General Contractor of the Year
Perini Building Company

By Scott Blair

For two years, Perini Building Company has been ranked at the top of Southwest Contractor's annual Top 140 Contractors of the Southwest. The firm has also garnered respect and accolades from the industry for on-time and under-budget project delivery. Southwest Contractor is pleased to name Perini as the 2005 General Contractor of the Year.

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Perini Building Company has constructed some of the most high-profile and innovative projects in Arizona and Nevada, including the recent expansion of The Forum Shops, various phases of Caesars Palace and the Colosseum, the Luxor, Bank One Ballpark, Paris Hotel & Casino and the Glendale Arena.

Even more impressive is the roster of projects the company has taken on for the
next several years. Westgate City Center and the Sheraton Phoenix Downtown Hotel will keep the firm's Phoenix group busy, while in Las Vegas the company will attempt an unprecedented level of construction by simultaneously working on the nation's largest private building, Project CityCenter, the $1 billion Cosmopolitan and the 50-story Trump Las Vegas.

History of Excellence

More than a hundred years ago, Bonfiglio Perini laid the foundation for the worldwide company when the Italian immigrant came to the United States to build a better life.

When Bonfiglio Perini died in 1924, his children assumed the daily operations of the firm, newly renamed B. Perini and Sons.

With the growing reputation for reliability, quality and consistency, the company's contracts grew larger and by 1932 Perini was awarded its first million-dollar contract.

The Boston Worcester Turnpike not only set world paving records but also helped boost the firm's confidence and propelled them into a new era of growth.

After being renamed Perini Corporation in 1954, the company went public in 1961.

The Arizona operation was originally founded in 1914 as Mardian Construction Company, which was acquired by the Perini Corporation in 1974. The company formally changed its name to Perini Building Company in the early 1990s and operates as a wholly-owned subsidiary of the parent company with Craig Shaw as president and Dick Rizzo as chairman. The division reported revenues exceeding $632 million in 2005.

Complex Projects

Perini has built a reputation for handling very large, highly complex construction programs with difficult time schedules. "Our most recent growth pivoted off of the success of Paris Hotel/Casino in Las Vegas, which was one of the most significant construction projects from the ground up," Rizzo said. "We were very successful in terms of meeting budget and being ahead of schedule by several months at a time when some of our competitors were struggling to get their projects done on time."

Perini's accomplishments in Las Vegas also include Thomas and Mack Sports Arena, Hard Rock Hotel and Casino, the Hyatt Regency and Ritz-Carlton Lake Las Vegas projects, Harrah's Las Vegas, Tropicana Resort Tower, The Palms and Terminal D at McCarran International Airport.

Because of their experience with many publicly-held gaming companies, Perini was selected to construct Mohegan Sun in Connecticut, which at $800 million was the largest privately-funded building project at that time, according to Rizzo. They went on to construct numerous Indian Gaming facilities in California.

"That really cemented us as the go-to contractor for Native American gaming throughout the country, and it's all based on performance and trust," Rizzo said.

The national recognition and experience made Perini uniquely qualified to take advantage of the current wave of construction back in Las Vegas. "With land becoming so expensive, everybody wants to build higher," said Rizzo. "It takes unique expertise, especially now that high rise construction is going upwards of 60 stories."

Based on this experience, Perini was recently awarded the MGM CityCenter project.

While details are not yet finalized, plans call for construction costs approaching $4 billion over four years, making it the largest privately funded project ever in the U.S., according to Rizzo. The mixed-use development will be located on approximately 66 acres on the Las Vegas Strip and is expected to break ground in mid-2006, opening the fourth quarter of 2009.

Unprecedented Backlog

The company is also simultaneously working on four other Las Vegas projects totaling nearly $2 billion of additional work: Trump International Hotel & Tower Las Vegas, Red Rock Resort Spa Casino, phase one of the condominium tower One Queensridge Place, and the recently-awarded Cosmopolitan Resort & Casino.

"Because of this unprecedented backlog, we have made a big commitment to our own infrastructure and increased the size of our training, HR, IT and accounting departments and support staff," said Ken Schacherbauer, vice president of operations at Perini. "We believe we will be ready to support the larger-sized project teams it will take over the next four years to manage these projects."

The company is also in the midst of hiring several hundred additional jobsite employees.

"We are in the construction service business," said Rizzo. "Our biggest asset is our people and the talent they bring with them, so our big concern right now is to make sure that the same Perini culture that has repeatedly brought our clients back to us is passed on to our new employees. We now have a full-time training director and started 'Perini Boot Camp', where we immerse new hires in our culture when they first arrive."

This training has proved valuable given most of the firm's projects are negotiated and awarded based upon relationships.

"Perini is very well-orchestrated in having appropriate representation in different areas of expertise, so that through meetings and planning you could get an answer immediately as opposed to having to wait or go through channels," said Maureen Crampton, director of marketing with Simon Property Group for The Forum Shops at Caesars. Perini completed the most recent expansion of the high-end mall while keeping the mall accessible 365 days a year. "There are always construction challenges and headaches on any project, but depending on who you are working with it, they either make them palatable or a disaster. Since their team was so positive and proactive, we didn't run into any snags."

