Michael Schendel – AssuredPartners
It’s practically a recession-proof business. So Michael Schendel says about issuing surety bonds for public projects primarily in the greater Washington/Baltimore market. Around here, there’s always infrastructure to build or refurbish, and bonding is necessary for a bidder to be considered for any project over the very modest threshold of $200,000.
Many such bidders acquire their bonds through AssuredPartners, which in 2016 bought Schendel’s firm, Centennial Surety Associates Inc., and retained him as a senior vice president for managing the bonding department and growing the overall business. Along with Schendel’s services, the firm acquired much of the clientele he had nurtured since the early 2000s. Business grows briskly, he says, with clientele including companies entrusted with installing blast-proof windows and doors at federal installations in and around the nation’s capital as well as Brazil and other foreign locales—everyone seemingly at risk these days.
But while Schendel says his employer’s business model is recession-proof, it’s far from foolproof. There’s always risk associated with the high-stakes surety process, what with bond and insurance companies guaranteeing a project will be completed even if the bondholder doesn’t perform. According to Schendel, it’s a trust-driven, good-faith process that generally satisfies the interests of the firm, bondholder and public entity that solicited the bid and, as is the case with insurance, the higher the risk, the costlier the bond.
“I have customers whose work is 100 percent bonded,” he tells Blueprint from his Hanover, Maryland, office in January. “It’s their lifeline. I work with people who may need one bond or many. I have had some customers for over 25 years but remain active with helping new and existing customers grow.”
With Schendel and his department poring over a client’s business and personal financials, he can suggest ways to enhance the business and mitigate risk. He retains accountants and law firms to review contracts and, if necessary, refer clients to a claims service or a bank to enhance financing.
It’s satisfying, Schendel says, to see the results of projects that couldn’t be consummated without the feds being assured that the financial foundation was sturdy. During the early 2010s, his Centennial sold the bond necessary for a contractor to paint the center span of the 4.3-mile Gov. William Preston Lane Jr. Memorial Bridge—aka Chesapeake Bay Bridge—that connects Maryland’s eastern and western shores.
When Hurricane Katrina devastated New Orleans, and much of the Mississippi Delta, Schendel’s firm covered $500 million in bonds for cleanup. Around 2015, when the Iwo Jima memorial in Arlington, Virginia, needed refurbishing, Centennial again guaranteed the work would be done to military precision.
More recently, during COVID-19, AssuredPartners was deemed an essential business as public projects couldn’t be paused because of the pandemic. Though military bases elsewhere were retracting, those in Virginia and Maryland were expanding. In the last five years, even the Bethlehem Steel Site in Baltimore has been revamped to house many large warehouses, including Amazon.
With the risk of terrorism or a large-scale disaster very real, it’s caused authorities to prepare for scenarios that had one of Schendel’s customers bonding a war environment, where doctors and nurses can hone their emergency skills. Other projects have included the firm bonding a customs border facility in Upstate New York, just this side of the Canadian border.
“We’re very fortunate to be in one of the most vibrant construction markets in the country,” Schendel says. “There’s always a billion-dollar project going on.”
Some of these calls for the contractor’s sensitive scheduling, such as when Schendel bonded the upkeep of a bridge over the Potomac River. With falcons nesting underneath, the project had to be delayed until the fledglings were gone. He’s guaranteed other projects with an environmental bent, including restoring oyster beds in Galveston Bay, Texas, and Chesapeake Bay. In addition, Schendel bonded most of the stream restoration work in Anne Arundel and Baltimore Counties.
“Oxygen levels in the Chesapeake are low, but as the oysters come back, water quality should improve through their filtering,” he says.
Schendel, being a boater on the Chesapeake, has a vested interest in a cleaner bay. Having a hand in that process is all part of what he calls the very intriguing industry of enabling public and sometimes private construction through bonding—a profession he took up partially out of happenstance.
Born to bond
A 1987 Loyola University Maryland graduate with a degree in management and marketing, Schendel recalls attending a campus job fair and interviewing with what was the nation’s largest bond writer, Fidelity & Deposit Company, and Kellogg’s. For whatever reason, construction bonding seemed more interesting than pitching breakfast cereal and around a quarter-century later, Schendel says he’s satisfied with his career choice.
He started out working for two of the top 10 bonding companies before going to a bonding agency. Comfortable enough in this business, he started his own nationwide brokerage, Centennial Surety, which performed well enough to be coveted by industry giant AssuredPartners in 2016.
Then a buyer and investor in insurance brokerage businesses, AssuredPartners sought access to the construction bonding market and approached Schendel with an offer to be acquired. Since that deal was sealed seven years ago, AssuredPartners has acquired around a dozen more such operations.
But while Schendel no longer owns his firm, he says his responsibilities remain unchanged.
“My company, Centennial Surety, was never for sale, but being acquired by AssuredPartners further expanded my company,” he says. “There’s been little or no change in what I do with my customers. I could not do what I do without a solid support team that handles the daily flow of bonds. I am proud that my entire support team with Centennial Surety remains in place with AssuredPartners. We’re the strongest department here, the one that drives the ship.”
That has the now 59-year-old Schendel essentially being on call at the client’s convenience. He’ll answer his cell if someone needs to speak with him at 6 a.m. or on a weekend. He’s had many productive brainstorming sessions on Sundays when, in a 9-to-5 world, he’d be on his boat or watching the Baltimore Ravens. Time is money—big money—in the construction industry, and before any ground can break for a public project, the would-be builder needs bonding.
Schendel can empathize with him, too, as he is a builder.
“I’ve always liked to build something,” he says. “I’m building relationships and helping my customers grow.”
View this feature in the Blueprint Vol. II 2024 Edition here.
Showcase your feature on your website with a custom “As Featured in Blueprint” badge that links directly to your article!
Copy and paste this script into your page coding (ideally right before the closing