It was June 2008 when one of San Diego’s leading general contractors, Doug Barnhart, finally gave in to pressure from several suitors and sold his company for $136 million to the British firm, Balfour Beatty.
His daughter, Tami Barnhart-Reese and her husband West Reese, had been working for Barnhart and were disappointed, he said. But he had been detecting signs of a coming recession and decided to bail out while the going was good.
“I knew we were headed into a downturn,” he said. “I didn’t know we were going to crash quite like the way we did.”
Within two months, the stock market collapsed, and construction nearly came to a halt.
But Barnhart, his daughter and son-in-law were not ready to hit the beach. Navigating around a no-compete clause in the sale and a five-year ban on using the Barnhart name in a new company, they soon formed J. Reese Construction, renamed in 2013 to Barnhart-Reese Construction.
The next-gen version of Douglas E. Barnhart construction was in business.
Every American entrepreneur hopes to succeed, and it’s an even greater source of pride when they can pass on their company to their children. In the general contracting business, Barnhart said the company name usually includes the names of the founders for a reason.
“Most purchasers of construction services want to look the person in the eye, face to face, to know whether or not that person is going to complete their building and do a good job,” he said. “That goes back in history. That has not changed.”
Barnhart, 72, was born in Illinois and moved in 1950 with his parents to west Texas, where his father oversaw Texaco oil fields. He fell into the construction business after earning a civil engineering degree at Texas Tech, handling logistics while in the Navy during the Vietnam War and serving as a resident officer in charge of construction for Navy projects in San Diego.
Married and with two young daughters, he left the Navy in 1975 and joined C.E. Wylie Construction as a project manager. Eight years later, he broke off to form his own company. He built it up to the point where he could bid successfully on Petco Park and Terminal 2 at San Diego International Airport.
Meanwhile, one daughter, Tara, went into teaching, while Tami got a business and marketing degree at the University of San Diego and joined her dad fulltime in 2001, about the same time she met and married West.
“(The company) was growing very rapidly,” Reese said, “and they couldn’t find staffing to fill all the vacancies.”
At its peak, the Barnhart firm had a staff of about 600 and annual sales of $700 million.
In some ways, it was easier to run a big company than a small one.
“You had at your disposal very skilled people in every aspect of the company,” Barnhart said. “With Barnhart-Reese, you don’t have that because you don’t have the volume (of sales) to carry it. You’ve got to build to that.”
He added, “You become a cook for everything. You’ve got a problem, you’ve got to solve it yourself. That’s time consuming, where in a large company you could say just handle this and it would be handled — you don’t have to. Time-wise, it’s harder to run one of these little companies — you have to do it.”
CEO Reese, 50, and President Barnhart-Reese, 44, were just a bit older when they started Barnhart-Reese than when Barnhart started out in 1983. They have 11- and 15-year-old sons and, understandably, focus on their family. Like her father, Barnhart-Reese and her husband have had to learn the basics of running a small business. But they understand the legacy they carry.
“I think our clients appreciate family firms,” Barnhart-Reese said. “We can provide high service without being a large firm. We have the smarts and know-how with a kind of boutique style. So if there’s a problem, an owner can call us.”
Like Barnhart, Reese did not come from a construction-background family. He earned a history degree at UC San Diego in 1994 and got his first post-graduation job at a Hertz car rental business, where he rose to become a branch manager.
At Barnhart’s company, he worked on cost accounting and controls, project management and field engineering duties. Barnhart-Reese worked in the marketing department after gaining experience at various public-relations firms.
In 10 years, Barnhart-Reese has grown to employ about 50, including about 15 who worked for the old Barnhart company. Sales are expected to reach about $50 million next year. They hear the talk of a looming recession but don’t see evidence of it yet in contracting.
Notable projects to date include the $15.4 million Bayside Fire Station in downtown San Diego and a $22 million parking structure at Sharp Memorial Hospital. Current projects include a $16.7 million gym at Gompers Preparatory Academy and an $11.7 million water treatment facility at the Del Mar fairgrounds.
But if they want to grow the company, the elder Barnhart said, they will have to work long hours to attract clients and add staff.
“I had a tremendous appetite for work, and if there was going to be something built, I felt like I was going to build it,” he said. “I would take on much more work than I needed because I was driven that way. It really depends on how much they want to split between work time and what else there might be.”
But for now, Reese and Barnhart-Reese take full advantage of Barnhart’s years of experience and the policies he established.
“He was very successful for a very long time using those policies,” his daughter said. “So we’d be fools to throw them in the trash.”
Added Reese: “He has been an excellent resource when problems come up with legal stuff or state (regulatory) stuff.”
The rewards for the elder Barnhart have been accolades from his alma mater and the construction industry. He’s the only San Diegan to date to be elected president of the Associated General Contractors of America.
Proceeds from his company sale enabled him to start the Doug and Nancy Barnhart Charitable Foundation and give millions of dollars to Sharp and Scripps hospitals and other charities and political causes. He also serves on the county Planning Commission.
But Barnhart, who remains as company owner and chairman, set a standard that Barnhart-Reese Construction clients see in the second generation executives.
“I think they’re doing great,” said Mike Asaro, a principal at Delawie Architects, of Reese and Barnhart-Reese. “I will be in their office on bid day on some project, and (Barnhart) will come in and do a quick scan. I think he’s doing it as a way to teach and pass on knowledge. … It’s family, and he wants them to do well. His presence is definitely felt.”
Showley is a freelance writer based in San Diego and can be reached at (619) 787-5714 and firstname.lastname@example.org.
Current project highlights
Camp Pendleton fire station: $11.5 million
Del Mar Fairgrounds water treatment facility: $11.7 million
Fort Rosecrans historic Building 158 renovation: $7.2 million
Gompers Preparatory Academy athletic facility: $16.7 million
MiraCosta College student services building: $10.5 million
Mission Middle School (Escondido) modernization: $14.9 million