Interview With Larry Monkarsh

What are some of LM Construction’s more notable jobs around town?

Every building project is important to LM Construction. Whether they win design awards or not, we know our buildings are contributing to the economic landscape of Las Vegas – increasing jobs, commerce and access to the people and businesses of Las Vegas.

Currently the Arroyo Industrial Center, a master-planned mixed use development consisting of over 450-acres along the Las Vegas I-215 Beltway has generated a lot of attention in the business community and in the press. LM currently has $30 million of work on the Arroyo project.

And the Master Plan community with office/retail and industrial, about 440 acres, and we’ve currently developed out there close to 750,000 square feet of industrial space, and we’re currently adding another 400,000 right now.

Arlen Ness Motorcycles was a 2005 design build project that has won us many awards for design build for a pre-engineered metal building. People may not know that we built it, but the building has great recognition. In addition, LM Construction has built hundreds of miles of roads and road work into the valley as well.

What differentiates LM as a builder in Las Vegas?

There is a contractor and there is a builder. But what differentiates LM as a contractor is that we care. Throughout our organization, people genuinely care if the client is satisfied. People care about the quality of the project and the integrity of the work, from the guys in the field, to the support staff, the management and most importantly – the owner.

So I think that’s what sets us apart from most, because my staff know how passionate I am about the product, and that trickles down to my employees. With most other contractors, you can’t get to the owner. He won’t meet with you. I’m very accessible.

Quality control and our standards of practice don’t change from one department to the next; we keep things consistent throughout all of our individual departments. Our clients get the same service, quality, communications and accountability whether you are in our metal buildings division, our paint division, our tilt-up department or tenant improvement.

We want our clients experience to be the same if you were with us a year ago, or two years into the future. Consistency and accountability keep our clients coming back.

What part of the job gives you the greatest sense of accomplishment?

There are two parts. This is, of course, when you finish the job. That’s natural, you’ve taken a project from inception to completion and now it’s completed and it’s beautiful and the client is happy and everybody moves in.

But that’s not the first time you’re satisfied. The first time I get satisfied is when I get a building permit land. When I’ve taken a project, and I’ve drawn the plans, represented the client at the town board meeting hearings and the planning commission hearings, then basically it’s your baby. You’ve raised it, you’ve taken it, and now it’s like having a child that you are ready to take to school.

You’ve raised your child and done everything you need to do, and now they are on their own. I’ve given you the tools to go build your building, or go live your life. I want to have the same accomplishment within the organization. So, the accomplishment is that I’ve provided you with a job. My biggest sense of pride is that I keep working to not just feed my own family, but to feed everyone else’s family also.

How important are versatility and flexibility to LM Construction?

If you are going to survive and do right for the client, you’ve got to be able to change on a dime. With construction costs changing based on energy costs, and you’ve designed a building in one manner and all of a sudden you go to build it and the cost has gone up exponentially because of building materials, we may have to turn quickly and change the way we are going to design and build that building.

So first and foremost, you’ve got to be flexible, you’ve got to be able to move and react to market conditions in order to make sure a project doesn’t get away.

Also, we want to be able to handle anything and everything that someone throws at us. We have a hard time saying no, however, we are always going to be up-front and tell a potential client if we feel we can’t service them properly or satisfy all of their needs.

What is LM Construction’s philosophy about servicing the client?

It’s all about communication at LM Construction. We want our clients to know everything about the project. We need them in our office on a regular basis. I can’t be effective if I can’t communicate with the client directly and find out what’s going on in their head. So my philosophy is simply communication limits surprises and helps our company stay on track.

When the project is complete, we will do what is called a pre-punch. We will have three or four sets of eyes to walk that job before the client walks it to make their list.

That is industry standard, however, we do a better job because our quality control also goes to our self-performed work. So we have a lot more control of the quality of the project than most.

The next thing we do is communicate to that person complete with those lists, and provide them with a warranty booklet with all of the information they need to deal with effectively with any mechanical, electrical, ventilation or tenant improvement issues that may arise after the warranty has expired.

We encourage our clients to keep calling us when they have questions or needs. Let’s say this is the second or third year and the air conditioning goes down, we prefer the first call to come to us, because it’s very possible that we can get that work repaired without charging the client.

What are some of the common problems developers’ face when doing a large-scale commercial or industrial development in Las Vegas?

In Las Vegas, it is almost certain that developers come upon the obstacle of cost. When you’re developing in the desert, it becomes your responsibility to get water, sewer, all utilities, power, phone, etc to the new development.

So if you are building a mile away from the nearest services, it’s very costly, and I think it surprises people.

In any environment, people can run into unscrupulous contractors. They run into construction companies that are not honest, and don’t have integrity. They don’t have an open-book policy and generally are hiding something from their clients. That’s another huge obstacle, finding someone they trust.

Along with the cost and the trust factor, it all comes down to design. Who can they go to for the design? Who they can go to for the civil engineering? This is a perpetual problem because if you get a bad civil engineer, everything else becomes bad exponentially. So if you’ve got a bad civil, all of a sudden your drains are going to have a problem and your slabs are going to have a problem, then the quality is going to have a problem, and it takes it all the way through the project.

A lot of people can’t fix the intrinsic design problems once the project has begun. They (developers) get themselves dug so deep with somebody that at that point they’ve gone on the road and spent that kind of money they can never recoup.

So by bringing you in after they have spent that kind of money, I can’t fix the problem at that point in time. It will be adding more money to solve that problem, and they don’t see the value because they’ve already spent the money elsewhere.

How does LM Construction incorporates Green Building practices into their commercial developments?

