Five minutes with Ramin Cherafat, McCownGordon’s “on deck” CEO

Starting in 2018, Ramin Cherafat will take over as CEO of McCownGordon Construction. Pat McCown and Brett Gordon founded the Kansas City-based construction company in 1999, and after nearly two decades the company has grown to one of the region’s most prolific players, with projected 2017 revenue of $525 million. Cherafat started his career at McCownGordon 17 years ago when he joined the company as a project manager. MetroWireMedia caught up with Cherafat at the construction company’s downtown Kansas City office to find out more about where he plans to take the company and how he plans to get there.

MWM: What is your strategic vision for McCownGordon?

Cherafat: Our vision is to continue to focus on growth and opportunity for our associates, not only in the markets we currently serve but also additional markets in the future, so we will be looking at both vertical market expansion and geographic expansion.

McCownGordon has a long history and commitment to civic involvement in the communities we serve, and that won’t change. Moving forward we’ve got an incredible leadership team that will continue that commitment, and in many respects our community engagement can increase with the broader level of leadership within the firm. 

Additionally, we will continue to focus on growing market share in our current markets as well as regional growth and expansion. With more than a half billion in revenue this year and a backlog of close to $750 million, we have built a foundation that will enable us to grown more diversely.

MWM: When did McCownGordon begin talking about a succession plan?

Cherafat: The process started about 5-7 years ago. We started to invest heavily in the next generation of leaders.  We invested in training, development and leadership planning. We worked with executive coaches to deepen our bench to best position the company for growth. The highest profile outcome of that process was our transition to being an ESOP (Employee Stock Ownership Plan) in 2015. McCownGordon is now 100 percent employee owned, and we are very proud of that. About that same time we started focusing on the succession plan for McCownGordon’s next CEO and developing our leadership team. 

Our leadership team now is comprised of several people, and a majority of the team has been here well over 10 years. We have an incredibly strong and deep bench in terms of leadership, and we have organized the company the way we think will help sustain it for generations into the future.

MWM: Where do you see the company going both short-term and long-term?

Cherafat: McCownGordon is on an incredible trajectory; we all recognize that. We’ve been blessed with a very entrepreneurial culture, and we don’t want to see that erode as we grow. Keeping our culture strong, entrepreneurial and progressive is paramount to our future success. We have the right team in place to make sure we continue on that path.

In the short term, we want to continue to grow our market share in the greater Kansas City metro area, as well as the areas that our Manhattan, Kan. office serves. We also plan to add regional offices. We opened our first regional office about three years ago, and it’s doing very well, so growing the company regionally is definitely a goal. If I had to share a long-term vision, it would be to position McCownGordon for a national expansion.

MWM: Where do you see company fitting into the construction market?

Cherafat: I see us as leaders in the markets we serve and as a firm that is focused on trusting partnerships, being easy to work with and one that sincerely cares about doing the right thing.

We are very diverse. We have five major markets, including education, corporate office, health care, civic/philanthropic and science/technology.

We are working on some really amazing projects right now: A $200 million expansion for Garmin’s world headquarters; a $300 million public/private partnership for the University of Kansas; a $40 million logistics and distribution facility in Lenexa; and Cerner’s headquarters in Kansas City. We also have active projects in South Dakota and Oklahoma. And our Veloxity division, which focuses on Kansas City-area projects under $5 million, has annual revenue of close to $50 million. Veloxity helps us serve our ongoing repeat clients and helps us build relationships with new ones.

MWM: How did the Great Recession change the construction industry, and is the industry prepared to handle another downturn?

Cherafat: When the Great Recession hit, we saw that we had a choice: Either buckle up, tighten the purse strings and wish for the best -- or you can invest and prepare to emerge from it stronger because you know it is going to end and you want to be ready when it does.  We chose the latter option and invested heavily in our team during the recession.

We initiated our strategic plan at the beginning of the recession, and we set some lofty goals that we were able to achieve.  A year and a half into the recession, we quadrupled our training and development budget. We reinvested into our people and our team and we told ourselves, “Okay, we are going invest in our team and stick to our values and then, when the market turns around, that will catapult us forward.” And in many ways, that’s what has happened.

MWM: How is your leadership style different from your predecessors? What are you building on, and what might be a bit different?

Cherafat: I like to look into the future and work with the team on where we want the company to go, always thinking about where we need to be going. My biggest strength to the company is to work with the team on formulating a vision for the future and then work to drive and implement that vision to reality. I enjoy working with teams and empowering the next generation of leadership to help the company grow.

