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CONCE ALING A GA S LINE

AMERICAN BUILDERS QUARTERLY

Alliance Pipeline buried 80.1 miles of pipe under North Dakota’s surface ME T ROPOL I TA N M A K EOV ERS

Paramount Group gives five prime downtown buildings a new look

CALIFORNIA H IGH-SPEED R AIL

The trek to complete the track MEE T KEITH PROBYN

Shell’s VP of real estate is reinventing the firm’s development efforts

DA TA C E N T E R

GENIUS JAY PA RK’S 2 A.M. BRE A K T H ROUGH BROUGH T FA C E B O O K A NE W, HIGHLY

EFFICIEN T DATA- CEN T ER DE SIGN, W HICH T HE S OCI A L MEDIA POW ERHOUSE IS NOW SH A RING W I T H T HE WORLD


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In This Issue

10

30 38

10 Fast-Tracking High-Speed Rail The California High-Speed Rail Authority is looking to finish the first line in the nation, which will take passengers from San Francisco to LA, by 2029

128

143

30 Facebook’s Energy-Efficiency Genius Jay Park woke up at 2 a.m. one morning and drew a power-system design on a napkin; his middle-of-the-night inspiration has led to a US patent and three (soon to be four) hyperefficient Facebook data centers that have sent ripples through the technology industry

On the COVER In a corner of Facebook that many don’t see stands Jay Park, the man with the plan. His mission: to improve the energy performance of data centers worldwide— and to honor the memory of his son, who died tragically last year. Park’s achievements are already historic, and he’s not done yet.

38 Now You See It, Now You Don’t For a state with as much natural beauty as North Dakota, an 80.1-mile pipeline seemed like a threat, until Alliance Pipeline worked its magical disappearing act, skillfully preserving the land 128 Improving a $10B Portfolio How Marce Sanchez maximizes the potential of Paramount Group’s properties, located in prime spots in the hearts of New York City, San Francisco, and Washington, DC 143 Innovating Shell’s Practices VP of real estate Keith Probyn changed the way the oil company sources its projects—learn how

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Photograph by Sheila Barabad

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5


CONTENTS

VIEW FROM THE TOP

NICHE

VISION

16 A Veteran of Senior Living Glenn Kaplan built his first senior-living facility in the 1970s and has seen the market boom over the past 35+ years—find out how he’s innovating the industry today

6

19 Chicago Architecture’s Up-and-Comers In 2013, Perimeter Architects added two new partners, and the firm’s portfolio of work is set to blossom with $96M of construction over the next three years

22 Master Planning Vista Canyon The story behind Santa Clarita, CA’s newest live-work-play community, nearly 10 years in the making 27 Growing Old in Paradise Tennis player-turned-Kisco Senior Living CEO Andy Kohlberg has built a brand of communities that focuses on high-quality staff and sought-after environments, including its newest in Hawaii

62

22 62 Laying The Groundwork It took just 10 years for HTI Polymer to become a leader in the industrial-flooring industry, and it continues to attract big names such as Boeing, Starbucks, and Costco by developing deep partnerships

78 Protecting Coastlines Everywhere The 124-year-old Great Lakes Dredge & Dock has made an indelible mark in Chicago’s history, expanding not only across the country but overseas as well; its most recent work is at PortMiami

67 From Hurricane Cleanup to Superfund Sites Clean Harbors has earned a reputation as the go-to contractor for truly harsh conditions; its emergency-response expertise has led to work in Superfund cleanup and building in the tundra

83 Save the Salmon When the State of Washington passed the Salmon Recovery Act in 1999, Morgan & Son Earthmoving found its new niche: fish-habitat restoration

72 Growing the Family Business Ken Bressler purchased Builders & Remodelers in 1995 and, together with his sons, is expanding into new services, a new warehouse, and postrecession growth

102 An Unlikely Match Proved Successful Callison general counsel Lisa Strauch Eggers’s experiences with such firms as Amoco and Starbucks more than make up for her inexperience in the architectural world

110 Pinkberry’s Real Estate Ringer After working for Panda Restaurant Group, BJ’s Restaurants, and Jamba Juice, Ryan Patel joined Pinkberry, and he has taken the frozen-yogurt chain to more than 250 locations worldwide

105 Protecting a 108-Year-Old Company PCL Constructors’ sales have grown nearly 100 percent since it launched its legal department in 2006—almost exactly 100 years after its founding

113 Branching Out to Olive Branch, MS Nabholz Construction Services’ executive VP and general counsel explains the challenges behind the firm’s expansion to the greater Memphis, TN, area

108 “I ask a lot of questions” How Jim Archibald, partner at Bradley Arant Boult Cummings LLP, stays on top in the field of construction law

115 Morgan Stanley’s ArchitectTurned-Project Manager “Architecture is not about buildings; it’s about the people who use them or live in them,” Saeid Garebaglow says—see how his philosophy informs his workplace designs

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87 Managing the Three Rs of a Project Waste Connections’ Recycle360 tool helps project managers easily track waste for certifications, giving them more time to get creative with their efforts to reduce, reuse, and recycle

120 Cutting Back to Stay in Business A breakdown of the methods Builders FirstSource employed to stay afloat during the recession, and how the company is poised for a comeback 123 Down to Business Paul Cohen, who has served as Golder Associates’ general counsel since 1992, provides insights into the employeeowned organization’s success 141 Gulfport Energy and Utica Shale A by-the-numbers look at the pureplay company’s natural-gas production progress in Ohio 149 Laying Down the Law How Burns and Roe’s senior VP and general counsel Andrew Ratzkin avoids the extraneous costs of outside counsel


CONTENTS

45 Zero Energy Ready in Michigan Cobblestone Homes strives to oneup itself year after year by seeking new efficiency challenges; its latest work meets the DOE’s Zero Energy Ready Home program guidelines

BUILD

49 The New R&D Campus ProTecs’s specialty in R&D and manufacturing facilities led it to Advance Realty’s New Jersey Center of Excellence at Bridgewater, a live-work-play R&D community unlike any other

54 Luxury Homes for the C-Suite Fore Group founder Fotis Dulos leveraged his managementconsulting skills to create an exceedingly successful highend homebuilding firm with CEOs and CFOs as clients 58 Juniper’s New HQ The story behind the hurdle-laden construction of Juniper Networks’ new campus in California on an old Lockheed Martin site full of surprises

52 Riding The Waves in Las Vegas Mountain Vista Development saw Sin City through boom and bust and has become leaner and meaner through it all

58 90 Al Jazeera America’s NYC Studio When the renowned broadcast network needed a US-based studio in 60 days (a project that should’ve taken nine months), it was Dennis Darcy Construction Group to the rescue

FINISHES

94 Multimillion-Dollar Coastal Dwellings The luxury Northeast beach homes of Dewson Construction

90 166 Shopping or Working? Rackspace’s new HQ inside an abandoned San Antonio mall is a new facet to the work-meets-play culture of today’s tech companies

156 Wood Partners’ Budget Guru “Most people look at project costs as an overall price per unit or per square foot, but I’ve never looked at it that way. … You miss the big picture,” Clayton Myhre says

169 Rescuing a Phoenix Hotspot How De Rito Partners worked with a local Native American tribe to redevelop and revitalize a shopping and entertainment plaza

158 26 Years with Clayton Homes General counsel Tom Hodges tells of his trial-byfire start at the manufactured-home builder, and the effects the firm felt from the Dodd-Frank Act

172 “The modern-day general contractor is a pencil pusher” Bob Knepper is an old-school kind of guy, so the renovation of a historic Denver home was right up his alley

160 Founding Father One of the nation’s leading surety bond lawyers, Robert Watt welcomes difficult cases; it’s how he led his firm to the top of the construction-law field

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REVISION

150 The Culmination of a Career Litigator-turned-real estate manager Alan Di Sciullo recounts his career and his role with Shearman & Sterling, one of the world’s largest law firms

174 Hitting the Jackpot To Loeffler Construction, the renovation of Jackpot Junction Casino is just the beginning of what it hopes will be a long-standing relationship with the Lower Sioux Indian Community

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EDITOR’S LETTER

Photo: Michelle Nolan

“Genius” is not a word I throw around lightly. WE COVER MANY INNOVATORS in the construction industry, but few, if any of them, have been worthy of being called “genius.” Until this issue. Until we met Jay Park. A kind, gracious man with serious brain power, Park conceptualized a power-system design and natural-cooling system for Facebook’s data centers (which are known to overuse energy) five years ago. This year, he was promoted to vice president of data-center design, construction, and facility operations for the social media giant. A few weeks later, his design finally received its patent. In the time between his idea and his accolades, three data centers were constructed under his supervision, all of which consume 38 percent less energy than comparably sized data centers. A fourth data center is in the works, and Park’s designs and the centers’ performance data are being shared with the world via Facebook’s opensource platform, the Open Compute Project (opencompute.org). The company also provides a dashboard that shares real-time readings of the centers’ power-usage effectiveness. It was 2 a.m. when Park first sketched his DC UPS power-system design—on a dinner napkin, no less (see a scan of it on p. 30). The napkin now hangs, framed, in Facebook’s headquarters. You can see why this is my favorite article in this issue and our cover feature. The story just writes itself; it’s that good. In a way, Park is a living legend. And, certainly, a genius.

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INDEX PEOPLE & COMPANIES

Hodges, Tom HTI Polymer Issa, John

A B C Advance Realty AECOM Al Jazeera America Alliance Pipeline Archibald, Jim Ashland Associated General Contractors of America Backer, James Berry, Steve Boeing Bouck, Steve Bradley Arant Boult Cummings LLP Builders & Remodelers Builders FirstSource Burns and Roe Bressler, Ken California High-Speed Rail Authority Callison, LLC Campton, Chris Carlise, Chuck CBRE Centerbrook Architects and Planners Ceridian Clayton Homes Clean Harbors Cobblestone Homes Cohen, Paul Costco Crow, Chad

49 144 90 38 108 49 77 22 87 63 87 108 72 120 149 72 10 102 62 169 144

90 169 94 94 49 150 75 55 19 102 30, 64 75 54

GHI Garebaglow, Saeid, 115 Golder Associates 123 Great Lakes Dredge & Dock 78 Gulfport Energy Corporation 141 Hainsworth, Josh 52 Helicopter Transport Services 65 Hines 144

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JKL JSB Development Juniper Networks, Inc. Kaplan Development Kaplan, Glenn Kapson Senior Quarters Kaufman, Molly Kinch, Jamie Kisco Senior Living Knepper, Bob Knepper Construction Kohlberg, Andy Kristin A. Park Residential Design Lavoy, Katie Les File Drywall Lockheed Martin Loeffler Construction & Consulting Loeffler, Doug Loeffler, Tammy Lucas, John

172 78 75 58 174 174 174 58

Malone, Mark 141 McCann, Jacinta 144 McDonald, Michael 67 Mooz, John 144 Morales, Jeff 10 Morgan & Son Earthmoving 83 Morgan, Dan 83 Morgan, Laurie 83 Morgan Stanley 115 Mountain Vista Development 52 Myhre, Clayton 156 Nabholz Construction Services 113

PQR Padavano, Kurt Paramount Group Park, Jay Patel, Ryan PCL Constructors Perimeter Architects Pinkberry Probyn, Keith ProTecs Rackspace Ratzkin, Andrew Richards, Steve Roosevelt, Theodore Rowland, Phil

49 128 30 110 105 19 110 143 49 166 149 105 40 144

STU Safeguard Sanchez, Marce Shearman & Sterling

Shell Soft-Lite Windows Sorrell, Lynsey

143 73 19

VWXYZ 22 58 16 16 16 169 166 27 172 172 27

MNO 178 121 158 67 45 123 66 120

DEF Dennis Darcy Construction Group De Rito Partners, Inc. Dewson Construction Dewson, Tim DiPaolo, Christopher R. Di Sciullo, Alan Dryvit Dulos, Fotis Dvorak, Branyo Eggers, Lisa Strauch Facebook File, Jason Fore Group

158 62 19

169 128 150

Valenziano, Steve Wahl, Mark Wahl, Melissa Waste Connections Watt, Robert Watts, Bill Watt Tieder Hoffar & Fitzgerald, LLP Wood Partners Woods, Andrea Zuckerberg, Mark

22 45 45 87 160 38 160 156 113 30

ADVERTISERS AdvanTech 179 AECOM 145 Alliance Land Planning & Engineering Inc. 25 Armistead Mechanical, Inc. 48 Assurance Ltd. 53 Atlas-Acon Electric Service Corp. 131 Atlas Copco 51 Baker Hughes 41 BBRL 109 BDO 153 Broderick Phillippi Wright & Card 77 Buckley Sandler LLP 159 Building Supply Depot 101 C & J Energy Services 142 CANY 133 Capitol Light 28 Caterpillar 37 CBRE 145 Chips Unlimited 66 Clune Construction Company 131 Connell Foley 125 Cupertino Electric Inc. 2 d5 Design and Metal Fabrication 18 David Pattillo & Associates 165 Delta Consulting Group 164 DEWALT Power Tools 180 Donnelly Mechanical 131 Ellensburg Cement Products 82 First American Title 18 First Quality Products, Inc. 26 Friday, Eldredge & Clark LLP 114 Gensler 155 Goodyear Tire & Rubber Company 89 Group70 International 28 Harvey 145 Henegan Construction Co., Inc. 119 Hiller Electric Company 107 Hines 147

Icon Interiors, Inc. 135 Jacobs 147 John Gallin & Son 133 Jones Walker LLP 82 JSB Development 25 The Kenrich Group LLC 164 KPF 133 Law Journal Press 153 LCM Architects 57 Lewis Bess Williams & Weese P.C. 66 Lockton Companies 104 MasRam Mechanical, LP 157 McKenney’s 37 Metropolitan Mechanical Contractors, Inc. 177 Moye, O’Brien, Pickert & Dillon, LLP 107 Natural Resource Group LLC (NRG) 43 NSC Facility Management 171 NYU Schack Institute of Real Estate 153 Office of James Ruderman LLP 137 OneLine Power Systems 29 Paradise Custom Kitchens 101 Paramount Group, Inc. 127 P.E. Stone, Inc. 137 Pillsbury Winthrop Shaw Pittman LLP 148 PinPoint Commercial 122 Priority Sign 140 ProBuild 48 Rio Grande Drywall Supply Co. 77 Robert Derector Associates 135 Rosendin Electric 29 Safeguard 171 Sanford & Hawley, Inc. 57 San Jose Construction 59 Sears Commercial 4 Soft-Lite Windows 73 SolarGalss 173 SOM 137 Sovereign Mechanical Corp. 135 Specialty Wood Products 173 Steele Land & Inspection 43 Stinson Leonard Street 107 Structure Tone 140 Studley Commercial Real Estate Advisors 155 Summit Law Group 104 Taft 71 TPG Architecture 140 Tri-City Electrical Contractors, Inc. 155 Tutor Perini Corporation 15 VVA Project Managers & Consultants 114 Waldorf Demolition 140 Weyerhaeuser 122 Wood Designè 93

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9


VISION

California’s high-speed rail system will reach speeds of 220 miles per hour and make the trip between San Francisco and LA in less than three hours.

10

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VISION

On the

The California High-Speed Rail Authority wants to finish a line from San Francisco to Los Angeles by 2029, and CEO Jeff Morales is cutting through red tape and finding funding to maintain momentum as the project finally gets under way by Christopher James Palafox

FAST TRACK

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VISION

E

VEN BY 2029, it’s unlikely we’ll all be fer-

rying ourselves to and fro via flying cars and hoverboards, but if all goes according to plan, the state of California will still have an exciting, new, more-grounded form of travel: high-speed rail. The system, which is being developed by the California HighSpeed Rail Authority, will run from San Francisco to the Los Angeles Basin. It will be the first of its kind in the nation, and at speeds of up to 220 miles per hour, it will transport passengers between the two cities (both of them currently rated among the world’s worst traffic regions) in less than three hours. Eventually, the system will run to Sacramento and San Diego as well, with as many as 24 stations and 800 miles of track—which, according to the authority’s estimates, will help revitalize the state’s downtown cores and create more than 100,000 jobs. The railway will also reduce emissions equivalent to those produced by a 500-mile-long line of cars packed onto a California freeway. And, it will save the state as many as 171 flights daily by 2030; by 2040, it will have reduced the state’s total vehicle miles of travel by almost 10 million a day.

It’s an ambitious vision, but again, this is all assuming that everything goes according to plan. So, the authority is currently doing all it can to ensure its hypothetical becomes a reality through proper organization, preparation, and collaboration. “THIS IS A ONCE-IN-A-LIFETIME OPPORTUNITY

to do something that is a once-in-a-generation investment,” says Jeff Morales, CEO of the authority. “It’s something that needs to happen, and it’s our job to make it happen.” Reaching all the way back to the early 1980s, the need to create a better transportation system for the Golden State has been in various stages of development for so long that the idea is now middle-aged, but it only received tangible traction in 1996, the year the authority was formed. The organization was chief ly brought together to handle the planning for a ballot measure regarding the system, scheduled for a vote in the 2004 general election. The proposal for the measure was met with two setbacks, though, which delayed the vote—first to 2006, then 2008. That year, voters finally approved the issuance of bonds, and four

CALIFORNIA HIGH-SPEED RAIL Sacramento

San Francisco

Oakland

Stockton Modesto Merced

San Jose Gilroy

Kings/Tulare

San Luis Obispo

years later, in September 2012, the Obama administration gave its own endorsement, fast-tracking the project. Notably, the president’s approval—aptly named the “We Can’t Wait” initiative—streamlined the permitting process for the segment of track from Fresno to Bakersfield. But, as it is with any massive state project, winning public approval for the rail line is a continual challenge. (Morales is quick to point out that the Golden Gate Bridge—a San Francisco icon—had more than 2,000 lawsuits filed against it during its construction in the Depression.) So, the authority is making a concerted effort to interact with the state’s populous through outreach programs for those directly affected by the project and through the disbursement of information. And, though the lawsuits against the rail line have been settled, allowing momentum to gather, the authority will have to maintain a fast pace to keep energy for the long-term project alive. As the CEO, Morales has had a major hand in bringing together a team he hopes is different from that of a typical state organization, and he has concentrated on keeping it lean so that it’s more akin to a public-private partnership. It has approximately 125 employees and growing, and it comprises top people from a range of public and private industries. Together with a private project-management team and the Federal Railroad Administration, the state-run authority is working toward a blended system that will include new tracks as well as upgrades and connections to existing regional and local rail infrastructures. Its $68 billion, five-step 2012 business plan arose from the passing of Senate Bill 1029 in July 2012, and the authority updated the outline in 2014 to adapt to the setbacks inherent in a project affecting tens of millions of citizens.

Bakersfield

Palmdale San Fernando Valley

Initial Operating Section Early Investment in Caltrain and Metrolink Corridors Bay to Basin Phase 1 Blended Phase 2 Amtrak Surfliner Service Nothern California Unified Service (San Joaquin/Capitol/ACE)

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Riverside

Los Angeles Anaheim

San Diego

The final high-speed rail system, which will cost approximately $68 billion to construct, will blend new track with existing lines and local infrastructure that have been upgraded. The rail line is expected to revitalize downtown corridors, and it will likely create more than 100,000 new jobs as each of its five phases goes up. Eventually, it will extend to Sacramento and San Diego as well.


VISION

California will take the knowledge that Japan has gained from its renowned Shinkansen—the long-running bullettrain system—and adapt it to a new geographic and economic climate.

THE FIRST PHASE, costing an estimated $5.85

billion, will offer immediate statewide benefits. Construction will begin in the Central Valley, an area infamous for its high unemployment rate, and it will generate more than 20,000 jobs annually over the course of five years as crews work on 114 miles of track. Funding for the initial build will come from

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a combination of federal and state sources, but future segments will be backed by a combination of state-bond funds and a program designed to bring in private investment. The first section of track will run from Madera County to Bakersfield, and after it’s completed in 2019, additional work will be done to electrify the Bay Area’s Caltrain

Corridor and help improve Bay Area rail infrastructure. The measures will provide passenger-rail transportation from the Central Valley to Southern California for the first time. By 2022, a 300-mile section from Merced to the San Fernando Valley will run without an operating subsidy, hopefully attracting private investment for the system’s expansion. In 2027, the line will expand from San Jose to Gilroy, and it will then be connected to the Merced portion. (The route will halve the time it takes one to traverse the same distance by car.) By 2029, all the segments will be connected, allowing high-speed travel for more than 520 miles from San Francisco to Los Angeles. The final phase will extend the rail to Sacramento and San Diego, adding 280 miles of track. As Morales sees it, this is an aggressive yet realistic schedule with a lot of work that will need to be done simultaneously. To hit each goal, his organization is constantly evaluating new methods that will help streamline the process and shorten the time frame, but the fact remains that the project will be a long undertaking.

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VISION

“This is a once-in-a-lifetime opportunity to do something that is a once-in-a-generation investment.” Jeff Morales, CEO

MUCH OF THE RAILWAY’S DESIGN, its general route, and its connection points were decided upon simply to meet the guidelines of the US Department of Transportation, but in finalizing the construction plans, Morales and his team looked at everything from environmental impact to community impact. The project will draw from the latest technology and best practices, and the authority has even established consulting relationships with numerous countries that already have highspeed rail systems. One such relationship is a memorandum of understanding between the authority and the Japanese Ministry of Land, Infrastructure, Transport, and Tourism,

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which can be traced all the way back to California’s early rumblings for high-speed rail in 1981. The state will take the knowledge that Japan has gained from its renowned Shinkansen—the long-running bullet-train system—and adapt it to a new geographic and economic climate. Hopefully, by being at the forefront of high-speed rail in the United States, Morales and the authority will act as exemplars for other states looking to adopt similar programs. They could become industry leaders for high-speed rail in the process, ushering in still more economic opportunities for the Golden State. “It’s about preparing California

In total, the system could have as many as 24 stations and 800 miles of track, and it will save the state roughly 171 flights daily by 2030 and reduce its total vehicle miles of travel by almost 10 million a day by 2040.

for the future,” Morales says. Such lofty ambition is what drives the organization’s board members to dedicate large portions of their time to the program. The board is a who’s who of finance, public-transit, infrastructure-development, and environmental-law professionals appointed by the governor and state legislature—but they are all still technically volunteers. California’s population of 38 million is projected to climb to 50 million by 2050, so the state’s zeal for high-speed rail has been born out of necessity more than anything else. And, with millennials gravitating toward walkable, urban neighborhoods, it only makes sense to cater to their needs. Increasingly, people—Californians or otherwise—are fantasizing about ditching their cars to ride the rails, but currently the infrastructure does not allow it. The authority hopes to realize their dream (at least on a local level) and show that if you build it, they will ride.


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VISION Glenn Kaplan’s Career Milestones

1972 Glenn Kaplan and his real estate partners complete their first senior-housing development after the State of New York requested the project to fill a void

GILDING THE GOLDEN YEARS

Senior-living facilities have become dramatically more inviting in the past three decades, and Glenn Kaplan and his various development firms have been there to capitalize on every step of the evolution by Kelli Lawrence

The Bentley Commons at Zephyr Hills is one of many independent-living communities that Glenn Kaplan has built since he got into the senior-housing market in the 1970s and helped transform it.

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1985 Kaplan develops his 10th senior-housing project and decides to found his own business, Kapson Senior Quarters, to focus exclusively on the market

T

HERE WAS A TIME NOT THAT LONG AGO

when the words “senior living” generated little more than blank stares. Nursing homes were an understood industry, but independent and partially dependent living establishments for senior citizens? Not so much. “It’s certainly a lot different now than when we started, when we had to do a dogand-pony show explaining exactly what we were doing and how we planned on doing it,” says CEO Glenn Kaplan, recalling the era when his first company, Kapson Senior Quarters, tried to secure bank financing for its senior-living construction efforts. “The good news is that there are enough [financial]


VISION

1998 Kapson Senior Quarters goes public

1999 Kapson Senior Quarters is bought out by Lazard Frerer

2002 Kaplan reenters the market with Kaplan Development Group LLC

2005 The company conducts its first expansion of multiple properties

2007 The company completes its first ground-up construction

2006 Kaplan watches his business surpass the 10property mark in its portfolio

2008 The Kaplan team completes a historical renovation of the multiproperty Bentley Commons at Keene in Keene, NH

2007 Employees celebrate as Kaplan Development reaches 1,000 units in its portfolio

2013 All American Assisted Living opens, serving as a model for 20–30 more developments Kaplan intends to build

2010 Kaplan sells a four-property, multistate portfolio to AEW Capitol Management while retaining management contracts on two properties in Massachusetts

iw

PC

americanbuildersquarterly.com

2012 Construction begins on All American Assisted Living in Hanson, MA

PC

institutions today. Not all of them will [fund senior-living development], but they understand it. And we’ve got enough of these built now where they’ll come out and take a look.” Kaplan initially entered the market when the State of New York approached him in the 1970s, requesting that he and his real estate partners produce a senior-housing development to fill a void. One project eventually led to more projects, and by 1985, Kaplan and his partners knew that this was where they wanted to focus all their developing efforts. “It was a huge evolution as to what was going on in the world and the infrastructure of family life,” Kaplan says. “People were resolving that, because they had to work, they couldn’t take care of mom and dad full-time, ... and they couldn’t afford to have caregivers and people around the clock.” Thus the need arose for a greater variety of senior-living establishments: assisted living, retirement communities, retirement homes, and the like. Kapson Senior Quarters was at the forefront of the industry boom, and its early efforts to get financing paid off in spades decades later. The company went public in the mid-1990s, was bought out a few years later, then Kaplan accepted a can’t-refuse offer that got him back into it all and led him to create Kaplan Development Group LLC. “We’d ended up with a lot of small mom-andpop [investors] and one-offs that joined what we were doing, and a couple of us broke out of the mold and decided we were going to do it in a much bigger way,” he says. “It worked out to our advantage—and to the advantage of some of those companies that also went public with us at that point in time. It just sort of turned the curve.” The result of his continued efforts is, today, Senior Management LLC, a whollyowned subsidiary of Kaplan Development with a mission of developing top-notch senior-living spaces focused on compassion,

2010 The company gets its first management contract, for the renovated Bentley Assisted Living at Branchville facility in Branchville, NJ

L.

integrity, and respect. More than a dozen Kaplan Development/Senior Management residences now stand in seven different states up and down the eastern seaboard, and for each project, Kaplan himself is involved with financing, acquisition, construction dollars, and oversight of the operational team—a corporate staff of 15 that he feels is key to his company’s success. Customer feedback, in a manner of speaking, is progressing at Kaplan Development as well, and proof of this can be found in one of its newest communities: the All American Assisted Living facility in Hanson, Massachusetts. At 48,000 square feet—compared to the 80,000–90,000 square feet of older structures—it’s more cost-controlled while still providing premium service to its residents. Kaplan Development found that an increasing number of clients with diminishing funds were wondering how to keep their senior family members in choice facilities.

Private Rooms Common Spaces Administrative and Staff Areas Rehabilitation Facilities Lobby Bathrooms

The All American Assisted Living facility in Hanson, MA, has 48 two-bedroom apartments and can accommodate as many as 16 cognitively impaired residents, and Kaplan hopes to build 20–30 more facilities just like it over the next few years.

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VISION

Single point of contact At First American Title, your success is a top priority. Our National Commercial Services team has an extensive knowledge of the challenges you face in the real estate industry, and the solutions necessary for success.

“[Independent senior living is] certainly a lot different now than when we started, when we had to do a dog-and-pony show explaining exactly what we were doing.”

Congratulations to our valued client Glenn Kaplan, President & CEO of Kaplan Development Group, on all of his success! Adam B. Cutler Vice President and Special Counsel 215.606.3626 acutler@firstam.com

Glenn Kaplan, CEO 866.561.5047 q www.firstam.com/ncs

So, the company responded by focusing on a new design that is “more like a college dorm unit,” Kaplan says, explaining that the communities still have private sleeping quarters but also place a greater emphasis on shared living spaces. “The [common areas] are being used, there’s activities, there’s always something going on,” Kaplan says. “And, as a result, people are finding it to be very homey. So, it’s working exactly as we planned.” In all, the two-story facility features 48 two-bedroom apartments, accommodates up to 16 residents with Alzheimer’s or other cognitive impairments, and boasts 24-hour security, a stateof-the-art emergency-response system, a bistro, a media room, and an arts and crafts room, among other amenities. Kaplan Development is looking to build 20–30 more properties like this one over the next few years. The All American is “It’s nice to build something for a spedesigned like a dorm: it cific group of people and have it be sucemphasizes shared living cessful—to know that you’re providing spaces while still offering private sleeping quarters. a service and taking care of people,” “The [common areas] Kaplan says. “We continue to build more are being used, there’s and get different mixes from within the activities, there’s always industry ... it’s very gratifying. That’s why something going on,” we like to do it.” Kaplan says.

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VISION LUXURY CONDO BUILDING Perimeter is currently designing a 16-story luxury condominium building in Chicago’s popular River North neighborhood. The firm designed a custom, high-performance building skin and incorporated luxurious finishes inside. “Each 3,200-square-foot fullfloor unit has stunning Chicago skyline views and massive outdoor decks,” partner Lynsey Sorrell says. “The developer has shown great confidence in us on this project, and we look forward to future collaborations.”

small firm,

BIG PROJECTS With a team of just six, who can work nimbly and closely with clients, Perimeter Architects is landing a number of large-scale design jobs

Text by Maureen Wilkey Renderings by Perimeter Architects

A

FTER NINE YEARS IN BUSINESS, Chicagobased Perimeter Architects expanded in 2013 when John Issa brought on two new partners: Branyo Dvorak and Lynsey Sorrell. The company is now bigger, but with only six people total, it’s still not exactly big. Yet, by culling together their trusted clients and strong portfolios, Perimeter’s three partners have been able to successfully secure substantial new projects and align themselves with local developers. As a result, their company has $96 million in construction work to be completed over the next three years. As they see it, their success is simply a matter of thinking big while working small. “We all come from larger-firm backgrounds; Lynsey and Branyo came from Holabird & Root, and I was formerly with Perkins + Will,” Issa says. “We took that experience and calibrated it with smaller-design-office intensity.” Issa founded Perimeter in 2004 and primarily focused on private residences after receiving his graduate degree from Columbia

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FULTON MARKET MIXED-USE DEVELOPMENT One of the firm’s large-scale projects is a mixeduse 225,000-square-foot development in the “increasingly hot” Fulton Market area of Chicago, Issa says. The lower levels will serve as space for high-end retailers and restaurants, above which will sit a parking component, and above that will be six stories of condo units. “The developer liked our aggressive mentality and wanted to see us grow,” Issa says. “They saw we had the ability to do something this big, and it was a compliment. We are up to the challenge.” HOUSE AT 1117 W. LILL AVE., CHICAGO Described as “one of our favorite smaller projects right now” by the Perimeter team, this single-family residence in the popular Lincoln Park neighborhood has “fantastic” owners who placed their confidence in Perimeter to let the team “design the project well beyond their expectations,” Issa says, noting that the project began in the summer of 2014. “[The clients] engaged us in the design process, and we engaged them in the peculiarities of how they live. It is a great residence.”

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VISION

John Issa (far right) founded Perimeter Architects in 2004, and in 2013 he brought on Branyo Dvorak (far left) and Lynsey Sorrell (not pictured) as partners. All three have backgrounds with larger firms and continue to think big while working small.

University in New York. Ten years later, his firm is designing a 20,000-square-foot office for a 120-person green-energy company, a 140,000-square-foot mixed-use project in the Fulton Market neighborhood, and a 16-story luxury-condominium building in River North. Outside the Chicago area, it’s also working on a multilocation project for a nationwide yoga-studio chain. Explaining how the small firm manages so many projects at once, Dvorak says, “Some projects have much shorter durations, and the bigger projects don’t move as fast.” At a larger firm, clients might meet with a principal at the outset of a project and not see that person again until the ribbon-cutting, but Perimeter appoints one principal as the lead on each of its projects, and that person will be there from start to finish, present at nearly every meeting. “We are architects,” Sorrell says. “We like to design, work with consultants, engage with contractors, and build relationships with our clients. When a senior staff isn’t involved with a project from concept to completion, the client suffers, and we miss solving the technical issues and being in the mix.” Collaboration is also extremely important at Perimeter. In-house project reviews often involve the entire staff; ideas regarding sustainability, architecture, construction techniques, building technology, and design are thoroughly debated; and everyone sets aside

“We all come from larger-firm backgrounds. ... We took that experience and calibrated it with smaller-design-office intensity.”

Portrait: Ana Miyares Photography

John Issa, Principal & Founder

americanbuildersquarterly.com

his or her ego to design the best project. “You have to be cognizant of each other’s skill set and be able to criticize without getting personal, but you also have to know what you’re good at and let others take the lead [so that] their strengths shine,” Dvorak says. Perimeter believes in the craft of architecture. The team will often test design ideas through large-scale models, and with CNC modeling and the multiple fabrication techniques available today, they can push the limits of design even within tight budget constraints. “We do not draw what we cannot speak of intelligently with a contractor,” Issa says. “We know how to build. We’re able to show a developer our cohesive work, including planning, architecture, and interiors.” As a small firm, Perimeter also relies on its competitive rates and low overhead as final measures that help it beat out other architects. “With the breadth and depth of experience in the building industry that the three of us have, we can be decisive,” Sorrell says. Often, the company is then able to land more projects from the same developer by gaining its trust. Handling multiple jobs at different scales takes organization, and clients often expect quick turnarounds. Fortunately, Perimeter can deliver thanks to its senior staff’s involvement. Larger firms often delegate tasks, but Perimeter operates with a flatter structure where young architects work alongside the partners. This approach is likely to remain, even as the company continues to expand. “We’re not afraid of growth,” Issa says. “Over the next five years, we are set to double our staff to maintain the projected construction Perimeter Architects has in the works.”

