Building the Future

Building the Future

EXECUTIVE SESSION by Jean Gruss | Editor/Lee-Collier

John Pinholster, president, Kraft Construction Co., Naples

Kraft Construction Co. is the largest builder on Florida's Gulf Coast with more than 500 employees and nearly $700 million in gross revenues in 2006. Based in Naples, the company has been expanding its reach from Collier and Lee counties northward into Charlotte and Sarasota counties. It is now beginning to do work in Tampa Bay.

John Pinholster is the new president of Kraft, taking over for co-founder Robert Carsello. Here is an extended executive session with the man who will be guiding the company.

PERSONAL

Age: 47

Family: Married 18 years, son, 13, daughter, 11.

Hometown: Savannah, Ga.

Education: Undergraduate degree in ocean engineering from Florida Tech in Melbourne and masters in civil engineering and construction management at Georgia Tech.

Favorite building: "I am probably most fascinated by the Georgia Dome, only because at the time it was the first structure of its type. It was the first project that I worked on as a commercial contractor, so it holds a special place in my heart. I savored every moment that I was working on it."

What music do you listen to: "I love Springsteen, I really like Sting's latest stuff, Matchbox 20, Counting Crows, Outkast. I like the symphony. I love anything Aaron Copeland ever did. I like music with passion. I like something that stirs your heart. I don't for Top 40 pop stuff."

Favorite high-tech gadget: "The GPS on my boat."

Your first paying job: "Mowing lawns when I was eight years old. I made $3 a lawn and I had five that I did every week, so that's $15. I was hustling. My dad set me up in the business and he said: 'You're not that strong so I'll get you a self-propelled mower so all you've got to do is hang onto it.'"

Favorite TV shows: "Entourage, Rome, 24 and I love college football and basketball."

Favorite movies: Raiders of the Lost Ark, Room with a View, Moonstruck, The Princess Bride and Godfather.

What you do for fun outside work: "Right now it's supporting the kids. My daughter is a great basketball player. Our son sails and so we travel throughout south Florida carrying him to regattas. So he's racing sailboats, she's playing basketball, we're zipping from one venue to another. When I'm not doing those things, I also sail. I have a Laser and a Hobie 20."

PROFESSIONAL

How you got in the construction business: "My dad's a contractor. I started working with him on a pipe-laying crew when I was 14. I put myself through school as a welder and shipfitter. That's how I paid for college. Then, with my degree in ocean engineering I took a job with McDermott right out of college designing offshore platforms. That was 1981, oil was $55 barrel a dollar then, which is equivalent to $85 a barrel now, so it was a good job. Two years later oil was $12 a barrel and the domestic offshore oil industry went down the tubes and I went out the door with it.

"I worked for a design engineer in Savannah for about three years and I realized it felt too much like homework. I really liked to be outside and the contracting side of the business. So I took three days off work and went to Atlanta and I did 13 interviews in three days and landed a job with Trammell Crow Residential building apartments. That was 1986. I was there for three years. The guy who hired me went to start his own business. He said 'Hey John, why don't you come with me, you'll be my partner, we'll figure out how to make things go.' At the time we both thought 1989 was the bottom of the market and things could only pick up from there. What we learned was that we were good contractors but lousy economic forecasters. We ran out of work.

"I took a job at Beers Construction in 1991, part-time hourly, at the Georgia Dome. I knew the guy who was running the job, he and I did work together at Trammell Crow. I knocked on his door and he said, 'I can't pay you more than $15 an hour.' I said, 'Hey, that's better than what I'm making right now.' He said he couldn't give me more than 20 hours a week and I said that gives me 20 hours to go look for a real job. I put in 60 hours the first week. After about three months they put me on salary. They hired me as a project manager in 1992. So I went to work on Concourse E, which is the international concourse at Hartsfield International Airport. So I was there for two and a half years and wound up as project director for Centennial Olympic Park. It was the best job of my life. Then the CEO of the company asked me if I'd be willing to move to Orlando and open an office for them. So in the 12 years that I was at Beers, I went from a part-time hourly guy at $15 an hour to the president of the Florida division running $500 million worth of work in four different offices. It was a heck of a run.

When you left Beers: "I left Beers in 2003. I was on my own. I had a couple of clients who needed some help. I had met Fred Pezeshkan through Leadership Florida. He and I were in the same Leadership Florida class. I was in my driveway one day helping my wife with a garage sale and Fred called and said 'John you need to come work for me.' And I said, 'Fred, you need to open an office in Orlando, I don't want to move.' I told Fred 'no' for six months, but as I found out, telling Fred no doesn't work very well. If Fred wants something, he's going to make it happen."

THE POSITION

What the position entails: "I want to make sure I'm really clear. There is no way I will ever be able to replace Robert Carsello (who recently retired as chairman of Kraft). Those shoes are just too big to fill. He was the founder of this company and clearly one half of the partnership that got it to where it is today. I think it's going to take two or three of us to replace Bob Carsello. Kraft is really built on taking care of its people, taking care of its clients and taking care of its subcontractors. I think that's the mantle that's been passed to me. Make sure that whatever happens we don't stray from that direction or that vision. It has been a successful formula for us in the past. We have to make sure it remains our successful formula."

What the biggest challenge is this year: "There are a couple of them. There are a lot of people looking at us, saying, 'Bob Carsello is gone, what's going to change?' Change is inevitable. There's change by the fact that Mr. Carsello is gone. One of the biggest challenges we have is to make sure that whatever changes happen are ultimately changes for the good. We don't need to change things that turn out to be detrimental to our employees, our clients or our subcontractors. There's a little bit of a challenge there and I think people are going to be watching us closely to see how we operate without Mr. C here.

