Bflconstruction2018

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SPECIAL REPORT 2018

THE REGION’S BUSINESS MAGAZINE

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PHOTO: BRENT G. MATHIS

From left

Delbert D. Dittmer

Senior VP & Project Manager BFL Construction

Garry Brav

CEO & Founder BFL Construction

David Larson

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President BFL Construction

BizCONSTRUCTION

BFL Construction Acquired by

JV Driver Group of Canada Local Company Now Backed

by North American Giant

By Jay Gonzales

In the four decades that Garry Brav built his construction company into one of the leading firms in Tucson, stability has been a constant.

It may have come from his management style that kept his employees at BFL Construction from taking their experience and talents elsewhere.

It may have come from a strategy to always be financially solid and never have any debt – a factor Brav said he recognized as common in the demise of construction companies all around him during the 45 years that BFL has operated in Tucson.

Today, BFL Construction is taking stability to new heights after being acquired by one of the largest construction companies in North America – JV Driver Group of Canada. It’s a development that immediately puts BFL in competition with every construction company in the region, able to bid for the large projects – locally and regionally – that have been beyond its means until now.

“It’s taken me 45 years to get here, continually marshaling our resources which are twofold – people and money,” Brav said. “You need both of those. If you don’t have the cash, you don’t have the bonding, and if you don’t have the people, you can’t perform the work because you don’t have the skill sets.

“They’re both hard to find. They take years of ac-

cumulation. My frustration is that after 45 years, I could see that the runway to get to the next level was going to take at least another 10 years.”

As Brav perused a recently published ranking of construction companies in the state by revenue, he pointed to BFL’s place on the list and noted that “here” is not where he wanted to be, although he would never say he was unhappy with what he’s built at BFL. Still, he wanted to be “there” as he pointed to companies that consistently rack up hundreds of millions of dollars in construction projects each year.

In 2017, BFL Construction was providing construction management or design/build services for $82 million in construction projects and was headed for more than $100 million in 2018 prior to the acquisition by JV Driver. But that was where Brav said he wanted his company to be 20 years ago.

He felt his company was big for Tucson, but small by the standards by which he wanted to measure it.

“I want to be big for the state,” Brav said. “I love the challenge with bigger projects, the scope of them, the creativity that they permit and the opportunities for employee growth that come with being a larger company with larger projects.” continued on page 137 >>> Summer 2018

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BANNER UMC

PHOTO: BRENT G. MATHIS

EL RIO EL PUEBLO

EL RIO CONGRESS From left â&#x20AC;&#x201C; Delbert D. Dittmer, Senior VP & Project Manager, BFL Construction; David Larson, President, BFL Construction; Garry Brav, CEO & Founder, BFL Construction; Dave Winsor, VP, BFL Builders; Lourdes Sykes, VP & CIO, BFL Construction

VENTANA MEDICAL SYSTEMS

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SENTINEL PEAK HIGH SCHOOL

COMMUNITY BRIDGES TOOLE FACILITY

CODAC COBBLESTONE COURT

CARONDELET ST. JOSEPH’S NEUROLOGICAL INSTITUTE AND WOMEN’S CARE CENTER

I love the challenge with bigger projects, the scope of them, the creativity that they permit and the opportunities for employee growth that come with being a larger company with larger projects.

”

– Garry Brav CEO & Founder BFL Construction

continued from page 135

VENTANA MEDICAL SYSTEMS ORO VALLEY CAMPUS

A chance meeting between BFL’s newly arrived executive and future president, David Larson, and a representative from JV Driver Group turned into a quick and easy courtship.

Larson, whom Brav had tapped as his heir apparent in April 2017, was attending an Arizona Mining Association conference in Sedona about a month later when he struck up a conversation with Ernie Smith, business development manager at JV Driver, who also was attending the conference. Both companies were exploring the prospect of adding mining site construction in Arizona to their business lines. The attraction was immediate, and they began talking about establishing some joint ventures in Arizona.

At the same time, Brav was already working on a succession plan for his company – hiring Larson and initiating the process of establishing an employee stock ownership plan for the company continued on page 138 >>> Summer 2018

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Growing Up Fast

BizCONSTRUCTION continued from page 137 for the time Brav decided to call it a day.

A meeting between BFL and JV Driver in Tucson at the end of October was followed by a meeting at JV Driver’s headquarters in Canada over Thanksgiving weekend. Within a few days, the companies had gone way beyond the joint-venture conversation.

They agreed to terms for an acquisition of BFL by JV Driver the following week.

It was a no-brainer, Brav said, because it accelerated BFL’s capacity in a hurry – right to where Brav wanted it to be.

“It gets us to where it would have taken us another 10 years to get to with a little luck and some breaks,” Brav said.

“It’s the difference between playing in the NCAA and playing in the NBA. Take that winning team (in the NCAA Tournament) and put them up against the Houston Rockets and it’s not even a game.”

JEWISH FEDERATION OF SOUTHERN ARIZONA CENTER FOR JEWISH PHILANTHROPY

JEWISH FEDERATION OF SOUTHERN ARIZONA CENTER FOR JEWISH PHILANTHROPY 138 BizTucson

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One of the first things established when the two companies began talking acquisition was that BFL would remain BFL Construction. Brav and Larson cited the model of their neighbor on Broadway – locally managed UNS Energy and Tucson Electric Power owned

by Fortis, a Canadian energy company.

“BFL is going to remain a Tucson company,” said Todd Patterson, COO of JV Driver buildings, civil and infrastructure enterprises. Patterson and JV Driver President Chuck Sanders negotiated and completed the acquisition of BFL. “We’re going to expand into other areas beyond Tucson as well, but the BFL head office and our office for the Arizona market and beyond will remain here.

“The thing that we like about BFL is that they’re very involved in the community. The organizations that we invest in, we’re pretty careful to make sure that they’re invested in the communities they work in.”

With BFL keeping hold of the reins in Tucson, Brav said future clients will continue to experience what BFL has always brought to the table with its management, its employees, its expercontinued on page 140 >>> www.BizTucson.com

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Big Resources, Same BFL

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EL RIO CONGRESS STREET/GOMEZ CLINIC

EL RIO MANNING HOUSE IT BUILDING

EL RIO CHERRYBELL

tise and its understanding of the community. It will just have a giant of a company and its resources behind it to expand its reach and capabilities.

“Clients know we have 40 years in the community, and JV Driver has the benefit of those roots because we’re still here,” Brav said. “The experience that this company brings is amazing.

“Over a period of the next 24 months, I think there’s going to be 140 BizTucson

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some tremendous growth in the types of projects that we do,” said Brav, adding that the company still will pursue the commercial construction projects in southeastern Arizona that have been its bread and butter, especially in the healthcare sector.

What BFL can be, however, is distinctly different, Larson said. “There is no limitation – no geographic limitations, no size limitations.”

What Has Been, What Will Be

A walk through BFL’s office at Broadway and Euclid Avenue is a virtual tour of the Tucson region with photos displayed of the company’s prominent projects through the years – schools, government buildings, small hotels, medical campuses, banks and housing.