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VISION

Main Street America Revival Vista Canyon is more than just a neighborhood—the Santa Clarita, CA, community, proposed by JSB Development, is designed to unite living, work, and recreational spaces in one place by Zach Baliva

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J

AMES BACKER AND STEVE VALENZIANO were

standing before the City of Santa Clarita, making a presentation. They had preliminary drawings, a development team, and a plan for a new residential neighborhood in the California community. There was just one problem: the city didn’t want another typical development. “When we interviewed residents and interacted with city officials, we discovered that people really needed service providers,” Valenziano says. “There was nowhere to go for dinner, nowhere to go shopping, no hotels, and few jobs. People were driving 30 miles to Los Angeles for work and play.” Backer and Valenziano rethought their development and instead created plans for Vista Canyon, a lively hub that combines living, work, shopping, and recreational spaces on the city’s east side.


VISION

Backer knows a thing or two about city planning. He has worked in the valley for three decades and was involved in developing the master plan for the community of Valencia. He started JSB Development in 2000 and calls himself a “developer of new projects” who finds creative ways to turn unused land into valuable property. Valenziano, a consultant with a deep background in commercial brokerage and real estate, joined Backer in 2005 to partner specifically on Vista Canyon. Prior to 2005, a friend approached Backer about a 40-acre parcel of land. Upon further examination, Backer discovered problems: the property was close to the freeway but lacked access, and it was surrounded by a dense collection of homes and schools. Backer tried to make the best of the situation and move forward with development, but he needed more entry points from surrounding land. The deal went to escrow but failed when other deals for adjacent land never materialized. That’s when Valenziano came aboard. Convinced his colleague had a viable project, the consultant helped acquire the adjacent land, eventually achieving a total property size of 100 acres. Then the duo met with the city and discovered its need for services. “This whole idea has always just kind of evolved naturally,” Valenziano says. “That fits the project because we want it to be sensitive. We want it to fit the needs of the community.” Some previous problems—such as limited access—disappeared on the second go-round. The city approached Backer and Valenziano about moving a Metrolink station to their site. The commuter rail will connect at Vista Canyon, which will provide more services and parking options for commuters. Addi-

tionally, the train station will anchor the walkable and transit-oriented village. The expanded 185-acre community will include seven parks and four miles of pedestrian, cycling, and equestrian trails. On the eastern side, Backer and Valenziano have planned multifamily apartments, townhomes, and courtyard homes. A town center with a pedestrian-friendly main street will house office space with ground-level retail, and Vista Square will offer a mix of restaurants, boutiques, specialty markets, hotels, open-air theaters, and other businesses. “This development has become what the city was looking for,” Backer says, adding that Santa Clarita was overloaded with amenities on its west side. During the approval process, JSB hosted or attended more than 80 community forums to solicit feedback. They uncovered many concerns, including those from residents who drive 10 miles to patronize drug stores, restaurants, and retailers across town. Vista Canyon provides much-needed balance, and its developers expect their project to generate 4,000 new jobs, $100 million in wages, and $5 million in tax revenue. Another important element of Vista Canyon is its River Education & Community Center, through which JSB will preserve and share the land’s history. “The valley has deep roots that date back before the turn of the century, and we don’t want to lose that,” Backer says. The land, settled by gold prospector Thomas Mitchell in the 1860s, was home to Santa Clarita’s first school. It still contains ancient oak trees and a historic cemetery. The site also includes a stretch of the Santa Clara River, which is dry most of the year. The Vista Canyon Bridge will span the river, creating Vista Canyon’s entry point.

The highlight of JSB Development’s revamped Vista Canyon master plan will be a walkable central corridor with a mix of restaurants, retailers, hotels, and theaters. The 185-acre community will also have seven parks, about four miles of pedestrian and cycling trails, and a Metrolink station.

5-foot concrete pedestrian walk 8-foot concrete pedestrian walk and bike path 12-foot decomposed-granite multiuse trail 15-foot asphalt-concrete or concrete walk and bike path 12-foot decomposed-granite equestrian trail Class II bike lanes

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The transit-focused, integrated project is truly a walkable community—a throwback to the days of Main Street America. It’s designed on a grid to minimize road impact. It connects all the way to downtown Los Angeles via Metrolink. Residents can walk to their jobs. Neighbors have spaces where they can interact. “We want it to be a special place,” Valenziano says. “We want Vista Canyon to have a positive impact.”

JSB is also working to build sustainable elements into the project. The very design of Vista Canyon will discourage and limit automobile use, and solar products, sun orientation, efficient systems, and waterconservation practices will further limit carbon emissions by almost 30 percent. Additionally, Vista Canyon will use only recycled water, supplied by a privately financed, new reclaimed-water factory with an output expected to exceed residential and commercial demand. The City of Santa Clarita will operate the reclamation plant and sell excess water to a local provider. Without the efforts of chief entitlement officer Glenn Adamick, Backer says, the water factory and the innumerable complexities of the Vista Canyon project would not have been possible. Despite the potential, projects of this size are difficult. Vista Canyon has been in the making since 2004, and JSB is finally

“There was nowhere to go for dinner, nowhere to go shopping, no hotels, and few jobs. People were driving 30 miles to Los Angeles for work and play.” Steve Valenziano, Development Partner

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DEVELOPMENT collaborating with archiJSB Development expects its project to generate 4,000 tects to design the develnew jobs, $100 million in opment’s key buildings wages, and $5 million in while working to attract tax revenue. The firm went like-minded retail comto more than 80 community panies. The job is putting forums to understand area needs. Backer and Valenziano’s 50 years of combined exp erience to the test. “It’s been a wild ride,” Backer says. “It takes the full combination of all our consultants and partners to get something of this magnitude off the ground.” Vista Canyon’s part of Santa Clarita has been farmed and occupied since 1860. Now, 154 years later, the development is becoming the land’s first permanent settlement. But first, JSB will have to clear a final hurdle. Although the city council approved Vista Canyon in 2011, and though JSB has been hard at work cleaning up and relocating existing structures, the project has been sued under the California Environmental Quality Act—par for the course for a California project of such size. As Backer and Valenziano defend their project in court, they’re hoping to break ground in late 2014 or early 2015.

americanbuildersquarterly.com

James S. Backer, President 27451 Tourney Road, #250 Valencia, CA 91355

(661) 255-3275 www.jsbdev.com OCT | NOV | DEC 2014

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VISION

Aging in Place— in Paradise Kisco Senior Living’s focus on local branding, a continuum of lifestyle options, and inclusive amenities and practices has led to Ilima at Leihano, its first property in Hawaii by Brian Justice

H

AWAII IS UNQUESTIONABLY BEAUTIFUL

and popular, but when it comes to property development, it remains one of the most statistically underserved markets in the United States. The high costs of land acquisition, construction, and labor— along with difficult regulatory, political, and entitlement processes—make for a limited supply of homes and unique building challenges, and many major players in real estate would rather just not bother with the

whole state. Andy Kohlberg, though, is not among them. The former ATP-ranked professional tennis player is now the president and CEO of Kisco Senior Living, and though the career transition may seem unusual, he says the lessons he learned as an athlete—preparation, discipline, focus, and understanding the competition—often come into play in his current venture. Starting with his first purchase of a Virginia Beach community in 1990, he has

“At the end of the day, residents and their families choose Kisco because we have better-trained people and a warm and friendly environment.” Andy Kohlberg, President & CEO

grown his company and developed more than 20 properties across the country, including, recently, Kisco’s first in Hawaii: Ilima at Leihano on the island of Oahu. This newest location is emblematic of the company’s specialty: developing properties in hard-to-enter markets. The 84-unit community, designed by Group 70 International, is scheduled to open in 2015, and it’s establishing itself in the area by conforming to regional styles and ideals. Like those of the firm’s other communities, Ilima at Leihano’s identity as a Kisco property is secondary. “We really believe that each community is a local business and that its identity is not as brand-driven as other residential or hospitality businesses such as hotels,” Kohlberg says. “Generally, our properties are known by their local name and not by a corporate brand, and at the end of the day, residents and their families choose Kisco because we have better-trained people and a warm and friendly environment. It’s really a local, hands-on business where the quality of the on-site staff is a key factor in determining success.” A prime example of the high quality of the on-site staff is the full-time wellness director, which each Kisco community has. The wellness director is responsible for that community’s health and wellness programs; the company encourages its residents to participate in a wide array of programs designed to help them live healthier, happier, more active lives. One such program is Stand Strong, designed to improve balance and reduce falls in order to help seniors stay mobile. Kisco communities also tend to be largescale campuses—for a variety of reasons, but mainly because the company is dedicated to offering multiple lifestyle options, including independent living, assisted living, and memory care. “Residents and their families want them to age in place and move through the continuum,” Kohlberg says. “It’s a more difficult operational challenge, but we’ve done well from a resident perspective.” Residents also want the comfort of knowing that, as their needs change, they can remain on the campus, in the community that becomes their home and around the friends and staff they come to know. Finally, larger communities enable Kisco to hire better executive

Kisco Senior Living’s Ilima at Leihano community, on the island of Oahu, is the company’s first in Hawaii. It’s scheduled to open in 2015, and it will have 84 units and conform to regional ideals and styles.

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VISION

directors and staff and update, improve, or add additional amenities such as multiple dining venues because costs are spread over a larger number of residents. Kohlberg sees the future of senior living being driven by the vastly different lifestyles and expanded expectations of the next generation of retirees. “The generation that’s coming through now lived through the Depression,” he says, “and they did not have a healthy lifestyle, exercising regularly or doing yoga, meditation, or tai chi. The next generation will be a very different group of customers. They are going to want more choices, they’re going to be willing to spend more money on themselves, and they’re going to expect more in terms of variety and quality of services.”

Frequent site visits and focus groups are key to maintaining the quality of Kisco’s communities, and they are, in fact, among the things that Kohlberg enjoys most about his role. Meetings with residents and front-line associates give Kohlberg insight into areas that need improvement, into the changing needs of residents, and into their expectations. “One of the questions I ask is, ‘Why did you choose to move to this community, and where did you move from?’” he says. “It gives me a good sense of what prospects and their families are really looking for when they’re moving to a community and what things we can do to continually improve our communities and services.” One of Kohlberg’s big goals for Kisco is to double its number of units from 3,500

to 7,000 within five Ilima is large and equipped to house years. “We’ve been residents as they move ver y successf ul … through the aging because we been continuum. The company selective and responalso encourages health sible in our growth, through a series of wellness programs. and I want to keep doing that,” he says. “That’s really our strategy, to just continue to implement and execute and evolve what’s been a successful strategy. … What differentiates Kisco is our warm and friendly environment. It’s part of our principles and values and beliefs, and when I ask residents why they chose one of our communities, 90 percent say, ‘The first time I walked in the door, I got a warm and friendly feeling. That’s why I chose to live here.’”

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AUSPICIOUS SCRIBBLES Engineer Jay Park drew the DC UPS power-system design for Facebook’s new data centers on a napkin during a 2 a.m. fit of inspiration. It was so innovative that a patent for the design was just approved this year. The napkin now hangs framed in Facebook’s Menlo Park, CA, headquarters.

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STROKE OF GENIUS From a simple napkin doodle rose Jay Park’s concept for Facebook’s new, naturally cooled data centers, and the company is now sharing the idea for the betterment of all by Russ Klettke Dedicated in loving memory to Jay Park’s son, Jason Park, who wanted to become an engineer and make the world a better place to live

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ON SEPTEMBER 23, 2012, the New York Times ran a page-one article under the headline “Power, Pollution and the Internet.” Detailing the wasteful use of energy and water in data centers—especially those run by the largest and most recognized Internet-based companies—the roughly 4,300-word report ruffled many feathers in the digital world. But, its criticisms had (and continue to have) some validity. The use of energy and water (mostly for cooling, which the hot servers generate a considerable demand for) has been a tertiary concern in the ongoing hypergrowth era of the information revolution. E-commerce is an inventive and evolving industry on steroids, after all, where everyone from entrepreneurs to programmers to engineers are working 24–7 to devise smarter ways of doing what they do. Matters of resource use have fallen by the wayside because being the fastest, most robust, and failsafe is what has proven to be the real difference between a $140 billion IPO (for Facebook) and a $545 million loss (which Rupert Murdoch ate on MySpace). The reality of energy and water overuse in data centers is still real in many quarters, but it’s now a bit behind the times with regard to the work of Facebook—particularly that of Jay Park, the company’s vice president of data-center design, construction, and facility operations. In earlier stages of its explosive growth, the company operated under service-level agreements with third-party data centers (known as colocation companies), but when Park joined in 2009, he was the first person on staff whose mission was to build the company its own more efficient data center. And, he had to do it on a pace that matched the growth of the social networking behemoth, which went

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from 350 million users in 2009 to 1 billion by the end of 2012. He has since fixed the problem—and then some. Not only have he and his engineers devised new ways of configuring, locating, and building data centers; they’ve actually gone open-source with what they’ve learned, sharing it with the world. The real marvel, though, is that all their plans and designs can be traced back to a 2 a.m. sketch Park made when solving the matters of efficiency for himself. “It was in my mind,” Park says, recalling the night in 2009 when he had an epiphany and instinctively reached for the nearest available piece of paper: a dinner napkin. “I was constantly thinking and dreaming about it. I had to get rid of two components: inefficiency and the problems that can result when you make radical changes. Those problems included harmonics and short-circuited current.” In simplest terms, harmonics are undesirable voltage and current characteristics caused by nonlinear loads, such as servers, that cause power-quality issues and inefficiencies. Park wanted to do away with these.

Jay Park began by studying The following civil engineering in college, morning, he took but he soon switched to the napkin sketch— chemical engineering then which still exists, finally moved on to electrical framed on a wall engineering. “Controlling power is what I love,” he says. at Facebook’s headquarters in Menlo Park, California—to the company’s chief hardware engineer, who examined it and declared Jay Park’s DC UPS system feasible. The world of data centers effectively changed that day; the two engineers were eventually proven right, and the system has since been patented. Power-usage effectiveness (PUE) and water-usage effectiveness are dramatically improved with Park’s configuration. And, it actually helped Facebook in a relatively short period of time. “Smart engineers try to utilize what’s already developed,” Park says. “We didn’t want to create something that was entirely new. We didn’t have three to five years to build.”

FACEBOOK’S SERVERS NOW RESIDE IN

350,000-square-foot data centers, the functionality of which depends largely on

Photo: (above) Sheila Barabad, (opposite, bottom) Alan Brandt

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1.09 PUE

A ductless air-distribution system draws cold air in from the outdoors and pipes it into the server room of each of Facebook’s data centers, negating the need for chiller plants, cooling towers, and associated pipes and pumps.

the power-usage effectiveness rating of Facebook’s Prineville, OR, data center (the industry target is 1.5, and a perfect score is 1.0)

Facebook sought to reduce the 21–27% efficiency loss that plagues typical data centers. It did so by eliminating the need for a centralized uninterrupted power-supply system, and it now uses 38% less energy than its counterparts.

27%

of Facebook’s Prineville data center is made from recycled materials

350,000 sq. ft. the size of each Facebook data center (currently there are three, and a fourth will open in 2015)

530 tons

of construction waste was recycled during the building of the Prineville data center

100%

outside economization is achieved by Facebook’s Prineville data center, eliminating the need for a chiller plant or cooling towers

americanbuildersquarterly.com

air handling, outdoor temperatures, and humidity, making the location of each new center a primary concern. The first was sited in Prineville, Oregon, centered in the high desert climate of the state, where cooler and dryer air is a predominant local feature. “Nothing is cheaper than bringing in cool air from the outside,” Park says. The system inside each data center is capable of 100 percent outside economization and air-evaporative cooling and humidification, which means a chiller plant is not necessary nor are cooling towers or associated piping, pumps, or controls. Instead, ductless air distribution brings cooler air in via a built-up penthouse and sends it down into the data center through drywall airshafts. (The outdoor air is treated with direct evaporative cooling and humidification if necessary.) The cooler air enters through the front of the servers in the “cold aisles” and is exhausted into the “hot aisles,” which draw the hot air up through the ceiling plenum. In summer, the air is eventually expelled back outside, but in winter, the hot air is mixed with more outdoor air to achieve an optimal supply temperature to cool the servers. Then, waste heat from the servers is used to warm the centers’ office areas. Facebook data centers also feature a new power-distribution configuration (the DC UPS

system that Park sketched on his famous napkin) that influences everything from the incoming utility power to the server power-supply level. Park’s team, which now comprises 100 people, sought to reduce the 21–27 percent efficiency loss that is typical in data centers by eliminating the need for a centralized uninterruptible power supply (UPS) system and 480V and 208/120V power-distribution units. Instead, 480/277V power is supplied directly to a custom-designed power supply that also takes in 48VDC from a local battery backup system. The result is a set of buildings that consumes 38 percent less energy than comparably sized data centers. The Prineville location even achieved a PUE of 1.09 in 2013. (The industry target is 1.5, with 1.0 being the perfect score.) Additionally, the facility earned a LEED Gold certification and a Best of the Best citation from Engineering News-Record in 2011. Outside of air handling, its other LEED points came mainly from its recycled and locally sourced materials (which make up 27 and 30 percent of the building, respectively), its use of FSC-certified wood (which makes up 91 percent of the building), and its recycling of 530 tons of its construction waste. “LEED Gold is the standard of all our data centers,” Park says. There are currently two others—one in Forest City, North Carolina, and the other in Lulea, Sweden—and a fourth is scheduled to open in Altoona, Iowa, by 2015, powered entirely by a local wind farm. The Prineville center is run by a 100-kilowatt solar array, and clean, renewable hydroelectric energy runs the entire Lulea facility.

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Photo: Alan Brandt

Facebook sited its first data center in the high-altitude desert region of Oregon because the area’s cool, dry air is ideal for reducing heat loads inside the facility.

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SOCIAL MEDIA DATA CENTERS + OPEN SOURCE = A BETTER WORLD While no one can claim that Facebook founder Mark Zuckerberg actually held Jay Park’s middle-of-the-night design inscribed on a napkin, “he certainly heard about it,” Jay Park says. But, as crucial to the business as the innovation was, the social media entrepreneur had no intention of keeping it confidential and proprietary. In at least two ways, Facebook shares how the resource-stingy data centers are configured and constructed and how they are performing. First, the company established the Open Compute Project (OCP), applying open-source software models to hardware. Through a dedicated website (opencompute.org), the organization offers CAD files on eight key components of the new generation of data centers: the server, storage, data-center design, networking, hardware management, certification, open rack, and solution providers. Second, the company provides a dashboard (via a Facebook page, of course) that shares real-time readings of the centers’ power-usage effectiveness and water-usage effectiveness, broken down by the minute, day, week, month, quarter, and year. Why all this openness? “Mark says it’s better to share this with the world,” Park says. “Data centers are our core business, and we take energy savings very seriously, which is why he founded the OCP—so that everyone can save energy and help make our planet more green.”

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VISION In the summer, the air-distribution system at each of Facebook’s data centers expels hot air back outside. In the winter, it mixes the hot air with more cold air to achieve an optimal cooling temperature.

“Nothing is cheaper than bringing in cool air from the outside.” Jay Park, VP of Data-Center Design, Construction, and Facility Operations IF ANYONE WAS MEANT TO DEVISE THESE BREAKTHROUGHS, it was Jay Park. His edu-

cational path toward better server management took a circuitous route and began long before the term “social media” entered our lexicon. “I loved math as a child,” he says. “But when I started to study civil engineering in college, I knew mixing concrete was not for me.” Not that there’s anything wrong with it—after all, he acknowledges, the rapid deployment of Facebook’s facilities in remote locations took some smart and skilled civil engineers and construction people—but he decided instead to switch to chemical engineering, and after that he got into electrical engineering. “Controlling power is what I love,” he says.

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Through the better part of the 1990s, Park worked in the semiconductor industry and was even responsible for building a semiconductor plant. He observed that the industry was moving offshore, though—China surpassed the United States in semiconductor manufacturing in 2013, with Japan, Taiwan, and Korea already controlling well over half the global market—so by 1999 he had transferred his skills to data centers. The decision turned out to be a fruitful one for him personally, but his entire industry should be grateful that it happened, too, for his experience helped him to fundamentally alter the physical management of data. “We learn from everywhere, from everything we do,” he says. “We apply it everywhere as well.”

A MESSAGE FROM CUPERTINO ELECTRIC Electrical engineering and construction leader Cupertino Electric is pleased to join American Builders Quarterly in recognizing the talent of Jay Park. Cupertino Electric is a private company headquartered in San Jose, CA, that has provided expert engineering and construction services for a constantly evolving world for 60 years. Cupertino Electric is ranked one of the largest specialty contractors and solar EPC contractors in the nation, and it is renowned for designing, procuring, constructing, installing, commissioning, and maintaining complex electrical systems. The company delivers custom solutions for clients in a variety of industries, including biotech, commercial, data center, education, health care, hospitality, manufacturing, retail, solar, and transmission and distribution. For more information, visit www.cei.com. A MESSAGE FROM MCKENNEY’S McKenney’s is the Southeast’s most trusted name in facility construction, operation, and maintenance. For more than six decades, our proven approach has ensured high-quality, energy-efficient solutions at every stage of a building—design, build, manage, and maintain. McKenney’s offers expertise in HVAC, process piping, plumbing, and building automation and control systems as well as service and maintenance. Our in-house engineering, fabrication, installation, and commissioning resources ensure cost-effective delivery of the highest-quality solutions.


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Alliance Pipeline used an assembly-line-like process to weld the Tioga Lateral Pipeline together and bury it in sections. Teams were able to complete approximately 1–1.5 miles of the pipeline every 24 hours.

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DISAPPE ARING

ACT

FOR ITS LATEST TRICK, ALLIANCE PIPELINE USED MINIMALLY INVASIVE CONSTRUCTION TECHNIQUES TO HIDE THE TIOGA LATERAL PIPELINE BENEATH THE

FERTILE SOIL OF NORTH DAKOTA AND MAINTAIN THE STATE’S NATURAL BEAUTY

TEX T BY GEOFF GEORGE PHOTOS COURTESY OF ALLIANCE PIPELINE

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“I HAVE ALWAYS SAID I WOULD NOT HAVE

been president had it not been for my experience in North Dakota,” Theodore Roosevelt once said. He first visited the state in 1883, and seeing such natural wonders as the brilliant Painted Canyon formation in the west and the endless prairie fields in the east was a transformative experience that later inspired him, as the 26th president of the United States, to dedicate his administration to the preservation of the natural world. Today, despite the Peace Garden State’s oil and gas boom, much of the splendor that Roosevelt encountered and felt moved by still exists there, and the more responsible companies in the region’s rapidly growing industry are working to keep it that way. Among them is Alliance Pipeline, an Alberta-based transmission business recently tasked with the construction of the Tioga Lateral Pipeline— its first lateral pipeline in the United States— across 80.1 miles of the state’s northern half. The project gave the company the opportunity to prove its environmental and so-

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“We’re part of the community, and we want to make sure our impact is as minimal as it can be.”

cial-consciousness bona fides all over again for the people and places affected by the new line’s installation. “We’re part of the community, and Bill Watts we want to make sure our Senior Project Manager impact is as minimal as it can be,” senior project manager Bill Watts says. Alliance first got involved with the project through an agreement with Hess, a company that was working to update its gas-processing plant in Tioga, North Dakota. As a transmission business, Alliance is exclusively concerned with moving natural gas from one location to another, and its main pipeline—in service since 2000—runs 2,311 miles from northeastern British Columbia to distributors in Chicago. The Tioga Lateral Pipeline offered Hess a way to get its product to market. To begin work, Alliance first had to conceive, propose, and win approval from the

In total, the Tioga Lateral Pipeline required 8,000 joints of 12-inch-diameter pipe. Semitrucks transported 16 joints at a time to the pipeline route, where they were bent and shaped to conform to the landscape.


BUILD

FULL ALLIANCE PIPELINE Taylor Blueberry

Windfall

Morinville Irma Kerrobert

US-Cana

da Borde

Loreburn

CALGARY

r

Estlin Alameda Towner

Wimbledon

TIOGA LATERAL DETAIL

Fairmount

US-Canada Border

Olivia Albert Lea CHICAGO

Tioga Ray

White Earth River

Souris River

Manchester

Des Lacs River

Tampico Stanley

White Earth River

Minot

Alliance’s central pipeline extends 2,311 miles from British Columbia to Chicago. Its new Tioga Lateral Pipeline runs 80.1 miles across North Dakota and links with the main line just south of the US-Canadian border.

Federal Energy Regulatory Commission (FERC) for the route of the pipeline from Tioga to the main line, which crosses over into the United States near Sherwood, North Dakota. In between are the Lostwood, Des Lacs, and Upper Souris National Wildlife Refuges, and Alliance had to take special care navigating around two and through one of them. The company also had to coordinate permitting with the various townships and counties it would be passing near and across, and it negotiated fees for damages with area farmers to compensate them for the farmland they would be prevented from using during the pipeline’s installation. Watts joined the project as construction began in October 2012, and his and his team’s main goal was to conduct all work as carefully and considerately as possible. “We want to make sure that the land disturbed for construction purposes is returned to the

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Aux Sable

same state as it was prior to construction,” Watts says. “That means that we salvage the topsoil, we bring it back, we make sure there’s no compaction in the subsoil.” To do this, the construction team first sent out crews to establish a 75-foot-wide “right-of-way” for the pipeline. Starting at Tioga, personnel began stripping away topand subsoil in order to dig an eventual trench through the middle of the right-of-way. The soils were then stored along the sides of the route so that they could later be put back in the proper order, and they were covered by mulch to keep them from blowing away during winter winds or washing away during spring rains. The team then started stringing 12-inchdiameter steel pipe along the route, confining equipment and crews—of up to 300 people per day—to the right-of-way as semitrucks delivered 16 joints of pipe at a time to be bent and welded. North Dakota has a “knob and kettle” terrain consisting of shallow depressions and low hills that were formed millennia ago when glaciers traversed the land, so Alliance’s piping had to be shaped and arranged to conform to the slight changes in

elevation. Following the welding, crews dug the actual trenches for the pipe, specialized tracked machines referred to as “side booms” helped lower the pieces into the ground, and, finally, more equipment helped backfill the trenches and return the topsoil. The whole process was carried out continuously in assembly-line fashion each day, and crews completed roughly a mile to a mile and a half of the pipeline every 24 hours. The total 8,000 joints of pipe for the project also came precoated with fusion-bond epoxy, which prevents corrosion, and each installed section underwent hydrostatic testing, which essentially entailed filling the pipe with water to check for leaks and ensure that each section could withstand a pressure of at least 1.25 times that of the maximum operating pressure. The biggest obstacles along the route were the three waterways the pipeline had to cross: the White Earth, Des Lacs, and Souris Rivers. The line had to go under each one, and though the White Earth was small enough to pose little challenge, the other two were significantly wider, requiring the Alliance team to employ a sophisticated horizontal-directional drill (HDD). The remote-controlled device dug


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All of Alliance’s personnel and equipment had to be confined to a right-of-way that was only 75 feet wide for most of the pipeline route. The company did this to disturb the surrounding land as little as possible.

24 -inch-wide tunnels beneath both rivers, the deepest and longest running 80 feet below the bottom of the Des Lacs for a little more than a mile. For two river crossings along the route, Alliance Once that was done, used a horizontal-directit was just a matter ional drill to dig 24-inchof pulling sections diameter tunnels under of pipe t hrough the water, and it then strung pipe through each each hole and linkhole. One tunnel stretched ing them together. more than a mile. Crews were careful to maintain proper pressure in both HDDs, though, in order to avoid a release that could have tainted either of the waterways with bentonite drilling fluid. A pair of Alliance-hired environmental inspectors and a compliance monitor appointed by the FERC were on hand throughout the construction process to ensure that the company adhered to the highest safety and environmental-preservation standards. Alliance had done research before submitting its proposal, and in addition to the typical eco-

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logical concerns, it determined that, because of the project’s many water crossings, there were two sensitive bird species it needed to watch for: the bald eagle and the piping plover. “Largely, that was mitigated by constructing in the late fall and wintertime, to be sure those species had migrated away,” Watts says. Alliance completed the pipeline in September 2013, and it took five days to “commission” it, which Watts explains as, “You’re essentially energizing your systems. It’s when you bring natural gas into the line for the first time. ... You’re testing your tubing to make sure all your instrumentation is correct and working.” The commissioning was a success, and since then, Alliance has been following up all along the pipeline route, reseeding areas of native prairie and grassland and conducting surveys to ensure bald eagle and piping plover habitats haven’t been impacted. And, 95 percent of the farmland should already be usable again for the coming season, Watts says, adding, “We want the landowners and farmers to be using the land as they were using it prior to construction.” In the wrong hands, naural gas can be a volatile substance, but Alliance’s extreme

“Ultimately, it’s our intent that, five years out, you wouldn’t know there’s a pipeline under there except for the pipeline marker signs.” Bill Watts Senior Project Manager

caution during construction and after helps prevent accidents and incidents along its lines. The company also encourages any nearby landowners to call in issues right away so that it can address them within 48 hours. And, by paying just as much attention to environmental concerns, Alliance is ensuring that the North Dakota landscape will continue to appear almost as untouched as when Roosevelt first laid eyes on it. “Ultimately,” Watts says, “it’s our intent that, five years out, you wouldn’t know there’s a pipeline under there except for the pipeline marker signs.”


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Building in the 99th Percentile

Mark and Melissa Wahl build sustainable custom homes in Michigan. Seen here is the kitchen area of one of two dwellings the company has built to the Department of Energy’s Zero Energy Ready Home standards.

Only one hundredth of existing homes meet the guidelines of the Department of Energy’s Zero Energy Ready Home program, and Cobblestone Homes has built two of them BY JULIE SCHAEFFER

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“We initially found [HVAC-systems requirements] very challenging, and a lot of builders dropped out of the program because of it. Now we think it isn’t stringent enough.” Melissa Wahl Owner

200 square miles of water

In 2008, Cobblestone partnered with the American Lung Association on the “Health Home” project, which taught the Wahls the importance of passively controlling radon, which is the second-leading cause of lung cancer in the United States. “At the time, 25,000 people died a year because of small increments of radon exposure over an extended period of time,” Melissa says. “I was appalled that smoke detectors are mandatory in every home when only 2,500 people die in house fires a year, but we weren’t doing anything about radon. Today, we put passive radon detectors in every home.”

90% custom-made

1st LEED home

The first Cobblestone project was a spec home, and the Wahls thought they’d do more of those, but “we found our true passion in custom-home building,” Melissa says. She stopped work on a postgraduate degree in education to start her business, and in the 14 years since, she and Mark have developed a number of processes similar to those used by production homebuilders. “It’s strange to mesh custom homebuilding with the systems of a production builder, but it’s a model that works for us,” Melissa says. The company now builds 50–60 homes a year, 90 percent of which are custom, the rest are spec homes.

100% Energy Star-certified

Per the Zero Energy Ready Home rules, this Cobblestone home has an HVAC system that can pass the most rigorous testing, even in the cold clime of the Great Lakes Bay region.

americanbuildersquarterly.com

In 2006, Cobblestone was the first company in the tri-city region to win Michigan’s Energy Star grant. And, in 2007, it built the area’s first Green Built Michigan home.

Mark and Melissa Wahl founded Saginaw, Michigan-based Cobblestone Homes around the year 2000, after already remodeling a number of homes. Originally, the couple planned to rent the houses they constructed, but after speaking with some friends in the business, they realized they could serve a space in the market by selling. “We saw a need for homes that are energy-efficient and showcase top craftsmanship but also represent a tremendous value,” Melissa says. The business now serves Michigan’s Great Lakes Bay region, the state’s largest watershed. Comprising four counties, the region features nine different rivers that intertwine and drain into Saginaw Bay; because of these waterways, approximately 200 square miles of the region is H 2O. The water and other natural resources are a major draw to the area.

Every year since 2005, Cobblestone has embraced at least one project that has challenged the firm in terms of building-science knowledge and business practices. “We say, ‘We’re going to use this as a growth project. What can we learn from it? What will we take away from it to use in our everyday work?’” Melissa says. In 2005, for instance, the company committed to building 100 percent of its homes to reach Energy Star certification.

25,000 deaths per year

in Great Lakes Bay

As it developed, Cobblestone Homes continued its efforts in sustainability, even constructing its region’s first LEED Gold home and—along with partners such as Dow Chemical Company—Michigan’s first net-zero energy home. By 2011, however, the Wahls wanted a new challenge. Melissa says she asked herself, “What can take us to the next level?” She found her answer in the Department of Energy’s (DOE) Zero Energy Ready Home initiative.

1% of homes

The Zero Energy Ready Home project guidelines are so strict that only one percent of all homes currently meet them, and the energy standards, Melissa says, are particularly tough for many builders. Like Energy Star, the DOE requires an HVAC system that is sized properly and sealed tightly enough to pass the harshest testing, and this can be difficult to achieve in Michigan’s colder climate. “Two years ago, when we began [sizing and testing HVAC systems] for Energy Star, we initially found it very challenging, and a lot of builders dropped out of the program because of it,” Melissa says. “Now we think it isn’t stringent enough.”

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The Cobblestone home is also outfitted for solar shingles, and it has an owner-operated controlled-recirculation pump that can heat water before it pours from the tap so that none goes wasted.

