Krafting Relationships

Krafting Relationships

Kraft Construction Co. - one of the area's largest contractors - expects the Sarasota division to experience explosive growth in the next few years.

By Sean Roth

Real Estate Editor

Tom Williams has a lot to live up to. The executive vice president and manager of the Sarasota office of Kraft Construction Co. recently helped the firm land contracts to build two of downtown Sarasota's largest projects.

There's the $75-million (total sales value) Plaza at Five Points and the $55-million (total sales value) One Hundred Central/Whole Foods Market Centre. The division has quickly risen from the doldrums of $10 million to $25 million in annual revenue to about $75 million this year, making it one of the top four commercial contractors in the two-county market. Now, Williams has the job of maintaining that prodigious growth rate and extending it.

So far, the near-term future looks good. Later this month, Kraft will start construction on 1350 Main, a 17-story, 134-unit condominium and retail complex at Main Street and Palm Avenue. Kraft has also been contracted to build the Rivo at Ringling, a 106-unit, 15-story, residential condominium near the intersection of Ringling Boulevard and Osprey Avenue.

The division is also in discussions with the heads of the next wave of downtown development, such as Wayne Morehead of The Boulevard.

Kraft has one of its biggest projects still in the wings. If everything goes as expected, Houston-based Ersa Grae Corp. will have a contract with the city of Sarasota to develop the million-square-foot Plaza Verdi. The development will include a 100-suite hotel, 116 condominium units, a 10-story mixed-use building, a more than 800-space parking garage, new facilities for the Golden Apple Dinner Theater and Sarasota Opera and a pedestrian galleria to link the project with Five Points.

Even if the negotiations between the city and Ersa Grae were to collapse, Kraft Construction is the general contractor for the second-place project for the property, Sarasota Main Street LLC's The Palm.

Growth built on relationships

Meanwhile, the entire Kraft Construction company, based in Naples, has been on a growing binge. Inc. Magazine ranked Kraft Construction as the 469th fastest growing private company in Florida in 2003 based on five-year growth in net sales. The company grew by 344%.

"Just like every other business this comes down to relationships," Williams says. "We have to be very service oriented, because everyone is out for immediate gratification. The largest end of our business has been contracts for high-rise condominiums. Condominium builders are few and far between, but even so we have been lucky enough to develop relationships with several of the biggest developers, such as WCI (Communities Inc.) and Signature Communities. We want that repeat business."

It was a past business interest with Bob Roskamp that encouraged the Naples business to open its first branch office. Williams was chosen to run the new office because of his background with the company, about six years at the time, and proven construction experience.

"We came up here in the summer of 1998," Williams says, "to be involved in the first phase of the Sarasota Bay Club. I was one of the first marines to hit the beachhead in 1998. I did the estimate on the Sarasota Bay Club and set up the trailer."

Kraft caught the downtown Sarasota resurgence at the right time.

"There was some momentum on the beaches ... on Siesta Key and Lido," Williams says. "But there was nothing in downtown Sarasota. Our crane was the first one to go up. The second was the Renaissance."

Shortly thereafter, the local office of Kraft built the Marina Tower condominium on the southern end of downtown for Robert Skalitzky.

Then the major Sarasota redevelopment effort hit with the completion of the Ritz-Carlton, Sarasota.

'Lighting the fuse'

It was around this time that F. Fred Pezeshkan found the Plaza at Five Points property. Pezeshkan, president of Kraft, was checking up on Williams and the Sarasota office.

"I had been having lunch at the corner of Pineapple (Avenue) and Main (Street at Patrick's Restaurant)," Pezeshkan says. "I was standing at the corner waiting for a traffic light on Main. I saw some property across from me that was covered with a wooden fence. I asked around about the property and heard that it was for sale. I couldn't believe that nobody else had seen what could be built there."

Pezeshkan knew of the new Ritz-Carlton and that the city of Sarasota had hired the famed city planner Andres Duany to develop a downtown master plan.

"I knew the effect the Ritz-Carlton had on Naples," Pezeshkan says. "I also saw that there was more nightlife and culture in Sarasota than in Naples. The downtown also had views of the water, which Naples doesn't have. I felt that this was going to be one of the fastest growing towns in the near future."

So Pezeshkan made it his mission to see that the Five Points property was developed. With a contract on the property, Pezeshkan started calling friends and past business associates to find a primary developer to spearhead the project.

It took some convincing but eventually Pezeshkan attracted Ali Ebrahimi, a former business associate from Pezeshkan's time in Iran, and his development company Ersa Grae Corp. Of course, Kraft Construction was hired as the general contractor.

"I call it 'lighting the fuse,' " Pezeshkan says.

