Pavarini's Big Plans

Contractor is Growing Under Gene McGovern's Leadership

by Scott Judy

Pavarini Construction Co. of Miami Lakes has big plans, and at the heart of them is the company's chief executive officer, Gene McGovern.

Leading the company since 2001, McGovern is a mover and shaker, and one of the construction industry's better-known characters. He's helped build the world's tallest building, the Petronas Twin Towers in Kuala Lumpur, Malaysia, as well as other projects such as Euro Disney, London's Canary Wharf and the restoration of the Statue of Liberty.

Previously he founded Lehrer McGovern in 1979; became chairman of the parent company Bovis Lend Lease in 1988; and founded GMO International in 1994.

Pavarini was one of numerous South Florida contractors with annual revenues of about $100 million when McGovern became CEO, but he saw the opportunity for bigger and better things.

"I saw it was an opportune time for another major player in the [South Florida] marketplace," he said. "When you look at the demographics of what's going on in this part of the country, and you start weighing all of those factors, it starts to smell like opportunity."

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And since McGovern's arrival, Pavarini has been taking its share of opportunities. In the last two years, the company's reported annual revenues to Southeast Construction have roughly doubled, from $100 million to about $200 million in the most recent "Top Contractors" survey. The firm has landed numerous high-profile projects, including the $150 million, 51-story Acqualina condominium in Sunny Isles Beach.

The Miami chapter of the American Institute of Architects named the company its "General Contractor of the Year" for 2003. And most recently the firm was in final contract negotiations with Broward County Schools for a program-management contract.

McGovern also has shaken things up with a new supporting cast, most notably Vice President of Operations Jim Rasche and Vice President Rick Kolb. Rasche spent more than 35 years with Turner Construction, most recently overseeing the North Terminal project at Miami International Airport, until he retired roughly two years ago with plans to become a consultant. Instead, McGovern "made me an offer I couldn't refuse," Rasche said.

Kolb is a 19-year construction veteran, with experience owning his own contracting business and with growing a regional development firm into a national one.

Both men are excited about Pavarini's potential for growth.

Rasche said that, previously, Pavarini managers "were satisfied to be an $80-million to $100-million-a-year contractor. They were satisfied to take whatever the market gave them, more or less. That's not the way we look at it now.

"When I came on board, the company had one solid client," Kolb said. " We wanted to grow that client list. We have achieved that and continue to add to that list selectively. Now our focus is to continue to feed the engine."

Hands-On

If there's a term that's often used to describe Gene McGovern, it's "hands-on." It's the way McGovern likes it. He visits jobsites frequently and can become quite "hands-on" with anyone who's not getting the job done to his satisfaction.

"From my perspective, this business is a very hands-on business," he said. "The margins we get are such that you have to watch virtually every operation. In order to do that, I believe in streamlining the management line to where the decision can be analyzed and made quickly.

"You've got to be hands-on, because once you've sold [a client] a job, our motto is just do what you say you're going to do," he continued. " We believe in moving a job. And we can't do all of that by remote control. I understand the need for computers and all of that fancy stuff today, but you've got to get down there and you've got to get it done."

McGovern strives to extend this hands-on approach thoroughly into the company culture.

"I know how certain other companies work," he said. "People get caught in the bureaucracy and it becomes just like working on an assembly line. That's good for a lot of people. But some people like a more entrepreneurial environment, a more challenging environment.

"We are not a bureaucracy; we are builders," McGovern continued. "We delegate responsibility to people. They can make decisions on the spot. That's an environment that I certainly encourage."

The close involvement of management to ongoing projects has evidently resulted in administrative improvements.

"Pavarini has always been very strong in the field," said Roy Hall, vice president of construction for Swire Properties of Miami, developer of Pavarini's current Jade Residences and Carbonell projects, both on Brickell Key. "Where Pavarini has improved is on the administrative side - their project-management control systems, their scheduling systems, their cost-control systems."

Hall also has witnessed improvements to safety and quality.

"Their safety record on the two projects they have for us now is exceptionally good," he added. "We always had good quality with Pavarini, but I'd say there's a little more focus on quality and a little greater success with quality."

Aggressive, but Steady

A majority of Pavarini's current project list is a hit parade of high-profile condos. In addition to Acqualina, there's AquAzul in Lauderdale-by-the-Sea; the Carbonell and Jade Residences; and The M Resort in Sunny Isles Beach. The firm is also building two parking garages at Florida International University and was just awarded the University of Miami's School of Music project.

This list could be deeper except, but Pavarini reportedly has declined numerous contracts.

"Gene is being very smart in his approach to new business," said Swire's Hall. "He's probably turned down more projects than he's taken because he realizes he can't continue that Pavarini reputation of service by taking on more than he has staff to handle."

To McGovern, the company needs to proceed carefully as it grows its staff.

"You have to have a nucleus of good people in order to expand," he added. "You can only expand with homegrown people. I don't believe hiring managers and then all of a sudden, they're new to the company and they can't recognize the face on the other end of the phone and they're two area codes away."

McGovern said the best projects to take on are those "where there's a synergy between ourselves, a client and a type of project where our talent can be utilized. I don't believe we can force ourselves into situations. Instinctively you'll get a feel whether you can succeed in it. If you can't, then I believe just don't get on that train. It's the wrong train; wait for the next one."

Diversification is another effort, with university, K-12, medical and transportation work representing some of the areas Pavarini is presently investigating.

While the company certainly hasn't conquered South Florida, expansion is on the horizon. Company leaders talk about expansion into Central and North Florida, as well as into other major metro areas in the Southeast, most notably Atlanta - where the firm is interested in finding an Atlanta-based minority contractor to partner with.

"Our vision today is to use the Miami area as a springboard for the rest of the state and moving up into the Georgia area, as well as looking at opportunities in the Caribbean and Latin America," McGovern said.

With operations in Manhattan as well, Kolb even mentioned the desire "to connect the dots in certain key cities up and down the Eastern Seaboard."

The company feels comfortable with meshing its hands-on approach with an expansion through the rest of the state and the Southeast.

"What gives us the level of comfort to do that is that I and Jim and some of our other senior staff members have significant amount of experience in those markets," Kolb said. "We feel we know the subs pretty well in those markets. We know the architects in those markets. So we don't have any trepidation about moving into those markets. It will be on a selective basis. We'll make sure we get the right job for the right client."

For now, at least, it appears to be so far, so good. McGovern's answer to the question of whether Pavarini's present reality matches his original vision for the company "depends on the time of the day," he said. "It depends upon which basement you're sitting in. But in the overall snapshot of time, yes."

(For an edited version of Southeast Construction's interview with Gene McGovern please click here.)