"The second thing is that the market has changed. The residential condominium market is nowhere near as strong as it used to be. You're seeing some of the school districts talk about their enrollments being less than they projected, so you're seeing some school districts reassess their facility needs. The hurricanes have affected our climate. I think people look at Florida with a little more hesitation now than they used to. On the whole, you still have 1,000 people a day moving to Florida. So it's not that we're going to quit growing, but it's understanding that the marketplace in the last two or three years has changed. We need to make sure we stay true to who we are but be able to adapt to the marketplace to make sure that we continue to take care of our employees. As the leader of any company, aside from making sure you get returns for your shareholders, is to make sure you've got a place for your folks to work. I think you've got an obligation there for continuing the business to keep your company healthy. So when the dynamics change, it's up to us to figure it out."

What areas Kraft is exploring for future business: "I think there are some interesting dynamics. Schools follow population growth. So I think you're going to see more things pushing away from the coast and a little more inland in Southwest Florida. Look at the climate of the current local road construction. Is that our opportunity where maybe the construction-manager-at-risk formula makes sense, applied to road and civil construction? What about a lot of the condominiums that have been on the market but were damaged in the hurricanes or are just getting old and need a facelift? Is there a market in the restoration area? Florida is still one of the biggest healthcare states in the country and there's also a lot of retail work here. Traditionally, we've only been a healthcare contractor for one or two clients. We've not traditionally had retail clients."

Plans for expansion beyond Southwest Florida: "We had a project in Pensacola last year. We went to Pensacola because WCI has been a longtime client of ours and asked us to go. Had the market not changed, we would probably be in the Daytona market with WCI right now. We had pretty strong plans in place to be in Daytona. We are stretching into the Tampa Bay market. We just competed for a project at the University of South Florida last week. We were not successful, but we were there. We've currently got a project ongoing in Tampa in the Westshore area. Again it's for WCI and the client pulled us into that area.

"We do a lot of higher education work, we do a lot of K-12 work. It seems right for us to look at those opportunities in that market. I don't see us anytime in the future making a decision to go build an office in Orlando or Fort Lauderdale or West Palm. We have opened a small office in Charlotte County. We have chased two to three projects recently in Charlotte County and I think that's going to be the next big frontier for us. We'll be filling that gap between Sarasota and Lee. I really would like to see us in Hillsborough, Pinellas, Manatee, Charlotte and Hendry for the next wave of our expansion, close to home but adjacent to our base of operations. I'm not too keen on getting the troops too far away from the supplies."

What project in the pipeline excites you the most: "We've got several things going on at Florida Gulf Coast University: the new housing complex and the new engineering building. That campus has been very good to us. We've got a package of six schools for Immokalee in Collier County that we're looking at. Managing that program and making that a success is a big deal. We've just gotten started on our third school for Sarasota County. We're chasing an opportunity at Tampa International Airport that if it pays off will be very good. It's actually a design-build road project and the gentleman who runs our Sarasota office had built a couple projects at Tampa International. It's something we hope we'll be able to capitalize on."

In His Own Words

Olympic Trial

John Pinholster recounts how he managed the construction of Centennial Olympic Park in downtown Atlanta.

The biggest challenge was I don't think anyone realized what we were getting into. It started out because [Olympics organizer] Billy Payne looked out of his office and saw this blighted area of Atlanta and said 'I'll be damned if I'm going to let the world come here and look at this. If nothing else, this needs to be a big green space that could be a gathering place for the Olympics.' Those words were his vision for nine blocks of downtown Atlanta.

So we got in there and demolished it. And I don't think too many people thought about it. We took the buildings down and started cleaning things up. And all of a sudden, the Olympic sponsors realized what was happening.

You know, when you've written a $40 million donation, which is what the Olympic sponsorships were at the time, you have a big ego. And you have the ability to walk in and say, 'I want to put a pavilion here.' So what started out as a $9 million contract with the state of Georgia to get rid of some old buildings and plant some grass and trees, turned into a $54 million project with 13 different owners: the State of Georgia, the Atlanta Olympic Committee, the Smithsonian, Budweiser, Swatch, Coca-Cola, AT&T, General Motors.

We put up seven different statues for Swatch that had been commissioned from all over the world with artists who didn't speak English. We had to hire translators so when the artists came they could tell us how to put these things together. Monumental statues don't come with instruction manuals.

I am an honorary Greek. I didn't know there was such a thing. After erecting a statue for the Hellenic Society of Atlanta that commemorated the history of the Olympics, I had Johnny Economy who was their president kiss me in front of a whole audience of people and say, 'From now on you are a Greek, whether you know it or not.'

The biggest challenge was the unbridled vision for what people thought the park could be, both for the Olympics and after the Olympics, and trying to balance those visions. Sometimes they were aligned and sometimes they were in conflict with each other, but we were trying to give everybody what they wanted and do it with an absolutely immovable completion date. You couldn't go ask for two more weeks.

When we went to the groundbreaking and I was standing on the balcony of the Olympic Committee's headquarters I was introduced to Billy Payne. He says: 'So you're the guy in charge of all this.' And I said 'Yes, sir.' He said, 'Come here, son. We need to talk for a minute.' And he put his arm around my shoulder and we stepped away from the crowd. And all of a sudden I felt this big hand - you know Billy played football for the University of Georgia, and I'm a Georgia Tech fan so I felt really uncomfortable - but I felt this big hand on the back of my neck and he says:

'I want to make sure we understand each other. In about two years there's going to be a little man running through these streets in a pair of shorts carrying a torch and you and all your [expletive] construction buddies will be gone. Do we understand each other? I cannot call the world and say I need another two weeks.' I said: 'Yes, sir, I understand.' He said: 'Good. As long as we understand each other we'll do great.' That's the only time I ever spoke to him. That would have been 1994 and I was a whopping 35 years old at the time.

-Jean Gruss