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Today, Cobblestone is finishing its first two Zero Energy Ready Home projects: one has solar shingles, and one is ready for solar shingles if the homeowners want to install them. However, the locations’ energy efficiency was less challenging to the Wahls than their waterdelivery systems. Potable water makes up just two percent of the world’s water supply, so to conserve it, the Zero Energy Ready Home standards require builders to find ways to reduce the amount of water that goes down the drain when users are waiting for the delivery of hot water. “When you turn on a faucet, you can’t have more than 0.6 gallons flow before the water gets hot, which has to happen within a certain time limit,” Melissa says. The obvious solution was a continuous recirculation line in the hot-water tank that would constantly pump hot water through pipes, but the DOE objected on the grounds that it would consume energy. “We really had to look at how we were plumbing homes,” Melissa says, explaining that ultimately she chose an owner-operated controlled-recirculation pump. “You get up in the morning and go into the bathroom, and instead of turning on the faucet, you push a button, get undressed, and 30 seconds later have hot water.”

FULL SERVICE MECHANICAL CONTRACTOR A MESSAGE FROM PROBUILD ProBuild is one of the nation’s largest suppliers of lumber and building materials to professional builders and contractors. ProBuild currently operates in 42 US states and sells a broad selection of building materials, including lumber, plywood, engineered wood, millwork, trusses, roofing, siding, windows, doors, and cabinets. To learn more about ProBuild, visit www.probuild.com.

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THE BOOMERANG EFFECT As big players exit legacy R&D campuses, smaller tenants need help taking them over, and ProTecs and Advance Realty are doing their part with the newly refurbished and apportioned New Jersey Center of Excellence at Bridgewater BY ZACH BALIVA

IT’S 1985, and John is a clinical researcher at the region’s largest pharmaceutical company. Each day, he commutes 40 minutes to work. When he arrives at the sprawling campus surrounded by razor wire, big iron gates swing open, and he presents a tattered ID badge to a security officer. He works all day in a sterile environment, only pausing to select a mediocre meal from the 40,000-square-foot cafeteria. John dines alone. Thankfully, those days are long gone. The modern workplace culture is changing, and big pharma is changing with it. Over the past decade, due to financial concerns, major corporations have moved away from humongous R&D campuses and instead outsourced the work, funding small biotech companies that each work toward one “sure thing.” Collaboration is key, and businesses are looking

for creative space that will foster these new relationships. Enter ProTecs. ProTecs is a nationwide design-build and construction-management firm. Christopher R. DiPaolo founded it nine years ago when he noticed smaller tech companies were leasing modest single-story flex space throughout the marketplace and larger companies were starting to farm out more of their R&D and manufacturing operations. He works with tenants and landlords to deliver high-tech facilities at the lowest possible price through a patented project-delivery system he calls “Target Costing.” The process focuses on performance, conformance, and price guarantees at the earliest onset of a project. Basically, DiPaolo and vice president of operations Jay McKenna are catering to displaced scientists who can’t afford to purchase and renovate buildings at $400–$500 per square foot or more. “We can get them into a building suited for their needs at an eighth of the cost,” DiPaolo says. “It’s a huge benefit for jobs, the local markets, and the industry.”

ProTecs and Advance Realty are creating the New Jersey Center of Excellence at Bridgewater from the skeleton of the former campus of pharma giant Sanofi.

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ProTecs and Advance are transforming the Bridgewater campus into an incubator that will accommodate research firms of varying sizes rather than one big tenant.

IN 2011, PROTECS SIGNED a lease-to-own agreement on a multitenant property once owned by a large REIT that didn’t have the vision or patience to create a life science innovation center. The company targeted smaller start-ups as potential tenants and had full occupancy within 15 months of purchasing the property. Then, Ashland, a specialty chemical and technology company, hired ProTecs to help it relocate. ProTecs found a spot in Bridgewater, New Jersey, on an expansive parcel once owned by pharma giant Sanofi. The Bridgewater site comprises 1.2 million square feet spread over 110 acres. Sanofi exited in 2012, leaving behind a centrally located and well-maintained facility with labs, research facilities, meeting rooms, offices, parking structures, café space, a central utility plant, a cogeneration system, basketball courts, and even a helipad. ProTecs repurposed one of the site’s pharmaceutical buildings for Ashland, who ended up leasing 198,000 square feet. That’s when Sanofi sold the site to a developer, Advance Realty, who liked what ProTecs did and hired the company to work on the rest of the campus, now called the New Jersey Center of Excellence at Bridgewater. Kurt Padavano is the COO of Advance Realty. His company has been in the market for 50 years and became attracted to the Bridgewater location and its infrastructure. Advance’s plan is to retain 850,000 square feet of mod-

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“We have the opportunity to create a new product out of something that has been a gated research campus for 50 years.” Kurt Padavano COO, Advance Realty

ern lab, research, and development space and demolish 350,000 square feet that has become obsolete. Then, the company will build 450 apartment units, 200,000 square feet of retail and restaurant space, new offices, new labs, and a hotel. “We have the opportunity to create a new product out of something that’s been a gated research campus for 50 years,” Padavano says. “It will now become part of the community again and meet the needs of today’s users.” Sustainable features, ample green space, walkways, and bike paths will combine to create a comfortable site where people can reside, eat, shop, and visit. The Center of Excellence will be open to the public and will truly connect back to its community. “As we look at the changing demographics of the workforce, we see that younger professionals increasingly value a live-work-play atmosphere,” Padavano says.

MCKENNA AND PROTECS HOPE the project catalyzes what he calls a “boomerang effect.” The site’s previous tenant had a huge facility it didn’t need, and few (if any) new single tenants were big enough to use the large space on their own. When large, specialized companies exit a municipality, they often displace hundreds of workers with very specific talents. Those people either leave the community in search of a job or pool their resources to launch a new company. But, if they launch a new company, they have nowhere to go. That’s the problem the Center of Excellence is built to address. “We hope to create a space where someone with a viable company can come, grow that company, and add employees,” McKenna says. “Before long, we’ll see a number of successful organizations that are the next acquisition targets for big pharma.” The model will also stimulate the local Bridgewater economy by helping retain taxes and jobs. After ProTecs used its patented Targeted Costing system to get Ashland into the Center of Excellence on time and on budget, Advance found a second tenant (a drug manufacturer) to take 150,000 square feet. Advance will accommodate users of 50,000 square feet and above in single buildings and subdivide structures for smaller tenants. The biggest challenge will be metering utilities, allocating costs, and splitting common areas such as loading docks, elevators, and mechanical rooms, but Padavano says his company’s deep experience with multitenant projects is helping it provide solutions. He’ll also rely on Advance’s relationship with ProTecs and DiPaolo’s process that provides guaranteed up-front costs. “We’re project-driven to meet all of our clients’ goals and objectives—whereas everyone else is task-driven,” DiPaolo says. By doing repeat work at Bridgewater, he’s able to understand more fully the cost and performance goals and then work with all disciplines to get everyone on the same page. Padavano and DiPaolo see huge potential for the Center of Excellence to have an impact on both the local economy and the scientific community. In fact, DiPaolo is so convinced that he’s planning to move in. Later this year, ProTecs will open a full-service office of its own on the campus.


ProTecs


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Surviving in Sin City Even Las Vegas wasn’t immune to the economic downturn, but construction firm Mountain Vista Development managed to make it through to the other side thanks to its adaptability

BY JULIE SCHAEFFER

IN THE PAST 50 YEARS, Las Vegas has played host to some of the largest construction projects in the world, reveling in its adult-playground reputation and widespread popularity. Then, in 2009, everything changed. “We saw construction firms that in the past wouldn’t move a muscle for contracts under $10 million now competing for contracts under $100,000,” says Josh Hainsworth, vice president of Mountain Vista Development, Inc. The city watched development come to a halt seemingly at once. Homebuilders and contractors lost almost all their work and turned to commercial and government jobs, but then those projects dried up as well. This created aggressive competition for the small amount of work that was still available, and prices dropped drastically. Small margins led companies to close their doors or leave the

state, and that, in turn, gave rise to another wave of competition as many contractors and subcontractors started working for themselves. It was the only way they could afford to work for the small margins the market would allow. “The downturn of the economy hit us hard and fast,” Hainsworth says. “We were forced to reduce our overhead, including downsizing employees and internal systems and services that were no longer cost-effective.” Such measures, though, allowed Mountain Vista to compete at very low margins, and though those margins didn’t translate to profitability, they allowed the firm to keep its doors open and focus on new areas, including government work. “We started to focus on where government funding was being spent and found that there were sizable allocations being made for projects that allowed for energy-efficiency retrofits and new green building,” Hainsworth says. “We put a lot of our energy into competing for these contracts and were successful.” Using this approach, the firm won a competitive-bid process to refurbish two buildings for the Seigle Diagnostic Center, where students of the Clark County School District obtain evaluations for speech impairment, hearing problems, traumatic brain injury, and associated maladies. The $4.5 million project involved the renovation of 40,000 square feet of interior offices, including a complete interior demolition and build-out, and, outside, refurbishment of the landscaping and the asphalt parking lot. “The plans By concentrating on projects with government funding, Mountain Vista Development found and won the bid for the $4.5 million renovation of the Seigle Diagnostic Center. The firm demolished and rebuilt the interior. At the same time, the company completed work on seven projects for the Caliente Youth Center, including improvements to dorms and construction of a 2,000-squarefoot recreation building, shown here.

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“For those of us lucky enough to still be in business, chances [are] starting to get better for being awarded new work.” Josh Hainsworth, VP

started with ambiguity, so we worked to create solutions from the start rather than wait for change orders to occur,” Hainsworth says. The revamped facility opened in 2010. As that project was winding down, Mountain Vista also completed seven concurrent projects for the Caliente Youth Center in accordance with its contract with the Nevada State Public Works Board (NSPWB). Per the contract, the firm was to provide design assistance, value-engineering proposals, and complex budgeting and scheduling options in order to calculate the most cost-efficient way to complete all seven projects. The first phase

americanbuildersquarterly.com

involved improvements to four dormitories and the surrounding site; the second phase entailed the demolishing and rebuilding of a swimming pool with new concrete, reinforcing plaster, deck finishes, and equipment and connections for a solar heating system; and the third phase called for the construction of a 2,000-square-foot recreation building. With Mountain Vista’s help, the NSPWB saved more than $400,000 in construction costs on the $4.5 million project. Such work kept the firm in business, and by early 2013, the downturn had thinned its herd of competitors. “The amount of work

wasn’t increasing, but for those of us lucky enough to still be in business, chances were starting to get better for being awarded new work,” Hainsworth says. He also started seeing an increase in the number of property owners feeling out the market for new projects, and by early 2014, work began to steadily pick up for the first time in more than five years. “Now we are nearing the end of the second quarter of 2014 and are still seeing the same levels of growth,” Hainsworth says. “We’ve been inundated with calls for new projects and requests for proposals across the board; from commercial, residential, and government contracts, the potential projects are everywhere.” Because of the firm’s initial downsizing, however, it’s conservative when it comes to increasing spending and allocating resources to obtain this new work. “Our idea is to grow slowly but steadily back to a level where we are comfortable operating,” Hainsworth says. “We hope that by the end of 2015, we will be back to where we want to be.”

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Jefferson Crossing, Connecticut Many developers shied away from the best piece of real estate in Farmington, Connecticut, because of environmental restrictions protecting the endangered Jefferson salamander. Fore Group, however, took on the project. Working with a herpetologist and environmental scientists to provide a sustainable environment for humans as well as amphibians, the company created a road and, along it, designed seven high-end homes with brick exteriors, slate roofs, and copper gutters that elicit the quality and luxury of the early 1900s. The 20.6-acre development is adjacent to a Metropolitan District Commission reservoir property, and Fore Group also donated five of its acres to the Farmington Land Trust, surrounding its homes with vegetation to provide exceptional privacy.

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“We’re polished compared to other builders. We can speak to the CEOs and CFOs at their level.” Fore Group founder Fotis Dulos explains how he parlayed his interest in architecture and his experience in management consulting into a career as a luxury residential developer

INTERVIEW BY JULIE SCHAEFFER

americanbuildersquarterly.com

When you founded Fore Group in 2004, you were working as a management consultant. What inspired the change? I’d always been interested in real estate. I grew up watching my sister, who is 13 years older than I am, flourish in a career as an architect, and I like the aesthetics of nice homes. So, I financed a home for a builder and paid very close attention to what he was doing. I realized it’s a pretty straightforward process and leverages a lot of the experiences I had in management consulting. Can you talk about that a little more? In management consulting, there’s project management, issue management, scope management, change management—and all of these things are directly transferable to construction projects, especially to highend residential projects. The clients are also very similar. I used to deal with CEOs and CFOS, and with high-end construction

projects, you’re dealing with individuals that are equally successful—they either own their own companies or work at this same level of executive positions. What inspired you to focus on the luxury market? The amount of effort you put into building a house is similar whether it’s lower-end or higher-end, so it made sense to focus on the higher end. So, we typically work on homes that range from 4,000 square feet to 15,000 square feet and are priced between $1.5 million and $9 million. Was it a tough market to break into? We didn’t have the client confidence to go straight to the super high end from the beginning, so we did some spec homes. People quickly realized we had the capability, so we got some custom work. But, as it turns out, we’re really fitted to the high end of the market.

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“[Clients are] very interested in design and architecture. ... We give them all the relevant information and let them make the decisions, and they make the right ones.” Fotis Dulos Founder

Each of Jefferson Crossing’s seven homes will be tucked away among the green trees of the larger Farmington Land Trust, which Fore Group donated five acres of its land to.

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How so? We understand the client and vice versa. All of us at Fore Group have solid educational backgrounds, and most of us have worked in finance. As a result, we can speak to our clients at their level. They’re smart. They understand the analytics—how you’re costing the project, sequencing it, managing it. They’re interested in the details, down to the structural. And they’re very interested in design and architecture. That’s important, because there are a lot of decisions to be made: it takes around six months to complete a smaller home, as many as two years to complete a larger one. We give them all the relevant information and let them make the decisions, and they make the right ones.


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House on Block Island, Rhode Island Block Island, which has about 40 percent of its land set aside for conservation, was named by the Nature Conservancy as one of the 12 “last great places.” Home to just a little more than 1,000 people, it’s now the site of one of Fore Group’s most notable projects. Although the home may have a traditional exterior, inside it’s a testament to all that is modern. Designed by celebrated architect Peter Bohlin, who is perhaps best known for designing the Apple stores, the home uses steel and natural materials, including a green roof, to complement its position on a bluff some 200 feet from the ocean. “It was a great learning experience for us,” Dulos says.

A MESSAGE FROM SANFORD & HAWLEY Sanford & Hawley has been supplying quality builders for more than 130 years from our locations in Unionville, Avon, and Manchester, CT, and West Springfield, MA. All locations are in the OSHA SHARP program.

Has your business model changed over the years? Not much. We started in the Farmington Valley in Connecticut, which is about 15 minutes away from Hartford. It’s a beautiful suburban area, but the goal was to eventually expand, and we did, working in New York and Rhode Island. And, while we started at a 50-50 balance between custom and spec homes, we’re now more like 75-25, but we’re still focused on the high end. What are people looking for in luxury homes today? The typical house around here is a traditional colonial-style home, and we do that well. But what sets us apart is our ability to do modern as well. It’s much more expensive per square foot and is harder to do. The architect is much more involved, and you can’t make mistakes in construction because everything is visible. I liken it to watching someone downhill skiing. The better they are, the easier it looks. It’s the same with homes. The simpler it looks, the harder it is.

Sanford & Hawley, Inc. LCM Architects was established in 1996 to provide both architectural and accessibility consulting ser vices. Our accessibility consulting staff of professionals has worked on a variety of accessibility projects for retailers, residential and commercial developers, designers, attorneys, architectural firms, institutions and government agencies. Our accessibility consulting projects span from coast to coast and involve the application of numerous accessibility standards for laws including the ADA and FHA.

1884

130th Anniversary

2014

Quality Building Materials • Kitchens, Windows, Doors, Lumber UNIONVILLE • AVON • MANCHESTER, CT • W. SPRINGFIELD, MA

800-433-7941 • www.sanfordandhawley.com

Sanford & Hawley is proud to supply Fore Group with innovative, quality lumber and building materials delivered with the highest level of safety and service.

LCM ARCHITECTS 819 SOUTH WABASH AVENUE | CHICAGO, ILLINOIS 60605 WWW.LCMARCHITECTS.COM

americanbuildersquarterly.com

Sanford & Hawley has been supplying quality builders for over 130 years from our locations in Unionville, Avon and Manchester, CT and West Springfield, MA. All locations are in the OSHA SHARP program.

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Juniper Networks built its new headquarters campus at a former Lockheed Martin test facility. The company demolished structures carefully because of the defense contractor’s partially classified plans of the site.

In California, on a trying piece of real estate with hidden obstacles, industry-leading networking firm Juniper Networks built a new headquarters incorporating the tech tools that have earned the company a valuation of $4.6 billion

BY CHRISTOPHER JAMES PALAFOX

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CAVEAT EMPTOR.

If there was any popular phrase Juniper Networks, Inc. should have bore in mind when acquiring a property once owned by aerospace, defense, and security company Lockheed Martin, it was that old Latin warning to prospective buyers. The tech firm needed the lot for its new headquarters, but it was quickly reminded that land once owned by a secretive government contractor is likely to come with some surprises. At its loftiest, Juniper seeks to empower everyone in an increasingly connected world. The $4.6 billion company is well on its way,

too, with offices in 46 countries that offer services in more than 100 countries, producing equipment and software that help power a majority of the world’s online networks and secure more than 86 percent of smartphone traffic in the United States. Before 2013, however, the company’s Sunnyvale, California, headquarters lacked key elements that would better allow Juniper to express its brand and its mission statement through its physical workspace. So, John Lucas, Juniper’s vice president of global real estate and workplace services, teamed up with the company’s C-level

Photo: Andre Bernard

JUNIPER RISING


Juniper Networks


BUILD

98%

of the materials from the old Lockheed buildings were recycled

and building documentation did not exist. Underground communication lines were not clearly catalogued, either, and had Juniper been less careful, it could have accidently knocked out communication for half of Sunnyvale. Luckily, through careful demolition, Lucas’s team was able to complete the process without further hiccups. The new 635,000-square-foot corporate campus is anchored by two buildings—simply labeled Building A and Building B—that house the company’s executive briefing center, proof-of-concept labs, R&D engineering labs, R&D workplaces, and cafeteria. Building A boasts LEED Gold certification, and Building B has achieved LEED Platinum. Some of the LEED points came from Juniper’s successful recycling of construction materials—

“A workplace should be a showcase, and it should catalyze connections, support functionality [and] agility, and promote employee wellness and sustainability.” John Lucas VP of Global Real Estate and Workplace Services

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In the lobby of Juniper’s including 120 tons of new executive briefing concrete and asphalt— center is a hanging light from the site’s former display that acts as an structures. The cominteractive map of the world and will display pany’s sustainability bits of real-time data via efforts highlight its a nearby touch screen. commitment not only to improving the economics of networked work environments but also to creating a healthy place for employees. As a networking company and data-centerhardware manufacturer, Juniper must run energy-intensive computer labs constantly, so to combat its headquarters’ power and heat load, the company placed its labs toward the outer skin of each building, allowing them to take in outside air when temperatures are favorable. Such measures have helped Juniper reduce its campus electric bill by 30 percent during the facility’s first year of operation. Perhaps the campus’s most-defining feature, though, is how it addresses workplace needs. By combining flexibility, customization, and bleeding-edge technology, Juniper was able to create spaces to meet the various needs of its employees, and different areas can be opened up or closed in with very little modification. The

Photo: (top) John McNeil Studio

executives to determine a vision for a new corporate campus, and he worked closely with the IT department to conceive a workplace that would reflect the company’s desire to innovate the network. What came out of this synergy was a set of four workplace principles that helped guide the design. “A workplace should be a showcase,” Lucas says, “and it should catalyze connections to happen in the workplace, support functionality [and] agility, and promote employee wellness and sustainability.” As a linchpin to these goals, Lucas and his team planned to run the new facility solely off of Juniper products, paving the way for scalability and future innovation. Juniper chose the former Lockheed Martin property as its development site, but before construction could begin, the company had to raze the lot’s existing buildings, some of which dated back to the 1930s. This was where the challenges truly began; during the demolition process, Juniper discovered that its supposedly complete and accurate records of the site were missing key information regarding underground utilities, some of which had not been installed according to code. In one instance, Lucas and his team discovered a 12 kV power feed just below surface level—one that should have been buried 15 feet underground. A worker was operating a scraper on some old curb edges and ended up shorting out the main power feed connected to the adjacent Onizuka Air Force Station, effectively shutting down its space shuttle tracking system midmission. Juniper eventually remedied the situation, but the top secret and sensitive nature of Lockheed’s former weapons-development work at the site continued to make reliable information concerning the area’s underground facilities nonexistent. Another challenge arose when Juniper had to locate an underground pool once used to test Trident submarine missiles. Lockheed engineers knew the pool was there, but its coordinates


BUILD

The campus has the space for 10 buildings, but Juniper has only built two so far, referred to as Building A and Building B. It wants to push the limits of employee consolidation in the two structures before it looks to grow further.

650,000+

man hours to build each building

Juniper Networks By the Numbers

$4.67 billion in 2013 revenue

9,483

employees as of December 31, 2013

More than 86%

of US smartphone traffic is secured by Juniper

All of the top 100 service providers in the world run Juniper products

620

US federal organizations use Juniper products

7 of the world’s 8 largest stock exchanges run Juniper products

Photo: Andre Bernard

2.4 million sq. ft. total real estate that Juniper operates in 111 locations

americanbuildersquarterly.com

infrastructure also emphasizes simplicity, with elements such as video conferencing, desktop sharing, online chatting, and voiceover IP telephone communication all tied to one unified interface, which was patterned after Juniper’s consumer technology. It allows Juniper to showcase how its own networking products can help other companies. “We want people to collaborate at a higher level,” Lucas says. This means increasing the number of connections individuals can have by building a more mobile work environment, which leads to more shared space and fewer dedicated desks. The new headquarters serves as a reminder of the company’s refined direction. The corporate campus has the ability to expand to 10 buildings in total, but there are no immediate plans for further growth. Instead, Juniper is concentrating on taking the design already in place and consolidating other offices in the area into these two buildings. Most large corporate campuses have a benchmark transient vacancy of approximately 40 percent at any given point in the day, but Juniper wants to change this. “If you went into a restaurant and 40 percent of their seats were vacant, but the host says you can’t sit there because someone [else] is sitting there, just not right now, and this happened consistently day after day, what would you think?” Lucas asks. “Pretty inefficient restaurant, right?” In the lobby of the executive briefing center is an interactive art display that also functions as a striking physical manifesta-

tion of the power of Juniper and its network equipment. There’s a dramatic LED light sculpture—a series of slender, hanging lights that form a semiabstract map of the globe— and a visual interface that allows visitors to select icons representing different sets of data streams. One icon could be “earthquakes in the past 24 hours” or “current Internet traffic,” but touch it and it comes to life, revealing an interactive, changing heat map of the selected data. “It’s taking the flow of information that’s actually traveling across the network today and elevating it,” Lucas says. It’s a symbol of what Juniper as a company hopes to accomplish—and what it has accomplished already at its new headquarters—with its leading infrastructure.

A MESSAGE FROM SAN JOSE CONSTRUCTION San Jose Construction Co., Inc. congratulates John Lucas on his many accomplishments and achievements in the commercial real estate industry. It has been an honor to partner with Lucas on Juniper Networks’ 80-acre, LEED Platinum- and LEED Gold-certified global headquarters campus, and we look forward to our continued relationship. Building for more than 60 years in Silicon Valley and the greater San Francisco Bay Area, San Jose Construction Co., Inc. is a well-diversified builder highly experienced in shell construction, tenant improvements, and commercial building rehabilitation, specializing in high-tech, corporate office, hospitality, retail, educational, and health-care projects. www.sanjoseconstruction.com

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INDUSTRIAL FLOORING

FROM THE GROUND LEVEL In less than 10 years, HTI Polymer has become a national leader in the industrial-flooring industry, and it continues to attract big names such as Starbucks and Costco by developing deep partnerships with each client BY ZACH BALIVA

C

hris Campton wanted to start a different kind of flooring company. After 21 years in the industry, he had grown tired of the status quo and knew there was a better way to serve customers, so he left his employer in 2005 and dedicated himself to creating a business based on building deep partnerships with each client. Two years later, Campton opened HTI Polymer, which is now anchored by major clients such as Boeing and Coca-Cola. The company uses complex, detailed analysis to approach and understand every customer’s specific performance requirements for floor coatings and coverings. It sources products from world-class manufacturers and selects the best ones for each unique situation, then HTI’s skilled workers install the high-performance materials with best practices that surpass manufacturers’ instructions. Considering that HTI completes almost 500 jobs per year, with revenues that exceed $23.5 million, its fresh approach seems to be working. Take a look at its history, its impressive client list, and its proven methods.

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CASE STUDY: BOEING

IN 2011, HTI COMPLETED its most technically complex job to date: an 80,000-square-foot final-assembly floor for Boeing. Over a period of eight months, HTI designed and installed a chemically resistant, antistatic, flat floor that allows on-site engineers to build aircraft to exacting specifications. The company encountered a challenge when a rail system required the floor elevation to be raised in the large manufacturing space, but it addressed the issue with a complex overlay that interfaces with the existing rails. Since that original project, HTI has completed an additional 150,000 square feet for Boeing.

HTI Polymer

americanbuildersquarterly.com

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THROUGH THE YEARS

2007

Campton founds HTI and closes year one with revenues approaching $8 million

2010

The company adds Boeing and Facebook as clients

2012

Contracts with Intel, Coca-Cola, and Raytheon (a major defense contractor) open entirely new markets for HTI

2013

The company grows to 85 employees

2014

HTI’s reach extends into the food and beverage, medical, pharmaceutical, data-services, and tech industries, among others

A CHAT WITH CHRIS CAMPTON What questions should a company ask when selecting a flooring contractor? The installation process is the biggest part of the puzzle. Ask how the floor will be prepared. Are there standard procedures? Is there a schedule? Will the crew operate safely in the facility? Is everyone drug tested? What will customers experience? What equipment will you use? Has the right product been selected? These are the most important questions to raise.

What factors go into picking the right floor? We analyze traffic conditions, spillage potential, slab structure, joint conditions, operating procedures, heat conditions, sloping, thermal shock, and how the surface interfaces with other materials. We also make sure we work with great vendors such as Chips Unlimited, Sherwin-Williams, Sika, Duraflex, and BASF. Chips Unlimited is a company that provides decorative vinyl chips that go into a lot of our floors. We only use companies that are dependable and deliver excellent, high-quality products on time.

DURING AFTER

In Prineville, OR, HTI Polymer constructed flooring that conforms to the complex technical specifications of Facebook’s new, hyperefficient data center. Read more about Facebook’s innovative Prineville data center in our cover story on p. 30.

GROWTH CHARTS: EMPLOYEES & PRODUCT VENDORS 325% INCREASE 85 employees

200% INCREASE 6 product vendors

2013

2013

What are some signs that a floor needs attention? Companies should invest the time and money to make sure floors won’t become major issues down the line. Twenty percent of our business is in maintenance or repairs. If floors don’t come clean or they have visible wear, cracks, or impacts, something needs to be done.

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2007 20 employees

2007

2 product vendors


Thanks to its range of experience, HTI does specialty flooring for businesses of all kinds. Pictured here is an HTI flooring installation in a hangar for Helicopter Transport Services, a nationwide chopper fleet.

THE HTI PROCESS: STEP BY STEP

2

3

4

5

The project manager and superintendent select appropriate products. Then, they generate an installation process, a safety plan, schedules, budgets, and equipment lists prior to delivering a proposal and estimate. The company presents its plan of attack to the client for approval.

LOCATIONS: AREAS OF OPERATION AND COUNTRIES WITH CONSULTING OPERATIONS

HEADQUARTERS: WOODINVILLE, WA

At a preconstruction meeting, the client and HTI personnel communicate about what will happen inside the facility so that each party understands the time line and safety plan. During each day of the installation, HTI leads the client through a pretask checklist designed to eliminate schedule changes and unexpected events. A superintendent directs his personnel on-site to go through goals and objectives for the day and to identify hazards before completing work. At the close of the day, HTI generates a formal daily job report that lists work completed, materials used, personnel present, weather conditions, and problems encountered. After installation is complete, a project manager walks through the facility with the client to ensure quality, gain acceptance, and answer questions.

americanbuildersquarterly.com

FACTS & FIGURES: REVENUE vs. ANNUAL JOBS

$25M $20M

500

472 394

$23.5M

400

349 $18.3M

$15M

300 $12.7M

$10M

200

$5M

100

$0

0 2011

2012

# OF JOBS

6

An HTI project manager meets with a client to understand performance requirements and environmental conditions. Together, they determine how the business will operate during construction.

REVENUE IN MILLIONS

1

2013

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For a Costco Wholesale warehouse in Covington, WA, HTI installed a food-safe urethane-cement flooring system in the fresh-line areas where meat and rotisserie chickens would be processed.

WORKING WITH TOP CLIENTELE SINCE DAY ONE, HTI Polymer has been building a reputation for designing and installing industrial floors, coatings, and linings for well-known companies with rigorous demands. Campton says he attracts big businesses with his ability to understand the nuances of clients’ operations. “Our approach is to dig into their business and discover how we can really help them,” he explains. “We want to partner with them.” Whether working in the OR of a hospital or a foodservice kitchen, HTI’s employees identify potential hazards before installation and isolate the process to ensure safety and cleanliness. After they put floors in, Campton and his colleagues continue to meet with clients periodically to monitor and evaluate project spaces and determine whether they require maintenance. This approach has earned HTI many giants of the business world as clients, including the following:

Aerojet Rocketdyne Bayer HealthCare Pharmaceuticals Bayer Medical Boeing The Coca-Cola Company ConAgra Foods, Inc. Costco Wholesale Corporation Facebook Harborview Medical Center Intel Corporation Oregon Zoo Raytheon Company Starbucks Corporation University of Washington

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EMERGENCY RESPONSE, REMEDIATION, AND CONSTRUCTION

TOUGH ON GRIME Clean Harbors got its start in emergency response, but it has since evolved to take on all manner of remediation and construction work at some of the world’s dirtiest and harshest sites

Photo: courtesy of NYS DEC

BY CHRISTOPHER JAMES PALAFOX

CLEAN HARBORS’ NAME IS CERTAINLY AN ACCURATE ONE. The Massachusetts-based company, originally established in 1980 as an emergency-response business, has since expanded its skill set to become a leading provider of environmental, energy, and industrial services in North America. It’s now worth $3.4 billion, and it’s divided into four business units that provide services ranging from the handling of hazardous material to chemical cleaning to oil recycling to exploration in the energy sector. Though it has become de rigueur for companies to espouse their environmental consciousness, Michael McDonald, Clean Harbors’ assistant general counsel, says his company is actually “doing the doing” to make the world safer and less polluted. Here, he helps break down some of the specific ways it’s doing so.

Clean Harbors clears and improves some of the most environmentally damaged properties in the world—known as Superfund sites—by working with its partners and the EPA according to a preestablished plan of action.

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THE NIAGRA FALLS CLEANUP

SUPERFUND SITES The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, often referred to as Superfund, was one of the first federal laws that established highly regulated cleanup processes for severely contaminated land. Clean Harbors usually tries to avoid such zones, but through some of its acquisitions, it has had to take on the unenviable task of purifying Superfund sites at the state and federal level. There are hundreds of potentially responsible parties (PRPs) for any given Superfund site, including Clean Harbors as the site’s owner, and the remediation effort can vary depending on the percentage of liability for a certain PRP and how many other PRPs are involved. Generally, the work entails coordination with the Environmental Protection Agency (EPA), which first takes over the site and identifies its problems. The EPA oversees the cleanup and approves the PRPs’ plans, but then it’s up to the PRPs themselves to execute the plan, pay for it, and pay for the EPA’s oversight costs as well. Last year, Clean Harbors was a part of a state Superfund site cleanup in Niagara Falls, New York. As the company was voting on a remedy and a contractor, it realized it could do the work much less expensively on its own. By doing so, it significantly reduced overall costs to the PRP group.

“One of Michael’s greatest strengths is his ability to pool the resources of Clean Harbors to attack a problem. Michael’s ability to work under pressure is incalculable. He and his team of in-house lawyers have presided over many of the legal challenges that come with the tremendous growth that Clean Harbors has achieved over the years. It has been a privilege to be a trusted trial lawyer for Clean Harbors.” John F. Kennedy Taft Stettinius & Hollister LLP

The cleanup process that Clean Harbors and the PRPs implemented at the Niagra Falls, New York, Superfund site was fairly typical. The crew performed the following: Prepared a remedial design based upon the EPA’s record of decision, a public document that explained which cleanup alternatives would be used to purify the site Performed a surface removal, which included the clearing of existing buildings, structures, and debris from the site Excavated and treated contaminated soil in the area Refilled the removed soil with site cover made from the zone’s former structures; this is a requirement for any future commercial or industrial use of the site

At Superfund sites, HTI clears structures and debris, excavates and treats contaminated soil, treats area groundwater, and replaces the removed soil with site cover made from former buildings.

Treated the groundwater using existing sewer infrastructure, per an agreement with the Niagara Falls Water Board Enforced an environmental easement for the property, restricting the site’s future use Prepared a final report describing the cleanup activities rendered and certified that all requirements were met or will be met

Chicago firm Shefsky & Froelich merged with Taft in January 2014. Today, Taft has more than 400 attorneys, with offices in Cincinnati, Cleveland, Columbus, and Dayton, Ohio; Chicago; Indianapolis; Covington, Kentucky; and Phoenix. It also maintains a presence in Florida. The firm practices across a wide range of industries, in virtually every area of law, including business and finance, business restructuring, bankruptcy and creditor rights, environmental, health and life sciences, intellectual property, labor and employment, litigation, private client, real estate, and tax.

