KAST Construction Company
August 14, 2019
Mike Neal is the President and CEO of KAST Construction Company. Mike became CEO of KAST in 2011 shortly after the recession rocked the economy in Florida. KAST Construction Company consistently ranks on ENR's Top 400 Contractors List.
Mike is a graduate of the University of Florida and has spent his entire career in the construction industry. In our conversation today, we talk about how to keep cool in the Florida heat, the importance of company culture, road biking in the desert, reasons to come out of retirement, and the best rods for fly fishing.
Mike: Yeah. What kinda bike you got?
Eric: Aw, geez. What kinda bike he's got? He's got, like, four bikes.
Matt: There's this kind of newer style of racing called gravel races in here in the Midwest.
Mike: Yeah, I saw something about that.
Matt: We don't have great roads and we don't have mountains, but what we have is farm roads. And you know with GPS units these days they can just kind of release a file, say, "Hey, the mass start is going to be at this time." And then there are these long races through country roads, pretty much.
Matt: You know, I have a gravel bike that has, like, pretty much a road geometry but big clearances for bigger tires.
Mike: Okay. I gotcha.
Matt: Where we are, we can get pretty good elevation changes out in those country roads. So, it's kind of, like, these cool long-form hilly races that we do around here, so.
Mike: Oh, Nice. Nice.
Eric: Yeah, it's like a cross between a road bike race and a mountain bike race.
Matt: Yeah. Yeah. It's kind of right in between, so.
Mike: You guys ride together?
Eric: I don't ride as much. We have different forms of fitness in the morning. I tend to go to the gym. Matt tends to ride his bike into work.
Matt: I mean, he could beat me up if he could catch me. That's probably...
Mike: That's right. So, you just gotta be a little bit faster than the guy that has the ability to take you on at a good judo match.
Eric: That's right. Exactly. Tell us a little bit about your father, he was in the construction industry and he was a journeyman electrician?
Mike: I grew up in what used to be a very small town called Hollywood, Florida. Hollywood is a little city that's kind of wedged between Fort Lauderdale and Dade County. Great little town. Lived in a blue-collar neighborhood. You know, great families. You know, we walked to school and it was just a great sense of community. But my father, was a journeyman electrician, the hardest working guy I ever met in my life. And we lived in a very traditional family environment where, you know, my mom stayed at home, raised a family, prepared the meals, took care of the kids. And my dad was a warrior. He just went out every day and did his job. And he was a great guy.
Matt: Where did you fall in your siblings order?
Mike: I'm the oldest of three. I have a brother, Tim, who's two years younger than me and a little sister, four years younger than me. Her name is Pamela.
Eric: Now, growing up did you ever pick up summer jobs doing construction-related stuff or did you have different types of summer jobs?
Mike: So, growing up my dad made it pretty clear to me that I was gonna have to, if I wanted any pocket money, I was going to have to learn how to earn it. So, I was the guy who had mowed the most lawns in our neighborhood, kind of a yard guy, you know, for $5 I would mow a half-acre lot edge it, you know, sweep it up, pull weeds. So, I did a lot of that. Had a paper route. And this was all before I was old enough to legally work. As you might expect that my father's philosophy didn't change as I got into high school. So, through his affiliation, he was a union electrician, so he was allowed to, I think once I turned 16 or 17, bring me on the job sites during the summer to work with him.
You know, I was really pretty much just a hired hand to do all the grunt work. He would hand me a bundle of half-inch pipe, 2 or 300 pieces of conduit in there. And he'd say, "I need you to bend this pipe in a 90-degree angle and we're going to do it in the same place every time," you know, lifting heavy electrical equipment up onto a roof. I was a slave, man. It was... You know, but I think that was his quiet way of trying to build a work ethic in me to understand what hard work meant, you know, what you do to earn a good day's wage and you know, nothing in life comes easy.
Matt: .Yeah, sure. Do you think those early jobs were kind of what drew you to the construction industry later in life?
Mike: I got to tell you, I wasn't thinking about what I wanted to do when I was out there working with hi., I knew I was making good money. And I think that there's an outside chance that building things and being part of, you know, something you can tangibly look at when it was complete might've stuck in my brain.But I wasn't thinking about it in that moment.
Eric: How do you stay cool in the Florida summers working construction jobs?
Mike: I don't think you do. You know, I think about things from time to time. You know, I go back and say, you know, "How did I get there? How did I get to where I am? And what do I appreciate about my life and the people who are in my life?" But actually being a worker, you know, working with your hands out in the hot sun in the summer in Florida, it's a bear of a job. It's hard. You know, you're dehydrated. By the time i'ts noon, lunch break, you're going, "Man, I gotta get out here." I mean, it's nothing but hard work. And these guys do this for 20, 30, 40 years straight. That's one of the things that's happening in our industry. Not too many people want to do that anymore.
Eric: Yeah. The physical comfort of jobs today versus jobs of yesterday are just kind of different.