BFL built the campus at Ventana Medical Systems, now known as Roche continued on page 142 >>> www.BizTucson.com

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BFL HEADQUARTERS continued from page 140 Tissue Diagnostics, at Innovation Park in Oro Valley, and over the last 20 years has completed new construction, remodeling and renovation projects on the campus totaling more than $60 million. It has built a number of projects for the nonprofit El Rio Community Health Center. Its multifamily construction subsidiary, BFL Builders (formerly known as Preferred Apartment Builders), has helped make the Avilla product of luxury rental home communities a success in Tucson and Phoenix.

What has been out of reach, however, were projects like the new nine-story

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hospital building going up at Banner University Medical Center, or any of the new multistory buildings that have gone up or are going up in downtown Tucson.

“We can now direct our focus on that market and be credible because we have the expertise now to do that work,” Brav said. JV Driver has specialized in vertical contracting since 1989.

Brav and Larson saw firsthand the magnitude of JV Driver’s capabilities during their visit to its Canada offices last November. At that time, JV Driver had 24 buildings under construction in Vancouver alone. They saw the

Olympic Village in Vancouver that JV Driver built for the 2010 Winter Olympic Games. They also visited Calgary, where there were several high-rises under construction.

And that doesn’t take into account JV Driver’s massive industrial construction line of business.

Tucson now has access to the capability of a construction company with $1.2 billion in annual construction volume and anywhere from 3,500 to 5,000 employees depending on the amount of work in progress.

“Our business is focused on buildings, commercial construction, as well

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as some of the heavy civil works, as a growth area for us,” Sanders said on a recent visit to the BFL offices.

“Looking all over North America, we look for opportunities like BFL. When you find those opportunities, you get to know them and you’ve either got a good alignment or not. We fell in love with BFL right away. It wasn’t hard to see the value that can be created in terms of having the team of BFL and their great people inside our organization.”

Right Place, Right Time

To use Brav’s analogy, Larson has gone from coaching an NCAA basket-

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ball team to being the president of an NBA team.

The resources at his disposal now are massive. The opportunity is greater, but so is the responsibility.

Larson said he arrived in 2017 comfortable with BFL as a company and comfortable with what it stood for.

“You want to be with a company that shares your core values of integrity and honesty and fiscal responsibility,” Larson said. “Garry has a great vision for the future. Having somebody like Garry as a mentor was an important thing to me.”

At the time he took the job, Larson

already had a vision to grow BFL into a company that could be strong locally and expand regionally. Brav’s financial strategy – to always be in a strong cash position with no long-term liabilities – was conducive to a potential growth strategy, Larson said.

In addition, Larson saw a company where people stayed and built careers.

“During walks around the office, 50 percent of the staff had been here for 10 years or more,” Larson said. “That says a lot about a company. You know that you’re going into a company that has something to work with, some great continued on page 144 >>>

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PIMA AIR AND SPACE MUSEUM

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Looking all over North America, we look for opportunities like BFL. When you find those opportunities, you get to know them and you’ve either got a good alignment or not. We fell in love with BFL right away.

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continued from page 143 people to work with.”

From a strategic standpoint, Larson was intrigued by BFL’s diversity in its business lines. BFL has close ties with several real estate development and investment firms – including Aerie Development, NexMetro and Iridius Capital – that create projects and match them with the necessary financing to ensure there is a steady stream of business.

Aerie Development and NexMetro are the developers of the Avilla product in Tucson and Phoenix. Iridius is a company that secures investors for the

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Chuck Sanders, President, JV Driver Group projects. Brav, through BFL Ventures, is an investor in all three companies.

“I’m really big on diversification,” Larson said. “As I walked around the office, I saw the diversification and I knew that this is a company that will reinvent itself when needed. It didn’t ever move the core values, but it diversified over the years from the very beginning of doing small tenant improvements to medical to mining to the Avilla product.

“When you’re looking at a company that you are going to work with and be a part of, you want to be in one that’s diversified because you know you’re going

to have to change your model at some point.”

Now as part of JV Driver, BFL is going through its biggest quantitative change ever, while offering the same high-quality products and performance.

“It’s just fantastic,” Brav said. “What’s neat is that it’s not a major change in culture. It’s the culture that I’ve tried to create here for years. It’s worked and it’s going to continue to work in the future.

It’s not like we’re changing the way we do business now. We’re just able to do business at the next level.”

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From left

David Larson

President BFL Construction

Garry Brav

CEO & Founder BFL Construction

Chuck Sanders President JV Driver Group

Todd Patterson

COO JV Driver Buildings/ Civil & Infrastructure Enterprises

Delbert D. Dittmer Senior VP & Project Manager BFL Construction

Nimble Execs Ink Deal in 10 Days BFL Construction Now Part of JV Driver Group

By Jay Gonzales Those who say that billion-dollar companies can’t be nimble haven’t met the executives at JV Driver Group – or, for that matter, those at the much smaller BFL Construction, a Tucson construction management company with an annual volume in the $100 million range.

In a matter of days around last Thanksgiving weekend, JV Driver Group of Canada went from discussions of joint ventures with BFL Construction, to suggesting an acquisition, to terms that were agreed upon and put to paper.

And just like that, BFL became part of one of the largest construction companies in North America, bringing a level of resources to Tucson that immediately puts BFL in competition with the state’s largest construction firms.

The acquisition is simply what Chuck Sanders, president of JV Driver Group, does for a good portion of his time. An acquisition can take more than a year or, as in the BFL acquisition, it can take no time at all. It’s all about the opportunity in front of them, Sanders said.

“We’re just executing on a strategy,” Sanders said on a recent visit to the BFL offices on East Broadway and Euclid Avenue. “We have a strategic plan that we wanted to be in this area with buildings and commercial construction. We looked around and this seemed to fit, obviously.”

The courtship between the two companies actually started slowly in May 2017 at an Arizona Mining Association conference in Sedona. That’s where soon-to-be BFL President David Larson began discussing joint mining ventures in Arizona with Ernie Smith, a business development executive at JV Driver. The next step – still in anticipation of a joint-venture relationship – was a visit by JV Driver to Tucson in October.

A date was then set for Thanksgiving weekend for Garry Brav, BFL CEO and founder, and Larson to visit JV Driver, which is where friendship turned to marriage faster than a Las Vegas wedding. continued on page 148 >>> Summer 2018

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continued from page 147 The early part of the trip was what the BFL executives would have expected. They visited projects. They spoke with project managers and superintendents. They asked about each other’s businesses.

“We’re asking questions about their projects and how they do things, how they buy stuff, how they estimate, what software they’re using, what project management they use,” Brav said.

“We’re just kind of comparing notes about how we do business and how they do business – talking shop.”

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The group stopped first in Calgary, Alberta, on the Saturday after Thanksgiving to visit some JV Driver projects.

The next day they visited Edmonton, Alberta, and then Vancouver, British Columbia, home to an impressive portfolio of JV Driver Group projects – including the Olympic Village for the 2010 Olympic Winter Games.

“I was looking for things they were doing such as safety. I grabbed a couple of their safety cards that they had on site,” Larson said. “At this point, we were really looking at this as a joint venture.”