"We have a long history with Perini, and they've earned both our trust and respect because of the job they do for their clients," said Dave Suder, president of KHS&S Contractors, a specialty interior contractor who worked with Perini on The Forum Shops. "We know we can count on them to do the job right, and they know they can count on us to perform our best work. It has made for a great working relationship."

Going Into Labor

Perini is well under construction on what will be the tallest structure in Las Vegas, the 64-story Trump International Hotel & Tower Las Vegas.

"The vertical transportation is going to be key in keeping the project on schedule," Schacherbauer said of the 620-ft. tall project. "We've allocated in our schedule a second shift and some third shifts to do nothing more than stock materials since it takes longer to get up to the upper floors on such a tall structure."

Management regularly holds operations meetings to look at coordination between their various projects, including start-up activities, major concrete pours, structural steel deliveries, crew sizes, off-site road closures and equipment start-up and commissioning procedures so each item isn't happening at the same time, according to Schacherbauer. This coordination includes hiring labor and subcontractors as well.

"It is our ability to manage and integrate all of these project schedules into one master schedule to make sure we control as much of the labor in town as we can necessary to pursue our needs, and we think we have a pretty good shot of doing that," Rizzo said.

"We did an analysis about a year ago for CityCenter which said that at peak we'd be employing around 7,000 people. With only 27,000 labor union folks available in Las Vegas, this means we are virtually utilizing almost one third of the entire available workforce just on this one project." Rizzo said that Perini has given the unions project schedules showing when the highest need would be, and has encouraged them to start training and getting the word out to even out-of-state labor pools, if necessary.

Another issue is finding enough qualified subcontractors to perform the work other than concrete, which Perini normally self-performs. "We are working very close with our subcontractors, understanding and helping to manage their material and equipment suppliers, their labor availability, cash flow and other resources needed to coordinate the project," Schacherbauer said. "We really go a little bit deeper and make sure the same sub isn't committing to everything on all of our jobs at the same time."

"Perini is always on time, and always makes their schedules, which is their trademark," said Tim Puetz, president of Reliable Steel, Inc., a Las Vegas-based miscellaneous steel subcontractor who has worked on numerous Perini projects including Luxor and currently Red Rock Casino. "Even when the owner makes hundreds of change orders, they still maintain their schedule."

Puetz added that many times the architectural drawings are not complete for large-scale casino/hotel projects because of the need for casinos to open and start their cash flow as early as possible. Perini works under a guaranteed maximum price on many of these projects and has never exceeded that price, according to Rizzo.

"There are so many people that look at us from the outside and ask 'are you crazy?'.

They would never think to guarantee these extraordinary schedules with these complex buildings," Rizzo said. "The only answer I can give is: if you don't set a goal, you'll never get there. We always seem to raise our goals even as we continue to make them. There is a huge commitment on behalf of our professional staff here to get that done and they work their tails off to do it."

Community Spirit

Perini regularly makes substantial financial and professional commitments to several charities, including Shade Tree Emergency Shelter, Teach for America, Women's Development Center and Girl Scouts of Frontier Council. This includes an annual golf tournament and donation of construction services at cost, with in-kind donations by many of the firm's regular host of subcontractors.

"Since I've been with the company, the corporate mandate has been to give back to the community in which we survive and prosper," Rizzo said. "We've committed to do that in various ways, mostly concentrating on women's and children's issues in both Phoenix and Las Vegas."

Valley of the Sun

Even though large-scale projects of the type Perini specializes in are less common in Phoenix, two high profile projects are currently in the works. The mixed-use Westgate City Center is underway near the Glendale Arena and the firm was recently announced as the general contractor for the Sheraton Phoenix Downtown Hotel. The 31-story, $350 million hotel offers 1,000 rooms and meeting space, and will play a key role in the success of the renovated Phoenix Convention Center next door when it opens in the fall of 2008.

Perini's contract at Westgate City Center encompasses nine buildings with 450,000 sq. ft. of retail and entertainment space, plus offices and interactive exterior spaces featuring fountains and massive 'Times Square'-style signage.

The project is being developed by The Ellman Companies, a Phoenix-based developer which also chose Perini to build the Glendale Arena several years ago.

"They did a great job for us on the arena, and we couldn't be more pleased to have them on board for this phase," said Sam Toporek, vice president of construction and development for The Ellman Companies. "We'd work with them again in a heartbeat.

Their numbers reflect a detailed understanding of what it's going to take to get the job done within the time frame we need it. If they say they are going to do something on Tuesday, it is done on Tuesday."

"Perini's success is due to a team of people that we've had together for 20-plus years who all share the same commitment to quality of work, fair treatment of subcontractors and honest relationships with owners," Schacherbauer said.

 
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