Measurement Inc., one of the city of Durham's largest employers, is moving in a new direction.
As Measurement celebrates its 30th anniversary this year, the $80 million company's founder and current CEO, Henry Scherich, wants to become a major developer of land the company owns near downtown Durham.
The move represents the first time that MI has diverted any corporate attention from its niche specialty in educational testing. Even so, this diversity is consistent with Scherich's business and personal strategy. He's been a longtime supporter of the restoration of the Durham's downtown. Morris Ridge, according to Scherich, will become an anchor for the city's downtown.
Ever since Scherich moved his then-tiny company from the basement of Northgate Mall to its current headquarters building on Morris Street in 1993, he has been one of Durham's most active promoters of the downtown business and residential community. That includes taking three landmark buildings - Brodie Duke, BC Remedy Co., and Imperial Tobacco - and converting them into offices and processing centers.
"Scherich," says William Kalkhof, president of Downtown Durham Inc., "is one of the shining stars in the turnaround and redevelopment of downtown Durham. He's brought his energy and vision to Durham's revitalization."
Scherich was a Downtown Durham board member for nine years and chairman from 2000 to 2002.
The real estate venture has been spun off as Measurement Durham LLC, a separate company owned jointly by MI and the Scherich family. One of Scherich's sons, Bryan, heads the Morris Ridge operations; his other son, Nathan, is a Broadway actor, presently touring as a lead actor in "Jersey Boys."
For starters is Morris Ridge, a five-story building with 25 one- and two-bedroom condominium apartments plus 78,000 square feet of office space. Scherich is confident that he'll be able to line up financing for Morris Ridge and begin construction next year, despite the down economy and increasing competition from other planned development projects such as the American Tobacco campus.
Looking ahead, Scherich plans a few years later to build a second similar building along with a 600-car parking deck.
Raised in Kansas
Scherich is from Wilmore in western Kansas, where his father was a rancher. His father went to high school and his mother had an eighth-grade education, but they encouraged him to get a college education as a way to avoid their hard ranching life.
Though it has been decades since he lived on a farm, he's never lost his interest in owning land. This instinct led him to acquire eight acres a block south of the old Durham Bulls field, where MI has its three buildings with approximately 275,000 square feet used for the company's offices and processing centers.
He graduated from Ottawa University in Kansas and then taught high school business and U.S. history for four years. This being a small Kansas school, Scherich was either the coach or assistant coach of the football, basketball and baseball teams, the school's only varsity teams.
After receiving a doctorate in educational testing from Southern Illinois University, he moved to Durham and a job for three years with NTS Research Corp. (now defunct) prior to starting MI in 1980 in the basement at home.
MI operates as a full-service educational testing company. Its initial business was developing and hand scoring student achievement examinations for kindergarten through college, as well as at the professional level for state departments of education, local school districts and other educational agencies. It subsequently moved toward automated scanning devices and readers for a number of state tests. Most MI contracts, Scherich says, range from three to five years, and are usually renewable.
The company has contracts with New Jersey, Connecticut, New York, Illinois, Tennessee, Alabama, Arkansas, Nebraska, West Virginia and Utah. Connecticut has been a client for the past 29 years.
MI, however, has no contracts with North Carolina since assessment tests are all true-false exams that are machine-read by the Department of Education. In New York, where all public high school students are required to take the annual exams that test academic skills in all academic subjects, MI staffers read and score the essays.
How it has grown
MI's sales growth to some extent is governed by economics. Scherich says that some states at this time are considering curtailing some tests to save money. At the same time, the Bush administration's No Child Left Behind act fueled the need for more state testing. The change by the Obama administration to its Rise to the Top approach to education, says Scherich, should continue the need for mandated state testing.
Measurement is listed in the top tier of companies in the educational testing field. The industry leaders are Educational Testing Service, ACT (both known for their college entrance exams), Pearson, and CTS McGraw-Hill followed by MI, and several other comparably sized companies.
"At least once a week I get a call from some Wall Street type on either taking us public, acquiring us or merging us with another company. We turn their offers down," Scherich says.
MI operates as an employee stock ownership plan, with Scherich continuing to own the largest share. "I want MI to control its own destiny despite what the experts tell us," he adds. "In 2008, we had a bad year and we lost money. As a public company, I might have been forced out of my job based on the results."
Still involved daily
At 71, Scherich has no plans to retire. He gets up at 6 a.m., reads two newspapers before getting to work a few hours later, and spends the typical day running a company with 375 full-time employees and many times that number of part-timers at peak periods, when MI staffers are reading and grading state mandated writing tests. Many staffers are either retired or former teachers.
When Scherich retires or leaves the company, MI will most likely be run by its current officers and managers, who, he says, will decide the direction of the company - whether it remains independent, goes public or is acquired.
MI has four directors including two company insiders, Michael Bunch, a senior vice president in charge of test development, and Alex Avila, vice president and chief financial officer, along with Ginny Bowman, a Northgate Mall principal and once MI's landlord.
Years ago, Scherich was involved with every aspect of the company's operations. Things have changed.
"I now spend my time on getting and renewing contracts. I do little project work. I let others do it since they can do it better than I can, and are better in handling the ever-changing technology."
Robert K. Otterbourg of Durham is the author of several books, including "Switching Careers." Reach him at email@example.com or 919-489-9591.