What Brav and Larson didn’t know was that the JV Driver representatives on the tour were all division presidents, not project managers. They found that out when they exchanged business cards at the end of the tour in Vancouver.

At that point, Brav said, “we knew they were taking us very seriously and they wanted to make the best impression – otherwise why would you bring the top guys from your company? And from their perspective, they wanted their top guys to know who we were.”

Brav said his takeaway was that if the two companies got involved in a www.BizTucson.com

joint venture, they already would have met with the company’s leaders, which would make the business relationship stronger and communication better.

“I’m thinking they’re great guys.

I’d like to be partners with these guys.

They bring something to the table for me,” Brav said. “We can talk to them and I can get some straight information back. I’m thinking we’ve got a joint venture partner that has no limitations on their end. I’m the limitation.”

“We didn’t think what happened next was going to happen,” Larson said.

After the Vancouver projects tour, www.BizTucson.com

Brav and Larson were dropped off at their hotel, where they shared their impressions of the JV Driver Group with each other, still thinking they were looking at exploring joint ventures for mining projects in Arizona.

“We talked about how we felt very comfortable with them because their presidents were in button-up shirts and jeans just like us,” Larson said. “They were regular guys. We realized they were a company that was different from the typical companies that we see of their size.”

Brav and Larson joined Sanders and

other JV Driver executives for dinner a short time later and that’s when things escalated quickly.

“They said, ‘Well, we really like your company. We like everything we’ve been talking about. We’d like to buy your company,’ ” Brav recalled.

“Just like that,” Larson said, adding that the first reaction was to say nothing. “We had to think about what we were going to say.”

Then Brav informed them that he was about to convert his company to an employee stock ownership plan – continued on page 150 >>> Summer 2018

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PHOTOS: COURTESY JV DRIVER GROUP

OLYMPIC VILLAGE FOR THE 2010 OLYMPIC WINTER GAMES

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Within a week we had a solid letter of intent and everything was set. It was great.

–

continued from page 149 he was essentially selling the company to his employees in preparation for his eventual retirement – and it was to go into effect on Jan. 1.

“I said, ‘If you’re serious, I’m happy to listen to it – but this has to get done in the next week to 10 days because I’m moving forward one way or another,’ ” Brav said. “I said, ‘You’re going to have to get there real fast.’ ” Larson said he and Brav were “shocked,” but thoughtfully approached the prospect of selling the company. Back at their hotel, they found a patio where they discussed the implications of a sale to JV Driver versus the employee stock ownership plan.

Brav particularly wanted to get Larson’s

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Chuck Sanders, President, JV Driver Group input because it was Larson who would end up with the reins to the company as Brav pondered his ride into the sunset.

“He honestly asked me, ‘David, what do you think? What should we do? I want to make sure I have your input on this because you’re the one that’s going to be heading forward with this thing no matter which one we do,’ ” Larson said.

“I felt this was an important moment in my life and in the lives of everybody here – and Garry’s life – and he’s asking me what I think. I had thought about it in those five minutes and felt strongly that we’re supposed to go forward with the sale of this thing.”

As it turned out, the preparation for the employee stock ownership plan – as well as Brav’s longtime strategy to be

”

financially stable with lots of cash on hand, no debt and few capital assets – made it easy to value the company.

Brav and Sanders agreed to terms of the sale on a phone call the following week – Sanders was in Scotland on other business at the time – and the two firms began to nail down the legal and operational details.

The sale of BFL Construction to JV Driver Group officially closed on March 9, but the deal was done in 10 days after the dinner in Vancouver on the Sunday after Thanksgiving, Brav said.

“It was really quick,” Sanders said.

“Within a week we had a solid letter of intent and everything was set. It was great. You know, the good ones come together quick.”

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JV Driver Group Sets Sights on Arizona

Acquires BFL Construction

By Jay Gonzales

It didn’t take long for JV Driver Group to decide it wanted to acquire one of Tucson’s leading construction companies last fall, partly because the Arizona market and its growth potential had already been on the company’s radar.

JV Driver, an international construction industry leader based in North America with a consistent annual construction volume of more than $1 billion, is now a player in Arizona with the purchase of BFL Construction, a company that’s been in business in Tucson for 45 years. JV Driver is headquartered in Leduc, Alberta, Canada, and has operations all over North America, including a fabrication facility in Phoenix.

With the purchase of BFL, JV Driver’s Arizona office will be located in Tucson.

Chuck Sanders, president of JV Driver Group, and Todd Patterson, COO of JV Driver’s buildings, civil and infrastructure enterprises, both said Arizona already was in their sights when the door swung wide open during discussions of a joint venture with BFL founder and CEO Garry Brav and its new president, David Larson, last fall.

“We had already made a commitment that we were going to be in the Arizona market on the building side,” Patterson said. “We had been talking about it for almost two years, and we were setting things up to enter the market.

“When BFL came along, they had a great company, so it just made total sense. They are a great, established company that’s got a great name and a great community presence.”

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That community presence is a characteristic prized by JV Driver. It’s a major factor in its acquisition strategy as it expands to other regions. Sanders and Patterson have stressed that BFL still will be managed by the existing management team, in part because they consider BFL’s business model is already aligned with JV Driver’s, and because JV Driver wants to benefit from BFL’s long-established connections in the business community.

“We like to do business with people that are similar to ourselves and we feel that they are very similar to ourselves,” Patterson said.

“It’s a people game,” Sanders added.

“If you don’t have the great people to start with, you’re going to have nothing but trouble all the way through. We look for the alignment of core values as a starting point between us and whomever we’re looking at.

“When you find that core value alignment, you know that as things move forward, you’re going to be okay no matter what happens. With David and Garry we saw that right away. It wasn’t hard to pick up.”

Bullish on Arizona

Even before connecting with BFL, JV Driver was not a stranger to Arizona. JV Driver Fabricators opened in Phoenix in 2013 to do pressure pipe fabrication, structural fabrication, module assembly, sign fabrication and installation. Its other United States locations are two operations each in Texas and Louisiana.

From left

Chuck Sanders President JV Driver Group Todd Patterson COO JV Driver Buildings/ Civil & Infrastructure Enterprises

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AZURA (RESIDENTIAL TOWER)

ALEXANDRA (RESIDENTIAL TOWER) CHRIST CHURCH CATHEDRAL

ROBERT H.N. HO RESEARCH CENTER

What caught JV Driver’s attention last year that led to the acquisition of BFL was Tucson’s mining industry. JV Driver, which has numerous mining-related projects and industrial maintenance operations, was interested in the business potential of the Rosemont mine, now owned by the Canadian company Hudbay.

BFL also was exploring business opportunities related to the Tucson-area mine, so the two companies began to discuss synergies.

However, as JV Driver executives spent more time looking at a potential entrance to the Tucson market, Patterson said, they were struck by the amount of development going on in the city and the potential for its building construction business.

“We see the Tucson market as a market where there’s going to be growth,” Patterson said. “The market has been a little bit slow in Tucson, but it’s picking up. Because of the growth in Phoenix, you’re going to see a lot happen in Tucson.”

Sanders said the attraction is also in the opportunity to get into a cozier market like Tucson as opposed to large markets like Los Angeles, Phoenix, Dallas and Houston.

