20 minute read
The revival continues
from CCR June 21
Construction executives discuss life in the New Normal
While nobody is officially using the term “post-pandemic life,” signs of activity in a world that was racked by the COVID-19 virus abound. Professionals particpating in the Commercial Construction & Renovation monthly podcast roundtable agree that new, more encouraging days are ahead. The monthly podcasts, hosted by CCR Publisher David Corson and Editor Michael J. Pallerino, include a diverse set of commercial construction professionals representing the vendor and end-user sides of the business. The June discussion centered on a return to normalcy, even though the industry still faces issues like labor and supply shortages. Following is an edited look at the June discussion.
ANDY BRIGGS Solara Hospitality
JASON KAPKA Tinker Federal Credit Union
BARRY SCHWARTZ FloorMax USA BARRY GREIVE Target Corp
TIM RICH Houchens
SHAWN WALCHEF Cali BBQ Media
CCR: Tell us a little about yourself.
Shawn Walchef, Cali BBQ Media: I know it raises eyebrows whenever I say I am with Cali BBQ Media, which is why I say it. We’re a single-unit barbecue restaurant that has been in business for 13 years in San Diego. We’ve done more than $25 million in sales from that single location. We failed multiple times in the beginning. We picked a terrible location, according to industry experts. We opened in 2008, which was a terrible time due to difficult low-margin business standards. But in 13 years, we’ve learned from the school of hard knocks how to use the smartphone and the internet to brand ourselves; to get our message out there; to use podcasting, YouTube videos, social media, Instagram, TikTok, you name it.
What we do is literally teach other small business owners and entrepreneurs how to embrace the power of digital storytelling. For example, I have a weekly podcast called “Digital Hospitality,” but we are in the barbecue business. We’re building the Amazon Prime of Barbecue. We’re converting our existing 5,700 square foot restaurant and sports bar into a master smokehouse. We’re going to have 10 Ole Hickory Pits. So, where people used to dine, I’m hiring architects and designers to remove seating from the restaurant. Literally, these people have been doing business for decades and they’ve said no restaurant owner or restaurant group has ever asked them to remove seating to add revenue. We’re adding ghost kitchens. We’ve already opened one in downtown San Diego that is staffed with one person. We plan to open up 10 more ghost kitchens in San Diego County that will all be serviced by our master smokehouse. The kitchens are 200 square feet and can be built out for less than $75,000. To open another full-service restaurant sports bar with 60 employees would cost $1.5 to $2 million. Now we’re adding micro-locations—the spoke-and-wheel.
Barry Schwartz, FloorMax USA: We’re actually a pretty unique company. We’re national flooring contractors, as opposed to one of those national facility companies you see at trade shows that do lighting, plumbing, etc. That’s not what we do. All we do is flooring, repairs, replacements, installations across the country. We are based out of Harrisburg, Pennsylvania. I co-founded the company
about 10 years ago. Today, we service about 3,500 stores a year, everything from new replacements to repairs, all types of flooring. We have another division called SAR Floor, which is on the manufacturing end.
Tim Rich, Houchens: We’ve been around for a little over 103 years. I’ve been here for about 15 years. My role is real estate, new construction, maintenance and a few other departments. We have about 18,000 employees who stretch from the western part of New York to the panhandle of Florida and Arkansas with grocery stores, restaurants, convenience stores and hardware stores. Plus, we own 17 other companies. My role is what we call the food group—restaurants, groceries and hardware stores. I oversee all of the stores for my respective departments—about 500 of them. We own a few shopping centers, but not many—10 to 12. The majority of our stores are leases, in which I play a tenant role.
Barry Greive, Target Corp.: I’m the building regulatory and strategy lead. When you envision Target, you think of Target stores. But there’s a lot more than that. We have approximately 1,900 stores in 50 states, but we also manage about 2,400 buildings. We own most of our properties. On average, we’re building about 30 to 40 new locations a year—most are the smaller format. They could be 8,000 to 50,000 square feet. We are starting to lease those, which are going into more large cities and college campuses. With that, we have about 2,400 buildings in our portfolio—high-rise buildings, 2 million square foot distribution centers. I think we’re up to about 45 different distribution centers across the country and 1,900 stores. I’m a former building inspector/building official. I help make sure there is consistent code application throughout all Target properties. If there are challenges during design, construction or during the life cycle of a building, I get involved, and advise or resolve as needed. I am in the properties department, so I work intimately with our project managers and owner site representatives who oversee construction projects. I also work closely with our interior designers, and architects and engineers. I get involved with our designs. We have internal architects and internal engineers who do our specifications. This year, we’re remodeling about 140 different locations. Next year, we’re looking at 200-plus. So, with the 30 new locations, we’re pretty busy. We have small projects going all the time. For example, we’re adding Ulta Beauty areas to approximately 100 of our locations this year. We also have a new partnership with Disney. So there’s always different initiatives.
