“Our Biggest Challenge is our Biggest Opportunity”: IMS Tackles Educational Projects Through Modular Design and Construction

iMod Structures, Mare Island, San Francisco, Goldman Sachs
Image Courtesy of iMod Structures

By Meghan Hall

The construction industry’s reputation that it is immoveable to change is slowly softening, and an increasing number of new and innovative companies are establishing a footing in an effort to address some of the construction industry’s biggest woes including costs, timelines and efficiency. These new companies are putting pressure on traditional processes and are forcing those in the industry to take a look at how construction practices can be improved. For those at iMod Structures (IMS), modular construction is the name of the game. According to IMS co-founder Craig Severance, modular has gained critical momentum in the industry and can help those within the Bay Area address critical projects in a timely and cost-conscious manner.

iMod Structures, Mare Island, San Francisco, Goldman Sachs
Craig Severance, iMod Structures

Craig, please tell The Registry about iMod Structures, which makes prefabricated modular classrooms. Why did iMod Structures believe that prefab was an important innovation from which to base its business? 

Our founding team has a deep background in commercial real estate and development, and it was very apparent to us at the get-go, about ten years ago, that traditional approaches to designing and constructing buildings of all types had to change, and change radically. Very little had changed in construction for decades, and traditional approaches were too slow, too expensive, inefficient and inflexible. So, we looked globally for new ideas and formed a joint venture with A.P. Moller Maersk who had a mutual interest in exploring prefabricated, modular construction on a global scale. Together, we designed an innovative moment-frame building structure that could be transported easily, globally by road, rail or sea. This heavy steel moment frame design eliminates the need for interior structural walls and there are no shear walls, so it is ideal for use in seismically active regions such as California. And, buildings based on this design can be easily relocated, expanded, contracted and reconfigured to meet the changing demands of our customers, in our case that means schools, colleges and universities. 

Why did IMS choose to target school and educational product types in particular? 

Initially, we saw a big opportunity in using this new building system in places where traditional construction was impractical, such as in immediate disaster relief. After deploying buildings to Guam, Chile and, after the earthquake, to Haiti, we returned home to California and were introduced to the folks at the Los Angeles Unified School District (LAUSD). We learned a lot, including that one out of every six Californians spends their day in a classroom. We also learned that LAUSD owned thousands of deteriorating classrooms, mostly in the form of wooden portables or double-wide trailers, in immediate need of replacement. Because of changing demographics, they needed classrooms that can be relocated multiple times, expanded and/or contracted in size, both horizontally and/or vertically. They needed classrooms that could accommodate new digital teaching solutions as they become available to help teachers engage students that have grown up in this post-digital era. Our new system met those needs ideally. Although it is an opaque market that commercial real estate does not track, it is huge, on par with the size of the office, industrial, retail and multifamily segments. According to a 2012 report by UC-Berkeley Center for Cities and Schools, California needed to invest $117 billion in repairing, replacing or building school facilities by 2022.

Why is an organization like IMS particularly important in a market such as the Bay Area, where construction costs are high and space is generally constrained? 

Our prefabricated, modular buildings are 90 percent finished inside our factory on Mare Island, just across the bay from San Francisco. Doing so gives us far better control of our product’s quality and delivery schedule. Our buildings can be installed within a few days after delivery to our customer’s site, at a lower price point and with degrees of flexibility — relocatability, reconfigurability, expansion, contraction — that just isn’t possible with traditional types of commercial real estate and construction. Collectively, this means lower costs and greater value in our facilities, short-term and long-term.

Is there a project that IMS has worked on within the Bay Area that it is particularly proud of or would like to highlight? If so, why? 

We are currently constructing prefabricated, modular classrooms for three schools in the Bay Area, including one of CSU’s campuses. For one of them, we will install eight “Future Proof” classrooms on temporary foundations and then, at a time of our customer’s choosing, these classrooms will be disassembled, relocated and incorporated into a permanent building as second-story classrooms. No other manufacturer of classrooms can match this capability to provide such flexibility and reconfigurability.

IMS was also the first modular classroom maker to receive the US Resiliency Council’s Platinum Earthquake Rating. Why is this recognition, that IMS is seismically sound, so important? 

Resiliency is critically important, particularly in California. Resiliency measures the degree to which a building can be put back into service after a major seismic event, meaning no broken windows, no walls cracked, no structural damage, among other things. A platinum LEED building that must be pushed into a landfill after an earthquake is an economic and environmental catastrophe. Because researchers at the United States Geologic Survey estimate that there is a 99 percent chance of a 6.7 magnitude or larger earthquake occurring somewhere in California within the next 20 years, who wouldn’t want a platinum-rated building from the USRC? 

In 2019, IMS leased and moved into a new, 100,000 square foot home, part of the Mare Island Naval Shipyard on San Francisco Bay. How will IMS’ new home facilitate its business in the Bay Area in the coming years? 

Mare Island is awesome! We could not be happier locating here within a historic 100-year-old building where the US Navy used to build submarines to help protect the nation. Now, we build state-of-the-art 21stcentury learning environments here. What a transition — from submarines to high-performance classrooms. How lucky are we! With 14 high-speed ferries each day to downtown San Francisco, proximity to route 80 and its access to the East Bay and Sacramento and a short commute to Napa and Sonoma, we believe our location is second to none. Importantly, we value the support we receive from the City of Vallejo and the greater Solano County community.

In early 2019, IMS received its first institutional investment from Goldman Sachs. The funding round garnered IMS $10 million. How has IMS used those funds to grow its business? 

We have accomplished a lot in the past year. We have invested over $1 million to transform our space into a modern manufacturing facility; competed for and won three out of three RFP’s to construct modular classrooms; diversified the sourcing of our iMod frames to three companies, two in Shanghai and one in Mexicali; have been awarded a platinum earthquake rating from the US Resiliency Council; and formed our own general contracting firm, iMod Construction. And, along the way, we’ve assembled an amazing crew of people dedicated to our mission of transforming education through classroom innovation. 

Much has changed since the beginning of the year. How has the coronavirus impacted the education facilities market, and your growth plans for 2020? 

In many ways, it has dramatically changed everything and nothing. At the end of the day, students still need to go to school, teachers and professors still need to instruct our future leaders. And the decision makers at schools at every level – at K-12 to community colleges to the CSU and UC systems – need to provide safe, healthy, stimulating 21st century learning environments the moment schools are reopened. There’s never been a better time for the leaders in our educational system to step back, reflect on what we’ve just gone through, and re-evaluate what role our schools play in our communities and what type of facilities are needed to ensure their ability to meet that challenge. 

No doubt, the challenges in front of us all are considerable. But we also recognize the critical need for safe, healthy, resilient school facilities and we believe in some ways, our time has come. By the end of 2020, we hope to have constructed more than 40 classrooms at schools around the state. And, we are projecting that we will have  built a pipeline of business for 2021 which will enable us to install over 200 classrooms per year. Our production plan projects that, by the end of the year, we’ll be producing one classroom per day, which will enable us to meet a steadily rising demand.

What challenges does IMS face as it grows its business, and how does the firm plan on working to overcome them? 

Our biggest challenge is our biggest opportunity: developing a reputation for providing an excellent customer experience. Consistently delivering at every stage of our customer relationship is how we’ll address that challenge. It starts with our strong belief that our Future Proof classrooms provide a learning environment that is second to none. Again, what can possibly be more important than the education of our children?