Competition there is stiffer and more established and, as a result, margins are lower, especially for building construction.

JV Driver recognized that there’s a lot happening already in Tucson downtown development, housing and building construction, as well as mining, and it wanted to be in on it before more competitors move in.

“We built a business on not necessarily trying to jump feet first into a big market like that continued on page 158 >>>

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PHOTOS: COURTESY JV DRIVER GROUP

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MINING

CIVIL & INFRASTRUCTURE

INDUSTRIAL

MAINTENANCE

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FABRICATION

PHOTOS: COURTESY JV DRIVER GROUP

MARINE

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PHOTOS: COURTESY JV DRIVER GROUP

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INTERNATIONAL – Montego Airport WESBROOK 4 AT UNIVERSITY OF BRITISH COLUMBIA

CASINO & HOTEL

NEWS (RESIDENTIAL)

NISSAN DEALERSHIP

continued from page 154 and just compete with them,” Sanders said of the mega-cities. “You come to a town like Tucson and there’s redevelopment that’s going on. There are big companies that are coming that need space. There is a strategy in the community to attract those types of things.

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“That’s where you can create value.

That’s where you build a sustainable construction business that provides real opportunity to people and communities – not trying to go at zero-percent margin in downtown L.A. against everybody else who’s been there for 45 years.

You’re just gonna go broke.”

Doing More With More

JV Driver’s acquisition of BFL gives the Tucson company greater capacity and resources to take on larger projects and different projects than it has in its history, which has primarily been in building construction. With the flash of a pen on the acquisition documents, no continued on page 160 >>> www.BizTucson.com

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“

The market has been a little bit slow in Tucson, but it’s picking up. Because of the growth in Phoenix, you’re going to see a lot happen in Tucson.

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Todd Patterson, COO, JV Driver Buildings/Civil and Infrastructure Enterprises

continued from page 158 project is out of reach for BFL with JV Driver now behind it – except perhaps JV Driver’s marine business, because of Tucson’s obvious lack of proximity to water.

“With us joining BFL, it’s going to open up some new doors for them sizewise, different clients,” Patterson said.

“We have a pretty good industrial background. We know that there are some mining projects that are going to take place in this area and we’re certainly interested in participating in those – not just in buildings, but in any aspect where there are opportunities. We can do anything.”

JV Driver’s portfolio stretches wide and far, and not just geographically.

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The company is divided into eight “Enterprises” – Technology, Industrial, Buildings, Marine, Fabrication, Maintenance, Infrastructure, Specialty Services and Shared Services. Everything it does includes innovative technology and an emphasis on safety through its branded program known as “Vigilance.”

While the acquisition has only been final since early March, the two companies have been working together to establish just what they can tackle with the infusion of resources and BFL’s long history and familiarity with the market.

“We’ve got a good strategic plan that we’ve been working on with Garry and David – of where our targets are and

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how we’re going to grow this,” Patterson said. “It will take a little bit of time to get where we want to go, but we’ve got a good plan and I think you’ll start to see a big change in 2019.

“You still have to be focused so you’re not going in 100 different directions.

You have to be methodical in that plan to make sure that it’s going to be successful.”

“It’s a little bit like a farmer who planted a new crop,” Sanders said.

“We just planted a new crop and a bigger crop. We’re going to nurture it and watch it grow – as opposed to trying to be everything to everybody all at once.”

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JV Driver’s Vigilance Safety Program

26 Years Without a Lost-Time Incident

By Christy Krueger

In construction safety, there’s a huge difference between complying with the rules and being vigilant on the job. That’s the belief of Chuck Sanders, president of JV Driver Group, the international construction giant that acquired Tucson’s BFL Construction earlier this year.

As part of its ongoing goal of setting an example for the construction industry across the globe, JV Driver is introducing its world-renowned Vigilance program to Arizona.

“Keeping people safe, taking care of each other every day is one of our core values,” Sanders said. “Not just because its what’s good from a business perspective, but because its morally right. We want people to be going home better than they came to work.”

Vigilance was formed by JV Driver’s workforce during an oil refinery project for Exxon in northern Alberta, Canada. Sanders said. “From 2,000 workers we chose some from each job area – 93 people” who came to be called The Original 93. “They were devoted to finding what was best about the safety programs we had that already delivered superior results – and what would make those results even better and continuous.”

The Original 93 held meetings to brainstorm methods for increasing the safety factor and how to get everyone on board. The idea of Vigilance is to 162 BizTucson

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get workers on job sites into the habit of looking out for those around them – to stop and ask the question: What could happen? Sanders compared it to having a scuba-diving buddy or airline pilots checking each other before they go to work. He said it goes far beyond compliance as set by industry watchdogs like the Occupational Safety and Health Administration. “It’s about taking care of your friend. It’s a basic human responsibility.”

“

It’s about taking care of your friend.

It’s a basic human responsibility.

Chuck Sanders President JV Driver Group

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After Vigilance was established with that original project, Exxon recognized JV Driver with a safety award. Then the program moved to the next job, a project for Shell Oil. “We received an

award from the global CEO of Shell for having the best safety project – we won from among 400,000 contractors,” Sanders said.

Eventually, JV Driver decided to brand the Vigilance program and run awareness campaigns using T-shirts, hats and temporary tattoos. “It extended outside of work – we’d see people wearing their hats and other gear in airports and all over,” he said. “It even changed people’s attitudes about safety at home and educating kids about safety.”

Once the culture of vigilance became entrenched in the company’s workforce, management continued to make it an everyday state of awareness by producing training videos accessible online.

They even used celebrity spokespersons in some, including former wrestler Hulk Hogan and National Hockey League and National Football League players.

Other processes that emerged from Vigilance include the Act of Vigilance card, a tool which captures in real time the acts of vigilance which workers make daily to take care of one another and stop to think what could happen to prevent incidents from occurring. Getting into the habit of watching for potentially unsafe conditions or hazards makes workers more aware and causes them to think about solutions and prevention. continued on page 164 >>> www.BizTucson.com

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• Construction Owners Association’s Albert Awards for Best Practices and Safety Implementation for several years

• Houston Business Roundtable Safety Excellence Award for world-class safety performance in 2018

• Chevron Phillips’ Contractor Safety Excellence Award in 2013

• Imperial Oil’s Golden Nugget Safety Award in 2011

• One of Canada’s 10 Most Admired Corporate Cultures in Western Canada

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continued from page 162 Sanders cited the example of noting electric lines over the job site.

“Let’s tie ribbons on the overhead power lines so everyone is aware of their path over the job site. Or it’s hot today, have more water available for our crew, or be aware of changing weather conditions and their effect on the jobsite.”

“Tool Box Meetings” help workers look at a job each day to see what risks may exist and allow them to discuss any events that stood out from the previous day. It also is where the previous day’s Acts of Vigilance are reviewed and actions reported.

Workers can also use Acts of Vigilance cards to record their observations of positive behaviors such as interventions or observations where things are being done well and with Vigilance in mind.