Andy Briggs, Solara Hospitality:
We own. We operate. We develop. Then we eventually sell the hotels we have. I’m based in Columbia, South Carolina. My partner, Clancy Cipkala, and I have been doing this for 30-plus years together. We are at a point where we are just doing hotels within a two hour radius of Columbia.
— Shawn Walchef, Cali BBQ Media
We’ve developed more than 30 hotels, but we do them one at a time. We pick out everything. I sit there and go over all of the flooring and look at plumbing fixtures. We do things now. We don’t wait.
CCR: Tell us a little about what’s on your to-do list.
Solara Hospitality Briggs’: We’ve been building a hotel right in the middle of all this craziness. That’s what we do. We own and operate six hotels—the majority of them are Marriott branded. We also own two Residence Inns, two TownPlaces, a Courtyard and a Sleep Inn near Charleston, South Carolina. We typically go with Marriott-branded hotels. Right now in our pipeline, we’re looking at three hotels over the next five years.
Target’s Greive: We’re renovating a lot of different stores right now. As I mentioned, we’re looking at 140, with 200 on the slate for next year. The projects vary from $200,000 to over $5 million. We’re also building out 30 plus new locations, many of those in large cities. For example, we used to have nine stores in New York City. Now, we’re getting close to 25, including multiple ones on Long Island. We have some in Connecticut, too. We’re now in all 50 states. The last holdout was Vermont, and we built one there last year. and Joanna, and Chip Gaines. It’s starting to happen more and more. Walmart has been doing it, too.
Cali BBQ Media’s Walchef: I’m curious. I saw that Walmart is getting into the ghost kitchen game. I know a lot of the McDonald’s haven’t renewed their leases there. That said, I know Target has a different philosophy, especially since you’re looking at smaller footprints. It’s happening more in the San Diego area. I love what Target’s doing. Can you tell us a little bit about the grocery and the food side of the business? Where do you see that going?
Target’s Greive: If you talk about a normal Target store on eight acres in a cornfield in
Kansas, we’re seeing those food offerings for grocery expanding. But you used to have a Pizza Hut in there, and a Starbucks. The food offerings in stores is ever evolving. In the urban areas you’re seeing more grab-and-go food—things like pre-packaged sandwiches. That’s a huge opportunity for those locations, so I don’t see that slowing down. I see it expanding, actually.
— Tim Rich, Houchens
CCR: Talk a little about the relationships you’re building with Ulta and Disney.
Target’s Greive: That’s a great question. We also have partnerships with Magnolia
CCR: Back to the to-do lists: What are some of the things you have going on right now?
Houchens Rich: We’re doing about eight to 12 new Ace Hardwares each year. We design and construct about three to four Crossroads Markets each year. Think of it like a 10,000 square foot neighborhood market that also has fuel and a small QSR inside. Just recently, we opened what we call a Crossroads Express. It’s about a 6,000 square foot convenience store focused on health. So, instead of the ghost kitchen, at this location, we have what we call a deli prep room. It’s where they cut fruit onsite and cook. They’ll do rotisserie chicken. We created a window into that deli prep area, which gives it a very clean look. I like the ghost kitchen idea from a financial standpoint, but this is more where customers can see the food being prepared onsite, which is normally labeled a gas station or convenience store. It gives them a more healthy feel. As we keep watching the numbers, I’m sure I’ll be asked to find more sites like this one. And then we’ll go to market and find more and more of those.
Cali BBQ Media’s Walchef: We’re in the process of securing a long-term lease at our existing location. Hopefully, that will allow me to put those 10 smokers in our existing dining room. I already have three: one that has been delivered, two that are being built and one that is getting shipped. I’m working on our second ghost kitchen location close to San Diego State. They’re building another extension of the campus and a smaller 35,000-seat stadium where the Chargers’ stadium used to be. So they’re looking for food partners. I’m working on a potential partnership agreement, but I’m more interested in being the primary barbecue partner for the entire campus. So, if anybody wants barbecue on any part of campus, whether it’s basketball, football, faculty or students, we’d be their source.
CCR: When you look at the past year or so, what are some of the lessons you’ve learned?