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Photo: courtesy of NYS DEC

A MESSAGE FROM TAFT STETTINIUS & HOLLISTER LLP Taft Stettinius & Hollister LLP is pleased that our client, Mike McDonald, assistant general counsel at Clean Harbors, has been recognized for his dedication and professionalism in the environmental industry. Like Mike and Clean Harbors, Taft attorneys also work as one committed team to help our clients succeed. Taft attorneys understand that innovative, value-creating legal solutions are derived from a collaborative approach, using advanced technological resources along with our significant depth of experience.


HOW TO BE SUCCESSFUL AT EMERGENCY RESPONSE McDonald outlines, in his own words, how Clean Harbors navigates crises, from natural disasters such as Hurricane Katrina to unfortunate accidents such as the Deepwater Horizon explosion. Being an emergency responder often starts long before the event occurs. Often, Clean Harbors will contract with government agencies and private entities. You say, ‘If you have an emergency, we’ll be there, or we’ll try our best.’ Ninety-nine out of 100 times, Clean Harbors is ready to respond. That’s where it starts. Your job is 24-7. During a significant response, our team is living at the site, sometimes for months at a time. Once, I was on my Blackberry, negotiating contracts—with my family in the car on the driveway, waiting to go on vacation. There isn’t time to be off, and you do what you need to do to get it done. You need experience. These are very stressful projects, and you’re going into difficult circumstances. There are questions you just are not going to answer before you go out the door. Our workers have to be able to hop in a truck and head somewhere without all the information. The only way they can be comfortable in that situation is by having the experience. It’s imperative to work with regulatory authorities; what needs to be done is decided by them. In Hurricane Katrina, we worked for state agencies and the federal government. Simply doing what needs to be done is what we do well. Understand priorities. During Hurricane Katrina, the number one priority was human health and safety. We were helping people off their roofs on our boats down there. One of the advantages that we have is that our equipment is stationed in places all across North America. We can often get there right after first responders are overwhelmed. Be able to evolve with the situation as it changes and moves. By definition, these are unplanned events. Bringing trained workers and the proper equipment where they need

americanbuildersquarterly.com

The HTI team was in Louisiana for months after Hurricane Katrina. The company’s staff is prepared to work in remote areas, and it can handle a number of different emergency-response scenarios.

“Our equipment is stationed in places all across North America. We can often get [to the site of an emergency] right after first responders are overwhelmed.” Michael McDonald Assistant General Counsel

to be is a big challenge. Hurricane Katrina was a wide area, but it’s not like it’s all right off a highway; you may have to travel by boat, helicopter, or even rail. Then, being able to manage large forces in a remote, heavily damaged area is a necessity. We tend to stay longer because we’re one of the larger firms that does this and we’re capable of hiring subcontractors to augment our forces. For Deepwater, we stayed for months and months. For Hurricane Katrina, we were still cleaning up hazardous waste that had been washed ashore and dislodged months after as well. But, ultimately, [how long we stay is] up to the government agency handling it or the private organization in charge.

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In Alberta, Canada, Clean Harbors worked with one of its subsidiaries to build the Ruth Lake Lodge, a place for remote oil workers to live in and find respite from the area’s extreme temperatures.

CONSTRUCTION AT RUTH LAKE

The lodge, completed in 2013, has 604 rooms and 220,000 square feet of space, which also includes a dining room, a theater, a workout room, and a rec room. Temperatures in rural Alberta can reach as low as -65 degrees Fahrenheit, and Clean Harbors had to build its lodge in the middle of winter. It was able to do so thanks to its experience with extremes.

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Though Clean Harbors cut its teeth in the environmental sector, it also practices traditional construction. In 2009, the company acquired oil field company Eveready, which also had a lodging business as a part of its operations. To serve staff working at the remote Athabasca oil sands in Alberta, Canada, Clean Harbors constructed the multiuse Ruth Lake Lodge. The 604-room, 220,000-square-foot space, completed in 2013, was built by a company subsidiary that does modular construction. It not only houses Clean Harbor employees but also others working in the secluded area, who spend large periods of time away from home. The project was important for business because, though construction in the United States shuts down considerably during the winter, in the oil sands it begins to intensify. And, much like Clean Harbor’s emergencyresponse efforts, constructing the Ruth Lake Lodge required the company to work in harsh conditions, including severe-cold temperatures of -65 degrees Fahrenheit.

The company provided first-class amenities and all the comforts of home to make drilling for oil in subzero temperatures a little more bearable. “The idea was to have a place for these folks to live for a while that wasn’t just a place to rest a head,” McDonald says. The lodge offers a restaurant and dining room, a private theater, 4,000 square feet of workout space, and a recreation room complete with pool tables, air hockey, foosball, video games, and even a golf simulator.

A MESSAGE FROM LEWIS, BESS, WILLIAMS & WEESE P.C. Mr. McDonald demonstrated exceptional substantive knowledge and extraordinary patience in negotiating with Colorado county and state agencies regarding permits for a heavily regulated Colorado facility. Lewis, Bess, Williams & Weese was pleased to assist Mr. McDonald and Clean Harbors in the negotiations and permitting process.


Industry-Leading Environmental Services Congratulations to our client, Mike McDonald, truly an industry-leading General Counsel. John Kennedy and the attorneys at Taft are proud to be associated with Mike and to serve the legal needs of Clean Harbors Clean Harbors, a premier provider of environmental, energy and industrial services in North America.

has joined

Bankruptcy / Business & Finance / Environmental / Health & Life Sciences / Intellectual Property Labor & Employment / Litigation / Private Client / Real Estate / Tax / www.taftlaw.com Chicago / Cincinnati / Cleveland / Columbus / Dayton / Indianapolis / N. Kentucky / Phoenix


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RESIDENTIAL EXTERIORS

A Bigger Slice of the Pie In a challenging economy, Minnesota-based Builders & Remodelers is not only staying ahead of the competition; it’s stealing business by adding new skills and upgrading its offerings BY JULIE SCHAEFFER

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Ken Bressler (left), president of Builders & Remodelers, joined the company in 1985 and purchased it a decade later. He’s now teaching the business to his sons (from left) Jason, Bryan, and Adam.


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R

IGHT THERE AT THE TOP of Builders & Remodelers, Inc.’s website, in the middle of its logo, sits the simple statement: “Since 1952.” The Twin Citiesbased compa ny was founded that year as a siding business, and in the more than 50 years since, it has added windows, doors, roofing, and, more recently, decking to its growing list of capabilities—the entire time specializing in low- or no-maintenance products. It’s all part of a larger effort to stay ahead of the competition through growth and improvement rather than price-slashing, particularly in lean times such as these, when the market contracts. “Without question, the economy has its challenges, and we have to anticipate that it may stay like this for quite a while,” says president Ken Bressler, who joined the company in 1985, was running it within two years, and purchased it in 1995. “But when the pie becomes smaller, as it has, we just need to get a bigger slice of the pie.” The company’s latest measure to increase its reach was the expansion of its connected office and warehouse space, which had remained unchanged for 35 years. “We just outgrew both spaces,” Bressler says. To complete the project, Builders & Remodelers leased a new warehouse that is twice the size of and located about four miles from the original space. It then remodeled the entire first location, including the warehouse, into an expansive office, also giving the facility a fresh new look. “We had some low ceilings, which we thought would get even lower, but then we learned the walls were load-bearing and were holding up the ceiling, not the roof, which forced us to remove the ceiling,” Bressler says. “That ended up being an advantage, opening the space.” The office remodel also incorporated a new 450-square-foot showroom, which the company had never had before. “It’s not huge, but we designed it efficiently,” Bressler says. According to him, the showroom has two benefits: first, it allows homeowners to come in and see all the company’s full-size

“90 percent of the time someone comes into the showroom, we finish the contract on the spot.” Ken Bressler President

products on display, which customers had been saying they wanted; second, the quality of the interior gives customers confidence in the company’s building skills. “I’d estimate that 90 percent of the time someone comes into the showroom, we finish the contract on the spot,” Bressler says. As it settles into its new digs, the company is also working to build better relationships with clients, and to this end, it recently updated its 15-year-old contact-management system, which it uses to stay in touch with leads. “We’re trying to build a relationship business by staying in contact with our customers,” Bressler says. “Every time we go out on an

appointment, we describe what happened in the system and enter a date for a next action; the system then alerts us when we need to make another contact with the lead. We also use it to send out e-mails after jobs are complete—that sort of thing.” Bressler is also helping his company maintain strong partnerships with important suppliers such as Soft-Lite Windows, the company’s main window provider, which currently has the most energy-efficient window on the market— the Elements window, which has a U value of 0.16, handily beating the average window, which has a score of 0.3—and Builders & Remodelers is the exclusive dealer for it in the area because of its standing with Soft-Lite. “Because of the economy, other companies aren’t coming to market with alternative windows, so we have the most energy-efficient window on the market, with no end in sight,” Bressler says. Not one of the company’s customers with Soft-Lite

Builders & Remodelers maintains close relationships with its suppliers in order to get top products, including Elements windows, the most energy-effiecient on the market, made by Soft-Lite Windows.

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The expansion of Builders & Remodelers’ office and warehouse space allowed the company to install a new 450-square-foot showroom as well. The company says the space is already attracting customers.

Windows has voiced any concerns or issues despite the extreme subzero temperatures Minnesota experienced this past winter. “It’s just a wonderful company,” Bressler says. Today, Bressler is teaching his sons the business: Adam, his oldest, is the marketing manager; Jason, his middle son, is a production manager; and Bryan, his youngest, is a sales rep. “They always had an interest in the business,” Bressler says. “Even when they were in high school, over the summers, they worked with the siding crews.” At the same time, his company is planning its next steps, including a greater push into decking. It got off to a slow start in the sector in 2013, doing just a handful of projects, but it has since hired three new sales people, going from six to nine total reps, and it hopes to see a return on that investment this year. Once again, expansion rules the day.

“S

oft-Lite Windows have allowed me to increase my profit and revenue over the past year!”— Ron Lomonaco, Guida Door & Window

Windows have allowed me to separate myself from competitors “Soft-Lite pushing price!”— Bob Dillon, Unique Home Solutions

…And Soft-Lite Windows can help grow YOUR business, too! You’ll enjoy: € € € €

Top-performing products Many styles & options Sales & lead generation tools More satisfied customers

Email Tyson Schwartz at tschwartz@soft-lite.com to find out how to grow YOUR business, too! 74

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DRYWALL

BREAKING DOWN (AND BUILDING) WALLS From the back of a pickup, Les File Drywall grew into New Mexico’s biggest drywall contractor, and it continues to add services and extend its reach BY ZACH BALIVA

Les File Drywall workers install exterior acoustical framing on a project in New Mexico. The company’s acoustical ceilings and interior finishes division installs acoustical ceilings, acoustical wall panels, sound panels, wall carpets, draperies, carpet and carpet tiles, and window coverings.

FIFTY-NINE YEARS AGO, Les File got out of the military and needed a job, so he and a friend started finishing drywall, handling odd jobs from the backs of their pickup trucks. When his friend left the industry, Les kept pressing on, going door to door to offer his expertise. Today, Les File Drywall, Inc. is the biggest drywall contractor in the state of New Mexico, with 150 employees who work on jobs ranging in value from $10,000 to $10 million. The company’s construction services include metal-stud framing, drywall, exterior and interior finishes, acoustical ceilings, and polished concrete floors. Recently, it also pioneered an exterior weatherization collaboration, through which a group of subcontractors rehab and retrofit building exteriors to decrease energy consumption and operating costs. Here, current president Jason File, Les’s son, takes us through the company’s background and some of its latest projects and processes.

FANS OF FRAMING Jason says he and his colleagues specialize in complicated, innovative framing techniques (including acoustical work, shown here). “If an architect has an idea, we can frame it,” he says. Recently, Les File Drywall completed exterior work at the University of New Mexico Children’s Hospital in Albuquerque, where it used a unique Reflectit finish from Dryvit that mimics the metal-panel aesthetic at about a quarter of the cost. Because the product was relatively new at the time, Jason’s team went through several renditions, testing and tweaking the system until it worked perfectly. When installed over EPS foam, the stucco-paint product yields higher R-values than metal panels without thermal breaks on the exterior.

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LES FILE MILESTONES 1960

1955

JD File (another of Les’s sons and Jason’s older brother) starts to take over the company

1970

After five years of working on homes, Les takes his first commercial job

The company begins as a oneman shop when Les File starts hanging residential drywall in New Mexico

1986

Les File Drywall begins working on larger multifamily projects

1966

Operations expand to neighboring states, including Texas and Colorado

1980

Intel becomes the growing company’s first major corporate client

2012

The company downsizes in the wake of the recession, and management increases its focus on diversification

1993

Multiple largescale courthouse projects help the company triple its size

1987

Les File Drywall acquires Western Drywall

2006

Jason File, who grew up working alongside his father, takes over as president; the company stands at 420 people

2014

With about 30 jobs per year and revenues between $20 million and $30 million, the company again braces for considerable growth

At the 130,000-square-foot, six-building W.D. Gattis Middle School, Les File Drywall installed one of its first acoustical systems. The project was later nominated for a regional general-contracting award.

in order because when the work hits, we’ve got to be ready to go. We have five big jobs coming up and could hire as many as 100 people this year.

What are you learning now? Business isn’t just a numbers game. You get a feel for what works and what doesn’t. That takes years.

You have a family business. What do you think that adds?

What major trends are you seeing these days?

Q&A WITH JASON FILE In many ways, your company has grown with the city of Albuquerque. What has that relationship been like? We’ve had a great run and enjoyed our time working there. We’ve worked on three major courthouses—the country, the metro, and the federal—and some of the largest downtown buildings. We’ve worked on a weapons-integration facility and some national labs. They have strict requirements in QC and safety, which are two strengths for us.

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We’re two years behind the national markets in New Mexico, so we know we always mimic other areas. Arizona, Colorado, and Texas are starting to boom again, and we’re just starting to see that uptick. These other states are early indicators, so I think things are looking up in New Mexico.

So, then, what do you have to do to prepare for what could be a coming boom? We have to move to internal development. This year is all about standardizing our processes. We’re hiring an efficiency firm and making sure HR is

It’s a personal touch. We try to hand deliver some of our bids instead of just faxing or e-mailing them. We hand out business cards and shake hands and look people in the eye. I’ve been here almost 20 years; I started by sweeping floors when I was a kid.

What keeps you coming back? Why do you like it? It’s challenging work, and you can see the fruits of your labor.

What’s next? We want to move into nearby states and expand the scope of the company to provide other services. We’re always looking to add more things we can do well for our customers.


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AWARD-WORTHY PROJECTS In January of 2014, the New Mexico branch of the Associated General Contractors of America (AGC) announced its annual “Best Buildings” awards. Among four nominated projects that Les File Drywall contributed to was W.D. Gattis Middle School (pictured on the opposite page). When the company worked on the 130,000-square-foot Gattis campus, comprising six buildings in Clovis, New Mexico, it had only recently begun installing acoustical systems, but while there, it got the opportunity to install complex ceiling and wall panels that help control sound. General contractor Bradbury Stamm Construction, Inc. and its partners collaborated with Clovis Municipal Schools and the Public School Facilities Authority to create the durable structure, which includes burnish-faced

THE LES FILE PROCESS: A WALK-THROUGH 1

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concrete masonry, polished concrete floors, concrete paving, and an acoustical deck that doubles as structure and soffit to replace traditional exterior soffits. Les File Drywall’s other AGC-nominated projects in 2013 were a four-story addition to the American Society of Radiologic Technologists’ offices, an expansion facility at Central New Mexico Community College, and the Bank of the Rio Grande’s Old Towne Albuquerque branch (pictured above).

The process actually starts before the company and client interact; Jason and his colleagues are always researching techniques and trends and interacting with new vendors so that they are better educated and equipped to win each project. An architect presents his or her preliminary drawings, and Les File Drywall works to help identify the best products for the intended purpose.

3

The company helps modify plans with input and ideas that the general contractor can take back to engineers.

4

Each job goes to a project manager, and the superintendent assigns a field foreman.

5

Les File Drywall performs the actual install with special attention to safety, quality, budget, and schedule.

& Broderick Phillippi Wright & Card

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WATERWAYS AND SEASHORES

THE DREDGE REPORT How Great Lakes Dredge & Dock has been shaping and protecting waterways and seashores for more than a century, carving its place in history BY CHRISTOPHER JAMES PALAFOX

W

hen a company has been in operation for more than 124 years, as Great Lakes Dredge & Dock (GLDD) has, it should come as no surprise that it has had a major hand in shaping the landscape and infrastructure of today’s world. Not only has the Oak Brook, Illinois-based business helped realize the modern-day layout of nearby Chicago through projects such as the straightening of the Chicago River; it has also been a part of deepening projects at most major US ports across the country. “The survival of the company from 1890 to present is a testament to two things: our employees and a little bit of luck,” says Katie LaVoy, the company’s vice president, general counsel of dredging operations, and a fourth-generation dredger. Today the corporation is the largest provider of dredging services in the United States, employing more than 150 engineers and deploying the largest, most diverse fleet in the country with more than 200 vessels. As a commercial and heavy-construction contractor, it brought in more than $687 million in 2012 and continues to work on creating, cleaning, and upgrading a variety of ports, harbors, beaches, and rivers. And, though the majority of the firm’s projects are stateside, a quarter of them occur abroad, making GLDD the only US dredging company with a significant international operation. Here’s a complete look at the company and its critical work, including the recent deepening of PortMiami.

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One of Great Lakes Dredge & Dock’s ships tackles a project in Qatar. The company is the only one in the United States with a substantial amount of international work.

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GLDD AND CHICAGO: A 124-YEAR HISTORY IN THE WINDY CITY

1890

William A. Lydon & Fred C. Drews found proto-GLDD company Lydon & Drews in Chicago, going to work on an offshore tunnel that eventually extends water intake at Chicago Avenue to a water crib further away from shore to ease concerns about contaminated drinking water

1905

As it expands to satellite locations in other major cities on the shores of the Great Lakes, the company changes its name to Great Lakes Dredge & Dock Company 1892

Lydon & Drews erects shoreline structures for Chicago’s Columbian Exposition, including the driving of piling foundations for what later becomes Navy Pier

CASE STUDY: PORTMIAMI

IN ORDER TO EXPAND THEIR CAPABILITIES to handle New Panamax ships—larger, deeper container vessels traveling through the Panama Canal—certain East Coast ports and canals are undergoing dredging work. Currently, only a few East Coast ports are able to handle the new ships, which are 1,400 feet long, 180 feet in beam, and 60 feet in depth. The US Army Corps of Engineers put out a request for proposal for the deepening of the Port of Miami (commonly known as PortMiami) which GLDD eventually won. It’s the single largest dredging contract ever awarded by the corps, and the work must be completed while the port remains open and includes measures to protect the surrounding coral reef colonies and sea grass beds. In fact, any displaced sea grass must be replaced post-dredge. To further enhance the difficulty level of this project, the material being dredged up in Miami happens to be some of the hardest and requires specialized equipment to move. Fortunately, deepening ports is one of GLDD’s core competencies. The firm was involved with such an operation at the Port of New York and New Jersey, the nation’s third largest and the East Coast’s busiest port. The PortMiami dredging project is expected to finish by the end of 2014.

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1910

After the LaSalle Street Tunnel is exposed in 1900 because of the reversal of the Chicago River, GLDD replaces it with a deeper, wider tunnel, lowering it into a trench in the riverbed

1922

GLDD completes construction of foundations and approaches to the Michigan Avenue Bridge over the Chicago River as well as the Outer Drive Bridge on Lake Shore Drive 1923

The firm is contracted to build a substructure for Adler Planetarium, and it also completes a 25 million-cubicyard shoreline reclamation for that site and for the Shedd Aquarium, Soldier Field, Northerly Island, and the Field Museum

1928

Beginning in September and finishing 15 months later in December 1929, GLDD undertakes a $9 million project to straighten the Chicago River between Polk and 18th Streets; the huge project allows railroad yards to line up with the street grid, greatly streamlining the area for trucks and train cars alike


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1954

1992

The company restores and prepares U-505, a German U-Boat, for the Museum of Science and Industry

On April 13, while driving pilings for work on the Kinzie Street Bridge, GLDD unwittingly breaches a utility tunnel beneath the Chicago River, causing an estimated 250 million gallons of water to flood downtown Chicago and costing the city upwards of $1.95 billion; GLDD claims the city failed to accurately depict the location of the utility tunnels, and a ruling by the Supreme Court of the United States determines that the company had greatly limited liability

THE PORTMIAMI DREDGES The Texas

A hydraulic dredge, the Texas has what is essentially a drill with a hydraulic pipe connected. The hydraulic portion acts like a combined vacuum and drill, sucking up the harder rocks that the vessel’s cutter-head drill kicks up.

Great Lakes Dredge & Dock’s clamshell dredge No. 55 strips soft material from the seabed and deposits it in a barge during the Red Hook Flats project. The company also does shoreline-protection work to keep coastal sites from wearing away completely. It’s costly but important work to nearby inhabitants.

THE HARBORDEEPENING PROCESS GLDD’s how-to guide to dredging PortMiami and others

1

The Terrapin Island

This is a hopper dredge, which has mechanical arms that come down on the sides and use hydraulic pressure to vacuum material up from the seabed. The vessel is used for operations that aren’t as hard as those that the Texas handles.

2

No. 55

The clamshell dredge No. 55 is a bucket dredge. Its bucket is used to strip soft materials that are on top of the harder bedrock.

3

Drillboat Apache

This vessel helps with drilling and blasting, which are exactly like they sound. Once material is blasted, another piece of equipment picks up the debris.

4

Photo: (opposite page, top right) Chicago Aerial Survey Co.

5

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Mobilize dredging equipment to the site, including dredges, pipelines, people, and a flotilla of support vessels such as tugboats, workboats, and survey boats. Next, survey the area before dredging to detect environmental concerns—including underwater material—and any possible issues that might occur during the work. If necessary, conduct drilling and blasting. This step is avoided as much as possible because it is more costly, even though it can be accomplished safely. However, for the PortMiami project, it had to be done. Finally, do the actual dredging. Once dredging is complete, do a post-dredge survey and a final environmental assessment.

A MESSAGE FROM JONES WALKER LLP PARTNERS Great Lakes has been a global leader in the dredging industry for more than 124 years, and Jones Walker is proud to have represented Great Lakes for more than 28 years. Our attorneys have grown to appreciate Katie Lavoy’s intimate knowledge of Great Lakes’ operations, which has served to complement our representations. —Jefferson R. Tillery, Jones Walker LLP Partners

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Jones Walker LLP congratulates

Great Lakes Dredge & Dock Company

KATIE LAVOY ON …

The importance of coastal maintenance Coastal restoration and protection should be important for everyone. Through the operation of tides, shorelines are gradually eroded away. If there were no man-made structures, over time, tides and storms would take the coastline away before eventually replacing the coastline. But, due to commercial purposes and the fact that we’ve built a lot of structures along the coast, people want their beaches and their structures protected. Rather than wait for nature to bring shorelines back, there’s a large industry that has developed to restore and replace the coastline. Sometimes restoration is for the tourist industry and for commercial purposes, but it’s also for protection. You’ve heard stories of Hurricane Sandy. When a storm surge is coming, anything in its path will slow it down; it’s necessary to protect the coastline. There are thousands of variables affecting the storm surge, but if you don’t have a protected coastline, then you can be sure that nothing is slowing down the storm. One of the things that we do is restore beaches and build berms to protect the coastline. Post-Hurricanes Katrina and Sandy, communities have really become involved. That’s the genesis of these projects. There’s only so many times you can have a 100-year storm before you stop calling it that. But, these projects are very expensive from cradle to grave. Before a dredge even gets there, you have to have engineering plans and environmental studies, so money is absolutely the number one challenge. There’s also more of a holistic debate about whether or not coastal protection is even something that should be done. It’s the commercial interest versus the environmental interest. Before a project even gets to us, there’s a lot of negotiation and fundraising that has to be done. Just as nature will erode a coastline, when we put it back, it’s going to be eroded again. From a business perspective, the work is important, but at the same time, it’s a reoccurring expense. Obviously, it’s something that can be a hard financial dollar for a community to swallow. One of the biggest challenges is you don’t know where the next hurricane is going to hit. Unfortunately, a lot of what we do is in response to these big disasters. What communities need to think about is prevention and protection before something like this happens and not after. Although expensive, I can guarantee you that the communities that are hit by these kinds of superstorms think that coastline protection is worth it.

for its 124 years of success throughout the U.S. and abroad, and

Kathleen Mackie LaVoy

for her service to the company. William H. Hines, Managing Partner 201 St. Charles Ave | New Orleans, LA 70170 504.582.8000 | bhines@joneswalker.com | joneswalker.com

ALABAMA | ARIZONA | CALIFORNIA | DISTRICT OF COLUMBIA | FLORIDA GEORGIA | LOUISIANA | MISSISSIPPI | NEW YORK | OHIO | TEXAS Attorney Advertising. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

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Photo: Kirk Conradi

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FISH-HABITAT (AND ROAD) RESTORATION

RIVERBED RENOVATIONS Washington State is worried about its salmon population, but president Dan Morgan explains how Morgan & Son Earthmoving is helping the fish thrive through habitat-restoration efforts BY MATT ALDERTON

americanbuildersquarterly.com

IF YOU LIVE IN A MAJOR METROPOLITAN Siblings Dan and Laurie Morgan took over Morgan AREA, you know how infuriating traffic jams & Son Earthmoving from can be. A bottleneck on the way to or from their father, J. P., who work is a nuisance at best and an act of tor- started it in 1957 with their grandfather John. ture at worst. Imagine, then, how devastating It was Dan and Laurie’s gridlock would be if you weren’t just trying idea to lead the firm to get to the office but rather to date night into fish-barrier removal. with your spouse—and if you and your spouse were somehow also the last couple on Earth. That’s probably how fish feel in Washington State. There, endangered species such as salmon and steelhead must swim upstream to reach their traditional spawning grounds. Along the way, they often encounter their own traffic jams, caused by deteriorating culverts, dilapidated bridges, and other barriers that block the passage of fish from point A to point B, hindering state and federal recovery efforts. Faced with such obstacles, the fish depend for their survival on experts who can restore their natural habitat by removing the barriers that restrict passage. Morgan & Son Earthmoving, Inc. of Ellensburg, Washington, is one such expert. Here, in a variety of ways, president Dan Morgan illustrates the problem and how his company is engineering solutions.

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FROM ROADS TO RIVERS: A FAMILY HISTORY MORGAN’S FATHER, J. P., and grandfather John founded Morgan & Son Earthmoving in 1957. The company’s origins, however, reach much further back. “It really started with my great grandfather August Thisius,” says Morgan, who, along with his sister, Laurie Morgan Bender, succeeded his parents as one of the company’s owners in 2006. “He was quite an entrepreneur. He had farmland, lumberyards, cattle and slaughterhouses, and real estate—all kinds of stuff—back in the 1920s. He also had a sawmill that they had set up in various locations in the woods of Central Washington. That was [when] you brought the mill to the woods instead of bringing the trees to town. Back in those days, they did logging with horses; it was about that time that horses started going away and bulldozers started coming in.” When he began working on the farm, John—August’s son-in-law—purchased the first dozer tractor in Washington State’s Yakima River Valley, which he used for many years to assist with building roads to service the family’s

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sawmill. Meanwhile, J. P. grew up and enlisted in the military. When he got out of the service and was trying to decide on a career, he had the idea to level land for other farms and sawmills as his father had long been doing for his own. Soon after, J. P. and his father formed a legal partnership to officially start Morgan & Son Earthmoving, which, for the past 57 years, has specialized in road construction and maintenance for farms and forests. Fast-forward to 1999: Washington State passes the Salmon Recovery Act to restore fish runs for endangered and threatened species of salmon and steelhead. “The Salmon Recovery Act required all the forest roads in the state to be brought up to new standards for fish passage,” Morgan says. “Landowners are required to upgrade their roads and either abandon them—bring them back to preroad conditions—or make the streams [that the roads cross] passable for fish.” Its experience in road construction, particularly in remote logging areas, made Morgan & Son Earthmoving uniquely equipped for the task of helping landowners comply with salmon recovery laws. That’s how the company got into the fish-habitat-restoration business.

As part of the Little Naches River project, Morgan installed man-made logjams, which are esstentially piles of trees with intact root systems that provide shade for swimming salmon to rest in.

MOVING MORE THAN EARTH SINCE 2000, more than 5,000 fish-passage barriers in Washington streams have been replaced with fish-friendly culverts and bridges, opening more than 4,800 miles of fish-spawning habitat statewide, according to the Washington State Salmon Recovery Funding Board. Ref lecting on his own contributions, Morgan realizes he has moved a lot more than earth with his excavators; he has moved the needle on environmental sustainability. “We’ve improved the ecosystem of the forest,” he says. “Not only am I providing my family an income, but I can look back on our work and be proud of what we did. I’ve got a six-year-old son, and if we can leave the world a better place for him, that’s a pretty good accomplishment, I think.”


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FISH FACTS Morgan & Son Earthmoving restores habitats for both public and private landowners, including timber companies, the US Forest Service, and the Washington State Department of Natural Resources. At the end of the day, however, the company’s most important stakeholders are the fish who benefit from its work. “I’m not a biologist, but I can tell you that [habitat restoration] is a huge issue,” Morgan says. Consider the following:

“The Salmon Recovery Act required all the forest roads in the state to be brought up to new standards for fish passage.” Dan Morgan President

Salmon are valuable In Washington State alone, commercial fishing generates approximately 60,000 jobs, according to the National Marine Fisheries Service, which also says salmon generate nearly $25 million in annual commercial fishing revenue along the West Coast.

Salmon are scarce In many salmon runs along the West Coast, the populations of wild salmon stand at less than 10 percent of their historical numbers, the American Fisheries Society says. What’s more, less than 40 percent of salmon stocks are in a healthy condition, according to the Washington Department of Fish & Wildlife.

Photo: (top) Jennifer Nicole Buchanan/Shutterstock, (bottom) Jeff McGraw/Shutterstock

Salmon are stressed Salmon are at risk of extinction in threequarters of Washington State, according to the Washington State Recreation and Conservation Office. Exacerbating threats against them are population growth—the state’s population is expected to grow from 7 million in 2014 to more than 8 million by 2030, according to the Washington Office of Financial Management—and climate change, which is gradually depleting and heating the water sources on which salmon rely.

Salmon populations in Washington State stand at less than 10 percent of what they once were, largely because culverts in rivers are preventing the fish from reaching their upstream spawning grounds. Salmon thrive in clean, clear freshwater, so Morgan & Son also installs riprap— rocks and rubble—along the shorelines of rivers to help armor them and prevent eroded soil from polluting the water.

SALMON SURVIVAL According to Washington State’s report, “Statewide Strategy to Recover Salmon,” salmon need the following to survive:

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Adequate amounts of cool, clean, and well-oxygenated freshwater so that the fish can breathe Fully functioning riparian corridors with large woody debris in the stream channel High-quality estuarine, nearshore, and marine habitats such as logjams Adequate supply of food, cover, and refuge from predators, including birds and mammals Unimpeded access to and from freshwater

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ANATOMY OF A PROJECT: LITTLE NACHES RIVER Floods from the Little Naches River wash away a stretch of Forest Service Road 1900—just off Highway 410—under which the river flows. The US Forest Service hires Morgan & Son Earthmoving to restore the road in its original footprint.

1

First, the company digs a diversion for the river, temporarily rerouting it to give crews access to the riverbed during construction. The diversion is lined with a plastic membrane to prevent seepage into otherwise dry soil.

2

Conservationists “defish” the dry riverbed, removing any stray fish from standing-water pools in order to ensure their survival.

3

Morgan & Son lines the riverbed with riprap—rock or rubble used to armor shorelines—and installs en-

4

CULPABLE CULVERTS

gineered logjams consisting of trees that still have their root systems intact. Laid in a deliberate manner, these logjams will prevent bridge scour and also create shaded fish habitats. The company rebuilds the washedout road. Meanwhile, in a small tributary upstream, it replaces a 36-inch culvert with a 24-foot bottomless box culvert, securing greater passage for fish.

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Morgan & Son replants disturbed trees and vegetation, which will provide additional shade that will keep the water cool enough to sustain fish.

6

Finally, the company reroutes the river from the temporary diversion back to its original channel beneath the road, which is now built in a manner that protects the integrity of the local fish habitat.

7

CULVERTS —tunnels that carry streams under roads—are the primary obstacle to salmon survival in Washington State, according to Morgan, because fish often have trouble traversing them in order to access upstream spawning grounds. Common problems include drops at culvert inlets and outlets; excessive water velocities; physical barriers in the culvert barrel such as weirs, baffles, and debris; and depths too shallow for fish to swim. “A lot of projects we do [involve] constructing a new road or reconstructing an old one,” Morgan says. “Often, a major item in [a reconstruction] project is to replace a culvert with either a bridge or a bottomless arch pipe—something that puts the stream back to its original width, restoring the entire streambed instead of choking it down into a pipe that prevents fish from swimming upstream.”