“We e-scan these cards,” Sanders said. “Management sees them and the worker will get feedback the next

day – such as we will change that or if not, why. We want at least one act of vigilance per day per worker. We reward workers based on this.”

These programs and mindsets have helped JV Driver achieve world-leading safety results among its employees everywhere they work – in Canada, United States, Caribbean, Africa and United Kingdom.

And the company continues to receive construction safety awards. It was recently honored by the Houston Business Roundtable for worldclass safety performance, Sanders said.

JV Driver’s mission to “think different, build better” is reflected in its everyday approach to safety and its pursuit of safety excellence. “We are now 26 years without a lost-time incident,” Sanders said. “Our goal is always zero. The difference is personal choice and a vigilant mindset.”

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PHOTO: COURTESY JV DRIVER GROUP

Safety Honors

JV DRIVER’S METAL FABRICATION FACILITY IN PHOENIX, AZ

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BFL Adds Real Estate Development Full Spectrum – From Acquisition Through Completion

By Jay Gonzales

As much as anything, JV Driver Group’s acquisition of BFL Construction signals that a company with vast resources has every intent to have a giant impact on the Tucson landscape.

Now that it is a part of JV Driver, BFL is launching a development arm of the company to give it the soup-to-nuts capability to create projects and carry them all the way through from land acquisition to handing the keys to a client.

It puts BFL and JV Driver in position to impact the overall look of the city as it continues through a development period that has seen a resurgence in downtown and construction activity all over the region.

“I really envision us just becoming the best version of Tucson – which is a kind of small town with a big-city feel, very community-oriented and just really offering a very high quality of life,” said Isaac Figueroa, who recently was hired to head BFL’s real estate development arm. “I think that’s the most important thing about Tucson. That’s why people stay – because the quality of life is so great.”

Figueroa, a 30-year-old native Tucsonan who graduated from Sahuaro High 166 BizTucson

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School and the University of Arizona, said he simply wants the best for his hometown. He’s involved in a variety of community organizations. He realizes his work at BFL can have lasting impacts as the company now has the capability to be involved in the city’s largest construction projects, whether it’s a building, a civic project like a road, or a much-needed facility for a nonprofit.

“We have a community that really cares,” Figueroa said. “The people here have character. The city has character.

There’s a certain spirit and charm to Tucson. As developers, that’s something that we want to keep in mind and want to maintain and sustain while we’re improving the infrastructure and in the way we’re building.”

BFL President David Larson said Figueroa’s new real estate position is part of an immediate growth strategy as JV Driver’s resources come into play.

“Because of the resources and because of our plan to remain an integral part of this community and to grow BFL, we’re focusing in a couple of key areas,” Larson said. “This is one of them that we think will really make a change for ourselves and for the com-

munity.

“We get to play in the community more, and that’s important to us. This is a significant portion of the plan.”

The more traditional role for a construction company would be to wait for projects to come along and either be asked to participate or bid on the projects and hope for the best. With an inhouse real estate broker, BFL can seek its own development opportunities and create projects that it can then execute from start to finish.

The real estate portion is something that Larson and BFL founder and CEO Garry Brav were both involved in before JV Driver purchased BFL. With the expectation of more and bigger business on the horizon, Larson said the two principals just needed to put it in someone else’s hands.

The intent, Brav said, is not to compete with other developers. It’s to provide another level of service for clients who need or want it. Even before the design-and-build phase, which is where a general contractor usually steps in, there are a number of aspects to a project that have to be addressed by a decontinued on page 168 >>> www.BizTucson.com

PHOTO: BRENT G. MATHIS

Isaac Figueroa

Director of Real Estate Development BFL Ventures

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“

Everybody’s a little more cautious since the recession – but everybody’s optimistic and things seem to have shifted to another level.

–

Isaac Figueroa, Director of Real Estate Development, BFL Ventures

continued from page 166 veloper – such as location of a project, feasibility studies, availability of water and utilities, and other engineering analyses.

A contractor usually gets a project after all of that is done.

“There are so many pieces to the puzzle,” said Brav, who started BFL 45 years ago. “Most general contractors really don’t have all those skill sets.”

With in-house real estate expertise, Larson said, there is an expectation that there will be plenty of work for BFL, as well as for other developers and builders in the region.

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“There’s a lot of action,” Larson said.

“It’s not the 2000s where you couldn’t miss. It’s a lot more calculated with a lot of moving parts and opportunities coming in all sectors of the market. It looks like it’s going to remain that way for the foreseeable future.”

“Cautious optimism is usually the term that’s thrown around,” Figueroa added. “Everybody’s a little more cautious since the recession – but everybody’s optimistic and things seem to have shifted to another level.”

While no one is declaring that Tucson’s economy is at full health, Brav said

”

waiting for that to happen before making a move to capitalize is too late.

“I’ve always found that the best time to expand business is when it was slow because people have time to talk to you,” Brav said. “When it’s busy, they rely on relationships that they’ve already developed.”

Larson said, “We see a future in the current market. That’s why we’re making this play. We don’t think we’re at the top yet. We haven’t seen the best that Tucson’s going to be.”

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Luxury Single-Family Rental Homes

Aerie and BFL Partner to Meet New Demand

During the 45 years since Garry Brav started BFL Construction, he has built many business relationships, as is often the case in Tucson. Brav had the foresight to take these connections to the next level – partnering with those he saw eye-to-eye with to bring about new business opportunities.

Aerie Development is one such entity that came together with the goal of using the strengths of each partner to further the growth of all.

Roger Karber, president of Aerie Development, explained the relationship: “Aerie Development is the development company I own 50/50 with G.S. Jaggi.

We formed a partnership with Garry Brav and together we develop multifamily communities.”

For each project, Aerie handles site selection and development services.

BFL, through its subsidiary BFL Builders (formerly Preferred Apartment Builders), takes care of cost estimating and construction. Brav, Jaggi and Karber are sponsors of the projects and provide management.

“I oversee the development process, Jaggi is responsible for the financial, and Garry manages the construction.

Aerie finds the sites and provides all of the pre-construction services.” Karber said.

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“

We start with determining where consumers want to be located.

The idea is to make the product accessible to jobs and be near riparian corridors.

”

Roger Karber President Aerie Development –

“Jaggi has a large pool of investors he brings in once the development starts.

After meeting the team, it is not uncommon for the land seller to maintain an interest by staying in the project as an investor.”

The group’s primary product is Avilla Homes, communities of luxury rental houses – or “casitas” – geared toward those who want want single-family-style living but with the freedom from homeownership and the work that may come with it. There currently are seven Avilla neighborhoods in the Tucson area.

“We wanted Avilla’s features to have the broadest appeal,” Karber said.

“There are 10-foot ceilings, which give a sense of additional square footage.

Taller walls allow us to add more glass so the source of light is better. Security is important, so our communities are gated, and the homes have full security systems. Homes are detached singlestory, and each has a side yard and its own private, walled rear yard.” Most Avilla neighborhoods offer one-, twoand three-bedroom floorplans.

