LEADERSHIP CORNER
Hawaiian Dredging president sees continued good times for construction
Interviewed by David Butts
Advertiser Staff Writer
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Age: 53
Title: President
Company: Hawaiian Dredging Construction Co.
High School: Oak Park, Ill.
College: Northwestern University
Breakthrough job: Promoted to vice president of Hawaiian Bitumuls & Paving at age 25.
Little known fact: He can be seen firing the starting gun at high-school swim meets. He officiates meets and watches his daughters compete.
Major challenge: "Competing in the construction industry. It is a very competitive industry. Always will be. The effort is focused on how you continue to meet clients' expectations and to do that in the context of other competitors making promises that you've got to compete with. We do it to them. They do it to us. It's a difficult business."
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Q. We hear the construction industry in Hawai'i is booming. Is that true?
A. In terms of the general activity level, it is a very good one.
In looking forward with many of the things that are talked about being planned, it looks like there is going to continue to be a good deal of construction activity. It's less than what it was in the 1980s and early 1990s. We have fewer people than we did at that time. It's not back to that level. People who want to work in construction and have the skills are working. It's good times rolling.
Q. In general, what do you think of the business climate in Hawai'i and the regulations you have to go through to get construction projects approved?
A. Sometimes it's not as quick as developers and others would like ... yet at the same time, from the overall public-good point of view, you have to deal with those issues. Sometimes those who are most capable of dealing with those issues are the ones who are able to move things forward and get it done. And others who don't quite understand how to do it or, in certain cases, perhaps don't go about it the right way, are the ones who wind up having the most trouble dealing with it. After a while, you learn to do what it takes to get it done and do it right.
Q. So you wouldn't agree that Hawai'i is a difficult place to do business?
A. I think it is challenging to do work, but other places are challenging to do work also. To think that it is hard here, and it's easy everywhere else, isn't the proper perspective. For those of us that are here and know how to do business here, you learn to make the adjustments. You got, perhaps, new people coming to town who don't know they need to do this or they think they can do it like they did somewhere else and they don't understand you can't do that here. That's part of the advantage we think we have because we know how to do it and others don't.
Q. You are the main contractor for the new University of Hawai'i medical school at Kaka'ako. Where does it stand now?
A. We have executed four incremental change orders (or segments of total project). We are in the process of finalizing the fifth one. It is anticipated there will be a sixth ... we hope to reach agreement on it very soon. That has been targeted for the end of September.
Q. Are you still looking at a total construction cost for the project of between $110 million and $120 million?
A. Yes.
Q: In November 2002, Kajima Corp., the largest construction company in Japan, bought Hawaiian Dredging from Dillingham Construction. How is your relationship with Kajima?
A. They have been an outstanding owner. There are two words: terrific and great. They have been supportive of those things that we think need to be done to improve the company.
Q. Some people are concerned that overseas ownership — with you and First Hawaiian Bank, for example — is going to result in less community involvement. Do you think that is the case?
A. Hawaiian Dredging has been part of this community for a long time. We take our role in the community very seriously. All of the employees of Hawaiian Dredging are Hawai'i residents.
Kajima, from their perspective, is a very significant corporate citizen in Japan and supportive of being that same way in America.
You talk generally about ownership interest from afar — The Advertiser is owned from afar. The Star-Bulletin is owned from afar. The fact that you have non-Hawaiian ownership of many of the significant companies of the state is not unusual. If you go to many communities, you get large national/international companies that have significant interest everywhere. ... You want corporate citizens to understand the need to participate in the local community. ... Ownership from afar doesn't mean that you don't do that.
Q. What went wrong with Kalia Tower? (The $95 million addition to the Hilton Hawaiian Village needed $55 million in repairs to fix a mold problem discovered 14 months after the building opened.)
A. I'm really not very familiar with what's all gone on in Kalia Tower. The Hilton Hotel people have focused on dealing with the problem themselves. The current Hawaiian Dredging, the company that I represent today which is part of Kajima Corp., was not the entity that was involved in building the Kalia Tower. Dillingham built the Kalia Tower. Kajima doesn't have anything to do with the Kalia Tower.
I have no contractual relationship with the Hilton people. I'm not in a position to speculate. ...
Q. Kajima is working on plans for an aquarium at Kaka'ako and Jeff Stone is planning an aquarium in Ko Olina. Do you think there is room for both?
A. What is contemplated at Kaka'ako, I believe, is more of a research facility to go along with the aquarium as opposed to something less of a research facility as is contemplated in Ko Olina.
I think they are intended to fill different purposes. They are looking for different markets. The locations are significantly different.
Q. What did you think of the $75 million tax break for the Ko Olina project and does the construction industry need stimulation by the state right now?
A. In terms of the current construction activity levels, it's really pretty good. I think it is still uncertain at this point what the state's concerns with their budget issues are going to be on the CIP (capital improvement) program in 2004 and the next year or two.
Some of the work that was contemplated to be bid has been delayed. What the effect of that delay is going to be on the construction industry, we don't really know. While you may see the Ko Olina aquarium as an opportunity to try to help the construction industry, some of the basic reduction in the state CIP funding that appears to be ongoing, will certainly counteract that.