AFTER BEFORE

PROJECT DETAILS

LOCATION: Little Naches River, near Chinook Pass, WA CLIENT: US Forest Service YEAR: 2012 OBJECTIVE: Restore a flooded road with fish passage in mind

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NICHE

WASTE CONNECTIONS: BY THE NUMBERS

RECYCLING AND WASTE

151 solid-waste collection operations 53 transfer stations 43 landfills 38 recycling facilities 31 states in which the company operates $2 BILLION total sales in 2013

HOW MUCH WASTE DID YOUR PROJECT RECYCLE? Waste Connections unveils a new tool that helps clients record their disposal efforts for LEED and ISO certification, giving them the time to envision new and unique recycling initiatives

BY MARY KENNEY

americanbuildersquarterly.com

THE CLIENT HAD A VERY SPECIFIC NEED: it had an excess of beans, and it didn’t know what to do with them. The company wanted to meet ISO standards, so a landfill wouldn’t do. Luckily, Waste Connections had recently unveiled a tool called Recycle 360, which tracks waste management in building projects. The product helped the client meet ISO standards while also freeing up time and creative energy, and with that the client devised a genius plan: convert the beans into hog feed, and give it to local farmers. It was challenges such as this, at the local level, that inspired Waste Connections to create Recycle 360 in the first place—in cooperation with WasteCap Resource Solutions, a nonprofit organization that devises recy-

cling and waste-reduction strategies. “What Recycle 360 has given to our local people is the initiative to go out there and find new ways to recycle and reuse to meet their goals,” says Steve Berry, a leader in corporate sales for Waste Connections. “That’s the real beauty of it—getting people to think outside the box.” Recycle 360’s tracking tool makes it simple for companies to monitor metrics to satisfy local, LEED, and ISO standards as well as show their initiatives to clients or other building managers. The dashboard tracks numbers for internal review and can be shared or hyperlinked so that others can easily view and analyze it. Project managers who use it for sustainable jobs don’t have to go through invoices to see how they’re measuring up to LEED standards, and that frees them up to problem-solve more important things. Waste Connections practices a decentralized business model, and its president, Steven Bouck, says this philosophy allows local markets to devise the best ways to manage waste. The business’s regional affiliates help client companies devise ways to sort, recycle, and dispose of excess, and they’ve always helped

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Waste Connections’ Recycle 360 tool tracks the weight, volume, and types of recycled material that a client company produces, and it can display the data in a quick graph with the click of a button.

the companies track where waste goes in order to help with LEED certification. Recycle 360 is an innovative tool that simplifies this tracking process, and clients can employ the tool for multiple needs, whether Waste Connections is helping them monitor a construction project or the disposal of trash from an occupied building. “[Recycle 360] pulls it all together in one easy-touse, easy-to-find place,” Bouck says. The Recycle 360 dashboard tracks recycled material by weight, volume, and type and displays it in a simple graph. It also labels the haul tickets and destinations so that clients can see where their waste is going, and it allows users to set up project files that can be labeled by type, budget, size, and location. Using the tool, clients can list recycling initiatives for each of their projects and easily view improvements and backslides to keep a thumb on each project’s achievements in diverting waste from landfills. From his position in corporate sales, Berry is leading the push to convince clients of just how much Recycle 360 will benefit their projects. That starts with education, Bouck says, about how the product can improve and simplify the green-building process. There are 200 sales representatives assigned to Recycle

“In some communities, you have certain resources available that others have to work harder to find. [Recycle 360] is a tool that allows you to track all of that.” Steve Bouck President

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360, and these salespeople are now including examples of the dashboard’s functions in sales meetings with contractors and builders. When Rob Buxton, one of the salespeople, pitched Waste Connections for the Denny Sanford PREMIER Center in Sioux Falls, South Dakota, Recycle 360 was what settled the project manager’s decision. Buxton used photos of some of his company’s existing projects and personalized how Recycle 360—which was unlike anything the manager had ever seen before—would work for the PREMIER Center. “What impressed [the project manager] was that we, as a hauler, would put together a waste-management plan for them and tailor it to their specific project,” Bouck says. “The icing on the cake was that we would provide them recycling numbers on a monthly basis so that they could provide them to their ultimate client: the City of Sioux Falls.” Waste Connections’ Recycle 360 product continues to wow potential and current clients, but to the company, it just makes good business sense. It’s the logical next step in carrying the disposal industry further into a new century. “The waste business is different everywhere,” Bouck says. “In some communities, you have certain resources available that others have to work harder to find. This is a tool that allows you to track all of that.”


Waste Connections


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The Pop-Up

NEWSROOM When Al Jazeera America needed a full studio up and running in just two months, it contracted Dennis Darcy Construction Group to build the space largely from scratch Text by Christopher James Palafox / Photos by Frank Oudeman/OTTO

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COOL HUES  one of Al Jazeera’s first US outposts, As

the New York City studio needed to reflect the brand’s ideals. Its swathes of white and its various blue highlights emphasize openness and modernity.

I

t all happened so fast, beginning with an emergency midnight phone call. Dennis Darcy, founder of Dennis Darcy Construction Group (DDCG), picked up, and on the other end of the line was an engineer whose firm was in the final throes of contract negotiations with Al Jazeera. The influential Qatar-based news organization wanted to build a fully functional “pop-up” news studio in an abandoned bank in the heart of New York City’s Midtown neighborhood—a studio that could compete directly with the likes of CNN, MSNBC, and Fox News when the new Al Jazeera America channel hit US airwaves on August 20, 2013, bringing the brand to North American shores for the first time.

americanbuildersquarterly.com

The engineer wanted DDCG’s experience, but the firm had just two months to make the project a reality. Dennis Darcy agreed to the terms, and half a day, a meeting, a napkin sketch, and a handshake later, he and his team were in charge of construction. “It took 60 days to deliver a project that should have taken nine months,” Darcy says. The firm was able to manage the incredible time line thanks to its experience and reputation as a leader in technically specific, acoustically specialized projects. For 10 years, it has created spaces for live television and radio and installed Dolby- or THX-certified theaters and viewing rooms, so “we’re one of the few companies that can say with confidence that we construct studio spaces,” Darcy says.

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SOURCES BROADLOOM MODULAR CARPETING JJ Invision Carpet jj-invision.com QUARTZ COUNTERTOPS Caesarstone caesarstoneus.com ACOUSTIC CEILING TILE Armstrong armstrong.com RESIN WALL PANELS 3form 3-form.com

SIGNS OF THE PAST To maintain the space’s 1930s Art Deco roots, DDCG restored and refinished its marble columns, 30-foot ceilings, and horseshoe-shaped mezzanine.

CORIAN RECEPTION DESK DuPont USA dupont.com VERTICAL-SURFACE ACOUSTICAL FABRIC Guilford of Maine guilfordofmaine.com ACOUSTICAL-FINISH CEILING TREATMENT SonaSpray sonaspray.com ENGINEERED RESILIENT FLOORING LSI Floors lsifloors.com BATHROOM AND PANTRY TILE Nemo Tile Company nemotile.com

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 hile grand, the dilapidated piece of W old New York architecture that the studio now occupies had been pilfered over the years. “People had been pulling off the marble slabs, and it looked like something from a war movie,” Darcy says. “It was just brutalized.”

He credits Al Jazeera and its construction manager, USTV’s Ted Nelson, with having the confidence to give DDCG complete autonomy for the Al Jazeera America studio. The client had just one request: get it done. So, Darcy brought in all the subcontractors necessary to get started the day after the agreement, and he let them all know that they needed to maintain a breakneck pace. The project wasn’t just on a tight time frame, either; it involved extensive planning on the fly. “When I got onboard, the project was barely designed,” Darcy says. “The design was one piece of paper—it might have been an 11x17 draw ing, but that was it.” Sketches were thus drawn and built on the same day. And, because the former Manufacturers Hanover Corporation bank location sat within an operational landmark hotel, the project required constant coordination between multiple stakeholders. The hotel’s shared freight elevators, for instance, became a complication when hotel employees went on strike for four days, leaving Darcy and his team unable


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“It took 60 days to deliver a project that should have taken nine months.” Dennis Darcy, Founder

CLEAN AND CLEAR The lobby evokes progressive design ideals and neutrality with metal, glass, and curved white walls.

to receive deliveries or even take debris or workers in and out. To make up for all this, DDCG and its subcontractors worked around the clock, either in three eight-hour or two twelve-hour shifts. The final product of their efforts is a two-story, 23,800-square-foot newsroom and lobby at the corner of 34th Street and 8th Avenue. Because of the studio’s location in a historic building, Lawrence Group New York (the architects for the project) sought to maintain the character of the surrounding landmark architecture while also modernizing the space, keeping areas neutral and clean and emphasizing technology and the flow of communication and people, including more than 200 writers. Before DDCG was brought on to the project, two other firms were in contention, but they had concerns about Al Jazeera’s intense schedule. Darcy and his team offered solutions. “DDCG is known in the industry for getting things done—plain and simple,” Darcy says. “We specialize in complex criteria and impossible deadlines.”

americanbuildersquarterly.com

Kitchens | Bathrooms | Closets | Doors Custom Milwork | General Contractor Green products for LEED Certification Manhattan office: 390 Broadway 4th Fl. New York, NY 10013 T. 212 229 0536 F. 212 229 0538

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NOT YOUR TYPICAL BEACH HOUSES Dewson Construction’s projects, including this home built along the Bohemia River in Chesapeake City, MD, are often grand in scale. The company has ample experience with luxury homes on the East Coast, particularly along the shoreline.

“We Work At a

DIFFERENT LEVEL” Photo: John Jenkins

Luxury homebuilder Dewson Construction rises to the high expectations of its customers to maintain a reputation that has expanded the business to four states

by Kelli Lawrence

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COASTAL ESTATE HOME For this vacation home—located only 200 yards from the ocean in Henlopen Acres, Delaware—Dewson Construction worked closely with the architect and interior designer to achieve a unique design and atmosphere while upholding its own high standards of artisanship. The home’s copper roof accents and ashstained floors combine to create a true beach oasis. Architect: Ratcliffe Architects Designer: Johnson Sokol Interior Design Photographer: Scott NathanTKTKTKTK

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L

uxury homebuilder Tim Dewson has entered into his third decade as the owner and president of Wilmington, Delaware-based Dewson Construction, and his company’s multimillion-dollar dwellings have become mainstays throughout the Diamond State­­­­­—as well as parts of Pennsylvania, New Jersey’s Avalon/Stone Harbor region, and Maryland’s Chesapeake Bay area. Basically, when the high demand for the firm’s work first grew in northern Delaware, it didn’t take long to spread. “I believe we deal with clients with very high expectations, and we’re used to meeting them; we bring that to the table,” Dewson says. “We’re there on nights, weekends, …

whatever it takes to provide the client what they want, we’re there for them. We work at a different level. … I’m not sure other [builders] have the same mindset.” This level of dedication can leave customers spoiled, and it was actually some former clients’ inability to find another builder of Dewson Construction’s caliber that recently sent the company in a new direction: the south Delaware hotspot known as Rehoboth Beach in Sussex County. “We had been considering going down there,” says John McMahon, the company’s vice president and director of operations. “But we had one or two clients that really pushed us over the edge to … make a go of it.” Home additions and renovations are vital components of Dewson Construction’s repertoire, but its new-construction jobs—particularly its beachside vacation homes—are what have garnered it the most attention. The number of such projects waned considerably in the wake of 2008’s economic free fall, but now, with 15 projects in development at any one time—most of them $2–$5 million homes on lots worth up to $3 million—Dewson believes the tide has changed again. “Our clients had a very high net worth in 2007, and, sure, it dipped 30–40 percent from 2009 to 2012,” he says, “but they feel [they’re] back in the comfort zone now and are of the age where they want to stop and smell the roses more.” Such customers, McMahon says, sometimes end up suffering through stilted communication with homebuilders that don’t offer much access to their company owners. “Everything kind of filters down through a few layers,” he explains, but he notes that he or Dewson or both make a point of being directly involved with the homeowners and the crew of each Dewson Construction project.

Photos: Scott Nathan

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“We’re there nights, weekends, ... whatever it takes to provide the client what they want, we’re there for them.”

Photos: John Jenkins

Tim Dewson Owner & President

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COASTAL VACATION HOME Natural light and ocean views abound in this Nantucket shingle-style vacation home located in Rehoboth Beach, Delaware. The open-space kitchen, bar, dining, and living area features mahogany and ebony cabinetry, reclaimed-beam ceilings, and a pebblestone fireplace with driftwood and marble accents. Outside is a stunning entertainment area with a pool, a spa, a chef-ready cooking area, a fireplace, and a pool house. Architect: Bernardon Haber Holloway Architects Designer: Bruce Palmer Design Studio Photographer: John Jenkins, Image Source

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NANTUCKET-STYLE HOME

Architect: OSK Design Partners Designer: Bruce Palmer Design Studio Photographer: John Jenkins, Image Source

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Photos: John Jenkins

Balancing an elegant, classy aesthetic with a warm and inviting atmosphere, this Nantucket-style oceanfront home in Bethany Beach, Delaware, features an exterior pocket-door system that seemingly disappears into the wall, opening the indoor living and dining areas to the outdoor screened porch. The curved stairway, leading from the pier level to the third floor, is uniquely crafted of bleached-oak spindles, a continuous mahogany rail system, and a plaster curved ceiling. The kitchen, dining, and two-story living areas offer a panoramic view of the Atlantic Ocean.


FINISHES

The firm’s jobs are also made easier by having carpenters and other craftspeople on staff rather than depending on subcontractors for everything. “There’s a lot of moving parts, and all of that has to be coordinated very well,” McMahon says. “That’s where our managers really set the standard.” Dewson Construction raises the bar in terms of technique, too, focusing on the most current heating and cooling elements, insulation products, windows, and other aspects of green, location-based building. “There are many different techniques used on these [Rehoboth] homes, from insulation standpoints to hurricane shutters to Stormwatch- [and] hurricane-rated glass,” McMahon says. “That’s probably one of the largest differences between the north and south Delaware markets. But in all markets, people are looking to build the most energy-efficient, value-oriented home they can nowadays.” No matter which high-end locale they’re serving, Dewson and his company make sure to create homes to match. “John and I keep our focus on the higher-end market because that’s what we’re most advanced in,” he says. “The craftsmanship goes hand in hand with what we do.”

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Lisa Strauch Eggers worked on Wall Street and at Amoco in the United States and abroad before joining Callison. Her colleagues appreciate the breadth of her experience.

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Photo: Callison, LLC

VIEW FROM THE TOP


VIEW FROM THE TOP

COMING IN FRESH Callison had never had a general counsel, and Lisa Strauch Eggers had never worked in architecture and design, but their unlikely match has birthed one of the most effective legal teams around Interview by Zach Baliva

A

glance at Lisa Strauch Eggers’s resume reveals a worldly past. The

Johns Hopkins Universit y and Georgetown Law graduate started her career in corporate finance on Wall Street before working for BP (then known as Amoco) in the United States and Switzerland, and later she moved to Seattle to serve as Starbucks’s first international lawyer. She also worked as general counsel for Seattle Biodiesel and Global Scholar, two Seattle start-ups. Mostly recently, in 2011, she joined Callison, LLC, a growing international architecture and design firm with 900 employees in 11 offices. Prior to her hiring, the firm had gone 36 years without an in-house counsel, so Callison CEO John Jastrem wanted Eggers to build a new legal department. Fortunately, as she explains here, her past gave her the tools to do just that. What first sparked your interest in law?

I almost went into the Foreign Service. I passed all the tests right after college but decided that I was intrigued by the study of law as an intellectual pursuit and because of the role it plays in business, domestically and internationally. Plus, the analytical rigor and discipline of law are invaluable in any setting. I could see that as business grew glob-

americanbuildersquarterly.com

ally, companies would value having a good lawyer on their team. I always wanted to be in-house and to be a true business partner. What is it about contributing to a business that’s so attractive?

I want to be part of a team that grows and manages a great business—an ethical place where people want to work. I love applying the law to help understand and manage risk and inform strategic decisions. The intersection of law and business fascinates me. How have you seen that interplay work out?

I remember being at Amoco just five years after law school, following four years on Wall Street, and having profound conversations with Amoco’s GC about the role of in-house counsel. He was an important mentor and told me we are an integral part of the business. That’s why we get invited to strategy and management meetings. We have to understand the business, and our knowledge of the business should inform our legal advice. My career was transforming; I was developing in-depth knowledge of my client and becoming integrated into the business team. My advice was sought at the early stages of every transaction because the perspective

of counsel was valued as one component of sound decision-making. My most satisfying experiences as in-house counsel result from the interplay of law and business and the relationships I build with my clients as a trusted advisor. After you started at Callison, you helped the firm hire a new insurance broker. What was that process like?

My job, when I first joined the company, was to take a fresh look at all components of contracts, litigation, compliance, and risk management. When you design buildings and interiors, there will inevitably be some claims and litigation. Callison has an excellent claims history. We choose our clients carefully, and we do great work, so we were well positioned to optimize our insurance program. With the help of an excellent team at Lockton, I did a bottom-up analysis of all of our types of insurance. Our professional liability policy is written in London, where the process is more personal than in the United States. I flew to the UK with our CEO, met with multiple underwriters, explained how we manage risk, described Callison’s financial strength, and succeeded in renewing at favorable rates and improving our policy terms. The underwriters really appreciated my background in managing risk for projects all over the world, as well as my department’s sophisticated and rigorous approach to contract review, our development of processes, and our rollout of a training and compliance program. What are some of the steps you take to limit risk?

Every contract at Callison should be reviewed by a lawyer. That review includes a standard analysis for key terms such as limitations of liability. When we enter a new country or have a new partner, we also ensure compliance with Department of Treasury, State, and Commerce regulations. I also started a training and compliance program in contract formation and anticorruption compliance, particularly the FCPA and UK Bribery Act. Callison does retail and commercial work in the United States, Asia, Europe, and Dubai. What challenges does that footprint bring?

We have resource constraints, obviously. We are a small team, and it’s a contract-driven business. Also, we have to review contracts that might never be awarded. RFPs often have form contracts that you either accept as-is

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“In some ways, it’s really been an advantage having not come from within the industry because I see opportunities for improvement with fresh eyes.” Lisa Strauch Eggers Chief Legal Officer & Corporate Secretary

it means that I don’t have the time or the background to do it myself. I want them to respond with something I can use immediately. I need them to stand in for me, and they do. That’s the value of having long-term relationships: they know me, they know our business issues, and they know our standards. What do you think is most important to your relationship with your executive team?

What’s that relationship like?

My executive team and board need to be able to rely on me for sound legal advice, which is informed by my knowledge of the company and its people. They want someone who is helping manage risk and thinking of important legal issues, including applicable laws and existing contracts.

My outside counsel are vital partners. They know I need practical, business-oriented advice. Of course I want them to apprise me of problems in a contract, and I also want them to propose solutions. If I give them a project,

It might sound strange, but I think it’s good that I worked in other areas first. I remember when Lou Gerstner went to be CEO of IBM

or make amendments to. We make it work because we have a really great team of talented people and good outside counsel we can really rely on when needed.

How does your past experience help?

and people thought he was an odd choice because he had never worked in tech. But he was a phenomenal manager, and he did fabulously. I had broad experience with sophisticated firms and corporations. I think our CEO knew I could bring that level to Callison. In some ways, it’s really been an advantage having not come from within the industry because I see opportunities for improvement with fresh eyes. I’ve learned a lot in this position, too, and am grateful to my CEO and clients for giving me this opportunity.

A MESSAGE FROM SUMMIT LAW GROUP We revolutionized the traditional law firm model by championing an approach that focuses on what matters most: our clients, not the billable hour. Summit is honored to celebrate the achievements of one of those clients, Lisa Strauch Eggers and Callison, and looks forward to their continued growth and future success.

Solid client relationships. It’s what we enjoy building the most.

Lockton Companies congratulates Lisa Strauch-Eggers on being featured

L AW G R O U P

in American Builders Quarterly.

We are proud to be a strategic partner to Lisa, to Callison, and to the design and construction industry.

www.lockton.com WE LIVE SERVICE!® Insurance • Risk Management • Employee Benefits 444 West 47th Street • Kansas City, MO 64112 816-960-9000 © 2013 Lockton, Inc. All rights reserved.© 2013 Thinkstock. All rights reserved.

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Attorneys providing exceptional and efficient business, litigation, environmental, and employment law guidance and representation for over 40 years. summitlaw.com


VIEW FROM THE TOP

POWER OF ATTORNEY(S)

Steve Richards is only the second person to serve as PCL Constructors’ general counsel since the 108-year-old building firm first started its legal department in 2006.

PCL Constructors’ sales have grown nearly 100 percent since it launched its legal department in 2006—almost exactly 100 years after its founding by Julie Schaeffer

F

ew companies can claim to have

been in business for more than a century. The year 1906—decades before the invention of power tools and trucks—is when PCL Constructors Inc. was founded in Saskatchewan. In the 108 years since, the company has erected such major projects as the Hawaii Convention Center, the Staples Center in Los Angeles, and the 69-story Scotia Plaza in Toronto. Its work, seen throughout the United States and abroad, has made PCL one of the largest construction companies in North America, with 10,000 employees and $7.5 billion in sales in 2013. Perhaps most remarkable, however, is that despite the company’s wealth of work and its size, it only recently—in 2006, to be exact—felt the need to create an in-house legal department. “The caliber of PCL’s management is noteworthy when you consider that 100 years of growth occurred—and largely without incident—before in-house attorneys showed up,” says Steve Richards, the company’s current general counsel, who joined in 2011. According to him, PCL’s legal department got off the ground when the company’s growing project portfolio and new contractual intricacies converged to make having a team of in-house lawyers seem like a good idea. Since taking over for the company’s first general counsel, Richards has worked to expand the role. Claims management, Richards says, was the initial impetus for launching the legal department. The top line of the company had grown remarkably—it was well past $3 billion at the time—and claims were ballooning both in volume and size. That was a challenge.

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“A bad claim can sink not just a project but a company if not properly attended to.” Steve Richards General Counsel

“A bad claim can sink not just a project but a company if not properly attended to,” Richards says. Additionally, deals were becoming more complex. For much of PCL’s history, the firm had used industry templates to draw up its contracts, but as time passed, bespoke models became more common. “Lenders entering the construction arena insisted on terms that would benefit them,” Richards explains, “and a lawyer was needed to navigate through that.” A popular new construction model was the public-private partnership, or P3, and PCL became actively involved in a good number of them. “They looked nothing like the standard industry templates we’d worked under for a hundred years, and they required negotiation so [that] we could proceed with comfort,” Richards says. These deals were also growing in size, sometimes with three- or four-year construction schedules and massive budgets. “We often see deals of $100 million, and some go north of $1 billion,” Richards says. Against the backdrop of these complications, PCL hired its inaugural general counsel, Doug Stollery, whom Richards later succeeded. During their tenures, the scope of the position has expanded, particularly with regards to regulatory compliance matters in the United States. “We have a good book of business with governments, and enforcement agencies began toughening up on the rules that come with doing business with the US government,” Richards says, citing as an example the Federal Acquisition Regulation, which contains, among other things, standard solicitation provisions and contract clauses. “That led to the creation of our ethics platform, which started with a code of conduct, followed by training modules, internal committees, investigation processes, hotlines—all of which was built in the years following the launch of PCL’s law department.”

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The benefits of having in-house counsel soon became evident, Richards says, so PCL expanded the department from one to three attorneys during the first few years. And, as the company more than doubled its billings between 2006 and 2014, the law department continued to grow as well. Today it has seven lawyers: three in the United States and four in Canada. Currently, Richards is fine-tuning the company’s contract-review process. “We only have seven people, but we sign thousands of contracts a year, so we can’t read every one of them,” he says. “So, we’ve triaged the system, turning our attention to the highest-risk contracts, like design-build projects of a certain size, project-finance deals, P3s, and the like.” Richards, who became general counsel in 2013, enjoys his work immensely, in part because PCL is an employee-owned company. It means more people understand why he’s there and why it’s important. “I’ve worked in public corporations and understand what that looks and feels like, but this is arguably even more demanding,” he says. “With an employee-owned company, scrutiny is higher. Almost every person who works with you on a daily basis is also a shareholder and thus has a natural appetite for understanding how the company’s money is being invested and how ethically the company is doing business.”

PCL decided it needed a legal department so that its construction teams could keep up with newer, more-complex industry regulations and contracts.

PCL Constructors By the Numbers

$3.9 billion gross sales in 2006

$7.5 billion gross sales in 2013

92%

sales growth since the launch of the legal department

4,400

salaried employees

6,000 hourly employees

7

in-house attorneys


HILLER Electric Company

Residential

Licensed, responsive 24 hour service

PCL

Industrial/Commercial

Applauding Steve Richards of PCL Constructors, Inc. for Continued Recognition of Outstanding Excellence in Construction Law

Insured & bonded above industry standards

rien, Pickert & Dillon, LLP e, O’B Moy

MOPD

No Job Too Big or Small for Hiller We are a full service electrical contractor that does electrical wiring for commercial, industrial, institutional, and residential applications. Hiller Electric has been doing the job right for 50 years. 5404 Dayton Street | Omaha, Nebraska 68117 PH 402.339.0524 | FX 402.331.3660 | hillerelectric.com

Attorneys at Law

Moye, O’Brien, Pickert & Dillon, LLP

Solving Problems in the Construction Industry for over 25 Years Attorneys at Law 800 South Orlando Avenue | Maitland, Florida 32751 Telephone: (407) 622-5250

Serving the construction industry from 14 locations nationwide.

Stinson Leonard Street (the result of the recent merger of Leonard, Street and Deinard and Stinson Morrison Hecker) has one of the largest dedicated construction law practices in the country. Our attorneys represent public and private sector clients nationwide in nearly every aspect of the design and construction process. We are especially proud of our 30-year relationship with PCL.

Lowell Noteboom » 612.335.1573 lowell.noteboom@stinsonleonard.com Steve Lindemann » 612.335.1724 steve.lindemann@stinsonleonard.com

STINSON LEONARD STREET LLP \\ STINSONLEONARD.COM LAW OFFICES IN 14 LOCATIONS NATIONWIDE The choice of a lawyer is important and should not be based solely on advertisements.

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ON THE RECORD:

JIM ARCHIBALD What the partner at Bradley Arant Boult Cummings LLP has learned from 20 years in construction law, and where he thinks the postrecession industry is headed

What first attracted you to law?

I was a debater in both high school and college, and that helped me realize how much I liked advocacy. I enjoyed speaking and presenting arguments, so law school seemed like a natural progression. I don’t have any lawyers or contractors in my family but somehow wound up being a construction lawyer.

Interview by Zach Baliva

How did that happen? How did you pick your specialty?

As technology becomes a more important player at construction sites, lawyer Jim Archibald is helping building firms settle who’s responsible for what.

I went to work for Bradley Arant in 1993, expecting to work on complex commercial litigation cases. The firm had a very strong construction-law group, and a few of the senior lawyers in that group were willing to take the time to mentor me and help me learn how to be a construction lawyer. I found that I enjoyed the work, and I connected especially well with the clients.

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You have been a construction lawyer at Bradley Arant for more than two decades. What keeps you loyal?

We have a great firm and great clients. The work is challenging and rewarding, and I am fortunate to work with many talented people who are also my friends. Our firm has more than 400 lawyers in seven offices, so I can find someone at the firm who has dealt with almost any kind of problem that my clients might encounter. I’ve also been able to observe many different lawyers over the years. What have you observed?

Different lawyers have different styles. Some are loud and aggressive while others are quiet and calculating. Some try to be intellectual while others rely on folksy Southern charm. All of these different styles can be effective, and I’ve been able to watch my colleagues use


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“I ask a lot of questions. I’m genuinely fascinated by what my clients do; I never lose sight of the amazing things they accomplish.” Jim Archibald, Partner them all. You can’t just copy someone else because you will not seem authentic, but you can definitely start to hone in on what approaches might work best with your own strengths and abilities by watching what other lawyers do. How would you describe your style, and how has it helped you develop an expertise in construction law?

I ask lots of questions. I’m genuinely fascinated by what my clients do; I never lose sight of the amazing things they accomplish. They take a vacant piece of property, and they figure out how to organize many different people and companies to build something that’s never been built before, usually on a tight schedule and budget. I try to pay attention to the challenges they encounter and the details that make them successful so [that] I can anticipate ways to help them in the future. Talk about the challenges of construction law.

Construction law is usually straightforward: the party that breaches the contract pays foreseeable damages. The challenging part is applying that law to very complicated facts. You have to understand the project and appreciate what might be motivating the different parties on the project to be able to give sound, practical advice and untangle those complicated facts—which is why I ask a lot of questions.

How did the recession impact your work?

A lot of our clients started pursuing federal government projects and overseas work because those were the jobs that were available. Federal government jobs require compliance with intricate regulations, and failing to do so can lead to major civil and even criminal liability. On the international side, construction disputes may be complicated by language barriers, different laws, and competing courts and arbitration tribunals. Like our clients, we have been forced to learn many new things to adapt to the unique challenges of federal work and international work.

And now?

Hopefully, the recession is ending and private construction will start to pick up again domestically. The recession unfortunately eliminated many contractors, leaving a lean, efficient, and tough collection of survivors. They’ll use new technology and the strategies that helped them survive the recession to deliver better-quality projects more efficiently than ever. What does it take to do your job well?

It’s always important to understand my clients’ goals and then help them realize those goals. Sometimes the goal is to go to court and win. Other times, the goal is to come up with a quick, amicable resolution that avoids litigation. Regardless, I have to make sure that what I’m doing will help my clients achieve their goals. I have the utmost respect for the people who make their living in the construction industry, and I never lose sight of how difficult it can be to do the things they do. Helping them continues to be very rewarding for me.

What emerging factors are changing your role?

Technology is the biggest factor. There’s a whole new generation of construction professionals out there with tablets and smartphones and design software. They can come up with amazing solutions to complex problems in a matter of minutes, often in the field, moments after the problem has been identified. That allows the industry to move quickly, but moving too quickly can sometimes result in mistakes and disputes. And there are legal issues behind that?

Collaborative problem-solving in the field with tablets and smartphones may blur some of the traditional lines that once separated what contractors do from what designers and owners do, creating uncertainty as to who agreed to do what. If there is a problem, delay, or injury, it may be harder than ever to identify the responsible party. I try to remind my clients that, no matter how fast they are going to keep the job on schedule, they need to remember to document what they are doing and preserve the records and data that show what they did. What else is changing?

Everyone is trying to be more efficient, and one approach we’re seeing involves collaborative contracts where the project participants are forming a “team” to share risks and rewards and work together toward common goals instead of entering separate contracts based on checks and balances that often turn into adversarial relationships.

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FLOODING THE WORLD WITH FROZEN YOGURT

Among the big-name brands that Ryan Patel has helped grow are Panda Express, Wet Seal, and BJ’s Restaurants.

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Ryan Patel has taken treat-maker Pinkberry from fewer than 95 locations to more than 250 using his vast experience in restaurant and retail expansion Text by Christopher James Palafox Photos by Andrey Zeynalyan


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F

ounded less than a decade ago in 2005, Pinkberry has already

captured the zeitgeist, boasting cult-like followers that swear by the chain’s frozen yogurt’s flavor—and by its relative healthiness in comparison to that of more pervasive iced treats. From regular celebrity sightings at West Coast locations to an entire Pinkberry-centric episode of HBO’s acclaimed Curb Your Enthusiasm, the frozen yogurt company has cemented itself in popular culture. It’s all part of the bigger plan, according to Ryan Patel, the director of global real estate and business development for Pinkberry. For himself, for the myriad companies that have employed him, for the people he works with, and for the future leaders he speaks to at US business schools, both work and life are all about growth. Now he’s applying his philosophies to the well-known frozen yogurt brand, and he has already taken it from fewer than 95 locations to more than 250 in 21 countries since he first joined in 2011. He has pushed Pinkberry into new markets by using the skills and lessons he learned from both a worldly business school and the numerous other brands he has worked with since graduating. Recalling his time as an undergrad at the University of California–Berkeley, Patel feels fortunate to have been exposed to not only a diverse student campus but also an educational environment with a global perspective. Courses on Asia and Latin America, while having no direct bearing on Patel’s business degree, laid important groundwork for his current international role. After graduation, he first joined the fastcasual restaurant chain Panda Express, part of Panda Restaurant Group, Inc., where he learned the legal side of the food industry as well as how leases work. “I learned backwards from a normal person,” says Patel, who learned the intricacies of lease negotiations solely through his experience. He saw the outcomes, identified where deals could be improved, and developed a foundational understanding

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of how to negotiate a lease from its inception because he knew the vision of the end product. From there, Patel went to California-based casual-dining operator BJ’s Restaurants, Inc., where he became more involved with the development side of business, helping put together layouts and pro forma alongside the company’s CFO. When Patel first arrived at BJ’s, it had approximately 30 restaurants and was on the cusp of launching a new prototype beyond the Golden State into Arizona, Washington, Nevada, Colorado, and the west side of Texas. He simultaneously took classes at the University of California–Irvine’s Paul Merage School of Business and helped put together more than 65 new restaurants for BJ’s.

He had returned to school to earn his MBA because he felt he was becoming savvier and wanted to further enhance his financial skills. In grad school, he was the only student out of the 54 that were accepted into his class that had worked in his field. And, once again, he was able to take advantage of his peers’ disparate points of view. Afterward, Patel was subsequently recruited by restaurant retailer Jamba Juice, his first category-leading brand. The company’s size allowed Patel to quickly get into its systems and understand how to structure a business that has a lot of units. Unfortunately, Patel joined Jamba Juice during the 2008 recession, and he ended up killing more deals than he created,

Pinkberry’s Global Reach With more than 250 locations worldwide, Pinkberry’s brand is widespread. Here’s a look at the countries it’s serving, highlighted and labeled with the number of locations in each.