Aerie does extensive research before selecting a site. “We start with determining where consumers want to be located. The idea is to make the product accessible to jobs and be near riparian continued on page 172 >>> www.BizTucson.com

photo: www.balfourwalker.com

By Christy Krueger

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BizCONSTRUCTION Avilla Luxury Rental Homes in Tucson (Year Completed)

1

4

1) Tanque Verde (2012) 2) Marana One (2013) 3) River (2014) 4) Preserve (2014) 5) Sabino One (2014) 6) Marana Two (2016) 7) Sabino Two (2016) 8) Pima Canyon Apartments (Coming in 2018)

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5

3

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corridors,” which means most Avilla neighborhoods are close to one of Tucson’s river systems.

During the past decade, there has been a strong shift among young professionals to shy away from homeownership, Karber said. In many cases they can certainly afford to buy, but choose not to do so. (Avilla household incomes average $80,000 or more.) Karber feels this goes back to the months and years following Sept. 11.

“In 2001 there was a nesting effect,” he said, noting that many owners stayed home more and fixed up their houses.

“Then when the Great Recession happened, they doubled down. People were unsure of their source of income, and the desire to build an ever-bigger house decreased.”

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Karber and his partners understand the freedom of a rental lifestyle and try to make it as desirable as possible for their residents. “We wrap almost everything into rent – for example, we even change air filters. They pay their own electricity and we bundle almost everything else in the rent – it’s simple.”

An interesting trend that came to Karber’s attention was with the female demographic. At Avilla Sabino, where only three-bedroom homes are available, he noticed that a high percentage of residents were single women. When he asked some of them about their choice of three bedrooms, they replied, “I think of it as a one-bedroom with a hobby room and a guest room.”

Looking forward, Aerie has plans to continue building Avilla products in the

Tucson area. “We have 27 acres near Ina and Thornydale along the Cañada del Oro bank. There are about 280 Avilla homes there to date, with room for about 300 more.”

Pima Canyon Luxury Rentals is a modified Avilla-style Aerie project nearing completion on Orange Grove Road one block west of Oracle Road. Instead of single-story detached homes, Pima Canyon is made up of two-story, eightplex buildings laid out so each home is a corner unit. The homes retain many of the sought-after features of Avilla, such as 10-foot-high ceilings.

Another housing type that Aerie partners are committed to is what Karber called “urban-core product.” It includes rentals in or near downtown, for continued on page 174 >>> www.BizTucson.com

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continued from page 172 a target demographic he described as “boomerennials.”

“The boomers are more interested in flexibility now that the kids are gone.

Millennials also are frequently childless and have high disposable income. Both want to find entertainment outside the house. Boomerennials are a good match for dense urban-core housing communities.”

One urban development Karber is particularly excited about is Bautista Plaza in the Mission District west of the freeway south of Congress Street. The development is named after Juan Bautista de Anza, who led the Spaniards through this area in 1776 on their way to San Francisco. Currently in the costestimating and design stages by BFL, Bautista will be a residential complex with sidewalk-level retail and restaurant spaces.

“It’s a five-story patio concept where residences are distributed around a series of courtyards,” Karber said. “It can enhance density by providing pocket parks in a community. It’s right across from the Caterpillar headquarters currently under construction at Linda Avenue and Cushing Street. The pool will be on the edge of the Santa Cruz River near the bike path.”

The property is close to Mercado San 174 BizTucson

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Agustin, which recently opened a new section of shops housed in shipping containers upgraded to class “A” interiors – a new trend in many Western urban centers. It adds dozens of retailers and amenities within walking distance of Bautista. A 500-seat amphitheater, grocery store and parking garage are also planned nearby.

Downtown Residential/ Mixed-Use Projects Bautista Plaza construction to start May 2019 The Cushing Building construction to start fall 2019 RendezVous Urban Flats under construction occupancy summer 2019

Other Rental Concepts Pima Canyon Luxury Rentals under construction opening 2018

Perhaps one of the best amenities for future residents will be nature itself. “The city and county are working together to recharge the Santa Cruz River to make a riparian habitat and it will be running all year round,” Karber said.

Other downtown residential/mixeduse projects Aerie has on the board include The Cushing Building, an eightstory, 200,000-square-foot commercial office building also in the Mission District, and RendezVous Urban Flats on the plaza of One South Church.

So far, all downtown Aerie residential homes are rentals – yet Karber hasn’t ruled out building condominiums.

“There are currently no urban-core products that are ground-up condos.

Ice House Lofts was a renovation of an existing building. There is demand there. I’d like to see something along the streetcar line.”

Karber is excited about BFL’s merger with JV Driver. Participating in some of the BFL meetings with JV Driver, he believes the international company’s presence in Tucson is a positive one.

“We see great value between BFL being local and JV Driver’s scale. We all benefit from Garry finding a way to make BFL even stronger.”

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AVILLA RENTAL HOME INTERIORS

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PIMA COUNTY JOINT TECHNICAL EDUCATION DISTRICT CAMINO SECO & 22ND STREET CAMPUS

When Nonprofits Build BFL Provides Expertise

Businesses often support nonprofits in their communities by occasionally writing a check, relieving some of the stress, worry and angst that comes with depending on the generosity of others to fulfill a mission.

However, a business also can support a nonprofit in a way that provides more enduring relief from the organization’s stress, worry and angst – say, by helping them spend their money as efficiently as possible on a major project like constructing a building.

BFL Construction, a company rooted in Tucson for 45 years, is like a lot of local, caring companies that donate thousands of dollars and have employees that volunteer and advocate for worthy causes.

But it’s also a company that will partner with a nonprofit going through the often-stressful process of making a major capital investment such as new construction, bringing expertise, financing and labor to the table.

Along with its extensive portfolio of commercial construction that includes biomedical campuses, housing, office complexes, banks, schools and government buildings, BFL has helped a number of nonprofits with their building process – sometimes from the very be176 BizTucson

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ginning at land acquisition to the very end when BFL hands over the keys to the front door.

“We work with nonprofits because they are a group that needs help from a company with a core value of integrity that can go in and say, ‘What are your needs?’ ” said BFL President David Larson. “We can take this client, whose

“

We can take this client, whose core business is not construction, find out their needs, design a plan and get them there.

David Larson President BFL Construction –

”

core business is not construction, find out their needs, design a plan and get

them there.”

With precious financial resources at stake, the margin for error in a building project is minimal. It takes the expertise of a company like BFL to ensure that a nonprofit’s funds are spent wisely and that, at the end, it has exactly what it needs.

While the construction company has all the operational and technical expertise, the nonprofit still has to have a firm grasp of what it actually does need. It may think it needs certain capabilities in a facility, or it may not realize that it needs something it hasn’t thought of.

The builder – in this case, BFL – can provide that level of guidance.

“We just kind of become the quarterback,” said BFL founder and CEO Garry Brav. “We recommend different players to meet with and just see if there’s chemistry, if there’s interest, if there’s expertise in specific things.

“Different projects require different resources, different expertise, and there are different problems. So you just have to do it on a case-by-case basis to figure out exactly where the emphasis has to be and where the money needs to be focused.”

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photos: www.balfourwalker.com

By Jay Gonzales

District, owned a 10,000-square-foot building on Tucson’s north side that it wanted to convert into a cosmetology education center, now known as the Master Pieces campus near River Road and Shannon Road. JTED Superintendent Alan Storm said BFL was the low bidder on the project and worked with JTED to get it done within the financial parameters of the bid.

