Fastest in their Field
Industry by industry, these are the companies that out-sprinted their peers
by Phoebe Dey
Construction: Classic Construction Ltd.
#10 Fast 25 Over $20 million
People may be skeptical when they hear a builder is offering affordable housing in the middle of Alberta’s housing boom. Murray Prokosch, CEO of Medicine Hat-based Classic Construction Ltd., is often asked “What’s the catch?” or “Why would you do this?” His answer is simple. “Why wouldn’t we want to do it? When we see how grateful people are to have their own homes, it is a win-win-win.
It can change people’s lives.”
Classic Construction, with approval from the federal Canada Mortgage and Housing Corporation, offers lower-priced new homes in a market where for many, saving for a down payment can be difficult. The goal is to keep mortgage payments at or lower than the cost of rent on comparable rental units.
“Where others have seen roadblocks we have seen opportunities,” says Prokosch. Classic Construction has tackled a market niche to which other developers paid only lip service: affordable homeownership. To do this, Classic sells the home for less than the appraised market value and provides a significant amount of money from its profit back into the individual home buyers’ pockets.
For its current Medicine Hat developments, for example, $23,000 goes to the home buyer, while in High River that number is as high as $67,000 per buyer. The company provides down payment assistance as well as a monthly subsidy for five, seven or 10 years to reduce mortgage costs,
condominium fees and utilities. So far, Classic Construction has helped almost 700 people buy homes, around 450 helped through its “Attainable Ownership” program. With sales of $22.1 million, up from $19.5 million the previous year, people are obviously buying in.
The company saves money by buying bulk materials for upwards of 300 units at a time. In the last year, it also began manufacturing its own cabinets and started including custom granite countertops. With often-scarce tradespeople working directly for Classic, including skilled cabinetmakers in its shop, the company saves on usual contracting fees. To maintain good relationships with any sub-trades it must employ, Classic pays their fees within 30 days, sometimes 15 for smaller businesses.
The biggest obstacle facing the builder is available land for housing projects. To qualify as suitable land, each parcel must have the proper zoning, size and location, which limits the possibilities of available space to develop. So increasingly Classic Construction is going to build up instead of out.
One of its next major projects is a four-storey, apartment-styled condo called Norwood Grande, aimed at the 50-plus lifestyle. The company has projects under construction in Medicine Hat and High River and is looking to expand into Lethbridge, Brooks, Calgary, Edmonton and Canmore.
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