A landmark-making business

Very few companies have shaped the Philadelphia skyline more than Turner Construction Co.

If you've visited the National Constitution Center, cheered in Lincoln Financial Field, or shopped at the former Strawbridge & Clothier flagship department store, you've sampled the company's handiwork.

Some of the city's biggest buildings: Mellon Bank Center, the Bell Atlantic Tower, Commerce Square, Cira Centre, One Logan Square, to name a few - all were built by Turner - which celebrated its 100th anniversary of doing business in Philadelphia yesterday. The company is based in New York, but it has an office in Philadelphia.

"We've built just about every highrise you see downtown, except for Liberty Place 1 and 2," Michael J. Kuntz, vice president and general manager of Turner's Philadelphia office, said.

Turner currently has 30 projects under way throughout the city.

"There is a glut of projects in Philadelphia," Kuntz said recently in his office on the 21st floor at 11 Penn Center, which his company built. "In the last three to four years, every major market has been very vibrant and robust.

"I call it 'the perfect storm' of construction," he said. "Philadelphia, historically, has been where one market is very vibrant, and the other ones are down.

"But that's not the case," he said.

Every sector - including health care, educational institutions and residential - were all way up.

Turner's Philadelphia office currently has about $1 billion in health-care construction under contract. They include projects at Virtua Hospital in South Jersey, Cooper Hospital in Camden, a south campus research center at Children's Hospital of Philadelphia, a $90 million project at St. Joseph's Hospital in Reading, and a new hospital for St. Luke's in Allentown.

On the education front, Turner is converting the Milton S. Hershey School in Hershey, Pa., into a new $85 million school and building a $42 million science building for Franklin and Marshall College in Lancaster.

The firm is also building the Murano on 21st and Market Streets and the 10 Rittenhouse, both luxury condominiums.

"Philadelphia hasn't built residential products in 20 years, and now there's six or seven condo towers going up," Kuntz said.

But the pressures of a shrinking labor pool, increasing costs of building materials, such as steel and copper, and the growing demand throughout Philadelphia were creating stresses on companies like Turner.

Kuntz, 48, said he purposely scaled back on the number of projects for Turner to take on this year.

"I didn't want to outstrip our capability to perform," he said. "That's how you get in trouble in this business.

"The biggest threat in construction today, other than escalation of material costs, is lack of professional staff to do it," he said. "We're limited by the amount of people we can hire competently to do the job."

In addition, Kuntz said Philadelphia was considered an urban jungle among subcontractors because of its high wage tax, traffic, and restrictions on construction.

While computers have made going from concept to drawing quicker, Kuntz said technology had had little impact on construction.

"From a technological standpoint, construction really hasn't advanced since the pyramids too much," Kuntz said. "You're still doing brick-by-brick for the most part."

Still, he finds nothing tedious about the process.

"There's something about building," Kuntz said. "Every day you see a tangible result. You know you're getting one day closer."

Mention height to Kuntz, and his eyes light up.

"I love to go vertical," he said. "I love to go high."

Turner has built the city's third- and fourth-tallest buildings - the Bell Atlantic Tower at 1717 Arch St., which is 53 stories high, and Mellon Bank Center at 52 stories. They will each move down a notch with the opening this fall of the Comcast Center, which will be the city's tallest. It's being built by Turner competitor L.F. Driscoll Co., based in Bala Cynwyd.

Turner uses a centralized purchasing and estimating system. Its Philadelphia office has a staff of 225 that includes five full-time purchasers to buy construction goods and services and 13 estimators, who include specialists in mechanical and electrical engineering.

"We've survived the last 100 years because we know how to make money building buildings," Kuntz said. A key component of that is the ability to accurately estimate costs.

The bulk of Turner's projects are covered by "at-risk" contracts in which the company guarantees a maximum price; the firm is at risk for anything behind schedule or over budget.

"When you try and skinny up an estimate and take out your contingency and something unforeseen happens, you don't have any money to cover it," Kuntz said. "That's how you start eating into your earnings."

Three of the biggest builders in Philadelphia's $4.5 billion market are Turner, Driscoll and Keating Group L.L.C.

Last year, Turner's Philadelphia office did $354 million in business. Driscoll had about the same.

Turner built terminals B and C at Philadelphia International Airport, but about 95 percent of its projects are commercial.

The firm has a policy of prohibiting contributions to politicians by its employees. The company is not endorsing a candidate in the mayoral race.

"It's something that's always been a hallmark of the company - that you work for a multitude of clients, including government, and how do you align yourself with one party or one individual?" Kuntz said. "It doesn't make much sense for us."

Kuntz said he was confident Turner would do $400 million to $450 million in volume this year, despite scaling back.

"We have utmost respect for them," said Daniel J. Keating III, chairman and chief executive officer of Keating Group, which built the Pennsylvania Convention Center and the Hyatt Hotel in Philadelphia. "We consider them first-class competition."

The two companies were co-contractors on Lincoln Financial Field, which was completed in 2001.

Kuntz said Turner's biggest competition in town is Driscoll, which also built the Kimmel Center, Citizens Bank Park and the Wachovia Center.

With 30 projects under way and soon to start, what keeps Kuntz up late at night these days has more to do with 22-year-olds coming out of college.

Kuntz recited the grim statistics for his field: Of about 400,000 students who go into engineering schools around the country, about 70,000 graduate with an engineering degree. Of those, he said about 20,000 will go into something other than construction. That leaves a pool of about 50,000 engineers every four years - which he says is not nearly enough to keep pace with the demand.

Kuntz said an engineer coming right out of college could start at $50,000 at Turner.

"It used to be generational," he said. "If your father worked in a steel mill, you worked in a steel mill. But that's no longer the case. There are more opportunities for kids now."