I am a big consensus builder. I like to have everyone around the table - perhaps to a fault. I want to make sure everybody has bought into what we are trying to do. Sometimes that takes quite a bit of persuasion, but I’m okay with that as long as we have consensus.

We have talked as a team about how leadership styles change as a company changes. Styles may change but values can’t, and that’s extremely important to our leadership team.

Being an entrepreneurial start-up company and being an entrepreneurial mature company are two different things and they require different types of leadership. The more we grow, the focus of leadership has to be more on empowering others. Being able to recognize the changing demands on leadership is why it has worked so well for McCownGordon over the last 17 years. We recognize that all of us bring different skill sets to the table. As we work to take this company to the next level, we are evaluating the skill sets of everyone at the table and making sure we have a balanced team.

MWM: What do you see ahead for McCownGordon?

Cherafat: One of our major goals moving forward is that we continue to live by the same set of values that we have always lived by since our inception. We have learned that people will hire and work with the people they trust, like and that are easy to work with. At our level of competition, it’s about working as a team with clients, designers, subcontractors and project partners. It’s relationship-based, trust-based and all about delivering value through the process.

What I tell the next generation of leaders in our company is while that our job is building structures, our business is building personal relationships. The construction part of the business is not the hardest part. The hardest part-- yet most rewarding-- is building strong and trusting relationships.

MWM: What do you see ahead for the construction industry in general?

Cherafat: The construction industry will continue to face issues with labor and management shortages. The best companies will have invested heavily into their people and team to ensure associate engagement.  In today’s market, it’s the company’s responsibility to ensure the best workplace environment and opportunities for their team. We will continue to focus on this moving forward to allow us to continue to attract and retain the best and the brightest in our industry.

MWM Panel: Eastern Jackson County poised for peak altitude

MetroWireMedia's 2017 events series took flight Tuesday at Lee's Summit Municipal Airport, as the region’s leading developers, brokers and attorneys offered a birds’ eye view of the Eastern Jackson County commercial real estate market.

Surrounded by business aircraft and aviation mechanical equipment, panelists tackled everything from incentives to infrastructure to industrial spec development while updating myriad mixed-use and multifamily projects already aloft in the metro's eastern suburbs. 

Cerner’s new South Kansas City headquarters already is driving demand for new, amenity-rich single-family and multifamily housing options in Lee’s Summit and along the I-70 corridor, creating ongoing opportunity for retailers and restaurant operators.

“Families are happy and want to be in Lee’s Summit. And if you have a community where people want to live, retailers will follow,” Block & Co., Inc. Director Bill Maas said.

The consumer shift to online shopping is forcing many retailers to re-evaluate and scale back their brick-and-mortar footprints, but it also creates an opportunity for well-situated retail centers, according to Eric Mann, director of development for RED Brokerage.

“It’s location, location, location,” Mann said. “What goes into that is demographics, visibility, access and workforce. I-70 continues to be a great access point for Lee’s Summit, drawing people from areas like Odessa, Concordia and even further away.”

All signs point to continued growth; Lee’s Summit’s population is expected to reach 100,000 by 2020 and new single-family building permits are approaching pre-recession levels. Anecdotally, NorthPoint Development’s The Residences at New Longview apartments saw the fastest lease-up of any community to date when it opened in 2016, according to NorthPoint VP of Development Mark Pomerenke.

With $1 billion in public and private investment in Lee's Summit in 2015-2016, the flight path is clear, but panelists cautioned that rising construction costs and availability of incentives could create headwinds.  

“There are a lot of opportunities in Jackson County, but many properties don’t have infrastructure in place,” said Christine Bushyhead, an attorney whose law firm Bushyhead LLC specializes in incentives and public finance. “The fact is we need infrastructure.”

Rick McDowell, Lee’s Summit EDC president and CEO, agreed on the need for more shovel-ready sites but said development of a 200,000 square foot speculative industrial building at The Grove, an 83-acre mixed-use project on south Missouri 291, should encourage future activity.

“The key to landing advanced manufacturing and warehouse and distribution tenants is having product ready and available,” McDowell said. “We see tremendous opportunity for industrial growth near The Grove and in the area near Lee’s Summit Municipal Airport on the north side of town.”

Panelists said Lee’s Summit has potential to attract Class A office users, thanks to its strong workforce and workforce development programs supported by the Missouri Innovation Campus and Summit Technology Center.

“The biggest challenge is lack of product, but Lee’s Summit has come a long way in getting ahead and having development-ready sites,” said Michael Van Buskirk, Newmark Grubb Zimmer executive managing director.