Within a year after the construction was completed, BFL was on the campus doing some follow-up, Storm said, when he struck up a conversation about needing an eastside campus for its programs. Word reached Brav, who said he owned a piece of land that might work for the new campus.

The next steps were a typical instance of a design/build model known as EPC – engineering, procurement, construction – in which a construction company like BFL will work with a client to develop the scope of a project, then manage the process through completion, often including the land acquisition and the financing.

BFL reached a lease-purchase agreement with JTED to put up the land, finance the project and build it. The

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agreement called for BFL to lease it back to JTED for a defined period of time, at which point JTED would assume ownership. Such a process allows an organization to develop new facilities without all the administration that it takes when a taxpayer or nonprofit initiates a project on its own.

“We pay for things in cash. We hadn’t established credit,” Storm said. The lease-purchase agreement meant “we didn’t have to go and get a construction loan. We took it as a lease-purchase and paid it off in three years, and we became the owners of the property.”

There were adjustments in the middle of the project, another aspect where construction expertise can adjust a project to fit the needs of the client.

The initial plan was for five buildings on the campus. Three were built in the initial construction. When the time came to build the last two, JTED and BFL changed course and built one large building instead of two smaller ones.

That construction was completed last year.

“It was huge for us,” Storm said. “It was such a pleasure. I really didn’t have to worry about anything.”

In 2011, BFL took a similar approach with the Flowing Wells Unified School District. Aerie Development, a frequent partner in BFL development projects, owned a property that was suitable for a much-needed new high school for the district. Under an agreement with the school district and Aerie, BFL managed the design and construction of Sentinel Peak High School, an alternative learning facility for students with special needs. The district then leased the property for a designated amount of time, before assuming ownership.

The cliché of a “win-win” applies as the nonprofits – in these cases, JTED and FWUSD – were able to quickly obtain the right kind of facility with an affordable financing arrangement and fewer planning and design headaches.

At the same time, BFL made a profit while also giving its client peace of mind throughout the project.

“These nonprofits are kind of like retirees in that they have a nest egg,” Larson said. “They have certain responsibilities for their nest egg and they hold it as very valuable. This is such a value to them.”

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Lourdes Sykes VP & CIO BFL Construction

PHOTOS: COURTESY BFL CONSTRUCTION

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High-Tech Solutions for Construction Building Information Modeling, Virtual Reality, Artificial Intelligence

By Christy Krueger BFL Construction’s growth during its long existence has meant an increase in the number of projects, clients and employees, along with massive changes in how companies manage their business.

In that 45 years, hand-drawn plans and logbooks have gone by the wayside, replaced by technology and terms like BIM – building information modeling.

Fortunately, BFL had a natural solution in a former accounting employee who learned the ropes of construction technology and is now the company’s 178 BizTucson

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CIO and a VP. Lourdes Sykes began working at BFL in the accounting department, left for five years, and returned, having been trained and certified in information technology, or IT as it is commonly known. On her return, Sykes realized she could help the company with the knowledge she had acquired.

When she took over IT management for the company 10 years ago, her goal was to provide in-house expertise instead of relying on consultants. She also

focused on bringing the best software applications available for the industry into every facet of BFL’s work.

“When I came back from Seattle, we weren’t much up on IT,” Sykes said.

“Back then, we had a consultant and we had to call that person and wait.”

She began updating hardware and software. She visited each department and recommended IT tools they could use, and she customized reports for clients. continued on page 180 >>> www.BizTucson.com

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“

Everyone can go on the system and see where we are on a project. We like to include clients and architects.

We will give them software access.

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continued from page 178 “I analyze each department and try to better the processes and standardize tasks,” she said. “It’s critical for efficiency. I’m continually improving processes.”

Sykes said the company began using cloud-based, construction-specific software called Viewpoint 15 years ago.

This platform includes a crucial capability to provide customized reports for clients. “It provides reports and data, and it integrates between project management and accounting.” Over the years, BFL has served as a beta test site

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Lourdes Sykes, VP & CIO, BFL Construction

for new Viewpoint modules and other upgrades.

On Center is another software BFL uses to evaluate architectural plans to determine quantities such as lineal feet, item counts and square footage. It enables project managers and administrators to apply material unit costs in budget estimates. A cost-loaded scheduling system from Microsoft Project is another software used by BFL. New Opportunities

The recent acquisition of BFL by JV Driver Group is exciting, Sykes said,

”

because of the ability to expand and the potential for incorporating new technologies the construction giant now uses. One example is Project Team Collaboration, a cloud-based, documentsharing software that JV Driver is recommending that BFL begin using.

“Everyone can go on the system and see where we are on a project,” Sykes said. “We like to include clients and architects. We will give them software access.” Implementation will take place after Sykes travels to Vancouver, British Columbia, for training with JV Driver.

Wireless communication brings great

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benefits to the construction industry as well, and BFL is no exception.

Employees on job sites are no longer hampered by the infrastructure limitations of temporary office trailers. They can relay data, messages and images through smart phones and I-pads using a cloud-based app. Communication between field and office personnel will be enhanced further once Project Team Collaboration is up and running.

BFL President David Larson also brings a technology background to the table for the company. Larson completed a bachelor’s degree in construction management at Brigham Young University in 2001, and technology was an integral part of his training.

Today, when Larson has questions about emerging construction technologies, he consults with Brian Capt, a professor of building information modeling at Larson’s alma mater. Capt spent 20 years as a design-build general contractor before he began teaching at BYU. He said building information modeling – BIM – hit the construction

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industry about a decade ago along with the use of virtual reality.

“It helps get things up quicker,” Capt said. “You can create everything with virtual reality. A lot of contractors use it in construction. They get the design from the architect and then build everything in-house.”

Construction management majors are in high demand, according to Capt.

At BYU they take classes in science, engineering and business. They study cost feasibility and the use of processes.

He said that 100 percent of the department’s students in the past 15 years have found jobs in the industry after graduation, and they’re starting at $50,000$60,000 per year.

“They’re taking positions as project managers, building information modelers, construction schedulers, estimators and other management jobs,” Capt said. A number of them start their own companies. And some of Capt’s BYU students have gone to work for BFL. The future of building information modeling, Capt said, is Oculus, a virtual

reality headset for use in all phases of construction design and management.

“You put on the goggles and can select materials for the job,” he said. “You can walk through the entire project from the parking structure on. It’s good for intricate designs like hospitals because you can see how the equipment will fit in. We teach this to our students.”

Another emerging technology in the construction industry is artificial intelligence, or AI, Capt said. “AI is used to make different models in designing projects. You tell it you want this number of units in each part of a project loaded into the system. Ask it to come up with 1,000 different requirements, and you can get 1,000 in 10 minutes. It takes six months off a construction project. It’s science fiction.”

JV Driver has integrated BIM and other technologies in certain projects and will introduce their applications to BFL, the next big step in moving the company to the next level of construction management technology.