From the news surrounding the Plaza at Five Points project, the Sarasota office was able to attract Casto Southeast, which was developing the Whole Foods project a few yards to the south of the Plaza project.

"There was a commonality of logistics," Williams says. "There was such synergy between the two projects that it just made sense. There were common challenges such as parking and noise." Doing both projects allowed Kraft to consolidate some of the challenges of the projects in a more cost effective way. For example, it costs Kraft almost the same amount to bus workers from outside of the downtown area to two projects as it would for just one project.

The exposure also attracted calls from Sarasota Main Street LLC, a joint venture between Boca Raton-based Southcoast Partners Inc. and Jacksonville-based LB Jax Development LLC. Those contacts led to an extensive interview process, and, eventually, Kraft was chosen as the general contractor for the $55 million (total sales value) 1350 Main project.

"We saw they would be dealing with the very delicate staging issues," says Michael Langton, managing partner of Sarasota Main Street. "Where you put the crane, you are dealing with such limited space that you have to be very careful with the neighboring property owners. I would say that weighed heavily on us choosing them as the contractor."

Kraft was contacted for assistance in understanding some of the zoning code changes and the Duany plans, by the principals of the Palm Walk project: Dr. Mark Kauffman, Piero Rivolta and David Band.

"(Although Palm Walk used a different general contractor) We became friends," Pezeshkan says. "So it was only natural that when Piero was planning the Rivo we would make a presentation."

In addition, Pezeshkan's friendship with Naples' Colleen Kvetko, president of Fifth Third Bank, Florida, led to Kraft renovating a building for the bank on St. Armand's Circle, and the company will construct a second building for the bank at Stickney Point and U.S. 41 in Sarasota. Fifth Third Bank has also committed to occupying 35,000 square feet in the Plaza at Five Points building.

Building schools, too

While high-rise work makes up the majority of Kraft's construction projects, the company also focuses on school and municipal construction. Kraft has already completed interior and historical renovation of the federal building at Orange Avenue and Ringling Boulevard in Sarasota.

"We're finishing up Cranberry Elementary in North Port for the School Board of Sarasota," Williams says. "We should be done with the North County Library (near Dr. Martin Luther King Jr. and Newtown Estates) this May."

Two months ago, Kraft hired Edwin Sankey as vice president of Sarasota, away from the Tampa office of Hardin Construction Co.

"He isn't new to Sarasota," Pezeshkan says. "He was in charge of building the Ritz-Carlton ... and was involved in Courthouse Centre."

The Sarasota office employs about 75 people - about 24 on the supervision side, while companywide, about 300 people work for Kraft.

Controlled growth

Recently, the Sarasota division relocated from a 2,000-square-foot space on Tamiami Trail, in the property designated for the Broadway Promenade, to a 4,300-square-foot space at 40 S. Pineapple Ave., closer to the downtown core.

Asked about the future growth of the company and the area, Williams responded: "These projects have certainly given us the right exposure. Our strategic plan calls for controlled growth."

The firm can now be pickier about accepting clients.

"These projects should allow us to be more selective, having that type of recognition attached to our name," Sankey says. "(But) these projects aren't by any means simple. You have to work around underground infrastructure. You have to have the project built before you put a shovel in the ground."

As for Manatee, Williams says the company has nothing in the works there, but is working hard to move into the school construction market.

"Manatee County is very aggressively building schools," Williams says. "We have been trying to get a project up there for a while. We plan to just keep knocking on that door. We are also talking to Manatee Community College and Manatee Technical Institute. It is always hard to break into a new area."

Of the three offices operated by Kraft (Naples, Fort Myers and Sarasota), Sarasota is growing the most quickly.

"That is the area where we will probably see the most growth," says Robert Carsello, chairman and COO of Kraft. "Certainly Sarasota has the greatest potential. We are just very optimistic about the area. The reputation we have created is starting to precede us, making it easier to sell our services. ... I have to give credit to my partner Mr. Pezeshkin. Around 1998, he told me, 'Bob, Sarasota is about to boom.' I sure wouldn't do anything differently."

"I think we have a really good opportunity here," Williams says. "We have already seen more operations coming in-house. Operations like marketing and estimating have already started coming in-house. If you look at Naples, where almost all the high-rise property is being built-out, a lot of development has already moved in to the Bonita Springs area. More and more people are looking north at Sarasota. There is certainly enough work around for everyone."

"I want us to be the contractor of choice for downtown Sarasota," Pezeshkan says.

Kraft Construction

Sarasota Division

YearGross Revenue

2001$10 million

2002$10 million

2003$25 million

2004 Projected about $75 million

2005 Projectedabout $100 million

Company-wide

YearGross Revenue

2004 Projectedabout $330 million