Firm eyes national growth following design merger: CSO SchenkelShultz could bring more offices into fold

The two design firms joined forces to become CSO SchenkelShultz and consolidated more than 100 employees at the north-side office CSO previously occupied by itself at Parkwood Crossing.

The combined firm might become much larger, however, if a long-term plan unfolds to bring more locations under the umbrella.

Based in Fort Wayne, SchenkelShultz has nine remaining locations in Indiana, Florida and North Carolina separate from the merged office in Indianapolis. The merger could be a first step to a deeper relationship between the two firms, said James Schellinger, president and CEO of the firm.

“There is not really a national player in the industry here,” he said. “We have good-quality players, but if we have a player that is going to be built up, this might be the seed that leads to it.”

A separate CSO office in Orlando, Fla., also could be brought into the fold.

Partners of the two firms began exploring a merger during their involvement in the $974 million midfield terminal project at Indianapolis International Airport. CSO is the architect of record and will approve all drawings submitted by the design architect, St. Louis-based HOK Inc. SchenkelShultz and Archonsortium LLC, a group of six minority-owned design firms, are associate architects.

CSO’s design specialties include education, aviation and corporate-commercial architecture.

SchenkelShultz also had a strong education and aviation practice, but brings a niche in designing justice and corrections buildings to the new operation.

“We came in with a pretty healthy list of projects,” said Thomas Neff, a principal who arrived from SchenkelShultz. “It’s not like we came in with our hands out and our mouths open. It’s a healthy merger.”

Before the consolidation, both firms had been involved in the first phase of Indianapolis Public Schools’ $832 million capital improvement project to renovate and build schools. So, before IPS awarded contracts for the second phase April 12, partners of both firms shared their merger intentions with IPS Superintendent Pat Pritchett.

The partners mollified any concerns that might have arisen, as the firms were awarded joint contracts on school projects totaling $67 million. They include renovations to George Washington School No. 14, Joseph Bingham School No. 84 and Shortridge Middle School.

“We have worked with both firms previously,” said Deb Kunce, an associate at Schmidt Associates who serves as program manager for the IPS bond issue. “We feel very confident they will do a great service, as they have done in the past.”

In the course of their education work, the two firms had crossed paths several times and shared a number of clients, which made the fusion easier, Schellinger said. But they often canceled each other out on projects, too.

That will no longer be an issue under the combined structure, which at least one rival also welcomed.

“It took two competitors and turned them into one, so there’s one less entity I have to go up against,” said Geof Odle, president of Odle McGuire & Shook. “In some ways, I feel like they did me a favor.”

The announcement, nonetheless, surprised Odle, who said he was unaware of any rumblings that the two firms might hook up.

Odle McGuire is the city’s 12th-largest architectural firm and also has IPS contracts, including renovations at Northwest and Howe high schools.

Odle considers CSO, which his firm worked alongside on Anderson school projects, and SchenkelShultz both “very qualified firms.” He doubted, however, that the merger would cause him to change business strategy.

“We’ve been around 90 years and have weathered a lot of storms,” he said. “I don’t see it really impacting what we’re trying to do as an organization. We’ll go head-to-head with them anytime.”

Schellinger and Neff, meanwhile, have known each other for years. Neff was a young instructor at the University of Notre Dame when Schellinger and fellow firm principal Daniel Moriarity were students. Later, the three men would see one another in the 9100 building at Keystone at the Crossing, where CSO’s office once was located, and where SchenkelShultz was housed until last month.

The casual relationship turned into a business courtship after the two became involved in the midfield terminal project.

“In the course of all that, we thought maybe there’s life beyond the airport for our firms,” Schellinger said. “It was kind of like dating.”

The locally based CSO was founded in 1961 and was the third-largest firm in the city, in terms of the $11.1 million in local architectural billings it posted in 2003, according to IBJ statistics.

SchenkelShultz was founded in 1958 and opened its local office in 1991. Its $3 million in local architectural billings in 2003 ranked the firm 13th largest in the city.

Combined, the two firms should leapfrog No. 2 Browning Day Mullins Dierdorf Architects, but finish well behind leader BSA LifeStructures Inc., which had $29.2 million in local architectural billings in 2003.

None of SchenkelShultz’s staff members lost their jobs during the transition, executives said.