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From left – Richa Singh, Raj Bakshi, Whitney Capanear, G.S. Jaggi, Sally Cooper & Caroline Janjic

Financing Partner Sees Opportunities

Presence of JV Driver Adds Potential for Growth

By Christy Krueger The recent acquisition of BFL Construction by JV Driver Group is expected to have a positive trickle-down effect on the people and entities that Garry Brav partners with in his multifamily building division. Those include Roger Karber of Aerie Development, Ken Abrahams, president of NexMetro Communities, which operates outside the Tucson area, and G.S. Jaggi, founder of Iridius Capital.

Jaggi believes JV Driver’s presence in Arizona will increase opportunities for development of future projects for him and his partners.

“JV Driver has the infrastructure and bonding capacity in place to increase the volume of business that BFL engages in,” Jaggi said. “BFL’s local leader182 BizTucson

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ship team will stay in place and continue to be a trusted construction partner.”

In 2011, Jaggi founded Iridius Capital, offering real estate investment opportunities to high-worth investors.

While he has extensive experience in venture capital and private equity, his preferred investment category is commercial real estate. “With real estate, there is always a tangible asset backing your investment,” he said.

Iridius Capital’s real estate investing sectors include apartment, retail, office and hotel properties. Its first multi-family housing project was Avilla Tanque Verde in Tucson, a luxury rental home neighborhood developed by Aerie Development and built by BFL Construction. Since then, he has participated in

the financing of Avilla projects in Phoenix, which are developed by NexMetro.

The Iridius team makes data-driven investment decisions and closely follows market circles. But it’s biggest strength, said Jaggi, is its relationships with its various partners.

He explained that the development process begins with entitlements and land acquisition. Iridius typically raises capital from investors after the entitlement process is complete, reducing some of the risks investors might bear if they were investing during the earliest stages of development. Avilla Homes projects usually have a total investment period of three to four years.

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“

Each of the markets that we’re in still have a lot of room for growth, and we’ve already started to identify the next markets we’ll move into.

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continued from page 182 proach to the entitlements process, and they build relationships with key stakeholders to get the required zoning approval and permits,” Jaggi said. And both organizations develop a high level of operational efficiency, which leads to meaningful results for investors.

BFL – through its multi-family housing company, BFL Builders (formerly Preferred Apartment Builders) – is an integral part of the development team, Jaggi said. “Garry has always done a great job of balancing the importance of quality with the importance of cost efficiency. He outperforms the competition by skillfully identifying where development dollars are best spent to add the most value.”

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G.S. Jaggi, Founder, Iridius Capital

Jaggi also sees opportunities for partnership with BFL Construction and Aerie Development beyond the Avilla Homes concept, such as their recently opened Pima Canyon Luxury Apartments on Orange Grove Road west of Oracle Road and upcoming projects in the downtown Tucson area. Still, Jaggi anticipates that funding the development of new Avilla Homes neighborhoods will be his primary focus for the foreseeable future.

After noting the success of Avilla Homes in Tucson, the founders of NexMetro Communities built their company to take Avilla Homes to Phoenix and other Sunbelt regions. Iridius Capital has remained the primary capital partner for all Avilla Homes communities to

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date.

“We think that the Avilla Homes concept is just starting to take off,” Jaggi emphasized. “Each of the markets that we’re in still have a lot of room for growth, and we’ve already started to identify the next markets we’ll move into.

“Other developers have taken note of what NexMetro is doing and have tried to follow its footsteps, but it’s difficult for anyone to come in and truly compete.

NexMetro’s track record of success gives it better access to great sites and more efficient financing options. I have complete confidence that NexMetro, partnering with BFL, will continue to be the leader in this truly unique market segment.”

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Avilla Product Expands

NexMetro Adding Projects in Florida

Since its 2012 startup in Tucson, Avilla Homes has caught the attention of others in the local residential development business. Some have tried to compete. Others, like Ken Abrahams, decided to work with the Avilla team and expand the concept into other markets.

It’s taken off like wildfire.

Shortly after Tucson’s first Avilla product opened, Abrahams launched NexMetro Communities to build Avilla-brand homes in the Phoenix metropolitan area. He has since expanded to Dallas and Denver.

“My group put equity together to create a building group for Aerie Development,” Abrahams said. “Roger (Karber), Garry (Brav) and Jaggi were general partners for Tucson. I was asked to evaluate it, and I decided to set up NexMetro. We have partners including Aerie and the Alta Vista people and several others to support it. We decided Avilla needs to be in bigger markets, in bigger cities.”

NexMetro has a large group of investors who like to invest in real estate projects. “They make their own decisions on what they’ll go into,” said Abrahams. “We’ve developed a reputation of being reliable to work with.”

He also assembled a board of directors, and each market has a three-person market director team. NexMetro’s corporate headquarters in Phoenix now has about 20 employees.

Market research guides the NexMetro team into areas with prime suburban growth that has a strong service base, such as retail, strong job growth and proximity to transportation. Avilla communities can be found in Gilbert, Chandler, Queen Creek, Phoenix, Mesa, Surprise, Peoria, Deer Valley 186 BizTucson

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and Goodyear.

“In Queen Creek we’re near a big commercial hub. Target is near, there’s easy access to a lot of retail, restaurants and health clubs in a suburban setting.

We have 11 projects in the Phoenix area, seven under contract. We’re starting one every few months. Our market research is extensive – more than most in our business,” Abrahams said.

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We decided Avilla needs to be in bigger markets, in bigger cities.

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Ken Abrahams CEO NexMetro Communities –

Research also identifies exactly who the NexMetro Avilla clients are. “They prefer to rent now. They may buy later.

About half are in the 23-33 age bracket and half in the 50-75 age bracket.

About 70 percent of renters with us are women.”

NexMetro homes are similar to the Avilla product in Tucson, Abrahams noted. “They’re single story, detached,

separated by a side yard, except the one-bedrooms are a duplex. They have private backyards. The appearance of the neighborhood is of a single-family neighborhood, but full-service. All is taken care of and in a great location and gated.”

Floor plans differ only slightly from neighborhood to neighborhood. The interiors are upscale with 10-foot ceilings, open floor plans and modern kitchens, available with one, two or three bedrooms.

“Exterior architecture varies,” Abrahams said. “It’s driven by local community standards. The goal is to fit into the neighborhood. Amenities are mainly in the home. We build a resort-style pool, Jacuzzi and ramada that are the primary exterior amenities, with a green belt and usually a dog area. Our clients want to spend their money on the home’s interior.”

Looking ahead, Abrahams anticipates growth to be healthy, as indicated by the number of Avilla properties already built in the Phoenix area. “We’ll grow into other metro markets suitable for the product based on our research.

We’re going into central Florida next year. We’ve identified 10 major markets in Florida.”

Success is a two-way street when partners are involved. “BFL is a strategic partner and vendor, building all Avilla homes in Arizona for NexMetro,” Abrahams said. “BFL has helped NexMetro’s growth and in managing the construction field services.”

Abrahams is confident about JV Driver Group’s future contributions.

“JV Driver will have only positive effects. We hope to be a stronger builder in Arizona. We’re optimistic about the new company.”

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photo: www.balfourwalker.com

By Christy Krueger

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