FloorMax’s Schwartz: For me, I was a little concerned because I’m from the old school. I like the handshake. I have the fun job of bringing samples and taking people to lunch. So not being able to travel took some getting used to—having to learn the technological part of meeting people was concerning. But I’ve been impressed with the quality. My 12 year old usually helped me with the technology side. But I’ve been managing to have very good meetings. I thought it might be hard to relate to people, but it was not.
I was recently on a virtual trade show conversation with a person from Walgreens for 25 minutes. I almost forgot I was online. It’s becoming very natural. That’s how I feel. We’ve been pretty busy. We have some accounts that have had a rough time. Before the pandemic, I was going for chains that I would call were Amazon proof. The biggest one I have found is a chain called DaVita Dialysis Center. No drone is coming down to clean your blood. So they must have locations. Healthcare has been a good industry for us, especially with COVID. Our installers have to go through the testing and procedures. And while business is down, we have been working through the pandemic pretty well. Another industry that I found doing well is distribution centers. I have done about three Walgreens distribution centers, where we’re doing the diamond plate steel flooring. I think that will be a big growth opportunity for us in the future, as opposed to just our standard regular retail chain stores.
CCR: Tell us a little about your story. How did you get started in the industry?
Target’s Greive: I grew up in Minnesota, a town called Lake City, in the beautiful river valley of the Mississippi. I grew up fishing and hunting—a lot of outdoor activities. When I graduated high school, I didn’t know what I wanted to do, so I joined the United States Marine Corps. I spent four years there. When I got out, I started my own little renovation construction company renovating and flipping homes before it was popular. I had a realtor tell me there was a need for inspectors, so I went to school and got a certificate in building inspection technology. Believe it or not, there are classes for becoming an inspector. I had a job before I graduated—and that was just with a certificate, not a college degree. I worked for the State of Minnesota doing code administration. My work consisted of traveling around the state and evaluating building inspection departments. What it really taught me was how various jurisdictions operate, and knowing where to find information was probably the biggest lessons learned. I came to work for Target over 11 years ago. I’ve been doing the same thing since Day 1. That’s making sure there is consistent application of the codes from beginning to maintaining our properties. I help with the designs of our properties and with any construction issues like flooring. Take slip and falls—I help our legal team in that area. I am involved in all the code aspects, whether it’s fire, building, electrical, plumbing or mechanical. One of the newer ones is energy efficiency and green codes—solar panels, windmills and electric vehicle charging stations. There’s a lot of aspects that Target has challenged me. Before coming to Target, I thought I was a really knowledgeable code person. The job has really stretched my knowledge and opened up my eyes to the many different parts of the country and their different requirements.
It takes a long time to get stuff through the permitting process. We get permits for over a hundred small projects that must be completed by the end of the year and we’re struggling with that. About eight years ago, I was challenged to go back to school and get my college degree. So I did it while working full-time. I now have a business administration degree. I don’t know if it’s helped me, but maybe I’m a little more well-rounded. When I was in the Marines, I was an A-4 jet mechanic—a plane captain for the same plane that was used in the movie “Top Gun.” I was the person you see standing on a ship or on the ground giving flight direction to the planes.
Cali BBQ Media’s Walchef: I never met my father. I was raised by my Bulgarian grandfather and Japanese grandmother. I was raised in a very privileged, white immigrant privileged household in La Jolla, California, a very affluent part of San Diego. At age 13, I started washing dishes and bussing tables at our family restaurant. My grandfather was a doctor who invested in real estate after his medical career. He developed different properties in San Diego—single-family residential condominium complexes, as well as a restaurant facility and assisted-care facility. He thought it would be a good idea to take over the restaurant business even though he had no business being in the restaurant business. And he wanted his children and grandkids to work in the business. That is the old Bulgarian way. So, at age 13, instead of playing sports and going to the beach and hanging out with my friends on the weekends, I’d
drive out about 20 miles east of La Jolla to a very eclectic part of town to bus tables and wash dishes. After I got rejected by all three law schools in San Diego (I wanted to be a sports attorney or sports entertainment attorney) it turned out that the same location where I was bussing tables and washing dishes became available after we sold the property. It was a restaurant as well as an assisted-care facility. I helped my grandfather sell it. I was the trustee of his estate as he started to age, and we had an opportunity to take over an existing breakfast business and turn it into a sports entertainment destination. We got to activate a full Type 47 liquor license. Me and one of my best friends from college decided it was a great idea in 2008 at the height of the economic recession to get involved in a restaurant in a difficult location. We were laughed at for the location we picked. It was very difficult.
— Barry Greive, Target Corp.
