The changing face of New York City construction has opened the door for new players such as Hunter Roberts Construction Co. But construction executives eyeing Big Apple building growth say the market is hypercompetive and lacks management capacity.
Hunter Roberts is a new start-up whose existence was revealed earlier this month when its chairman, former Turner Construction Co. CEO Robert Fee, disclosed his new venture and the recruiting of 11 former Turner executives to join him. The timing is not accidental. Local industry executives say the city is poised for a construction renaissance, with Ground Zero rebuilding under way, plans for a new football stadium that could generate redevelopment of Manhattans West Side and zoning changes in Brooklyn and Queens that could spark significant housing construction. That does not include a local bid for the 2012 Olympics.
The new work comes at a time when major building firms such as J.A. Jones and AMEC Americas have left the market, or are about to. Executives hint that a number of major firms that are foreign-owned have not delivered financially, as hoped. "AMEC Americas has decided that we dont want to compete in the high-risk commercial market," says Roland Ferrera, business development vice president. "Its not the panacea in the U.S. that some thought," adds John Cavanaugh, former AMEC vice chairman and a 45-year building industry veteran, who now is a consultant in the city to Gilbane Building Co., Providence, R.I.
Hunter Roberts executives see the market as perfect for a new entrant with old connections. "Its all about opportunities," says James C. McKenna, the firms president and CEO. He had been head of Turners New York City unit. McKenna claims Hunter Roberts U.S.-based financial backers are "well-capitalized and substantial," but declines to reveal additional details.
But industry sources say one key player may be George Jeffrey Records Jr., a prominent Midwest banker, who is chairman and CEO of Midland Financial Co., Oklahoma City. Midland is the holding company for MidFirst bank, one of the largest privately owned banks in the U.S with assets of $9.5 billion.
Records reportedly has a long relationship with former Turner Corp. Chairman E.T. "Bud" Gravette Jr. and both are close to Fee, who left Turner in 2003. Records was a member of Turners board in the late 1990s under Gravette, and then asked Gravette to join MidFirsts board. He did not return calls.
While market hopefuls such as Hunter Roberts and Gilbane seek New York opportunities, sources say they still will face cutthroat competition and fee-squeezing by developers and other owners. "Owners want to squeeze every competitor, and there are firms that will take it to get the job," says one executive.