval over his son’s career to date. The father and son had once worked together at Seisel Construction, a company that was dissolved in 1992. The two worked on landmark projects including Marquette University structures such as the Haggarty Art Museum and the College of Nursing building — and the original Northwest Mutual Life parking structure.
By the time Stelter the Younger landed at Bentley, he had the experience to help the young contracting firm grow from seven employees to the current complement of 23 office staff and as many as 110 people in the field during a peak construction season.
Stelter’s father may have approved of his son’s career. But he might just shake his head in amazement at some of the industry trends his son and AGC will have to help member companies deal with in 2003 and beyond.
"This mold insurance thing — this is something the contractors — if they don’t already know about it — will find out when they try to renew their general liability policies," Stelter said, referring to the fact that insurers have been inserting mold exclusions into liability policies for the last couple of years. "Multi-tenant buildings are particularly difficult."
Design-builders will be particularly hard-hit by mold exclusions, according to Stelter.
"They are in a more difficult situation," Stelter said. "The fact that they are both the contractor and the designer takes away one of the potential defenses for builders. Of course most design-builders that sub out the design pass that risk on."
The lack of established standards for mold levels and the fact that links between mold and health risks are poorly defined make for a volatile situation.
"You have owners coming back to a contractor 10 years after construction is completed complaining about mold," Stelter said. "This is long after the warrantee period is up."
Contractors — including Bentley — are taking steps to protect themselves. Bentley hired Michael Best & Friedrich’s "mold queen," Cynthia Smith, bring the company’s management firm up to speed. Already, Bentley is using a different type of heater on its winter construction projects so it can dry out materials even as workers warm up their work areas. The firm is also developing a moisture control plan for use on all projects.
Some state legislation enacted since Stelter’s father has passed on would raise the elder contractor’s eyebrows — if not his blood pressure.
Changes to state projects due to the current state budget shortfall are only the tip of the iceberg.
"This moratorium on state building — for those involved in state work, that is going to have a huge impact," Stelter said. "We need to advocate to Madison that by going ahead with some of these projects they are providing jobs, and that helps offset the state deficit, as well."
As Gov. Jim Doyle tightens the state’s purse strings, Stelter fears that some construction services that had previously been tax-exempt may be taxed.
"If you take the tax-exempt status away from schools or hospitals, that could be significant," Stelter said. "We have new people at the Department of Administration, and I am not sure of all of their positions. From where we sit, if we don’t have to make purchases on a tax-exempt basis for these projects, that actually makes things easier for our accounting people. But the presence of the tax reduces what the client can afford."
Other state regulations reduce the amount of land that can be built on — including the Department of Transportation’s new regulation of land abutting state highways — or lengthen the amount of time required for permitting and other state approval processes. Particularly onerous to Stelter are the Wisconsin Department of Natural Resources’ stormwater regulations designed to improve the quality of water running off of developed parcels.
"Anything that will allow contractors to bring their projects in sooner is something the industry would embrace," Stelter said. "The problem we run into is that so many of the current guidelines are over the top."
Another regulatory issue of concern to Stelter is the estate tax. In an industry where most firms are family-owned, the ability of on generation to pass a company down to the next is critical, according to Stelter.
"The death tax has a significant effect on the means and methods people use to pass down their business," Stelter said.
Of course more than the regulatory landscape has changed since 1980. Stelter sees as positive the presence of computers on job sites, in the design process, in management offices and elsewhere. He is dedicated to helping AGC build participation in its Virtual Plan Room, an on-line space where contractors can share information in construction plans and submit bids. A grant from AGC’s national operation will help the chapters in Wisconsin promote the site.
"We anticipate that the Virtual Plan Room will not only be helpful to a huge contractor base, but as it grows, it will help us fund other programs," Stelter said.
However, technology is not the determiner of success in the industry.
"The biggest thing is that you still have to use your brain and be creative," Stelter said. "If you create a bunch of robots, you won’t be able to meet the needs of your clients. I see too many people using tools to do their thinking for them."
That perhaps points to the biggest thing that the elder Stelter would recognize about the 21st century construction industry.
"This is really a people business, and if you don’t realize that, you won’t be successful," Stelter said.
Feb. 7, 2003 Small Business Times, Milwaukee