We opened with 18 employees, did $300,000 in sales the first year and failed miserably for multiple years. So we decided to do barbecue. That became our point of differentiation. We did it because of our love of giving back to the community. We wanted to help some underprivileged youth get involved with sports. One of the ideas was to put on an amateur barbecue contest, which I knew nothing about. After hitting the internet, I found the names of three different people involved in professional barbecue. One of them, Gene Goycochea, said he’d help put on our amateur event since we were doing it for kids to raise money. It was successful. He said that if we ever wanted to open a barbecue restaurant he would teach us how. Thirteen years later and we’ve done more than $25 million in sales. But more importantly, we have a barbecue media company. Every week, I interview people who are playing the game within the game.
Every business is a media business. Every business is an e-commerce business. It’s our job to figure out the digital side and the real-life side—how do we actually implement and make it easier on our customers digitally. The pandemic has only accelerated what we’ve seen in the hospitality business before—ordering online, having a mobile-first website, understanding that technology. If you can figure that out, you will win. For us, it’s all thanks to digital.
Solara Hospitality Briggs’: I am from Asheville, North Carolina. I’m a Southern boy who didn’t grow up with anything. We were backwoods rednecks who farmed. I actually was a baseball player. I played at the University of Tennessee. I played there a year and actually did real college. By the time I was done, I had been working in hotels since I was 19. I’ve been doing this as an owner for about 12 years. I started out as a banquet waiter—schlepping plates and things like that. My partner gave me an opportunity to help operate all of our hotels. We own and operate them. I have a 38-inch screen where I can see all the front desks of our hotels. We’re grinding it out trying to make it all happen.
Houchens Rich: I currently live in the Bowling Green, Kentucky area. I grew up in rural Kentucky where my dad was a construction worker and mom ran a country restaurant she owned. I come from humble beginnings. I went to the University of Kentucky. I ended up on the five-year plan, where after graduating, I went to work for Conrail in the Northeast. I worked on the railroad for 10 years, managing bridge projects and railroad projects. I lived in
Columbus, Ohio, Philadelphia, Harrisburg, Pennsylvania and Indianapolis. Finally, I ended up back in Kentucky, where I worked for a design-build general contractor as a project manager. I spent 10 years there. One of the projects I had was at Tinker Air Force Base. The best project I had was in Lemoore, California—a Naval air station that had an F-18 fleet. I’ve built several buildings on that base. I never got to ride in one; I was impressed with the F-18s. I’ve been here at Houchens for 15 years. I enjoy what I do. I have three children and three grandchildren. Of my three kids, my oldest daughter lives in different places around the world. She currently lives in Chicago. My second, my son, is in the Air Force. He is a weapons instructor. He works at a firing range, where he instructs Air Force recruits coming through on how to shoot—what to do right, what not to do. My youngest son will be a senior at the University of Alabama. He is going for an aerospace engineering degree. He’ll be the first rocket scientist from our area.
FloorMax’s Schwartz: I grew up in the flooring business. My father would talk about being an inspector. My company started as a carpet inspector for manufacturers. We started in the residential sector. For example, if you had a problem with your carpet or someone saw something they didn’t like in the carpet, they’d contact the manufacturer. The manufacturer would contact Carpet Technical Services—the name of our company: CTS Flooring. We’d determine whether your carpet was a manufacturer defect or not. We started doing more commercial project inspections. Waldenbooks was one of our first clients. And then the light went on. My father said, “Why don’t we sell flooring?” There was more money than just doing inspections and everyone was asking for our recommendation. That’s how it started. We entered into installations because we had to be experts in determining if the problems were installation-related. When I graduated from college, I wasn’t sure what I was going to do. I graduated with a degree in business and economics. I saw my brother doing really well in the family business and living down in Brooklyn Heights, a really nice part of New York. So I told my dad I wanted to be involved. Sales was the only option. My dad was a very encouraging kind of guy. So I went out and got involved with a company with a headhunter—learning about sales. My dad ended up retiring and moving to Santa Fe, New Mexico—like a scene from the movie “City Slickers” with Billy Crystal. There was this Jewish guy from New York living in Santa Fe. He had a cowboy hat and he was riding horses. My son is not going to be in the business. He’s in the film industry, working on digital production, which is popular now. He just finished working on a Mark Wahlberg film in the Boston area. He works on projects all over. My daughter works in film as well. She was on the COVID team—a Netflix project called “Don’t Look Up” with Meryl Streep, Leo DiCaprio and Jonah Hill. Their budget was $30 million. CCR
We’ve been pretty busy. Healthcare has been a good industry for us, especially with COVID. Our installers have to go through the testing and procedures.
— Barry Schwartz, FloorMax USA
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