Developers of the Paragon Star soccer village and entertainment complex at I-470 and View High Drive are hoping to lure Class A office users. The first phase of the $200 million destination entertainment complex is master planned for Class A office space, as well as hotel and retail space, according to Paragon Star Principal Bill Brown.

“Paragon Star’s location is a gateway to Lee’s Summit and Eastern Jackson County, so office users and brokers should begin looking at Lee’s Summit in a different way,” Brown said.

Ron Baker, Saint Luke’s East Hospital CEO, also served on the panel. Lee’s Summit Mayor Randy Rhoads was emcee, and John Lovell III, Cobbs Allen risk consultant, moderated the discussion.

John Ohrazda, Lee’s Summit Municipal Airport Director, teed up the discussion by updating the airport’s 5,500 foot-long runway extension project, which will allow larger jets to takeoff and land and is expected to boost corporate airport traffic by up to 30 percent. The new runway is expected to open in August. 

Hunt Midwest development team breaks ground on Downtown Overland Park mixed-use project

Construction is underway at The Vue in Downtown Overland Park, a $49 million mixed-use project that will include 219 luxury apartments above 10,000 square feet of ground-floor retail, and an attached 324-space parking garage. Developer Hunt Midwest and project partners held an official groundbreaking ceremony adjacent to the 2.5 acre construction site at 80th and Marty streets on Tuesday, April 4.

“Hunt Midwest wanted to create an urban living concept that offers chic finishes and conveniences that ‘renters by choice’ desire, while giving special attention to the building’s exterior, ensuring the design reflects the charming character and architectural style of Downtown Overland Park,” Hunt Midwest President and CEO Ora Reynolds said.

The Vue is located within walking distance to nearby attractions including the Matt Ross Community Center, Overland Park Farmer’s Market, historic Rio Theatre and newly designated Downtown Arts District. The City of Overland Park hopes the project, which repurposes an underutilized site in a prime location, will draw hundreds of new residents and customers to existing downtown businesses.

“While in the early stages of construction, we’re already seeing interest in The Vue- from Millennials to Baby Boomers- that is adding to the community’s excitement in historic Downtown Overland Park,” Overland Park Mayor Carl Gerlach said.

Outdoor amenities will include a resort-style pool area with bar and grill, lounge seating and covered bike racks. Inside, The Vue’s clubhouse will include a fitness center, coffee lounge, game rooms and a shared kitchen - all connecting to an outdoor deck that overlooks downtown. The project’s design reflects the changing environment of apartment living, according to Rob Welker, Hoefer Wysocki Architecture president and partner.

“Residents want to feel connected to their neighbors and have the opportunity to interact and engage with each other. The Vue portrays experiences through multiple types of interactions, delivered in spaces that accommodate a wide range of needs,” Welker said.

The Vue blends Hunt Midwest’s experience in luxury multifamily development with its award-winning infill redevelopment expertise, according to Brenner Holland, Hunt Midwest vice president of residential development.

“A rewarding aspect of the project involved making sure its design fit in with the existing style and vibe of Downtown Overland Park while adding fresh and innovative features,” Holland said. “This is a high-visibility location, so we really wanted to create an eye-catching addition to the heart of the city that enhanced revitalization while bringing new residents into downtown.”

Reynolds thanked the City of Overland Park for its support of The Vue, which is expected to open in the second half of 2018. Hunt Midwest’s development team includes: McPherson Contractors, general construction; Hoefer Wysocki Architecture, architecture and design; Olsson & Associates, engineering services; Bank Midwest, financing; and Greystar, leasing and property management.

Runway Construction Cleared for Takeoff at Lee’s Summit Airport

A key runway at Lee’s Summit Municipal Airport will close in April as construction begins on the final phase of an airfield extension plan two decades in the making. The city first approved conceptual plans to extend the airport’s primary north/south runway in 1996, envisioning a corporate aircraft hub serving Eastern Jackson County that would lift Lee’s Summit’s economic profile. This September, the extended 5,500-foot long runway will finally open, paving the way for fresh economic development opportunity and expansion.

"This is an exciting time for Lee’s Summit with all of the economic development activity in the I-470 corridor near the airport. The runway extension will encourage additional investment as we accommodate more business and corporate aircraft," said Lee’s Summit Mayor Randy Rhoads. “This project continues to solidify Lee’s Summit’s ranking as a best place to live in the metropolitan area, state, and nation.”

Approximately 50,000 takeoffs and landings occur at the Lee’s Summit Airport each year, with aircraft ranging from single engine, single seat planes to midsize corporate jets. On average, about 137 takeoffs and landings take place each day for a total of about 50,000 operations a year.  After the new runway is completed, airport officials predict air traffic will increase by 30 percent.

