One on One with Peter Warren, CEO of Warren Construction
Photo / Peter Van Allen
Peter Warren, who founded Warren Construction Co. in 1999, recently converted the company to an ESOP structure. He's pictured at the company's offices in Freeport.
Peter Warren, CEO and board chairman of Warren Construction Co. in Freeport, is the latest Maine business leader to sell his company to employees.
Warren Construction keeps a low profile — its Freeport headquarters doesn't even have a sign outside. Yet its portfolio includes some well-known buildings: the new Friends School of Portland, a dining facility at the Kents Hill School, Edwards Center for Arts and Dance at Bowdoin College, the Hebron Academy Athletic Center, as well as the fit-outs of the Portland Food Co-op and Foulmouthed Brewing Co. The company also builds high-end private residences.
Warren, 60, has no plans to retire, but he says his 40 employees were starting to wonder about his plans. So he hired Susan Scherbel of Bellview Associates to set up the employee stock ownership plan, which was effective July 1. Mainebiz sat down with Warren to discuss the transition. An edited transcript follows.
Mainebiz: Warren Construction has keeps a low profile. How do you get business?
Peter Warren: We've been flying under the radar for a number of years. As long as I've been working in construction in Maine, it's only occasionally that a client comes to your office. You're going to them. I was passionate about having a great workspace. I used to drive 800 miles a week, banging around in a pickup truck to visit clients and job sites. I thought if I ever have a chance to own my own company I wouldn't have a long commute. Here I have an office and live in the house next door. If you own a business in Maine, you have to work every day. One of the issues we have as a company is people don't understand our capabilities. Our clients know us. Once in a while, someone won't hire us because they don't think we're big enough, but we have a lot of horsepower and we have access to a lot of horsepower.
MB: You've had variety of projects. How did you approach the Hebron Academy Athletic Center, a 54,000-square-foot job with a tight budget and a specific look?
PW: When you live in Maine, you eat what they're serving. We have lot of really skilled people. They can do a lot of things. We beat a lot of people out for that job. We worked with an architecture firm we really liked, SMRT. We had a vision of what the building would look like. We never wavered; we were focused. Each of us knew our businesses. It was a wonderful collaboration. [Hebron] had a limited budget — we built that for a lot less than other people were building field houses, $155 a square foot.
MB: Why an ESOP and why now?
PW: I'm 60 and I'm not ready to stop anytime soon. But you have to look at this stuff. You have to plan. And your people are wondering, 'What's he going to do?' They don't say it but it was clear to me they were thinking it. I basically had three options. I could sell the company, but selling a construction company in Maine is tough. If you own a lot of stuff — equipment or an excavation company or a rigging company, maybe. But we're not Reed & Reed. What we have is people, a reputation, some cash and a little bit of equipment. So there's no value in that. It's really hard to make a living in construction in Maine. I could liquidate, but what about all these people? I kept hearing we were small for an ESOP, but then I called Susan Scherbel. She was hesitant but she ran the numbers and said, 'This might open up the floodgate for little deals.' She figured out a way to streamline the deal. It worked for me. It took a while and it's expensive. But I saw it as the avenue. You have to value the thing so the employees can pull it off. I just want the business to continue.
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