Russia 3 Turkey 7 Lebanon 3 Canada 4

Jordan 2

USA 169

Kuwait 12

United Kingdom 3

India 3

Morocco 1

Bahrain 1

Dominican Republic 1

Qatar 2

Peru 20

Philippines 4

United Arab Emirates 17 Oman 1 Saudi Arabia 6 Egypt 4

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“Our growth is based on the demand from our consumer. We’re not going to grow just to grow.” Ryan Patel Director of Global Real Estate and Business Development

Patel helped Pinkberry improve the flexibility of its footprint so that new locations can fit into kiosks and stores-within-a-store as well as stand-alone structures.

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but he did learn how to take a step back and form a new market plan when business isn’t going well. Lastly, before joining Pinkberry, Patel moved into the retail market, joining Wet Seal, Inc. He helped grow the clothier to more than 500 stores while concurrently cutting occupancy costs down. Ultimately, across all industries, Patel looks for ways to thrive and to build and evolve a brand, even when there are lots of competitors, which is typically the case in the restaurant markets. At Pinkberry, that hasn’t changed. “Yogurt is a low-barrier venture,” Patel says, “so it’s not just competitive; it’s hypercompetitive.” To give the company an edge, Patel has helped Pinkberry create a more f lexible footprint that can still employ a full-service model. The brand can now fit locations into stand-alone structures, kiosks, and storeswithin-a-store, which allows it to populate both airports and retail giants such as Macy’s. “You have to have the flexibility to create a vehicle to push out there but still be Pinkberry,” Patel says.

Additonally, the brand is adapting to local tastes. For instance, locations in Peru now peddle a lúcuma flavor, derived from a fruit that is native to the South American country and is a staple in its cuisine. “Our growth is based on the demand from our consumer,” Patel says. “We’re not going to grow just to grow.” Amid all this, Patel is quick to def lect praise, instead focusing accolades firmly on the leaders and team members he has worked with. “It’s not just what you do, but it’s how you can help others,” Patel says. “If they’re successful, you’re successful, and the whole company is successful.” This is one of the lessons that Patel seeks to impart to budding business students, and he continues to lecture at various business schools, including those at USC, Oxford, and UPenn. “It’s about paying it forward,” Patel says. “And, if you give behindthe-scenes information to those people, they’re going to make it better for everyone.” Officially, Patel is in charge of growing the Pinkberry brand globally, but for the 15-year expansion expert, team confidence is just as—if not more—important. “When you empower people,” he says, “that builds the culture where you can be innovative and creative.”


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“In expansion, you don’t just jump in. You have to see what you’ll have when you get there.” Nabholz Construction Services works in Arkansas, Oklahoma, Kansas, Missouri, and other surrounding states. Recently, the firm opened a new office in Olive Branch, MS, part of the greater Memphis, TN, area. Executive VP and corporate counsel Andrea Woods explains the legalities and planning behind the move. As Told To Zach Baliva We’re known for our work in commercial, higher education, health care, and school districts. Since 1949, our firm

has expanded both in services and geography, and that has served us well. Industry diversity has helped us get through difficult times in the market because we can share our resources inside the company and better respond to the challenges of the market. Not all areas trend downward at the same time, and we’ve been able to better weather such downturns. Expanding into Olive Branch is the latest in this series of steps over the years. We

opened an office there as a result of our industrial-services group, seeing [that] they

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could fill a market for the niche services they provide. We decided to invest there by selecting a key location and purchasing real estate. Management decided that our client-services division would also expand into this market, so part of the move’s success comes from both groups being available to serve a broader base of client needs from one location. The work starts long before the legal department gets involved. Our leadership team had considered this move for years. We’ve made trips to the region, interviewed other business leaders, met with clients who have interests nearby, and done other homework. In expansion, you don’t just jump in; you have to see what you’ll have when you get there. You want to make sure you’ll be ready to stay once you land in a new place.

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“Our leadership team had considered this move for years. We’ve made trips to the region, interviewed other business leaders, met with clients who have interests nearby, and done other homework.” Andrea Woods Executive VP & General Counsel

When the project landed in my office, we were close to

completion of the due diligence phases, and that’s when the legal team is engaged to review real estate negotiations, draft contracts, and ensure we’re compliant with the new state’s regulations. It’s important to comb through state-specific and local regulations and laws that can affect your business—in our case, those related to employment, construction, liens, prompt payments, and prevailing wage. Since Olive Branch almost straddles the Mississippi and Tennessee state lines, it was important to thoroughly learn both jurisdictions. The best practice for a general counsel, I think, is to work with local attorneys. I’m not licensed in either state, so it was helpful to have local counsel review what we were about to put in place because they are a part of the community day to day. This also helps develop longterm relationships with local counsel, so it’s a good strategy.

Client focused every day As a full service law firm, Friday, Eldredge & Clark LLP, responds to construction industry clients’ needs from finance, real estate, and governmental affairs to contracts, litigation and employment matters. We represent all major participants in the industry, including contractors, owners, developers, architects, and engineers. LITTLE ROCK

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FAY ET T E VIL L E

Contact: J. Shepherd Russell III, managing partner

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ROGERS

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Proceed with Confidence

Another key to entering a new market is making sure your company is competitive when it comes to pay and

benefits. You want to attract the best team from the onset because you need them to be with you for a long time to come if you expect to have sustained success. We compared the markets to determine what would constitute competitive pay and great benefits. We brought in some transfers and combined them with new local hires to get the office up and running. We wanted to make sure we were offering something in terms of an overall compensation package that could get this done without any missteps. Culture is a huge part of providing unified services to our clients. We had to ensure we had the right leadership

team to begin with. It’s crucial to have the right people that know how to build a new team and support everyone. Otherwise, a new office and a new team might feel fragmented and isolated. We committed to actually visiting the location. Our south central operation is based in Arkansas and is a home base for many in the corporation. Accounting executives, other leaders, and myself will often visit Olive Branch to make sure they have what they need. We do site visits, we talk with people, and we communicate regularly. They’re excited to be there, we’re excited to be there, and Nabholz Construction Services is set up to have extended success in yet another new market.

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Celebrating 20 Years of Excellence in Project Management & Cost Consulting New York | New Jersey | Boston Wa s h i n g t o n , D.C . | Lo s A n ge l e s

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HE CREATES OFFICES THAT WORK Architect-turned-project manager Saeid Garebaglow is changing the design of Morgan Stanley’s corporate real estate, with an emphasis on the occupants Interview by Matt Alderton

T

ypical project managers are concerned with three things: cost,

schedule, and scope. Faced with massive construction projects, it’s their job to make sure each is completed on time, on budget, and within the stated specifications. Everything else is secondary. Saeid Garebaglow isn’t a typical project manager, though. Because he’s a licensed architect, he sees more than just costs when he looks at commercial real estate; he sees opportunities. To seize them, he must protect the bottom line but also look beyond it. The result is buildings that are not only completed quickly and affordably but that also meet the needs of their users, Garebaglow says. As the head of institutional project management at New York-based Morgan Stanley, he’s in charge of the bank’s commercial real estate projects throughout North and Latin America, and he recently sat down with American Builders Quarterly to explain how his unique background results in offices that work for people.

Photo: Chuck Choi

In Morgan Stanley’s remodeled headquarters, hubs on each floor contain coffee, tea, water, and vending machines, and their open design encourages collaboration.

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Saeid Garebaglow’s Career Milestones

1979 Moves to New York from Iran at age 17; plans to return to Iran after school but can’t because of the Iranian revolution

1981-1986 Graduates high school and takes several years off to work and travel

1986 Enrolls in college to study architecture

1990-1991 Spends his last two years in school studying architecture abroad in France, which shapes his belief that architecture should be more about users than buildings

1995 1994 Joins Citibank as a Receives his strategic planner architectural and builds a digital registration, library to cull data becoming a registered from Citibank’s architect in New York real estate portfolio New York State 1991-1994 Works for a number of architectural firms, first as a designer and then as a project architect, all the while craving a more senior role

You began your career as an architect. How did you get interested in architecture?

I grew up in Iran until I was 17. Then I came to the United States to finish high school and go to college. At this same time, a revolution was happening in Iran. Iran has a very rich history around architecture and design, but with the revolution, things shifted from color to black. That’s when I realized what a rich culture I’d left behind. With that, more and more, I was drawn to the visual cues around myself, and I started noticing architecture and the built environment. What did you notice exactly?

To me, architecture is not about buildings; it’s about the people who use them or live in them. As an architect, you have to be very aware of what is really, truly the reason for architecture, be it colors, fabrics, finishes, or the design of the building itself. Too often, I think, architects lose sight of that. Architecture for them becomes about the building on its own, but for me it’s about its intended use or users. It can look fantastic, it can look colorful, it can look tall, it can look short— but it still has to work for the people who are using it.

Saeid Garebaglow’s time as a boy in Iran informed his philosophy that a building must “work for the people who are using it.” He led the renovation of Morgan Stanley’s HQ.

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You’re obviously passionate about architecture, so how did you end up in project management?

After school, I worked for several architectural firms in New York. Then I had an opportunity to work for Citibank doing

strategic planning. At that time, Citibank was ramping up its corporate real estate organization, and they wanted subject-matter experts who had enough architectural expertise to understand issues and provide solutions. When you start out as an architect, you’re assigned to a project but you’re working on a very small-scale part of that project. You’re working with the architect in charge, but you’re always focused on only a small part of the bigger picture. At Citibank, I could be part of that bigger picture. In this case, the bigger picture happened to be around “workplace.” It was my job to ask, “What do people look for in a workplace?” Again, it goes back to the idea of making an impact on a building’s user. How did you end up at Morgan Stanley?

For a long time I wanted to own my own business, so in 2001 I decided to open up a company called REplan, which was a small boutique real estate firm offering consulting services to Fortune 500 companies. The biggest challenge we faced was being a young company. Because we were small, it was hard to win large projects. At some point it became clear we weren’t going to win the big projects I wanted to do, so in 2004 I decided to join Morgan Stanley’s corporate-services group. Citibank’s real estate group was a very large organization with lots of layers of management. Morgan Stanley’s, on the other hand, was a very lean organization where you could make decisions


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1998 Citibank becomes Citigroup, at which point Garebaglow is promoted to VP of the company’s workplace strategies and solutions group; there, he oversees workplace design across the company’s real estate portfolio, including a global expansion of his New York project, encompassing 54 million square feet of commercial real estate across 22 countries

2001 Starts his own real estate consultancy, REplan LLC

2004 Joins Morgan Stanley in his current role as VP, overseeing project management within the company’s North American commercial real estate portfolio; within six months, he’s assigned his first major project: designing Morgan Stanley’s new office in downtown Manhattan

2014 Morgan Stanley promotes Garebaglow to head of institutional project management in its Americas region

2011-2014 Executes his most significant project to date: a consolidation and enhancement of Morgan Stanley’s New York metro-area real estate holdings, known as the Midtown and Downtown Initiative

and move to execution very fast. That was welcome news to me. I came in originally to look at processes and best practices within the organization, but six months in, a major initiative came up: Morgan Stanley was opening an office downtown at 1 New York Plaza. I was asked to lead the project, which was several office floors and some infrastructure spaces as well as conferencing and multimedia rooms. The project took 12–14 months.

Photos: Chuck Choi

Glass-walled outer offices allow as much sunlight into the middle of the workplace as possible, improving staff morale.

Garebaglow pushed Morgan Stanley away from cubicles and toward an open floor plan that allows more employee interaction.

americanbuildersquarterly.com

That was your first commercial real estate project for Morgan Stanley. No doubt, you’ve managed several others since. What’s one that stands out?

In 2011, we started an initiative in New York that we called our Midtown and Downtown Initiative. There were lots of leases due, and also we had a major tenant in our headquarters building that was leaving. So, there was an opportunity to create a master plan that involved consolidating and enhancing our space throughout the whole New York metro area. I was one of three executives who managed the Midtown and Downtown Initiative. At our headquarters in Midtown, we had the opportunity to build 12–15 floors of office space, a conference center, training space, a cafeteria, and a fitness and health center. Downtown, we added new floors and moved away from cubicles and offices to an open floor plan that incorporated as much daylight as possible and more collaborative spaces.

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Photo: Chuck Choi

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“To me, architecture is not about buildings; it’s about the people who use them or live in them.” Saeid Garebaglow Head of Institutional Project Management

It took away the walls between cubicles so [that] people could collaborate with each other. Part of the new design also was bringing watercooler discussions out into the open, so we made a sort of town square where people could gather to have lunch or coffee but also meet spontaneously about a project or client without having to be stuck in some backroom someplace. It was a big change in terms of design, but it was very successful. We’ve gotten lots of good feedback. People love the spaces. Clearly, your architectural philosophy— designing for users—is very much alive and well. Now that your job is project management, do you miss design?

What I do is actually very closely aligned with what I want to do. There are days that I have to think more strategically about

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the big picture, but I’m also someone who likes to roll up his sleeves and be part of the design process to really understand what employees’ issues are and what design elements we have to incorporate to meet their needs—whether it’s office space, infrastructure, or amenities like a cafeteria. With that, I do use my architectural and design skills to collaborate with our architects and planners and come up with designs that make sense—or even designs that can change the way we work. Have your projects at Morgan Stanley also changed the way that you work personally?

It’s interesting. My last few years in the project-management world have been like listening to a symphony. Lots of people contribute to every song. That, to me, has been the big takeaway from my work. In architecture, you’re taught that the architect is a single person who builds a skyscraper. What I’ve realized, however, is that it’s not about one person; it’s about collaboration and coming together as a team to get things done.

To bring “watercooler discussions out into the open,” Garebaglow conceived a town square inside the headquarters where workers can eat together or have a meeting.

A MESSAGE FROM VVA PROJECT MANAGERS AND CONSULTANTS VVA Project Managers and Consultants congratulates Saeid Garebaglow of Morgan Stanley on his many achievements and impressive career in corporate real estate. VVA is a leading independent project-management and cost-consultancy firm offering a full range of advisory and technical project-management services within the real estate and construction industry.


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CFO Chad Crow and his team had to take some extreme measures to steer Builders FirstSource through the housing-market collapse of 2008.

HOW TO 1 SURVIVE A SLUMP The methods Builders FirstSource employed to stay in the manufacturing and distribution business during the recession by Julie Schaeffer

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IDENTIFY THE PROBLEM EARLY

Builders FirstSource, Inc., which manufactures and distributes building products, had some incredibly good years between its founding in 1998 and its initial public offering in 2005, thanks in part to the housing bubble. “It was one of the best environments for single-family construction this country has ever seen,” CFO Chad Crow says. In the middle of 2006, however, everything changed. “We heard rumblings of a slowdown in construction but at that point had no idea the downturn would be as drastic and last as long as it did,” Crow says. One person did predict the coming storm, however: Builders FirstSource CEO Floyd F. Sherman. “We all thought he was a Chicken Little, saying the sky was falling, but it certainly did, and that foresight was invaluable,” Crow says. “He was on the forefront of reacting, and that allowed us to survive.”

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BECOME MORE EFFICIENT

Business activity can slow a lot more quickly than a company can adjust its cost structure, Crow says. Builders FirstSource’s revenues fell 70 percent, going from more than $2.3 billion in 2005 to $678 million in 2009. Reacting as fast as possible was a necessity, and the first step was centralizing operations. The company had grown primarily through nearly 30 acquisitions that went all the way back to 1998, so going into the downturn, it was decentralized, with mini corporate offices up and down the East Coast. To reverse this, it established a single corporate headquarters in Dallas, closed a number of locations, and converted the remaining business units to one operating system. “We probably took $25 million of permanent costs out of the company by doing so,” Crow says. “But, just as importantly, it gave us the daily insight into the company that allowed us to operate more efficiently and control ongoing costs.”


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Builders FirstSource went from 8,800 full-time-equivalent employees to just 2,500. Those who stayed took pay and benefits cuts and tackled workloads normally meant for two to three people.

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BUILDERS FIRSTSOURCE REVENUE

OBTAIN LIQUIDITY

Builders FirstSource had significant liquidity constraints during the downturn because of the credit crunch. “Lenders weren’t jumping to loan money into the homebuilding space during those dark times, so when we could find debt, it was pretty expensive,” Crow says. The company had a plan for this—have enough cash on hand to survive another 18–24 months—but it had to pay for it. “When one debt facility ran out, we’d go back to the well and find someone else, and usually it was a little more expensive, so our average cost of interest ended up being 12.5 percent,” Crow says. “But, we survived and, in May of 2013, refinanced, so we now have ample liquidity at a much lower interest rate.” That’s in sharp contrast to many of the company’s competitors. “Some who didn’t do this had to go through Chapter 11 to stay in business,” Crow says, “and some didn’t stay in business at all.”

The company’s revenues plummeted right along with the housing market in 2008, but it has since slowly made gains and hopes to even back out soon. $2.5B $2.3B

$2.25B

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$2B $1.75B $1.6B $1.5B

$1.5B $1.25B

$1.1B

$1.1B

$1B $779M

$750M

$678M

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$500M 2005

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REDUCE HEAD COUNT

“We had to cut employees who had been with the legacy companies we had acquired for 20 or 30 years, and it was gut-wrenching,” Crow says. “But, we had to do what we had to do to survive, and it was better to save [some] jobs than see all of our employees lose their jobs.” In 2005, Builders FirstSource had approximately 8,800 full-time-equivalent employees, and that number went as low as 2,500 at one point. Two strategies were key to the cuts: First, the company winnowed field operations and corporate jobs equally, sending the message that “we were in the trenches together,” Crow says. Second, it didn’t cut the sales force. “The lifeblood of this company is our commission-based sales force, and we had to make sure we kept them in place, so we implemented a minimum-pay policy to allow them to keep food on the table.” Also helpful was the company’s relationship with payroll processor Ceridian, which, like many service providers, did what it could to help its client stay alive by tempering its fees during the downturn.

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TRIM EMPLOYEE EXPENSES

The personnel who remained took a hit for the team as well. Builders FirstSource froze wages, eliminated bonuses, and cut benefits—some minor (such as the elimination of free beverages in break rooms across the company, which saved several hundred thousand dollars annually) and some significant (including an increase in the employee portion of medical premiums and lowered matching payments to 401(k) plans, which together saved several million dollars annually). “Nothing is insignificant when you’re looking for any dollar you can find,” says Crow, who gives a lot of credit to the employees who stuck with the company through the hard times. “We can make all the decisions we want in corporate, but if the folks in the field aren’t executing those decisions, they’re meaningless, so I thank the folks in the field, who saw their coworkers lose their jobs and had to do the work of two or three people without raises and with their benefits cut.”

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BUILDERS FIRSTSOURCE MARKET SHARE

TURN THE CHALLENGE INTO AN OPPORTUNITY

In 2011, though the company had negative cash flow and negative earnings before interest, taxes, depreciation, and amortization (EBITDA), it was seeing signs of a turnaround thanks to revenues of $779 million. In 2012 and 2013, it earned $1.1 billion and $1.5 billion in revenue, respectively, with positive EBITDA in both years. It also gained significant market share, which is measured by calculating how much revenue the company generates per US single-family-home start. During the last housing peak, from 2005 to 2006, Builders FirstSource was at $1,250; today it’s at $2,500. “That tells me we can generate financial results similar to what we did at the last peak if single-family starts are 900,000 per year, whereas at the last peak it took 1.7 million,” Crow says. “For the past six years, starts have been 400,000– 600,000, well below the historical average of 1.1 million, but they’re improving.”

Market share is measured by dividing the company’s revenue by US single-family-housing starts

2005

2013

$1,250

$2,500

A MESSAGE FROM PINPOINT COMMERCIAL PinPoint Commercial is an industry-leading, full-service real estate developer; Builders FirstSource is a top supplier of structural building materials and services. Its desire to be the best has led to a long, ethical, value-driven relationship. PinPoint Commercial congratulates Builders FirstSource on providing outstanding products and services to every customer.

Congrats to our friends at Builders FirstSource!

the industry’s leading full-service real estate development company.

WE’VE GOT YOUR BACK

www.pinpointcommercial.com 122

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IN

C E 1921


VIEW FROM THE TOP

General counsel Paul Cohen joined Golder Associates in 1992. Recently, he and the company’s chief information officer worked to improve employee connectivity.

DOWN TO BUSINESS WITH

PAUL COHEN by Julie Schaeffer

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“What is the measure of a company’s success?” asks Golder Associates in Conversations on Our First 50 Years, a publication it put out in 2010 to celebrate its golden jubilee. The question is entirely rhetorical, for surely the company already has a good answer: since launching in 1960, it has grown to become one of the largest and most respected consulting,design, and construction-services firms working in the areas of earth, environment, and energy. ¶ Today, with 8,200 employees in more than 180 offices worldwide, the employee-owned organization brings in $1 billion in annual gross revenue. Paul Cohen, who has served as general counsel of the company’s US operations since 1992, has some insights on how it got to where it is.

I

n its early days, Golder Associates said that it had three governing principles: do good work, have fun, and make a profit. These ideas have evolved and taken on new intricacies as the company has expanded. Cohen has watched the evolution happen, as his job has grown along with the organization. “We used to work in silos,” he says. “The legal team worked on legal matters; the other corporate-service groups worked independently to support the business. But, we realized that working together proactively in a collaborative way would be a better model, and we changed the way we did things. This enables us to better support our people and build stronger relationships with our clients.” Cohen cites an example from 2013, when he, along with other members of the global legal team, opened a dialogue with Emmanuel Rodriguez, Golder Associates’ chief information officer. Quickly thereafter, Cohen got involved in a number of information technology (IT) projects, one of which involved negotiating a global network system contract. In keeping with the three aforementioned principles—do good work, have fun, and make a profit—Cohen says, “I enjoyed learning more about our IT operations. IT is a very dynamic and vital part of our business. Ultimately, the effort allowed us to leverage our size, improve the connectivity with our people around the world, and save money.”

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East Link Externally, the company is working on a wide variety of projects that are conducive to doing good work, having fun, and making a profit. Currently, it’s the lead geotechnical engineer on Sound Transit’s East Link railway project in Washington State, helping to give Puget Sound residents a fast and reliable connection from Seattle to large population centers east of Lake Washington such as Bellevue and Redmond. The Bellevue-to-Redmond portion

of East Link will consist of seven miles of twintrack light rail, 2,600 feet of sequential-excavation-method tunnel next to high-rise buildings, more than a mile of elevated guideway, and seven stations. Golder will develop design recommendations for a variety of structures, including tunnels, guideway foundations, retaining walls, and light-rail stations, and it will perform more than 8,000 feet of drilling before the project is complete.


TKTKTK


VIEW FROM THE TOP

“We realized that working together proactively in a collaborative way would be a better model, and we changed the way we did things.” Paul Cohen Principal & General Counsel

Cohen says a significant part of Golder Associates’ success stems from its ownership model. The fact that there are thousands of employee shareholders, all working together, creates a pervasive sense of accountability. There is a sense that “this is my company, and I have to do this right,” Cohen says. This sets the bar for quality high. Additionally, Cohen says, being an employee-owned organization gives Golder Associates some flexibility in how it deals with long-term planning and investments. “Sometimes we get too focused on the day-to day numbers, and profitability is, of course, very important,” he says. “But finance is a lagging indicator, by which I mean, if you focus on the right things, the financial piece takes care

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of itself. We’re not operating quarter to quarter, so we can invest for the long term in our people. Combine that with building sustainable relationships with our clients and supporting it all with eff icient and responsive systems—you end up with a winning formula.” If Golder Associates’ growth is any indication, it does indeed have a winning formula. After it was founded in Canada, the firm extended its reach into the United States in 1968, then the United Kingdom and Australia in 1972, and it has grown both organically and through a combination of mergers and acquisitions since. Over the past decade, it has posted a 15 percent compound annual growth rate— right through one of the worst recessions the world has ever seen. Natural resources, energy, and infrastructure will continue to be major needs all over the globe, too, so USbased company president Mark Swallow says those markets will continue to drive Golder Associates’ expansion for years to come.

US Deparment of Defense Golder Associates also recently stepped in to help when engineering firm Bechtel Corporation, under contract with the US Department of Defense, was looking for a way to treat liquid waste generated from the neutralization of mustard agents contained in artillery shells, mortar rounds, and projectiles held by the US Army. Golder Associates used immobilized-cell-bioreactor technology, a proprietary innovation that uses a series of biological processes to remove contaminants from water while generating significantly less sludge and collecting off-gas from the process. The result: an environmentally sound process that is safely ridding the world of a serious threat to human health and ecosystems.


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VIEW FROM THE TOP

After joining Paramount Group, Marce Sanchez worked his way up to a position as the vice president of construction and development. He helps the company analyze its properties.

KEEPING PARAMOUNT PREMIUM

 et it never be said that connections don’t L pay off. Marce Sanchez always wanted to get

Paramount Group has assembled a 14 million-square-foot, $10.5 billion portfolio of office buildings in prime New York City, DC, and San Francisco locations, and Marce Sanchez ensures each property is as appealing as its locale by Julie Schaeffer

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into the New York real estate market, and in 1985 he got his chance. He was working as a construction manager for the Edward J. DeBartolo Corporation, overseeing the building of a Miami mall that contained the first Macy’s store in Florida. Through this project, he met the vice president of Macy’s, who eventually went on to work at Paramount Group, Inc. and tapped Sanchez to become director of design and construction. Sanchez now directly assists the New York real estate investment and management firm with its simple growth strategy: seek out central-business-district properties, buy them at competitive prices, upgrade them to a premium standard, and provide unparalleled tenant service afterward. “What’s great about working with Paramount Group is the clarity of vision,” says Jarrett Huddleston, a principal at partnering firm CANY Architecture + Engineering DPC. “They know what they want and how to get there, which allows us to focus on what we do best: resolving the technical issues of the building enclosure.” Paramount Group’s strategy is clearly working. The company has assembled a 14 million-square-foot, $10.5 billion portfolio of office buildings in New York City; Washington, DC; and San Francisco. It is also known as a market leader in sustainability, having reduced its portfolio’s energy usage by 15.1 percent since 2007. Additionally, 80 percent of its portfolio is LEED-certified (22 percent Gold and 20 percent Silver). “We emphasize the fact that we’re not only owners but managers as well,” says Sanchez, now the firm’s vice president of construction and development. “As such, we’re constantly upgrading our properties because we’re conscious of the cost savings that can be achieved for our tenants with energy efficiency.” Sanchez, whose job is to analyze properties to determine the feasibility, scope, and cost of their potential improvements, describes some of Paramount Group’s more notable projects.


Photo: Sheila Barabad

VIEW FROM THE TOP

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PACIFI existing retail footprint, adding exteriJACKSON or-facing retail space, and modernizing N ST SQUARE JACKSO the décor. To that end, it is incorporating flamed absolute-black granite, office lob-N ST TO WASHING by walls of white glass, and LED lighting throughout the entire floor. Sanchez’s TRANSAMERICA NOMA PYRAMID16-foot-high team is also installing CLAY ST FINANCIAL ST storefronts made of ultraclear low-iron ENTO SACRAM DISTRICT ST K glass, and it’s creating a large lobby HALLEC restaurant and bar to enliven the atrium IA ST and make it a space for nightlife CALIFORN fun as well as daytime shopping. The changes will help the building PINE ST compete with newer office towers going up along the Mission Street corridor near the Embarcadero; they will fit BUSH ST the vision of the new San Francisco. “There’sUNION a push to make it more of SQUARE a 24-7 city, and what we’re doing to One Market Plaza is consistent with that vision,” Sanchez says.

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For a while now, Paramount Group has had a strong desire to dip into the San Francisco market. It’s finally doing so with an exciting property near the city’s famed Embarcadero, an important thoroughfare surrounded by numerous hotels, restaurants, and retail venues. One Market Plaza is expansive, consisting of two office towers—the 42-story Spear Tower and the 27-story Steuart Tower—that together have more than 1.6 million square feet of office and retail space. But, the large retail spaces on the first floor do not meet the needs of modern tenants, and the architecture and design of the lobby and a connecting concourse are eclectic—“a hodgepodge of different kinds of marble and glass, with no continuity,” Sanchez says. To ready the space for today’s vendors, Paramount Group is redesigning the


Clune Construction Congratulates Marce Sanchez.

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It is our privilege to work together and we look forward to working with his team for years to come.

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Tel: 718.886.1500

info@donnellymech.com

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In June 2011, Paramount Group purchased a property that’s well located on Pennsylvania Avenue and 7th Street. The 12-story glass and precast office tower had much to offer: it is fully integrated with the Fireman’s Fund Building, a Washington, DC, landmark. It has expansive views of the Washington Monument, the National Archives, and the National Mall from its windows and from a 6,000-square-foot landscaped roof terrace. It has a four-story

Southwest

E ST SW THOMAS JEFFERSON MEMORIAL

parking garage with 153 stacked spaces that create an above-average parking ratio. And, it’s LEED-certified. But, because it was originally constructed in 1991, Liberty Place still needed some work. “The architecture of the interior lobby was staid and old-fashioned,” Sanchez says. Today, as it re-leases the building’s 172,734 square feet of office space, Paramount Group is also renovating the 3,000-square-foot lobby and el-

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evator cabs to bring the property up to a more modern standard. The old ornate lobby was broken into small areas and felt very closed in, Sanchez says, so his firm is opening it up. The company is also installing new finishes, including a majestic two-story entrance, granite floors, limestone walls, sophisticated lighting, exquisite paintings, and other features that will reinforce a high-end look. As of press time, the project was expected to wrap in June 2014.

D ST SW


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“When the property’s [waterfront] location is considered, you understand why we were so diligent about expanding it.” Marce Sanchez VP of Construction and Development

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Best Wishes and Congratulations to Vice President of

ROBERT DERECTOR ASSOCIATES Consulting Engineers

Construction & Development, Mr. Marce Sanchez. SOVEREIGN

Sovereign Mechanical Corp. has been installing and servicing commercial H.V.A.C. systems in the New York metropolitan area for the past fourteen years. The majority of our work has been in the mid-town area of Manhattan, where we have installed systems as a sub-contractor for some of New York’s major General Contractors. We have installed systems for some of the most prominent Advertising, Financial, Consulting and Law firms in New York, many of which are in Paramount Buildings.

RDA congratulates Marce Sanchez and Paramount Group. We are proud of our professional relationship with Paramount Group and look forward to being a service provider for many more years.

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1633 Broadway

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New York City

TIME WARNER W. 59TH ST CENTER

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745 Fifth Ave.

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Sited near Times Square, with unencumbered 360-degree views from its center core floors, this 2.6 million-square-foot, 48-story office tower offers the prestigious address and elegant space that today’s large corporations so often look for. But, the building’s retail space, accessed from the exterior plaza, wasn’t working, and changing it proved challenging. “The plaza is controlled by the city, and [its] aesthetics, seating, and open space cannot be changed without approval from the New York City Planning Commission,” Sanchez says. Paramount Group purchased the property in 1976, and it originally obtained permission to renovate the exterior plaza in 1989, which led to an eventual update to the finishes and the creation of a better pedestrian experience at the sidewalk level and in the two subterranean wells. The subterranean retail space still wasn’t ideal on the north side of the plaza, though, so Paramount Group is now making another change. Namely, it’s raising the elevation of the north side of the plaza and creating a street-level glass box that will serve as an entrance to the retail space below. The plaza will be pedestrian-friendly, with both permanent and movable seating, and it will be a prime spot for a sophisticated retail tenant. “The property presents a great opportunity for a retail user to create indelible landmark signage, as it sits on the edge of Times Square,” Sanchez says.

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NY BRYANT PUBLIC PARK LIBRARY

SAKS FIFTH AVE


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ST OMERY MONTG

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NOMA San Francisco-based architecture ENTO ST SACRAM FINANCIAL firm Skidmore Owings &HALLMerrill is ECK ST DISTRICT designing the building, and when it’s RNIA SToffer complete, nearly every unit CALIFOwill a view of the San Francisco Bay and the Bay Bridge. The design will be elegant PINE ST but friendly. “The first seven stories of the project, called BU the SH STpodium, will have ipe-wood verandas that give UNION feel,” Sanchez says. a neighborhood “On topSQUARE of the podium will rise the tower, a slender glass and granite posttensioned concrete structure NEW befitting a modern skyline.” TRANSBAY

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Also near the Embarcadero in San Francisco will be a second property, a planned 26-story condominium tower at 75 Howard Street that will include 155 residential units and two restaurants on the first floor. An eight-level above-ground parking deck currently occupies the site, and Sanchez says it presented an opportunity. “San Francisco is crying for housing right now,” he says, “but it’s difficult to get projects approved, especially when they require a rezoning, and we have been working through the city approval process for 24 months on this rezoning.”

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Q&A with Marce Sanchez How did you begin your career?

I am a civil/structural engineer with a degree from Youngstown State University in Ohio. My first opportunity was with the Edward J. DeBartolo Corporation, where I worked in the field as an engineer and then a project manager. After this field experience, I returned to the home office to work in the purchasing department. This enabled me to understand how a project is constructed “on paper” with an emphasis on cost containment and scheduling. What advice would you give someone entering your field?

The best advice to anyone entering this field and being successful is to have well-rounded experience in all aspects of the design/construction and overall development process. What is one significant lesson you’ve learned?

No matter what one’s position is in a development and real estate outfit, one must be focused and not afraid to ask questions. In addition, it is critical to take on more responsi-

bilities when the opportunity arises, focusing on your area of responsibility but also understanding the entire development strategy and how its many complex pieces fit together to create a financially successful product. What would you like to accomplish over the next 10 years?

Continue to improve Paramount Group’s existing portfolio of properties, taking advantage of the rapidly improving design and engineering techniques that are transforming the industry. Moreover, my division looks forward to adding new development properties and helping to advance our acquisition strategy to increase the size of our portfolio. What is your favorite Paramount Group property (currently owned or since sold)?