“These flights are primarily business related, and they bring marketing, professional, technical, service and support personnel to the area. Those travelers help boost the local economy by spending money at nearby hotels, car rental agencies and restaurants,” Lee’s Summit Airport Manager John Ohrazda said. “The new runway is expected to have a significant positive impact on Lee’s Summit Airport takeoffs and landings.”

All flights will be halted for three weeks starting April 10 when work begins on the primary intersection of the airport’s two runways. Air traffic is expected to resume by May 1 when the airport’s second, shorter runway reopens. Ohrazda said city staff and planners worked hard to minimize disruptions for users and airport tenants throughout the construction process. 

“While the short-term runway closures will be an inconvenience to all, the long-term benefits of the airport improvements will result in Lee’s Summit Airport being a first-class general aviation airport of which the aviation community can be proud,” Ohrazda said.

The runway improvements will be completed less than a year after Lee’s Summit purchased the former Air Charter hangar building at 2525 N.E. Douglas St., from DeJarnette Enterprises Inc. for $1.5 million. Renamed Hangar 1, the city purchased the 40,000 square foot facility to help accommodate expected demand for additional business aircraft space.

Lee’s Summit Economic Development Council President and CEO Rick McDowell said his organization will leveragethe airport runway extension project and new hangar to help attract new investment and development. 

“The increase in aviation related activity creates a tremendous opportunity for enhanced business retention, expansion and attraction activity tied to the airport,” McDowell said. “The LSEDC plans to highlight the new hangar as an important community asset as we work to grow and attract businesses that rely on aviation.”

The runway improvements and hangar investment is expected to open up new development opportunities for Lee’s Summit, as well as surrounding communities in Eastern Jackson County and the entire Kansas City region, according to 2017 LSEDC Chairwoman Christine Bushyhead. 

“The ability to accommodate ‘based’ corporate aircraft, as well as offer additional room for overnight, transient aircraft, helps create a strong selling point for Lee’s Summit as an important gateway to the Kansas City region,” Bushyhead said.

Emery Sapp and Sons was the low bidder for the paving project, which began with phased-in airfield closures in the fall of 2016. Crawford Murphy and Tilly, Inc. is providing engineering services.

Lee's Summit Airport will be the setting-- and development in and around the airport will be a featured topic at MetroWireMedia's "This is our KC" breakfast and panel discussion from 7:30-9 am on April 11. Register for the event here and check out our panelists here. Sponsorship opportunities are still available. Email Lisa@MetroWireMedia.com for more information!

Staples Lease Fills NorthPoint Spec

With a 400,000 square foot building fully leased and pads for two additional buildings under construction, NorthPoint Development sees a bright future for its newest business park in Kansas City.

Staples will lease 260,000 square feet in NorthPoint’s first speculative industrial building in Northland Park, filling most of a building that already had lease agreements with Ford supplier Delaco Steel Corp. and Pathfinder Systems Inc., a local manufacturer. Now undergoing vertical construction, it is the first of three buildings comprising phase 1 of the 240-acre business park off of MO-210.

"We think the bones of the site are really good,” said Brent Miles, NorthPoint vice president of economic development. "It was a little surprising to us that it hadn't developed faster before our involvement.”

Northland Park is finding success in an area with plenty of land, an intermodal facility and access to the nearby Ford Claycomo plant. When fully developed, the industrial park will include more than 4 million square feet of business space and is expected to employ up to 2,000 workers.

Northland Park is among several large business parks under development throughout the Kansas City region, a commercial real estate trend driven largely by consumers shifting to online shopping. Retailers like Amazon and Staples are increasingly choosing the center of the country for new, sprawling warehouse and distribution centers that can efficiently deliver products to consumers.

"You see a lot of e-commerce in Kansas City because you can get to 85 percent of the U.S. population in a two-day truck drive," said Joe Accurso, senior director at Cushman & Wakefield, the leasing firm for NorthPoint. "To have shovel-ready land that's with an excellent development group that can put together up to 4 million square feet of product within the I-435 loop is pretty special.”

With successful projects at Logistics Park Kansas City in Edgerton, Kan., and Central Industrial Park in Kansas City, Kan.’s Fairfax district, NorthPoint is among the region's most successful big box industrial developers. With the expertise of 15 engineers available to help overcome problems with tenant improvement, the developer prides itself on its ability to create spaces that fill customer needs in a timely manner.

"We have a good flow of capital, which means we can always have a spec development working -- we've always got product," Miles said. "You can't lease a building anymore unless they see something coming out of the ground."