KBS one of region's largest contractors, thanks to Paulette

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KBS: Changing the landscape


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• KBS projects in central Va.

Richmond is known for its colonial architecture, but KBS Inc. has quietly reshaped the area for more than three decades.

The general contracting company has built such structures as Ukrop's stores, Strange's Florist and the CarMax and Luck Stone headquarters. It has handled renovation projects including the Edgeworth and Lucky Strike buildings in Tobacco Row.

"I love the way those old buildings come to life," said William A. "Bill" Paulette, president of KBS.

The company also did the Virginia Commonwealth University Rice Center, the first platinum LEED building in Virginia -- the highest certification for Leadership in Energy and Environment Design, a building standard to measure energy efficiency.

A 1969 graduate of Virginia Military Institute who married his childhood sweetheart, Carolyn, 40 years ago, Paulette co-founded Kenbridge Building Systems -- now simply KBS -- 34 years ago.

"The true secret of our success is a group of people working together," Paulette said. "I just happened to be the first person on the scene."

. . .

Paulette, 61, was working as a salesman for the now-defunct Republic Steel in Richmond when the venture opportunity arose.

He had returned to Richmond in 1972, after serving in the U.S. Army as a platoon tank leader based in Fort Hood, Texas.

He was beckoned through family connections one day to see George B. Clarke III, president of Kenbridge Construction Inc.

"I went to see Mr. Clarke, thinking I would sell him some product. He wasn't interested in my product," Paulette said. "He was interested in starting a business in Richmond, and he thought I might be the guy."

Paulette was asked to come up with a business plan. He wrote about 10 lines on a legal pad.

Paulette was told he could use the Kenbridge business name and reputation. But he wasn't so sure.

He had a wife and a 5-year-old daughter. Besides, he worked for a company that was listed on the New York Stock Exchange, which was more secure than a startup venture.

Then again, Republic Steel was based in Ohio, and Paulette eventually would need to move there.

"I don't talk like they do in Ohio," said Paulette, who was born and reared in South Hill.

"Scared me to death. But we started Kenbridge Building Systems. We put $1,000 into the company, and that's all the capital we ever needed."

His first job was building a body shop for an American Motors Co. dealership at Roseneath Road and Broad Street. The contract was for $150,000.

The second person hired was Dennis Lynch, who came three months after the company was started.

"We only had one desk. I sat on one side and Bill sat on the other, but we had a coffeepot," said Lynch, executive vice president and a majority shareholder along with Paulette.

Their first office was in a sheet-metal shop. Today, the company operates in three buildings in Henrico County.

"It's been a good run," Lynch said. "The nice thing about it is we are the owners and we work every day. Customers know they can come into the office and see us."

The three-person contracting company has grown over the years to 150 people.

. . .

KBS generated $275 million last year and is on goal to do about the same this year.

Coming off its best year yet, KBS was ranked the 261st largest U.S. contractor last year based on revenue, up from No. 382 of the Top 400 Contractors in 2007, according to Engineering News-Record, an industry publication.

"With the economy in recession and the market in decline, many large contractors are thankful that 2008 was booming, giving them one last chance to build backlogs," the ENR reported.

Commercial real estate lags the residential market, so KBS is only beginning to feel the economic downturn, Paulette said.

"We think we will feel it even more in the not-too-distant future," he said.

The company has laid off about 15 people in the past year as jobs were completed, he said. "Hopefully, we won't have to lay off more."

To deal with the downturn, KBS is bidding on jobs that it normally would have passed up and will take on smaller projects. "Three years ago, we would not have been interested in a $500,000 job," Paulette said.

The contractor also is looking at investing in deals with developers whose banks have cut off or limited financing options. Paulette is not ready to talk about those possibilities.

"I have always operated and been motivated by fear," he said.

. . .

One of the largest contractors in the mid-Atlantic, KBS has done residential and office projects across Virginia and elsewhere, including Charlotte, N.C., Washington and Maryland.

Most jobs are in the $5 million to $10 million range.

Yet, KBS had four projects for more than $60 million in the works last year: West Broad Village in western Henrico; The Shops at White Oak Village in eastern Henrico; High Street, a retail and residential community in Williamsburg; and Hampton Roads military housing.

It also completed what Paulette called one of his most stressful jobs -- the Country Club of Virginia's aquatic center in Richmond.

"We agreed to have it finished by Memorial Day weekend. It was done that Friday," he said.

The company doesn't do sewage-treatment plants, wastewater or highway or bridge work. "We haven't done a 50-story building, but we could conceivably get to that," Paulette said.

"KBS has really good people working for them. I trust these guys," said Greg Spivey, vice president of construction for the Washington office of Forest City Enterprises Inc., which has developed projects in the Richmond area, including adaptive reuse buildings in Tobacco Row.

"I would absolutely put KBS at the top of the list in terms of professional approach and treating the owner/developer with fairness," Spivey said.

Spivey said he feels privileged to negotiate with the people at KBS. "They really have an approach that is lacking in the business these days."

. . .

The name was shortened to KBS in 1987 after Clarke retired and Paulette bought out his interest.

The company went through another major shift about 10 years ago, bringing in Rich Less, vice president of operations, and Steve Satterfield, vice president of estimating.

"People who start companies have vision and ideas, but they are not necessarily the best people to manage when the companies get big," Paulette said.

"We needed a systems approach. We had gotten bigger and bigger. Our ability to get the work was exceeding our ability to do the work."

Paulette said he has no plans to retire. "I've always liked coming to work every day. Work is a big part of life. You have to like what you do."

. . .

Paulette's most defining decisions -- going to VMI, getting married and starting his business -- are the three best things he ever did in his life, he said.

He said he knew from about age 12 or 13 who he wanted to marry. He and his wife-to-be grew up across the street from each other.

"She was looking at other guys. I was in the background." They were married six months after he graduated from VMI in 1969.

"VMI has been a big part of my life. The legitimacy you get in business from coming out of VMI is priceless. You get instant trust and respect. That doesn't mean everyone who goes to VMI is trustworthy. You must continually earn that respect."

G. Gilmer Minor III, a fellow VMI graduate and chairman of Owens & Minor, a Hanover County-based distributor of medical and surgical products, said Paulette is a straight shooter.

"There is no one I would rather have by my side," Minor said.

"He has a heart of gold, a man of great integrity -- loves all sports and he's a very good businessman. What he has done in Richmond [with all the buildings] is profound."

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.