Posted on: Sunday, August 17, 2003

Military homes contractor spurted from diverse roots

By Dan Nakaso
Advertiser Staff Writer

The company selected to build, manage and maintain thousands of military homes on O'ahu traces its roots to a family-run construction company in California's wine country and to an Australian startup that grew into a multibillion-dollar conglomerate now trying to reinvent itself.

Actus Lend Lease is the progeny of two companies from divergent parts of the world, focused on getting military housing contracts like the $1.7 billion one on O'ahu announced earlier this month. The company was formed in 1999 from a joint venture between Napa, Calif.-based Actus Corp. and Lend Lease Projects U.S.

Actus Lend Lease remains a private subsidiary of Sydney-based Lend Lease, one of Australia's largest construction companies that's traded on the Australian Stock Exchange.

The Lend Lease Group operates in 43 countries on six continents. Its more than 100 subsidiaries have offices worldwide and are responsible for building landmarks such as the Olympic Village for the Sydney Olympics.

But Lend Lease grew into many divergent ventures, resulting this year in a retrenchment and after-tax write-down of $300 million. And in the past several months, its three top executives have left the company.

"The essential business decisions have been made to build on our successes and deal conclusively with our failures," Lend Lease's managing director and CEO, Greg Clarke, said in May while the write-down was being announced.

"It is clear that what I would call the grand global strategy embarked upon several years ago has eluded successful execution, especially in the U.S. ... "

But as the parent corporation adjusts itself, Actus Lend Lease and its 200 employees have scored four of the Pentagon's new "privatized" military housing projects — including this month's Army contract to build 6,500 homes on O'ahu and renovate 1,200 existing ones. Besides the major work for the Army, which will include maintaining the new homes for the next half century, Actus Lend Lease will build some Marine and Coast Guard homes on O'ahu.

Actus Lend Lease, which is focused on privatized military housing, now stands as one of the keys to Lend Lease's new streamlined strategy, Clarke said.

Actus Lend Lease has held a low profile in its four years of existence. Company officials decline to disclose separate revenue figures. Lend Lease's 2002 consolidated financial report does not list specific Actus revenues.

But Actus Lend Lease won some of the Army's first privatized military housing projects — for 5,912 homes at Fort Hood, Texas; 4,230 more at Fort Campbell, Ky.; and 1,718 units at Beaufort Marine and Navy bases in Beaufort and Parris Island, S.C.

For the Army's O'ahu project, spending will rise to $6.9 billion over the 50-year life. Actus Lend Lease remains in the running for Navy and Air Force privatized housing projects on O'ahu.

It's a long way for the Actus side of the company, which was started in 1979 by a Napa builder named Mike Hubbard. His family business worked on military housing contracts and 20 years later drew the attention of Lend Lease, which was looking to expand in the United States.

Lend Lease traces its history to 1950, when a Dutch building company called Bredero's sent a man named Dick Dusseldorp to Australia to search for business opportunities. Civil & Civic grew out of Dusseldorp's efforts and its first contract was building 200 prefabricated houses for the Snowy Mountain's Authority in 1951. Seven years later, Civil & Civic took on new investors and changed its name to Lend Lease.

In 2002, Actus Lend Lease drew Lucien Wong out of semi-retirement to take charge of the company's military construction on O'ahu as regional vice president.

Wong, now 59, had worked on two of Hawai'i's biggest master-planned communities — Hawai'i Kai for Kaiser Development Co., and Mililani for Castle & Cooke.

"When I was asked about helping the Actus team work on the military privatization, I really saw it as a great opportunity to use the over 30 years I have in real estate in solving a major problem that the military has, which is in trying to provide decent homes for military families and Army families, in this case," Wong said.

When he joined Actus Lend Lease in September, Wong was unprepared for the changes about to hit parent Lend Lease. He was primarily focused on Actus Lend Lease's privatized military contracts and managing the 18 Honolulu-based employees.

But even with the shifts under way in Sydney, Wong remains convinced that Actus Lend Lease will continue to move forward.

"Change is not necessarily something to fear," he said. "Sometimes change brings opportunities."

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.