LM Construction does a lot of speculative projects, where we build a lot of “shell” buildings with no tenant improvements committed at the time of construction. So what ends up happening is they fill in as the project gets completed and they begin leasing it out.

So it’s very difficult to take Green Buildings and make them spec. units or take a spec. building and make it a Green Building, because you don’t know what the uses are going to be inside, and you could take all the precautions in the world and use all the building materials in the world, and put grey-water systems in, etc. for you to only get a use that throws you out of the Green Building environment. A paint booth for an auto detailing business is a perfect example. No matter what you do, I don’t believe there is a way to qualify as a green use. So if you get a paint booth and an auto shop in your building and you’ve designed the shell to Green Building spec., odds are you are not going to get a Green Building certification because of the use inside that building.

That’s where the fallacy comes in, that you can design shell buildings to green specifications. You can, but it could be wasted money, because you get a use in there and you’re thrown right out of the classification. So you may be trying to obtain silver or gold or a platinum certification, and you get knocked down each time by the use going in to the building.

If we knew the use going into that building, yes, we can utilize Green Building environments. One of the things that we’re changing is that we are removing metal halide high bay lighting in our warehousing. Metal halide high bay lights burn a lot of energy and give off a lot of heat. So not only are you burning energy, but now you’ve got a heat gain that you have to cool. So what we’re looking at doing is using what is called a T-1 lamp, which is a fluorescent lamp that puts off the same kind of candle foot without utilizing any heat gain or any kind of energy consumption. So your energy consumption drops considerably.

In a warehouse environment it’s very hard, especially if they have encapsulated plastics to make it a Green Building. However, you can take measures to reduce your energy consumption.

So we are trying to put green measures in the buildings, but they don’t always qualify for green measures. It’s a delicate balance with the Green Building counsel. If you go to them, they will give you what you need to get to that certification, but you’re probably not going to be able to afford it. One of my biggest obstacles with the Green Building movement is that I’m up against every obstacle as it is, I’ve got oil going up, commodities going up, labor and overhead going up, and on top of it all, they are asking me to increase the construction cost by spec’ing Green Building products. I don’t know if the economics work on every project to do that with.

I think if you read the paper and you listen to people who have taken green measures, I know, for example, and competitor of mine, put in covered parking, and in part of that covered parking the roofs were solar paneled, so they doubled up as rain guards and shade guards and they were generating electricity and putting it back into the grid. They will never pay for the cost. The owner of that project won’t see the savings in his lifetime. The savings will never reimburse in his lifetime, it could be a 50 year payback. At that point in time a developer is going to make a decision, if he’s not going to hold onto the building for 50 years, there is no point in putting the additional 5% into it.

Are Green Building practices practical for commercial or industrial buildings in Las Vegas?

Everybody is touting the benefits of Green Building; they are talking about tax breaks. It may be reduced energy consumption, but the tax breaks, in my opinion, are the greatest thing to be getting back, because if you look around the country right now, cities, counties and the federal government are having budget problems.

In Nevada we have our own budget crisis. What is happening is that you give back property taxes out of the coffers, tax breaks because they’ve spec’d the Green Building that also cost them too much money. So now all of a sudden you’re pumping up the prices to build the project, and then you’re giving back tax dollars too. So the Smart Building issue, why don’t we utilize Smart Building requirements and not go looking to the government to subsidize them for us.

What is the difference between Smart Building and Green Building?

The Green Building Counsel and the Green Building program right now have very specific guidelines to meet their accreditation. If you want to become silver, gold or platinum certified with the Green Building Counsel, you have to specify what they tell you; you need to find recycled materials; the glues can’t be used on the carpet; there are a lot of issues that you have to look into.

On a Smart Building, there are no guidelines, it’s your conscience. It’s the conscience of the developer, the contractor and the architect. It’s how we can best develop this project, so my client doesn’t have a power bill for heat in the summer that escalates to $1,000 per month. How we do cost-effectively use gas operated air conditioning units in lieu of electrical. So Smart Building is choosing the lesser of two evils sometimes.

You may be stuck using energy that you don’t want to use, but you’ve chosen the lesser of the two options that were available to you. Not meaning that you’re going to eliminate as a possibility, but you’re going to go down in what’s required to get it done. So the Green Building has guidelines, certification, accreditation to get it done, and tax breaks.

Smart Building doesn’t promise you any of that. Smart Building is doing it on your own because you know its right. A Smart Building can be efficient, but an efficient building may not be smart, because sometimes efficiency can double up on your work.

If you think sometimes you’re getting efficient, you may be causing someone else more work down the line. If you’re trying to become Green and you are trying to become efficient at that same time, or being Smart and efficient, you’d probably be Smart and efficient more than Green and efficient. Definitely, Green Buildings are not always efficient.

How does LM Give Back to Las Vegas?

LM Construction has a large base of employees from across the spectrum of society. As a company we like to support our employees’ charitable concerns when possible.

As the owner, I have certain causes that are important to me. So giving back to the community, for example, is getting high school and college students within the valley interested in the construction development industry.

Right now we are not filling the ranks with younger people; the average age of a superintendent is 56 years old. So it’s very important for us as a company to give back to the community and start looking and researching how to get people interested in this field.

We also know that there are pockets of the valley that are poverty-stricken, one of which is an area in North Las Vegas that we identify with because we are doing a lot of work in the area. Food drives are big for us, and we’re doing them every Thanksgiving now, benefiting a local Elementary School. It’s a big boost to us when we know that there is someone going home at night with a meal in their backpack because of us.

It’s important because if you are involved in a community and don’t give back, then all you do is take, someday there may not be something there for you to take. So someone has to give so someone else can receive. If we don’t give, and give to the right areas, those people looking for support and services may not receive them. So it’s important that someone fill that void.

 

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