There are actually two properties that are my favorites—and for different reasons: the condominium development at 75 Howard has an opportunity to create an architecturally significant statement on the San Francisco skyline, [one] which will be visible to anyone passing through the San Francisco Bay or traversing the Bay Bridge. And 1633 Broadway represents what Paramount Group does best: continually transform a property to meet the needs of present-day office tenants.

Sanchez earned his engineering degree from Youngstown State University and first worked at Edward J. DeBartolo Corporation before Paramount Group.

americanbuildersquarterly.com

Photo: Sheila Barabad

A MESSAGE FROM THE OFFICE OF JAMES RUDERMAN Congratulations and best wishes for continued success to Marce Sanchez! We are thankful and pleased for the years we provided and are continuing to provide structural-engineering services for Paramount Group, Inc., especially for projects at 1633 Broadway, New York, NY, one of the buildings OJR designed! A MESSAGE FROM CANY CANY Architecture + Engineering, DPC / CANY Technical Services LLC are affiliated firms offering a full range of exterior building-enclosure investigation, design, and inspection services. We are trusted by a wide array of commercial, residential and institutional owners and by developers, architects, management firms, builders, and manufacturers to provide the expertise, insight, innovation, and experience essential to successful projects. CANY DPC is an accredited Special Inspection Agency for curtain wall, panel wall, and EIFS.

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congratulates

Marce Sanchez of Paramount Group on being featured in

corporate interiors retail & hospitality education health sciences & wellness

American Builders Quarterly NEW YORK CITY | LONG ISLAND | LONDON

broadcast & technology architecture branding & graphics www.tpgarchitecture.com

S H A R P T U R N S A N T I C I PAT E D .

D E A D E N D S AV O I D E D .

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In the past year, Gulfport Energy Corporation has upped its production program atop the Utica Shale formation, going from two completed wells to 50.

179,000

Net Acres (and Counting) Gulfport Energy Corporation’s territory continues to grow as the company maintains its aggressive leasing program by Kelli Lawrence

A

s oil and gas exploration/production companies go, Gulfport Energy

Corporation is not generally considered one of the heavy hitters. But, having increased its production output by 60 percent in 2013, it has clearly become a success story nonetheless. Though vice president of operations Mark Malone has only been with the business since November 2013, his tenure has been long enough to understand what’s at the heart of Gulfport Energy’s whirlwind of growth. “We have a motto: plan to work, work to plan,” he says. “That’s been our focus. And to do that, you’ve got to be qualified for it.”

1997

Gulfport Energy got its start in 1997 as a Southern Louisiana-based pure-play company. As it expanded, it also developed interests in North American regions such as the Permian Basin (in West Central Texas) and the Canadian Oil Sands (in Northern Alberta), but its presence in Eastern Ohio’s portion of the Utica Shale formation is what has taken the business to the next level. “We’re a pretty small company and quickly recognized the amount of people that would need to be added to get the work accomplished,” Malone says.

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38.2 trillion cubic feet of gas

Drilling into and producing from the Utica formation started in Québec back in 2006 and in New York in 2009, but it didn’t occur in Ohio until 2011. One year later, the US Geological Survey estimated that the Ohio portion of the formation held 38.2 trillion cubic feet of undiscovered gas, 940 million barrels of oil, and 208 million barrels of natural gas liquids. Gulfport made a play for territory in late 2010 and spud its first well in early 2012.

50 wells

Tapping into more of its territory came next, and as of March 31, 2014, Gulfport had spud 75 wells in the Utica formation—with 50 of them completed. “At the end of March, Gulfport had brought online 50 wells in the Utica [formation] and had leased approximately 179,000 net acres in the play,” Malone says. “When you put that in perspective, at this same time last year, we had online two wells and had leased approximately 128,000 net acres. So, in one year’s time, that’s a pretty productive program.” The plan is to reach 85–95 gross wells in the Utica formation by the end of 2014.

7 rigs

With drilling activity comes rigs, and Gulfport has seven of them operating in the Utica formation. And, thanks to its partnerships with MarkWest Energy Partners, Gulfport now has crucial “gathering and processing arrangements” as well. “It’s one thing to produce oil and gas; it’s another thing to be able to get it to market,” Malone says. “There was not a large amount of pipeline infrastructure to start with, so MarkWest has had to build out the necessary infrastructure to produce these wells. That’s been quite a challenge, but one that they have been successful with.” A MESSAGE FROM C&J ENERGY SERVICES C&J Energy Services is an independent provider of premium hydraulic-fracturing, wireline, and coiled-tubing services with a focus on complex, technically demanding well completions. Our services are provided in conjunction with both conventional and unconventional well completions as well as workover and stimulation operations for existing wells. Headquartered in Houston, C&J operates across the United States, with service centers near major domestic shale basins. C&J also has offices in the Middle East. For more information about C&J Energy Services and the premium completion and intervention services we offer, visit www.cjenergy.com.

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A member of the Shell Oil Company family since 1988, Keith Probyn is now the business’s VP of real estate, and his shake-up of its approach has increased efficiency.

A NEW SET OF RULES Ten years ago, Keith Probyn changed how Shell sources its real estate projects. By partnering with a developer investing Shell’s money, the vice president is delivering flexible and efficient real estate and workplaces that will attract top talent and drive innovation during a critical time of increasing demand. As Told To Zach Baliva

americanbuildersquarterly.com

I bought a newspaper one day and was reading it on the

way home when I saw a Shell job listing for an electrical mechanical engineer. I thought I’d apply for the job and wound up getting it. That was in 1988, and I’ve been with the company ever since. I didn’t have a whole lot of experience back then. I was born in London and never did that well in school. I did know, however, that I was interested in engineering. At age 16, I started an apprenticeship at a large company and attended college on a sponsored education. I ended up working 10 years with that company before moving to a position with the UK government’s Property Services Agency. I was in this role when I saw the job listing for Shell and decided to apply. Since then, I’ve had the great fortune to work across every sector in the industry and in every region with the company. I moved from the UK to the United States in 2002 and then

transitioned to Asia from 2007 to 2010. After that, I returned to the US and still consider it home. I’ve been involved in some of our largest real estate projects, and I think that experience is an enormous asset for me now as VP of real estate. I started in engineering facilities and moved to project management before I began heading up bigger developments. I was working on a big investment in the Hague when my boss presented an opportunity for me to relocate to the US to gain transactions experience. From there, I was put in charge of the Asia Pacific Region before moving to my current global role in 2009. My time in the United States was very foundational for the way we operate. We changed the way that we put large real estate projects together in the US by asking the business to step back and allow us to deliver their real estate solutions for them. This was the start of our journey to becoming a professional function within Shell, support-

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Testimonials “What I like best about Keith is that he has a sense of humor that he keeps while doing excellent work. When you’re on these complex jobs all day every day, [humor] helps. He expects excellence, but he recognizes others who really stand out. He’s someone who can work on bigpicture strategy, but he also knows how to get to work and execute.” Jacinta McCann, Executive VP, AECOM

“Keith is thoughtful and comes at projects with a refreshing approach. We’ve never felt like we are working with a large firm that makes edicts from on high. We know that he understands the market and allows us to prescribe an optimized process. Keith and the real estate group made a huge change in how Shell develops its projects. It’s not disconnected, disjointed, or canned. He changed the way Shell sources its projects, and not many other leaders could have pulled that off. When Shell started to do this, they defined a new strategy that works.”

“Keith is a leading professional in the industry and a very effective partner. He is very connected to his partnership relationships, is consistent, and is realistic in his expectations, given his depth of understanding of the Asia markets and the industry as a whole.” Phil Rowland, Executive Managing Director of Global Corporate Services in the Asia Pacific, CBRE

John Mooz, Senior VP, Hines

ing the mainstream businesses in the same way you would expect from HR, IT, finance, and other functions. My boss should get all the credit for really driving us hard in that space, and we have come a very long way. In 2009, we went from a regional structure— where the regional manager was accountable for the whole real estate remit—to a very different role where standardization and simplification are key. I became VP to lead real estate transactions and projects across the globe with a great team that has now grown to more than 80 people. Our focus is to protect Shell’s interests and investments in the whole real estate arena. Until we made that change, we were always negotiating with the business regarding how much influence we had. Fast-forward to today, and we have a responsibility to ensure the business receives a professional service to meet the business needs. It all goes hand in hand. In the US, we also totally changed the way we work with developers, and it is a model

we take as wide as we can as opportunities present themselves. One size does not fit all, but for me, on large projects, the developer model would be the preference. They do what a regular developer would do with investors, but they do it with our money. This leverages our low cost of capital. The model is still maturing and is gaining wider interest. One of the first places we tried this was in Houston with Hines, the developer for our upstream business campus. It really paves the

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way to delivering projects on budget and on time with minimal involvement for the business so that they can get on with their day job, which is driving revenues and protecting the interest of our shareholders. We’re no longer building facilities that are tied forever to Shell. Instead, wherever possible, we create market solutions and buildings that we can sell or lease in the marketplace if Shell exits the property. The Houston project is known as Woodcreek. The pilot was a LEED Gold building that totals 200,000 square feet and was the start of a key partnership in the United States that has delivered 2.5 million square feet across sev-

“We’re no longer building facilities that are tied forever to Shell. Instead, wherever possible, we create market solutions and buildings that we can sell or lease in the marketplace if Shell exits the property.” Keith Probyn VP of Real Estate

eral projects, including Woodcreek and the Shell Technology Center in Houston. As a team, we shouldn’t do anything that doesn’t contribute to a business outcome. If we get a request from one of the business units, we make sure it fits with the local and overall strategies. If a business unit wants us to invest in refurbishing a space, for example, we check the business strategy to ensure we plan on staying in that location for x number of years. We’ve also created “connect workplace” standards, which are a set of design standards we apply to any new investment or refurbishment to make sure that all our real estate investments meet the needs of the business and the activities we need to accomplish. Spaces being delivered to these standards have a look, feel, and brand—but in a flexible way that can be optimized and later repurposed in the marketplace. We have major projects around the world. We’re finishing up several in Houston and are looking at our HQ in the Netherlands while also going through a big transition in London, where the Shell Centre building that we finished in the 1960s has run its course. We sold off 700,000 square feet of the building in the early 1990s and retained over a million square feet. Since then, we have entered into a joint venture to redevelop the whole site. To do so, we’ve struck a commercial deal with the developer, who will do all the heavy lifting, with Shell as a partner and one of the future occupiers of the site.


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Perhaps most importantly, we’re working on a new Shell Technology Center in India that is one of the most challenging projects I’ve ever been a part of. This—together with Amsterdam and Houston—will be our third technology center for main R&D projects. We wanted it in India because the country is such an important talent pipeline for our company. We decided to buy directly from the government in a business park it was developing. In India, a business must first lease land until the government sees a sincere investment and effort, then you receive permission to acquire the title. After the financial crisis, strict requirements around time lines loosened, and we made the purchase. We fine-tuned the master plan, and the business went through an entire look at the R&D footprint worldwide before finally signing the investment proposal and breaking ground. Today, the main civil infrastructure is well in progress, and we are about to start the engineering infrastructure. Some of Shell’s R&D activities will move and take place in Bangalore. Technology is an important differentiator for us, and the

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facility must be designed and fit for business. We need to have the right space to attract the talent we want and need. The facility will have offices to accommodate 1,200 people and could expand to fit 1,800. We’ll build wet labs and large-scale experimentation and research areas in an enclosed environment as well as infrastructure for pilot plants. This will allow researchers and engineers the space to do trials and tests on mini prototypes before building full-scale working models. The project will be fully complete in 2016. This new center is critical to achieving Shell’s vision. Energy use could double by 2050, and we need the right technologies and the right talent to help our company meet the coming increase in demand. Within real estate, we’re building our strategic supplier network, increasing efficiencies, and investing in standardization. By doing so, we can pick up new projects and move quickly with all the people and ingredients in place to execute flawlessly. We plan to help Shell move forward by doing our piece as professionally and efficiently as possible.

The new Shell Technology Center in Bangalore, India, will be an R&D center capable of holding 1,200 people. Shell expects to wrap the project in 2016.

A MESSAGE FROM AECOM AECOM, a global provider of professional services in a range of markets, including oil and gas, offers a blend of global reach, local knowledge, innovation, and technical excellence in delivering solutions that create, enhance, and sustain the world’s built, natural, and social environments. We truly value our partnership with Shell. A MESSAGE FROM JACOBS With our integrated design and delivery capability and full spectrum of services, Jacobs Global Buildings meets the comprehensive requirements of our corporate and institutional clients worldwide. Our Center of Excellence for the petrochemical industry offers our major energy clients tailored facility solutions, including corporate office, research and development, mission critical, and industrial workplace. We congratulate Keith Probyn on his well-deserved recognition by American Builders Quarterly and his continued leadership in corporate real estate.


Value-Driven Design Solutions Worldwide Jacobs is one of the world’s largest and most diverse providers of technical, professional, and construction services, including all aspects of architecture, engineering, construction, and operations and maintenance.

Consulting Master Planning Architecture Interiors Engineering Landscape Architecture Program Management Asset Management

www.jacobs.com Offices Worldwide

Clarion Partners | Metro Park VI

Celebrating Shell’s legacy of excellence in real estate. Hines is proud to have partnered with the people of Shell for more than half a century. We salute their vision, integrity and commitment to sustainable workplaces.

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Pillsbury’s Nuclear Energy practice is pleased to support

Andrew Ratzkin, Esq., Senior Vice President and General Counsel, Burns and Roe. It is an honor to collaborate with Andrew and Burns&and Roe. Burns Roe

Pillsbury Winthrop Shaw Pittman LLP 2300 N Street, NW | Washington, DC 20037 | +1.202.663.8000 www.pillsburylaw.com


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INSIDE MAN A good legal team should add significant value to a business, and by trusting the in-house function he has built at Burns and Roe and avoiding the extraneous costs of outside counsel, Andrew Ratzkin is finding new ways to contribute by Zach Baliva

I

n constr uction and engineering,

a good legal team is often seen as either a luxury or an afterthought. Some firms are willing to pass legal work to outside counsel while others are content to let legal matters slide until they become unavoidable problems. Neither view is sustainable, though—especially for a company with a bold vision. Burns and Roe, an ENR Top 500 design firm, is one such company. The engineering, construction, and operations firm, well

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known for its broad suite of electric-generation projects, has aspirations of growing its global profile. It’s a goal that requires an exceptional legal team. And, as senior vice president and general counsel, Andrew Ratzkin isn’t merely negotiating contracts and performing traditional services; he’s adding value by finding innovative ways to slash budgets, avoid disputes, and open up new revenue streams. Ratzkin, a native New Yorker, came up as an environmental lawyer working primarily in the energy, electric, and manufacturing sectors. After years of building experience in permitting and licensing, he went inhouse at GE Energy and became their environmental counsel. In 2007, he joined Burns and Roe. “When I came to this firm, we were spending a large sum on outside counsel,” he recalls. “That was one of the things I wanted to change.” Ratzkin says working with outside attorneys can be essential, but his company was using its outside-counsel budget on things a good legal team should do internally. “A solid legal team needs to handle its own contractual matters and not rely on others for issues that come up all the time and are closely aligned to the business,” he says. Ratzkin brought that work in-house as a matter of principle, then imposed a rubric on the outside firms that enabled them to work more efficiently. “I’ve worked in a firm, and I know that their institutional imperatives are not the same as our business objectives,” Ratzkin says. “We don’t need a firm that has only a desire to bill hours and cover its flank. We need a firm that has expertise that our legal team doesn’t have.” He centralized the authority to engage outside legal services, something that had previously been spread across various functions. He placed a monthly ceiling on billables. He required prior approval for the preparation of formal legal memoranda and internal research memos, placed limits on lawyer-to-lawyer meetings, imposed controls on out-of-pocket expenses, and front-loaded work on make-or-break issues. These steps, molded in part after GE’s outside-counsel-management policy, shifted burdens from outside counsel to Burns and Roe’s internal legal function. “An internal team needs to be responsible for the critical matters close to the business,” Ratzkin says. And, the results speak volumes: his strategies have cut Burns and Roe’s outside legal spending by more than 50 percent.

Another philosophy fundamental to Ratzkin’s approach is to dig deep into all legal matters and confront problems before disputes explode. Some legal teams litigate too quickly, and others are too hesitant. Ratzkin prefers to try all angles. “Sometimes there’s an intersection of parties’ interests, and sometimes there’s not, … but we never move forward without seeking to identify a resolution that’s in the interest of both sides,” he explains. A few years ago, Ratzkin and his colleagues found themselves embroiled in an extended dispute that seemed headed for the courtroom. A rational resolution looked unlikely, and the opposing company’s outside counsel had rejected many proposals from Burns and Roe. Ratzkin used his position as in-house counsel and arranged a series of calls with his counterpart at the other (much larger) company and discussed the matter in depth. After the calls, the other company essentially walked away, no longer even interested in the settlement that had been on the table. Ratzkin demonstrated that the other company’s outside counsel was simply racking up billable hours, keeping the firm on the hook for costly and unwise litigation. “Conflicts are sometimes fed by ancillary motives or driven by poor understandings and not by true business interests,” Ratzkin says. He strives to uncover these issues before heading to trial or allowing his company to be dragged into one. In addition to helping the bottom line and avoiding litigation, Ratzkin has helped Burns and Roe tap new revenue streams. When a client sought access to know-how related to the firm’s engineering services, he encouraged management to seek satisfactory compensation. Burns and Roe was able to collect a significant royalty on the company’s unpatented internal IP. Then Ratzkin redrafted contracts to ensure the company didn’t forfeit the right to use similar strategies in future deals. A good general counsel needs to “make decisions at the pace of business” and do more than reflexively naysay risk. As Ratzkin has demonstrated, a valuable legal team will address risk, help shape scope, save money, find new revenue, and enable a company to move forward with its intended activities. It requires a shift beyond the legal mind accustomed to working at a large firm. “A general counsel has a whole different way of working,” Ratzkin says. “We’re part of the decision-making process for a business. And that’s what makes it so exciting.”

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“IT’S THE CULMINATION OF A CAREER.” Alan Di Sciullo is a litigator-turned-real estate manager with a storied career, and now he’s managing the global real estate of Shearman & Sterling, one of the world’s largest law firms Text by Julie Schaeffer / Photos by Bluehaus Group

F

ounded way back in 1873, Shearman & Sterling LLP is now one of the world’s largest law firms, with nearly 850 lawyers and more than $820 million dollars in annual revenues. It seems only fitting, therefore, that the legal juggernaut’s director of global real estate, Alan Di Sciullo, began his career as a lawyer, too. The young Georgetown University Law Center student graduated in 1977, and soon after, he began working as a litigator for Shanley & Fisher (now Drinker Biddle) in New Jersey. By 1980, however, he was working on Wall Street with Paine Webber & Company, where he focused on transactional real estate. “My undergraduate degree was in economics and government, and in law school I had concentrated on regulatory and tax law and was a judicial law clerk on the US Tax Court, so it was a better fit,” Di Sciullo says. Working at Paine Webber, and later Dean Witter Reynolds (which became Morgan Stanley Dean Witter) as well as Citigroup Realty Services, Di Sciullo oversaw some impressive transactions. Perhaps most notably, he served as real estate counsel for the consolidation of Dean Witter’s New York headquarters into the World Trade Center in 1985. The $1 billion, 20-year lease involved one million square feet

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Per the firm’s updated design guidelines, Shearman & Sterling’s new office in Abu Dhabi, UAE, has collaboration areas, where employees can work collectively.

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When conceiving the company’s new design standards, Alan Di Sciullo sought to make the sizes of conference rooms and executive offices more uniform.

“We promote … design guidelines rather than standards because we want there to be enough flexibility to account for local cultural differences.” Alan Di Sciullo Director of Global Real Estate

of space, with an additional quarter-millionsquare-foot acquisition, and it was the World Trade Center’s largest single transaction. And, as counsel, Di Sciullo saw it through the 1993 bombing and 2001 terrorist attacks, when myriad issues had to be addressed, including staff relocation. His extensive experience with such large portfolios is what best prepared Di Sciullo for his position with Shearman & Sterling, and since joining, he has navigated the challenges of reining in his worldwide team in order to create more comprehensive design and pricing standards for the firm. Di Sciullo came to Shearman & Sterling in 2007 to manage a global real estate

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portfolio consisting of 18 client-service offices and two administrative offices. “It’s the culmination of a career,” he says. “Previously, I did a lot of work domestically and some in London and Asia; now, I’m working globally. But, I’ve found that many real estate practices in the United States and London are mimicked throughout the rest of the world. Continental Europe, South America, and Louisiana are different in that they use the Napoleonic Code, but still, business approaches seem to be the same. People around the world have the same space needs, are conscious of economic terms, and employ similar negotiation strategies [with some slight local cultural differences].” Di Sciullo’s team, working with the firm’s senior administrators and a liaison partner, recently embarked on the development of design guidelines to promote more efficient use of the firm’s space, ensure consistent branding, and contain costs. “It was really a two-pronged endeavor,” Di Sciullo says. For one, he looked at metrics in order to create

uniform sizes for partner and associate offices and eliminate outdated areas such as large libraries and storage, and he also looked at aesthetics in order to ensure appealing and consistent building materials and signage were incorporated. Today, he and his team are promoting the design guidelines globally. “We promote them as design guidelines rather than standards because we want there to be enough flexibility to account for local cultural differences, but every new project we do is an opportunity to apply our guidelines,” Di Sciullo explains, citing the recent openings of offices in Frankfurt, Germany, and Abu Dhabi, United Arab Emirates, as examples. “The Frankfurt move was to a floor and a half in the OpernTurm building, and the move in Abu Dhabi was to a single floor in Etihad Towers. These new offices are excellent reflections of our design guidelines, with more-uniform office sizes and extensive use of our design elements, such as glass.” Everything Di Sciullo and his team do is within the context of industry trends. For years, Shearman & Sterling has been looking at spacing needs and costs, and the firm has been working closely on a number of projects with noted architecture firm Gensler “to fit


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BDO Consulting is proud of our association with Shearman and Sterling and their work with leading companies in the industry. The Corporate Real Estate Practice at BDO Real Estate markets globally are undergoing a period of virtually unprecedented turmoil. Now more than ever, it is crucial to have proactive financial guidance to help you address these issues. BDO’s Corporate Real Estate practice combines in-depth knowledge from the industry with a truly global network of support. All through a single point of contact. Accountants and Consultants http://www.bdo.com/services/realestate/ © 2014 BDO USA, LLP. All rights reserved.

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VIEW FROM THE TOP The Abu Dhabi office’s reception area stands out from the rest of the space through the use of decorative millwork in a local design style.

our design guidelines within the context of industry initiatives,” Di Sciullo explains. To illustrate this idea, he points to the recession of 2008 and 2009, when his team monitored pricing at all the firm’s locations and renegotiated leases as necessary. “We took a close look at leases that were coming up—and even those that were a few years out—and determined where there were opportunities to renegotiate with landlords,” he says. “In many instances, we were able to renegotiate several years early, allowing us to lock in the low market prices.” The challenge of the job, Di Sciullo says, is running a business that operates on multiple continents virtually 24-7. Helping to keep his team on top of things, though, is technology, including Webex and cloud computing. “We can finish a document at the end of the business day in the United States and pick up a response the next morning—and vice versa,” Di Sciullo says. Even as he continues to adjust to an international framework, Di Scullio ultimately considers his transition into real estate management relatively smooth, and he’s actually enjoying it. “Moving from litigation to my current role was a natural progression,” he says. “It’s as demanding as being a litigator but draws upon my real estate background and management skills—and it’s much more fun.”

Shearman & Sterling Offices Around the Globe 1. Abu Dhabi, UAE 2. Beijing 3. Brussels, Belgium 4. Frankfurt, Germany 5. Hong Kong 6. London

7. Milan, Italy 8. New York City 9. Palo Alto, California 10. Paris 11. Rome 12. San Francisco

13. São Paulo, Brazil 14. Shanghai, China 15. Singapore 16. Tokyo 17. Toronto 18. Washington, DC

A MESSAGE FROM THE NYU SCHACK INSTITUTE OF REAL ESTATE Alan Di Sciullo brings his expertise in global real estate to the NYU Schack Institute of Real Estate, where he teaches commercial-lease analysis. The breadth and depth of his knowledge and his dedication to his students epitomize the quality of education that NYU Schack delivers to professionals and to those just starting in their careers.

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16 A MESSAGE FROM BDO BDO USA, LLP is a national professional-services firm providing assurance, tax, financial-advisory, and consulting services to publicly traded and privately held companies. As a leading consulting and accountancy firm, BDO and its dedicated professionals provide customized, cost-effective solutions to meet the corporate real estate advisory and audit needs of leading companies such as Shearman & Sterling. We are proud of our positive working relationship with Shearman & Sterling and wish the firm continued success.


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“IF YOU COUNT IT, YOU’LL PUT A PRICE TO IT.” You’ve heard the adage “measure twice, cut once,” but Clayton Myhre of Wood Partners is taking the philosophy to a whole new level by estimating large-scale projects with 99 percent accuracy As Told To Zach Baliva

Wood Partners specializes in class A apartment buildings, including Alta Alameda Station (pictured) in Denver. Clayton Myhre ensures each is properly budgeted.

ects, warehouse distribution centers, prefab buildings, and student housing to, now, class A multifamily apartments. At Wood Partners, we build class A apart-

I take a different approach to estimating than most people. I think it goes way back to my early days growing up in a small Montana community where my dad ran a grain elevator. I started doing construction jobs for him, including erecting grain bins for farmers. When I went to college for construction engineering, I was considering dropping out because I wanted to build buildings and not just design them. Then, the dean of engineering told me he was starting a new construction-engineering-technology program to do just that. He personally taught the estimating class based on real projects, and that really got me interested in the discipline.

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I’ve learned throughout my career where

the holes are at the various stages of plans and to make sure those costs are covered up front at the concept stage. Now, I can get most projects—even high-dollar projects—within one percent of the final cost when there are no scope changes to the project. When I first left the army, I went to work in construction as a field [engineer] and soon after as cost engineer, eventually getting to Dallas, where I started working for a design-build contractor that specialized in car dealerships. I’ve pretty much been doing design-build ever since then—for a variety of companies—ranging from international proj-

ments all across the nation. We’re a fully integrated firm with a group of developers that works hard to find the right properties at the right price, a construction company to build them, and a residential group to manage them. We’re one of the largest players out there and have built more than 40,000 units. As the central-region preconstruction manager, I cover everything west of the Mississippi except for the West Coast. It’s a challenge because we have several top markets like Dallas, Denver, Houston, and Phoenix, and we normally have 7–10 projects in design and construction at any given time. Projects range from 110 to 300-plus units. We’re busy, and it’s important that we get the estimates right. Most people look

at project costs as an overall price per unit or price per square foot, but I’ve never looked at it that way. That just gives you some of the info, and you miss the big picture. I ask more questions than others. The more you know, the better you can do at managing the costs and risks. You will have varying site costs like parking, utilities, and moving dirt. When will construction start? Starting in December in Colorado is different than in Texas. Then there’s the actual building. If you build the same or similar product each time, you know


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“I ask more questions than others. The more you know, the better you can do at managing the costs and risks.” Clayton Myhre Regional Preconstruction Manager

the gaps in plans are, especially at the concept and SD stages. We try to standardize our details and finishes as much as possible and then work with a select group of designers and consultants who can then develop the most efficient building possible for that particular project. If you’re always modifying, you’re going to increase costs. Years ago, my boss taught me a valuable lesson. He had budgeted a job and forgot to

the costs, risks, and schedule. We also know the historic costs in different areas of the country and maintain pricing info for the four main cities in the central region. Site work is the biggest risk for a general counsel, and it’s one of the first things

I look at. A flat, clean site keeps your costs down, but there aren’t many of those left. When I get a site plan, the first thing I do is sketch out how to run the utilities like water, sewer, storm, and electrical around the site to service the buildings and tie to existing lines so that we have a better idea of costs right from the very beginning and can engage the civil engineer early on. These factors drive costs.

AIR CONDITIONING & HEATING

We do four budgets on each project, from

concept to GMP, getting more detailed estimates as the plans get more detailed. That lets us monitor real costs as the plans are developing. At each stage, if we’re pushing or over budget, we can bring costs back in line by working with the subs on valueengineering ideas and then recommend and work with the design consultants to make the needed changes to keep the project within budget. I’ve spent 32 years in construction, work-

ing in estimating, project management, design, and operations. That’s experience most estimators don’t have a chance to get. It gives you a different perspective on where

include the cost of the plumbing fixtures. Ever since, I measure everything. If you count it, you’ll put a price to it. If you don’t count it, you might forget about it, not get a price, and then have a hole in the budget because it’s not magically going to appear. Once you have a quantity, you can alter things and ask questions and start a conversation with venders, subs, clients, and colleagues. Measure, measure, measure. That yields

accurate quantities coupled with historical and/or sub pricing—and knowing where the gaps in plans are. That’s what it takes to do my job, which is to deliver the most accurate price possible at each stage of the plans.

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VIEW FROM THE TOP General counsel Tom Hodges has been with Clayton Homes for nearly 20 years. He joined straight out of law school and helped grow the firm’s legal department.

“IT WAS ALMOST COMPLETELY BAPTISM BY FIRE.” Interview by Kelli Lawrence

N

ineteen years ago, when he accepted an offer to go from part-time to full-time at

Clayton Homes and become the company’s only attorney—fresh out of law school, no less—Tom Hodges didn’t know what to expect. But, diving immediately into the details of a critical merger while simultaneously awaiting the birth of his first child probably didn’t make the short list—nor, likely, did eventually shouldering the implementation of the recent, game-changing Dodd-Frank Act, which changed the landscape of the homebuilding industry. Nonetheless, Hodges will happily tell you he has “grown up” at Clayton, and in the nearly two decades since he first walked through the door, his team has expanded to 18, with Hodges himself still serving as general counsel. Here, he speaks about the many milestones highlighting his path at the only employer he has ever known—or cares to know—in his legal career.

The founder of Clayton Homes, Jim Clayton—obviously he knew of you when you worked there before and during law school, but how did he come to offer you full-time employment?

I accepted a full-time offer that summer, went back for my third year with a job already, took the bar in July, and started work in August.

When I went to law school, I just figured I’d get my degree and move on to a law firm, but Jim Clayton said, “Just stay with the company, part-time, and we’ll see where it goes from here.” But, during my second year in law school, both of their lawyers left. They asked about me coming back after school full-time as a lawyer, and I didn’t know anything, so I said, “Sure! This is great!”

What was that like for you?

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It was almost completely baptism by fire. People saw I was a lawyer and assumed I knew everything, but I remember feeling like I didn’t have the first clue what I was doing. My average hours those first four to five years— I would have outbilled any associate at any law firm. I had to learn everything the first time through, every time.

So, it was sometime afterward that a full legal department began to take shape?

Yeah. After our merger with Berkshire Hathaway, I told Kevin [Clayton], “I love working here, but I can only cover, at best, 10 percent of what you need done. It’s not helping you, and it’s killing me.” And thank heavens, Kevin was like, “We’ll find a way to make this work.” We almost immediately started purchasing a big competitor, and they said, “Go through their legal department and find who you want to keep.” So, sure enough, I hired the first one, and we’ve been adding them slowly ever since. Anything that makes me successful and effective today is almost wholly borne out of that time period—the sheer crucible of having to learn it the way I did. Acquisitions aside, what other things have stood out during your time with Clayton Homes?

Last year we celebrated 10 years [as a company merged] with Berkshire Hathaway, and it’s just been a great relationship. They’ve let us run the business, and I think we’ve been able to capitalize on that for them,


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which is sort of neat now that we’re through some of the economic crisis and some of the Dodd-Frank financial reform is still settling in with the whole world right now. But, even with the uncertainty that the regulation brings, [companies] are looking to expand to help build a moat around their business. Great visual.

Well, that’s what you’re doing—because your moat is not just your financial security and protection, but it’s also your competitive advantage. Clayton Homes also built a leadershipdevelopment program called Ignite. Can you share what that’s about?

Basically, our HR leaders began a discussion—and I’m oversimplifying it—but we found out [that] if you can develop people’s leadership and personality skills, you actually do a lot more for the company than just working on their technical skills. That started the genesis of Ignite, this three-part, nearly two-year program that is broken down in phases: discover, connect, and lead. So, you go from “leader to self” to “leader to other people” to “leader to team.” Each step

builds on itself. From my perspective, the best thing [the program] does is it provides an outlet for people to grow in leadership in a way that is not primarily focused on their own good but, rather, the good of other people.

Clayton Homes offers a variety of customizable home models, including the Sequoia. The firm builds modular and manufactured dwellings at an affordable price.

What other sorts of things are you looking forward to in the coming months at Clayton?

I’m curious about how the whole housing industry adapts to the regulatory reform of Dodd-Frank. It’s interesting to see people start with fear, concern, and apprehension a couple of years ago, then see that transition into an assertive, find-a-way-to-do-it sort of attitude, and also to see us adapt into reality; people aren’t letting it be an excuse but are instead using it as an opportunity. We have new people who have taken on significant leadership roles during this critical transitional period, and it’s interesting to see how their influence is going to grow. I’m still pretty young, but in my role, I’ve seen some of these people for a long time and now I’m able to see their influence at a very senior level. It’ll be neat to see where that goes.

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Named the leading surety bond lawyer in the country in 2004, Robert Watt cofounded construction-law firm Watt Tieder Hoffar & Fitzgerald, LLP more than 30 years ago. His firm has taken on difficult cases in its history, creating case law that is still relied upon today to decide contentious matters between contractors and surety companies.

