Veteran Contractor Is A City Change Agent
Complex projects that require a healthy measure of innovation and problem-solving skills are the norm for New York City’s construction management firms. But applying an entrepreneurial approach to tackle those challenges is what Ken Colao, founding principal and president of CNY Group, believes sets his firm apart.
“We encourage our entire staff, particularly our executive and site managers, to be leaders and agents of change,” says Colao, who co-founded CNY Group with his brother, Steve, in 2003. “To do that, you have to truly care about the owner’s interest, and be able to think on your feet and get right in there to help.”
Their approach certainly proved successful in 2016. CNY Group garnered nearly $250 million in revenue, a 48% increase from 2015, with the majority of work distributed evenly across commercial, hospitality and residential sectors.
Formerly a founding partner of York Hunter Cos., a city-based construction management firm, Colao has spent more than 30 years in the industry. The brothers now run a firm of 139 employees.
Current projects include The Crossing at Jamaica Station, a $400-million, mixed-use development in Queens that will include nearly 670 affordable housing units in 30- and 15-story high-rises, and the 378,000-sq-ft Marriott Edition mixed-use retail and hospitality development project in the heart of Times Square.
CNY Group also is well versed in renovation work. Projects include conversion of the historic Woolworth Building’s top 30 floors into 33 luxury, high-end residential condominiums—including a single five-level townhome within the building’s pinnacle—and repurposing the nearly 90-year old Tammany Hall adjacent to Union Square into a new home for high-end commercial clients.
The experience and individual skill sets of CNY Group leaders were instrumental in quickly gaining a foothold in the New York City construction market, but the firm’s willingness to take a risk has paid off as well.
In 2009, CNY Group was the first union builder to go independent, allowing both union and nonunion subcontractors to bid on projects, says Colao. Any initial disruption was mitigated in part by the company’s willingness to make its case to union leaders, through presentations and open discussions.
“Our message was, this was the direction the industry was going, so change was inevitable,” he contends. “By buying in to the concept, union shops would have a chance at jobs they might not get otherwise.”
Colao is heartened by the fact that other construction managers followed suit, although he feels the benefits of open subcontractor competition are readily apparent.
“We can combine the best of both worlds, choosing the labor source we feel will be best for a particular project,” he says, noting that every CNY Group project employs both union and nonunion subcontractors.
“It was a bit of a culture change for those who have been in the industry for a long time,” agrees Dennis Prude, CNY Group’s executive vice president for field operations. “We worked hard to make it work, and it’s paid off.”
Another element of CNY Group’s forward-thinking philosophy is that the firm doesn’t wait for problems to come to it.
“It begins at preconstruction,” says Steve Colao, the firm’s chief operating officer. “Our principals are involved up front, and they drive the process to project completion.”
While the need for close attention limits the number of projects CNY Group can handle at one time, “it allows continuity throughout the project and allows us to do more complex jobs,” he adds.
So too does CNY Group’s in-house technical services group, comprised of experts representing the key construction disciplines. “The group delivers a lot of firepower to research ‘what if’ situations and how to reduce costs,” Steve Colao notes.
Among the many examples of CNY Group’s approach to problem-solving is the 370,000-sq ft, 70-story tower at 1717 Broadway, which combines two Marriott-brand select-service hotels atop a retail podium. Ken Colao says the project team “took the schedule very seriously, looking for ideas from the get-go.”
Among the time- and cost-saving solutions was globally sourcing components for the slender tower curtain wall’s intricate glazing units and collaborating with subs to scale back the combined MEP packages by 20% without compromising the overall design.
Ronnie Gross, president and CEO of developer G-Holdings Corp., the project’s developer, credits CNY Group’s “well-organized and process-driven project management team” for successfully navigating the project’s myriad complexities—particularly the intricate logistics of building on a 10,000-sq-ft Midtown footprint constrained by an existing 32-story residential building on one side and a separate construction site on the other.
The firm “worked with our trade contractors, their respective unions, the neighboring construction team and all others involved to assure a unified set of work hours and procedures that allowed the work to proceed on time and on budget,” Gross adds.
That same kind of ingenuity was also necessary for building 860 Washington, a 10-story, 122,000-sq-ft commercial and retail building adjacent to the High Line in Manhattan’s Meatpacking District.
The close proximity to so many landmark buildings “obviously required a high degree of oversight and monitoring,” says Steve Colao, noting technical challenges such as a basement and slab-on-grade foundation located below the area water table.
Along with safeguarding High Line visitors, CNY Group had to craft cantilevered structures to protect a glass geodesic dome atop a neighboring three-story building owned by fashion designer Diane von Furstenberg and a water tower on another adjacent structure.
“That’s just the nature of New York City construction,” Steve Colao says.
To be sure, not every owner-contractor relationship is free of conflict.
“CNY at times is not always an easy company to work with,” observes Margaret Cotter, executive vice president of New York real estate for Reading International Inc./Liberty Theatres LLC, owner of the $50-million Tammany Hall makeover. The contractor “requires an equal commitment from ownership in order to benefit fully from the advantages their level of service offers.”
That can be a challenge in and of itself, Cotter adds, but the results are worth the effort. “CNY is thorough and deliberate in all facets of construction management,” she says.
A Family-Style Culture
Addressing problems head-on has also made CNY Group’s projects among New York’s safest, with a company experience modification rate of 0.75.
“Anything that’s out of the ordinary, we consider all possible things that could happen, and plan for them,” Prude says. “With everything required for 1717 Broadway, our only incident was one worker who twisted his ankle. That’s it.”
Steve Colao adds that CNY Group’s safety program is structured so site safety managers report directly to the firm’s risk management group, instead of to site superintendents. “We want our safety people to feel independent and empowered to speak up,” he says.
That applies to everyone else in the CNY Group organization, adds Ken Colao.
“We continually remind our staff that we’re a family-style, mutually supportive company that does things in an entrepreneurial manner,” he says, adding that employee’s individual charitable causes and interests regularly receive the full backing of the company.“When you step up and be a leader, we’ll support you,” he says.
That kind of attitude appeals to owners like Cotter.
“I describe CNY as a big-league player maintaining its small-town, non-corporate appeal,” she says. The firm “preserves the personal attention of a small, family-like operation while having the skills and depth of resources to undertake large, complex projects. That is a rare combination.”
As with others in the construction industry, cultivating the coveted next generation of construction industry professionals is on the minds of CNY Group’s leaders.
Steve Colao is an active supporter of the ACE Mentor Program, serving as both a mentor and lecturer on the theory and practice of construction management.
Likewise, Ken Colao has endowed scholarships at several local universities for students interested in construction or who demonstrate a knack for entrepreneurship. CNY Group leaders also provide direct assistance to those who showed promise as construction industry professionals. “We feel it’s better to provide an opportunity to learn rather than just send money for someone else to administer,” Ken Colao says.
The CEO was recently named the 2017 Entrepreneur of the Year in the New York real estate, hospitality and construction category by EY, a global business services firm. The award recognizes entrepreneurs who excel in areas such as innovation, financial performance and personal commitment to their businesses and communities.
Noting that the award recognizes the entire company, Colao says there is a lot more to do.
“There is a lot of obsolete space in New York that needs change for the city to remain competitive with other locations,” he says.
“Although there’s been talk of a falloff in the high-end residential market, there are still opportunities in the affordable and mid-market sectors. Health care and institutional work are growing, and there are infrastructure needs across the board.”
It remains to be seen how many of those opportunities become CNY Group projects, but Colao couldn’t be more optimistic. “These are exciting times,” he says.