FATHER OF THE FIRM Text by Christopher James Palafox / Photos by Sheila Barabad

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B

Back in September 1979, about a year and half after the legal firm Watt Tieder Hoffar & Fitzgerald, LLP (WTHF) was founded, partner Robert Watt received a phone call from a prospective client: Maryland-based Fidelity and Deposit Co., the largest surety bonding company in the country at the time. Fidelity and Deposit believed it had claim on a US Army Corps of Engineers project, a dredge job on the Tennessee-Tombigbee River. The claim stated that if the subsurface conditions found at the site were materially different than what was represented in the contract, then Fidelity and Deposit could recover. ¶ So, Watt did what he thought any reasonable lawyer would: he rented a boat and investigated the claim himself. When he arrived, he saw a hard material jutting out of the water and thought, “Gee, that’s not supposed to be there.” His examination allowed Fidelity and Deposit to create a strong claim and ultimately recover $4 million dollars. It was the beginning of a historic and winning relationship with the bonding company, which is now owned by Zurich Insurance Group. The case is a sterling example of Watt’s specialty with surety law—according to a 2004 issue of Chambers USA , clients dubbed Watt as the leading surety bond lawyer in the country—but it also represents the best his firm has to offer when it comes to client service. 162

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Watt and his partners built their firm around the idea that employees should be rewarded and regarded for their talent and results, not their position within the chain of command.


Ever since he was a teenager in Winchester, Illinois, Watt’s goal has been simple: build

something that will last. In his town of 1,600, Watt spent two formative summers working for a local homebuilder, learning the fundamentals of construction. But, like his attorney father, he eventually went into law. He has never lost sight of his initial goal, though; he has simply gone from building structures to building relationships, and it’s the one skill he believes accounts for his and his firm’s success. While attending George Washington University Law School, Watt began working in December 1969 as a law clerk for Lewis Mitchell Bixler & Moore, a boutique law firm specializing in government-contract and construction law. After passing the bar exam and becoming a full-fledged associate in 1971,

americanbuildersquarterly.com

though, Watt decided to branch off on his own, helping to launch Watt Tieder Killian & Toole (the first iteration of WTHF) in 1978. He wanted to step away from convention. “The philosophy our firm is built on is that merit and ability, not seniority, are key to a successful business,” Watt says. His firm furthered this ethos by developing systems where attorneys were rewarded not only for creating good client relations but also for the results they produced. As the managing partner for the firm’s first 30 years, Watt concentrated on attracting top talent, enhancing employees’ skills, and spreading the impact of each professional’s contributions. “True leadership is making everyone invested in the team to make something greater than its parts,” Watt says. His firm has since become one of the nation’s best construction-law

firms; it, too, has been cited by Chambers USA, specifically as the number one construction-law firm in 2009 and 2011. For Watt, it was the firm’s willingness to take on difficult cases that allowed it to build an enviable reputation and create case law that is still relied upon today to decide contentious matters between contractors and surety companies—the firm’s two primary customers. One of those difficult cases also became one of WTHF’s highest-profile cases when the firm took on Clark County, Nevada, over a disagreement regarding the county’s new Regional Justice Center project (which had been contractually awarded based on a bid of $125 million)—and won. Clark County wanted to settle with WTHF and its client before arbitration, so Watt reluctantly met with the county’s lawyers. They

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fiscally challenged projects “The philosophy our firm such as toll roads. While these is built on is that merit and partnerships are mutually beneficial when built intelability, not seniority, are key ligently, they carry greater to a successful business.” risks for all parties involved, and there are usually more Robert Watt parties to contend with, so Chairman WTHF’s legal team must take offered to settle for $2 million, and Watt extra care and look at the cases through balked at the number and immediately a variety of lenses. Watt also notes hat, particularly in the walked out of the meeting. After 10 weeks of arbitration and a too-soon public declara- field of office construction, there has been tion of victory in local papers by the county, a rise in the use of modular building techWTHF’s client won a net recovery of $52.7 niques. The 32-story Skanska USA building million, thoroughly beating the county’s in New York City, for instance, is set to becounterclaim. The case was not only an enor- come the largest modular building in the mous victory; it cemented WTHF’s reputation. city. The projects have a number of benefits, And, in the past year, things came full circle including the low costs of factory labor verwhen the people of Clark County actually sus unionized labor, but modular systems hired WTHF to handle a case for them. also create numerous liability issues. The building strategy can call into question the Now that the firm has fully ingrained itself interpretation and applicability of many into the world of construction law, Watt and typical contract clauses merely because innohis colleagues are continuing to evolve with vation changes operating methodology and the industry’s changing legal landscape. thus legal frameworks. So, careful planning, Recently, they have noticed an uptick in coordination, and execution are necessary public-private partnerships over higher-risk, to avoid costly remedial actions or delays.

Plus, companies have to be cognizant of the different legal requirements in each state; for example, Tennessee is the only state that has adopted a modular-construction statute. Finally, WTHF is seeing an increase in early dispute resolutions and dispute-resolution boards in order to avoid litigation. “I will almost always go to a mediation before I would go to court,” Watt says. Traditional litigation in construction cases involves getting a judge or jury to understand complex issues in an unfamiliar field, but dispute-resolution boards and mediations allow parties to agree in advance and resolve as many potential problems as possible on their own. Selecting the right mediator and having an experienced DRB panel are often the key factors that will help lead to an equitable resolution. WTHF arose from Watt and his partners’ need to put a premium on results, not seniority, and in its aggressive search for and subsequent winning of challenging cases, the firm has achieved a leading reputation in the construction industry. Through it all, Watt has played his own part, too. As the father of the firm, he has helped foster its relationships, and it’s that work that has earned WTHF its big-name clients and high-profile victories in the first place.

Salutes Bob Watt

Congratulations to Bob Watt on his recognition from American Builders Quarterly

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By 2007, Rackspace had 1,500 employees and was adding 600 more each year, so it revamped an old mall in Windcrest, TX, to create its new, capacious headquarters.

Let’s Go to the Mall Work! Rackspace converted a ghost town of a mall into the coolest office ever—with a two-story slide, a basketballcourt-size chessboard, and more—and in doing so, it saved a struggling community TEXT BY JULIE SCHAEFFER / PHOTOS BY KATE LEMMON

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as an abandoned shopping mall covered in graffiti, Rackspace envisioned as a unique corporate headquarters— and today, its more than 3,800 employees work in cubicles where retailers such as JCPenney and Piercing Pagoda previously operated. “It would have been easy for us to build a 500,000-square-foot office building or lease any number of properties, but we like to stay away from conventional, easy decisions,” says Jamie Kinch, director of real estate for Rackspace, a $1.5 billion cloudcomputing company. The business began out of a garage in the late 1990s, but by 2007, it had about 1,500 employees and was adding roughly 600 more each year. Because of this, it was already rapidly outgrowing the 200,000-square-foot office space in San Antonio that it had startWHAT MOST PEOPLE SAW


Portrait: Kate Lemmon

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ed leasing just two years earlier, so it needed a new facility—fast. And, at the same time, the struggling suburb of Windcrest, adjacent to the decrepit Windsor Park Mall, had been losing $100,000 in tax revenue annually since the mall closed in 2005. “Twenty years ago, Windcrest was the place to live around San Antonio, but over time, it really declined, and it was in desperate need of new energy,” Kinch says. It was Rackspace chairman Graham Weston’s idea to buy the 1.2 million-squarefoot mall, but pretty much everyone else thought he was crazy—and not just because of the property’s mammoth size. “Our employees were craving a corporate campus like those of Microsoft and Google, and the idea that they had left San Antonio to get impressive degrees, only to come back and sit in a cubicle at the mall they had worked at in high school, was not appealing,” Kinch says. Weston was undeterred, however, and Rackspace signed a 30-year lease for the former mall. It turned out to be a win-win deal for everyone. In exchange for providing high-paying jobs in the area, Rackspace receives development grants from the State of Texas and favorable tax treatment on its property. And, since Rackspace’s lease began, Windcrest’s tax revenue has increased 10 percent every year—an outcome that Kinch says sits well with the company’s core values. “We want to be part of the community in which we’re based, and it felt like a good fit for us to have a positive impact,” he says. There was initially some concern that Weston, who is known for his frugality, was simply seeking bargain-basement office space to save money, but that wasn’t the case. He envisioned a technology center comparable to Austin, Texas’s Silicon Hills, home to Dell,

and he hired noted architect and urban planner Andrés Duany to develop a master plan. The result is what must be one of the coolest office spaces in existence today. “There’s no forgetting that you’re in a mall,” Kinch says, but it may be the best mall ever. A soaring metallic half-arch over the entry greets employees, and inside they have conference rooms named after television game shows and breakfast cereals. There are also more unusual features, including a two-story slide, a chessboard the size of a basketball court, and a coffee shop. “Because of how spread out the space is, navigation has been a consistent challenge, so we’ve created memorable sections and anchor features with each phase of development,” K inch says. A recent ly opened phase, for example, used books as a theme, and it’s anchored by a breakout space called the Bookstore, which is designed to look like an old-fashioned shop, with low light, leather furniture, and materials repurposed from the old mall.

“It would have been easy for us to build a 500,000-square-foot office building or lease any number of properties, but we like to stay away from conventional, easy decisions.” Jamie Kinch Director of Real Estate

Jamie Kinch, Rackspace’s director of real estate, has been key to the firm’s move into the Windsor Park Mall. “We’ve created memorable sections and anchor features with each phase of development,” he says. In addition to themed work areas, the office has many playful diversionary elements, including a spiral slide, a chessboard the size of a basketball court, and a coffee shop.

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One of the headquarters’ newest themed areas is the Bookstore, which is outfitted with leather furniture, low lighting, and actual shelves full of old and new tomes. The former mall comprises 1.2 million square feet in total, and Rackspace is already getting close to filling it, so the firm next plans to buy up neighboring land for a larger plaza.

Conference rooms are named after books, including the Alice in Wonderland conference room, which has strange-shaped chairs and other psychedelic features to create the sensation of being at the Mad Hatter’s tea party, and the Murder on the Orient Express conference room, which is designed like the inside of a train, with a whiteboard that looks like a window onto passing scenery. The next phase, which is expected to open in June, will have a toy-store theme, and when employees enter, they’ll pass through the façade of an old-fashioned toy shop. Conference rooms will look like display windows, and they will be named after different toys such as the Slinky and Legos. “We’re constantly getting feedback from employees to ensure that we’re creating usable as well as cool spaces,” Kinch says. “We figured we’d use a third of the [mall] space,” Kinch adds, “but it became apparent to us two years ago that we might run out.” So, soon, the company plans to break ground on a neighborhood plaza comprising the several acres around its new headquarters. The extra room will allow Rackspace to incorporate jogging trails, a performance venue, and other features, which will enhance the employee experience and revitalize the community that much more.

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A Retail Renaissance

De Rito Partners is jump-starting Phoenix—and its Native American community—with the Pavilions at Talking Stick, a renovated megamall site with open-air shopping, big-name tenants such as the Home Depot, and even a school BY KELLI LAWRENCE

CHUCK CARLISE SEES PHOENIX as a “boom or bust town”—that is, it’s either bursting at the seams with new building projects or failing to do anything new at all. In the wake of the country’s economic free fall in 2008, the city has been mired in “bust” mode, but Carlise, the president of De Rito Partners, Inc., now thinks it’s ready to roll back to “boom”— even if his fellow developers don’t. In fact, their doubt actually suits him just fine, for De Rito has been doing business against the grain for years. “[Developers] tend to do the ‘if we build it, they will come’ thing, right?” Carlise says.

“Well, we don’t do that. We lease it first. Then we build it. There’s a lot less risk that way.” When it came to De Rito’s development of the Pavilions at Talking Stick—a renovation of the former Scottsdale Pavilions—some of the risk was easy to assess. Overgrown landscaping, an outdated paint job, and 350 light fixtures out of commission told the story of a late-1980s megamall that had fallen on hard times. “It was where families came to shop, teens came to see movies, and kids came to play miniature golf; it was never without a crowd,” recalls Molly Kaufman from Safeguard, which provided fire-sup-

pression equipment and expertise to the Pavilions renovation. “As a native of Scottsdale, I watched the Pavilions’ unfortunate downfall and, like many residents, was deeply disappointed at what became of it.” “There was a sweet and sour aspect to it,” Carlise says of De Rito’s Pavilions purchase. “You’d look at it and think about the way it’s going to benefit you—then you think, ‘Wait a second. It’s 140 acres, and it’s virtually in Scottsdale, on the freeway. How many public properties are there like that? Zero!’ So, from a location perspective alone, the property had a tremendous amount of value.” The property is actually part of the Salt River Pima Maricopa Indian Community— an important fact that De Rito chose to acknowledge early on when renaming the facility. “Talking Stick is the name that [the tribe has] given a casino, a 15-story high-rise hotel, a golf course, and a stadium—we just thought the old name was inappropriate, so we renamed it the Pavilions at Talking Stick,” Carlise says. “It was a way to show the tribe [that] we understand we are part of the community.” Looking to keep in step with the nearby top-flight Talking Stick destinations, De Rito revitalized the Pavilions with $21 million worth of renovations and tenant improvements, including improved landscaping, pedestrian access, parking, and an all-new food court. To address aging fire-safety equipment, De Rito partnered with Safeguard,

De Rito Partners’ renovation of the Scottsdale Pavilions into the Pavilions at Talking Stick cost $21 million and included significant landscaping and walkway improvements.

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“[The renovation site is] 140 acres, and it’s basically in Scottsdale, on the freeway. How many public properties are there like that? Zero!” Chuck Carlise President

Arizona’s largest provider of integrated-technology solutions. “Upon meeting with Mr. Carlise, it became clear that De Rito was not simply looking for a vendor to satisfy the Pavilions’ monthly fire monitoring and annual fire and sprinkler inspection needs,” Kaufman says. “They were looking for an experienced partner to assist them in assessing the deficiencies in their life-safety systems on-site while providing the advice and services needed to identify and address the various problems that posed fire-safety risks to both guests and employees.” For nearly three months, Safeguard surveyed and inspected the property and its life-safety

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(fire-suppression) systems on-site. Then it provided a turnkey solution for satisfying NFPA requirements, making the property not only compliant but, more importantly, safe. Toys-R-Us, the Home Depot, and Sports Authority are among dozens of recognizable retailers, but the Pavilions is also home to a number of alcohol-serving restaurants— something that initially didn’t sit well with the “dry” Native American community. Carlise had to convince the tribe that having alcohol in businesses this close to the reservation would ultimately keep patrons closer to the nearby casino rather than draw their business to Scottsdale. “That was the difference,”

NO FOOD DESERTS IN THE DESERT With building at a virtual standstill since 2008, even the more optimistic businesses such as De Rito Land Development (a new entity for De Rito Partners) are taking a careful approach as they work their way back from the brink. A number of 50- to 75-acre power centers anchored by Target and similar stores have saturated the Phoenix market, according to De Rito president Jerry Friedman, and more are on the way. So, De Rito has instead turned its attention to grocery-anchored centers and small neighborhood centers, which will feed the growing populations in both Phoenix and Las Vegas (another area of interest for the company). “It depends upon what grocer you talk to, but they’re really selling to a very localized area; maybe a one- or two-mile area is their primary market,” Friedman says. “In Phoenix, as you see growth in all directions, they have a lot of grocers. And yet you still see new ones trying to get in!” He points to WinCo Foods and WalMart Neighborhood Markets as two recent additions to the local competition. Between Phoenix and Las Vegas, Friedman hopes to identify 10–15 sites total spanning 10–18 acres each, and from there his teams will slowly start developing the lots as grocery-anchored neighborhood centers.


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De Rito Partners found space for a number of alcohol-serving restaurants, but the firm made sure to OK the move with the surrounding “dry” Native American community. Among the anchor tenants the new Pavilions has drawn are Toys-R-Us, the Home Depot, and Sports Authority. Their success has attracted other tenants, including a school.

he says. “The Pavilions is an amenity to the casino, the resort, the golf course. We are as much an amenity to all that as we are just a mature shopping center.” T hat statement especially holds true when you consider one of the newest additions to the Pavilions: Great Hearts Academy, a K–12 charter school that just opened for the 2014–15 school year. The school went in where a family fun center once was, and Carlise was delighted by the lack of red tape he encountered in getting it to open on time. “That’s the beauty of being here,” he says. “I can go to the people in charge and make a case in front of the top brass of the tribe: ‘Here’s what’s going on. Can we do this or not?’ Of course, they say, ‘Yes, we can. You’ve got to do this, this, and this, but if you do that, we will expedite all the approvals.’ You can imagine there aren’t many cities that could be as nimble-footed!”

Cities are one entity; communities are another. But the Salt River Pima Maricopa Indian Community, long ready to shed the negativity that the previous Pavilions incarnation brought to the area, seems to be embracing the efforts of De Rito more and more. “I think what was appreciated more than anything was our willingness and ability to get the job done,” Carlise says. Now, even though it’s still a work in progress, the Pavilions development is booming again. “The parking lots are full, the strategic selection of tenants appeals to multiple demographics, and for the first time in years, new buildings are rapidly rising,” Kaufman says. “To say that the De Rito Partners team works around the clock to continually improve the Pavilions is an understatement.”

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Old-School Work on an Old-School Home Bob Knepper of Knepper Construction eschews technology in favor of artisanship and face-to-face engagement, and it has kept his firm rich with renovation projects, including an update to a Denver home first built in 1903

BOB KNEPPER IS GRADUALLY TRYING TO GET OUT

of the 20th century, but it has been hard. The owner of Knepper Construction Company founded the Parker, Colorado-based business in 1974 and continues to infuse his work with an old-school work ethic, drawing up 50-page project proposals by hand and only using his computer to check his e-mail—which he still avoids when he can. “The modern-day general contractor to me is a pencil pusher,” he says. “There’s not a lot of us old guys around anymore, and contractors today don’t even have their own shop, people, or equipment; they just sub everything.” Not Knepper, though, whose cradleto-grave approach allows him, his lean group of 12 employees, and his accompanying shop crew the ability to complete and generate

more projects through referrals. The strategy helped double the number of projects Knepper Construction completed this past year, including a Tudor-style Denver home originally built in 1903 that fit perfectly into the firm’s restoration-heavy wheelhouse. It was after the initial contractor had a falling out with the project architect, Kristin Park, that Park pushed for Knepper Construction’s involvement. The initial contractor was a client referral, but its expertise lay in commercial real estate, and its relative inexperience caused the project to stall for a year before Knepper Construction got involved. Fortunately, rehabs and renovations account for 99 percent of the company’s projects, so it was able to step in and complete the job within a year using only half its workforce.

The home still posed numerous challenges, though, including, first and foremost, its location in the historical part of Denver. Knepper Construction had to obtain extensive permitting from the city’s Landmark Preservation organization, but in the end it was still able to rework the dwelling from the inside out. Pitched roofs, patterned brickwork, and decorative half timbering easily identified the home as one created in the Tudor style, popular in the area from 1890 to 1930, and all those elements—along with deteriorating stucco board, drooping batten, and a leaky roof—were torn down and replaced. “We made everything look like it was when it was built 100 years ago,” Knepper says. “But now it’s actually better.” The crew even replaced all the old windows with clad Marvin windows, which are normally unheard of for such a renovation job, and it finished the modern-day products so that they would match the existing trim and bead. Because the home’s previous owners had subjected it to four renovations and additions, its classic features were masked. The original dwelling’s windows were inset at four inches, for example, and the numerous windows that lacked the inset stood out. So, Knepper Construction’s crew smoothed over those rough edges while making some additions of its own—including a bathroom for

The outside of the Denver home had to match the Tudor style it was originally built in, but Knepper Construction gutted the inside and updated rooms with new finishes. In addition to lowering portions of the basement and removing entire walls, Knepper found space to fit a bathroom adjacent to each of the home’s eight bedrooms.

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Photos: Kristin A. Park Residential Design

BY CHRISTOPHER JAMES PALAFOX


REVISION

“We made [the home] look like it was when it was built 100 years ago, but now it’s actually better.” Bob Knepper Owner

each of the home’s eight bedrooms—and it made sure to keep its work consistent with the original structure’s look. The home’s exterior was subject to landmark regulations, but its interiors weren’t put under the same scrutiny. “We made it look like a house built in that era,” Knepper says, “but with modern ideas about space. T his meant gutting the whole interior. … The biggest challenge of demolishing all the old walls was that they were actually created with masonry, with quite a few of them carrying loads up to the second floor. Care was used to surgically remove walls, shore up the upper levels, and get steel beams to handle the shifted loads.” Notably, the Knepper Construction team underpinned the basement, allowing the company to replace a winding staircase with a straight five foot-wide one. And, after excavating to reinforce the existing walls, the crew lowered

half the basement by 15 inches and the other half by 30 inches. This allowed the client to tuck modern elements away downstairs, including a golf simulator, a game room, a powder room, a bathroom, and a card room. Removing walls allowed Knepper Construction to square up the home’s foundation and repair decaying joists that were making masonry walls crooked on the exterior. And, finally, the crew converted the home’s old guest quarters into a four-stall garage. Such detailed work is what keeps Knepper himself so busy, and unfortunately there’s only one of him. To keep up, the contractor works a grueling 90-hour workweek, his family acting as his eyes and ears. His daughter helps by processing payroll electronically, and his two sons—one of whom has been with Knepper Construction for more than 18 years—work on-site, allowing Knepper himself, a carpenter by trade, to keep his personal touch while he splits time between the office and out in the field meeting clients. “We want to be friends with our clients,” he says. “Because those are the people who are going to get us the next job.”

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A Win-Win With the Jackpot Junction Casino renovation, Loeffler Construction & Consulting is doubling down on its efforts to become a local Native American tribe’s regular builder BY ZACH BALIVA

The centerpiece of Loeffler Construction’s reimagined Jackpot Junction Casino will be a circular bar, 60 feet in diameter, with an LED light cloud hanging overhead.

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JACKPOT JUNCTION CASINO MIGHT SEEM LIKE

just another renovation and addition job, but to Loeffler Construction & Consulting, it’s so much more. The Lakeville, Minnesota-based company recently won the bid to act as construction manager for the $22 million project, and though the work is expected to be challenging, it’s the client that has founders Doug and Tammy Loeffler excited. Jackpot Junction is owned by the Lower Sioux Indian Community, and the Loefflers see the facility’s renovation as the start to a long-term relationship. The casino was Min-

nesota’s first gambling mecca, but the Lower Sioux now face stiff competition. A quality, efficient renovation will help the tribe remain competitive in the industry and recover lost market share. Loeffler Construction is striving to become the tribe’s builder for all future projects. The company started in 2010, when Doug and Tammy created the business along with two former colleagues, Ben Nordquist and Colin Bigalke. Tammy was already a successful business owner, and Doug served as vice president of operations at JE Dunn Construction. Since 2010, Loeffler Construction has provided various services for other casino and tribal projects, including the Elders Lodge senior-housing facility for Little Earth of United Tribes, and the recent design and construction of the Turtle Mountain Indian Tribe Museum. The company’s experience working on reservation buildings, restaurants, and gaming facilities comes naturally. Tammy, also a court reporter for the Mdewakanton Sioux judicial system, is a member

Renderings: (this page and opposite) Multivista Construction Documentation

REVISION


REVISION

The new casino will have a

1,201-slot 225-seat 160-seat

gaming floor, a

bingo area, a

sports bar and entertainment venue, and

20

blackjack tables.

Outside, additional upgrades will include a new LED entrance canopy and a bus canopy. The renovations and new construction are predicted to last approximately a year and half. A new sports bar will sit beyond the central bar, and Loeffler Construction is also making space for 1,201 slot machines and 20 blackjack tables.

americanbuildersquarterly.com

of White Earth Nation and has a passion for supporting Native people and communities. Jackpot Junction is situated in Morton, Minnesota, where the Lower Sioux community has been pursuing a facility expansion for several years. The project received its funding in 2013, and Loeffler Construction entered a bid along with about six other competitors. “We were the newest and youngest company going up against some major players,” Doug says. “We really scoured the marketplace for good subs—Native American subs—and local contractors.” Using Native American subs not only helped the Loeffler team win the project but will also help those minority-owned companies grow their businesses. Originally opened as a bingo hall in 1984 and converted to a full casino in 1991, the outdated Jackpot Junction required something new to enhance the experience, wow clients, and attract visitors. The Lower Sioux tribe, along with the design team, design LLC, decided on a completely new casino area with greatly improved indoor air quality, more ex-

citing gaming, and dynamic bars and restaurants. The entire project will take 18 months, during which Loeffler Construction plans to keep the casino operational. “The casino is the primary revenue source for the tribe, and you have to get it done quickly so [that] the new space starts making money for the tribe and its members,” Tammy says. The task has proven especially difficult so far because the Loefflers’ crew had to remove part of the existing building and create its addition while maintaining the heart and soul of the original casino. First, the company shut down second-floor casino operations to build new offices for management and administrative staff, and in phase two, it completed a second story in the Dakota Exposition Center for suites and a kitchen on the lower level. Then, crews demolished a large portion of the existing building to make way for new construction, which will take approximately one year to complete. A six-month renovation project will follow that.

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REVISION

The first phase of the project involved the demolition of portions of the existing structure, and the company also shut down second-floor casino operations to build new offices for management.

Tammy Loeffler Owner

The new casino will include an LED-illuminated entrance canopy stretching through to the interior and funneling up to a spectacular center bar that will be 60 feet in diameter. Overhead, an illuminated cloud with LED-lit acrylic shelves will help to draw people in. Beyond the new center bar will be a new sports bar, and the project will also include a new bus canopy, more than 1,201 slot machines, blackjack tables, a promotions area, and a bingo space. Because tribal casinos allow indoor smoking, their operators often receive complaints. The renovation team is addressing this problem at Jackpot Junction with a displacement-air system, and the entire gaming floor will be on

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DOUG AND TAMMY LOEFFLER ON ... WORKING WITH NATIVE AMERICAN TRIBES What’s most important when it comes to working with tribal clients? TL: You have to understand their sovereignty and how important it is to them. Your contracts need to strike the right balance between maintaining this and protecting payment rights. Both parties in [the Jackpot Junction Casino] project brought law firms with extensive Native American contracting experience. DL: There are also important goals that you need to help achieve. That’s true with any client, of course, but for the Lower Sioux, it was the ability to use subcontractors owned by Native Americans. That is hard sometimes because a lot of them are small companies, and there aren’t a lot out there. We solved this by finding the best Native American subcontractors in Minnesota, and they have done a great job on this project. Is there more red tape involved? DL: Not really. They’re tax exempt, so you have to make sure all your subs understand that. There’s also a tribal council watching over the project and a governing body responsible for its delivery. TL: Like with any other client, the key is communication with the owner and being sensitive to their ongoing operations.

Photos: Loeffler Construction & Consulting

“The casino is the primary revenue source for the tribe, and [we] have to get it done quickly so [that] the new space starts making money for the tribe and its members.”


REVISION

With the demolition phase now complete, new construction has begun, and the project will wrap with renovations to existing spaces. Throughout, the casino will remain open.

60,000 sq. ft.

of Jackpot Junction Casino’s existing

86,000 sq. ft. 50,000 sq. ft. was demolished.

is the size of the new construction.

26,000 sq. ft. is being remodeled.

Nothing forms the heart of a building more than its mechanical systems.

a 21-inch access floor above the infrastructure. The system will gather air from the roof and send it under the access floor and up through diffusers in the carpet so that the cigarette smoke will rise and abundant fresh air will remain. Overall, the project fits nicely into Loeffler Construction’s expanding Native American projects portfolio, and the company hopes to extend its relationship with the Lower Sioux beyond Jackpot Junction. “Our overarching goal is to build that trust and confidence so

[that] when they go to add on or renovate, we are their first and only call,” Doug says. Recently, the Loefflers approached the tribe about health-care facilities and discovered it doesn’t have a clinic. They then met with tribal leaders, found a site, contacted a developer, and fathered funding. They’re now acting as the design-build team for a full turnkey clinic. By continuing to partner with local tribes, Loeffler Construction hopes to build on its expertise while supporting important Native American communities.

®

It’s What’s Inside That Counts

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Preconstruction Design Fabrication Installation 24/7 Service Controls Technology metromech.com OCT | NOV | DEC 2014

177


OUT OF THE BOX

Generous plantings of sedum on the roof of the Hotchkiss School’s biomass heating plant will help the facility fit in with the natural landscape. They’ll also help the roof capture rainwater.

BIOMASS HEATING PLANT Location: Hotchkiss School, Lakeville, CT Architect: Centerbrook Architects and Planners

WHERE THE GREEN GRASS GROWS ALL AROUND

Engineer: DeStafano & Chamberlain, Inc. Contractor: O&B Industries

Inside, curved beams of FSC-certified wood support the roof much more cheaply than steel trusses would, and a 17,500-square-foot storage area holds a week’s worth of wood chips, the plant’s fuel source. Building Diagram

3

Solid Lumber (Douglas Fir) Framing is Forest Stewardship Council (FSC) certified. FSC is a non-profit organization devoted to encouraging the responsible management of the world’s forests. FSC sets standards that ensure forestry is practiced in an environmentally responsible, socially beneficial, and economically viable way.

The Central Heating Plant, completed in 2012, burns waste woodchips from sustainably managed local forests and efficiently heats the entire campus. The 16,500-square-foot plant reduces the school’s carbon footprint by more than a third, while also substantially lowering its heating costs. It is a critical component of the School’s commitment to becoming a carbon-neutral campus by 2020.

4

Oriented Strand Board has similar properties to plywood, but the OSB manufacturing process allows producers to use fast growing tree species such as aspen or poplar. The production method of OSB uses almost all the wood of the harvested trees so small, young trees can be used. OSB has a greater load bearing capacity than milled wood panels. Due to the type of resins used, wood-based structural-use panels like OSB emit very low levels of formaldehyde.

5

6

Wheat board is an eco friendly and Noformaldehyde-emission board. Wheat board is produced from wheat stalks, one of many emerging products finding use for biomass byproducts for construction materials.

Finish Wood Species of the railing were harvested, milled, kiln-dried, and fabricated locally. The the boards were sawn through the log centers, leaving the wany edges to show the characteristics of the bark, sap-wood, and heartwood of native wood species.

7

Laminated veneer lumber (LVL) is an engineered wood product that uses multiple layers of long thin wood strips assembled with adhesives. it is stronger, straighter, and more uniform than typical milled lumber. Made in a factory under controlled specifications, LVL products allow users to reduce the onsite labor. A comparable material is parallel strand lumber (PSL). Rather than being manufactured from full, parallel veneers, Parallel Strand uses veneers with more defects in a more random pattern. Laminated strand lumber (LSL) is another similar type that uses smaller veneers, and is similar to oriented strand board (OSB) in appearance.

FOR THE PAST TWO YEARS, golfers playing a quick nine

8

Glued laminated timber, also called Glulam, is a structural timber composed of layers of dimensioned timber bonded together. By laminating pieces of timber, a single large, structural member is manufactured from a variety of smaller trees harvested from secondand third-growth forests and plantations. Glulam provides the strength and versatility of large wood members without relying on the old growth-dependent solid-sawn timbers. Glulam has much lower embodied energy than reinforced concrete and steel. It is two-thirds the weight of steel and one sixth the weight of concrete – the embodied energy to produce it is six times less than the same suitable strength of steel, two times as strong as steel on a strength-to-weight basis, and has a greater compressive resistance strength than concrete.

The building is LEED certified and has a distinctive vegetative roof that adds to the local ecosystem and merges visually with its surroundings.

8

The building’s other conservation features include: a renewable, laminated wood structural system; waterconserving plumbing fixtures; use of local materials with a high recycled content; natural daylighting; and highly efficient mechanical and lighting systems.

1

Concrete Foundation The concrete used for the foundation was obtained locally and has recycled content; it therefore embodies less energy by significantly reducing the resources consumed in manufacturing and transportation. The foundation is designed without penetrations – except for a sump pit to relieve subsurface water under extreme conditions – allowing the building to sit low in the landscape within a high water table. Water below the slab is directed to the rain garden, where it is reintroduced to the subsurface aquifer.

See more of this feature online and in our iPad edition.

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2

2 3

7 5

6 4 Interior Lighting The Central Heating Plant is illuminated, in part, by harvesting natural daylight through clerestory windows, thereby offsetting significant electrical loads and saving energy. Artificial light is provided by energy efficient and long-lasting fixtures such as LEDs and metal halide lamps. The life of a high-power white LED, or light-emitting diodes, is projected to be from 35,000 to 50,000 hours, compared to 750 to 2,000 hours for an incandescent bulb, 8,000 to 10,000 hours for a compact fluorescent and 20,000 to 30,000 hours for a linear fluorescent bulb.

1

Photos: David Sunberg/Esto Photography

around the Hotchkiss School’s private course, in the northwestern Connecticut town of Lakeville, have been privy to a new and unusual site: the undulating green roof of the new biomass heating plant, designed by Centerbrook Architects and Planners, that now warms the campus in winter. The 16,500-square-foot structure, the roof of which is meant to blend in with its surroundings and capture excess rainwater, is a tentpole of the college’s new goal to become carbonneutral by 2020. By burning 5,400 tons of locally produced wood chips each year, the plant generates steam heat with a minimum amount of accompanying particulate matter, and this has helped reduce the school’s carbon footprint by 35— 45 percent and its annual heating costs by about 62 percent. The building’s green roof is supported by FSC-certified wood beams, and nearby the school is constructing new wetlands to further integrate the structure with the natural landscape.


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American Builders Quarterly #55  

Oct/Nov/Dec 2014, #55. Data Center Genius. Your peers, today's projects, through every phase. americanbuildersquarterly.com.

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