Mike: They are. It is different. And you know, with a lot of work is getting done, you know, behind the computer. A lot of work is, you know, a lot of jobs will become automated. The reality is, there is such a huge demand for skilled labor and unskilled labor in our industry and I'm sure others. We've got to work somehow unconvincing young people that, you know, if you don't go to college you could still make a six-figure salary in our industry by being a skilled laborer, electrician, a heavy equipment operator. I mean, there's a way to make a great living.
Matt: Yeah. Tips and tricks for staying cool outside? Like, what types of things did you do? Do you remember, like covering up or sunscreen or taking breaks to put cold water on your back or anything like that? Do you guys do that stuff or no?
Matt: Are there any special Floridian tricks that we don't know in Midwest?
Eric: Yeah. I guess, yeah, I don't know any of these things.
Mike: Well, listen, I'm ashamed to admit that, I don't think I've ever put sunscreen on. I grew up surfing and diving and being out in the sun pretty much all my life. What I would say if I had to make up an answer to that, I think it's just sort of pacing yourself and staying hydrated. You know, your body tells you when it's time to maybe go find a shady spot in a cool breeze and take a 10-minute break.
Matt: I mean, if you live in Florida a good tan is an important thing to have, right? So, you can't use sunscreen.
Mike: Yeah, well, I don't know. I'm not too terribly worried about my tan, but I have naturally deep olive Italian skin. So I'm not... That's never been my problem.
Matt: All right. So you grew up being a beach kid. You would go to the beach and swimming and hanging out and surfing. Tell us some of those experiences and how they were formative.
Mike: Well, I mean, that was the way most of the people that I grew up with and my family recreated. You know, my dad got off work Friday afternoon and he loved going down to the beach and spending the day with his family and that's where he... Yeah, we kinda got raised in the water. You know, that's where we learned how to swim. And then my dad showed us a little bit about, you know, "Okay, there's a few reefs out here," and we'd go out and diving and seeing all the coral reefs together. And then we got a little older, he started taking us fishing. And when we weren't at home or at school or at work, you know, we lived our lives in the water.
Matt: Did your dad introduce you to fishing, salt fly fishing or was he into a different style?
Mike: No. I didn't really get interested in fly fishing until I was probably in my mid to late 30s. But my father, you know, he loved being on the water. And I remember when we were old enough, he would take me and my brother down to the Keys. And we didn't have our own boat, but he rented a boat down there and we would bottom fish for snapper and grouper and it was just awesome. I couldn't wait for summertime to go down to the Keys and if you all have never been to the Florida Keys, it's truly a paradise. I mean, it's completely different from the vibe in Miami or Palm Beach County. It's like being in the islands and it's just one of the most remarkable ecosystems in the world.
Matt: So, you grew up going down there and doing fishing?
Mike: Yeah. Yeah. I mean, alternatively, you know, you ask how we got out of the heat. Sometimes my father said, "You know what? We're blowing off the Keys this year. We're going up to North Carolina mountains and it might be a little bit cooler up there."
Eric: There you go. Okay. So, it sounds like you spent a ton of time with your dad. So you guys as a family spent a lot of time together. You got a chance to work with him. What are some of the most important lessons that you've learned from your dad that came out of your childhood?
Mike: My father, you know, he was a depression baby. You know, his parents grew up super hard and so he wasn't a great philosopher. I mean, he was a guy who instead of talking about things, he did them. So, I think he really taught us the value, you know, saving our money. He built our house. And I remember, I was very young when he did that. But he was a guy that his hands and his ability to produce things with his hands, if he did ever philosophize with me, it was really about, working hard, getting up early in the morning, you know, "Give it your best. Be the first guy in, the last guy off the job." That's how he made his living. You know, neither of my parents went to college. So I don't think either of my parents were really had the skill set to really understand how critical it was to get a college education and shaping our lives beyond the time we were in high school. But they certainly gave us a great foundation, a great set of tools to build our lives on.
Eric: Yeah. So, you grew up at the beach mostly in high school, but you're also a high school swimmer and a good one at that. Can you share with us how you became good at swimming? And, yeah, what was your best event?
Mike: Okay. So, we get to talk about my mom a little bit, too. So, my mom was a warden who took care of us during the day while my dad was off at work. So, I don't know how she precipitated this, but I just remember one day being dropped off at a pool with my little brother. And we were at the pool pretty much all day and getting, you know, started off with swim lessons, and then as we got older then that turned into getting on a non-school affiliated swim team where those practices became, went from one practice a day to two. And then there were the weekend swim meets. And you know, I was a skinny little, 135-pound kid that, you know, I was pretty good in the water. I was surfing before I swam. So, I was pretty strong in that, the swimming tight muscles. I can't say that I loved it, but it became my routine. As I got into high school, it became the one thing athletically that I was good at. I was not anywhere near large enough to play any contact sport. I would've probably been a cripple.
I probably discovered I was a little bit competitive. I had a swim coach in high school who was also one of my teachers and he was pretty inspirational. You know, he was the probably the one guy in my high school life that somehow was able to inspire me and maybe make me feel good about the athletic ability I had in the pool. And you know, he started working with me on specific events. So, I was not a distance guy, I was a sprinter. So, my events were the 50 meter freestyle, the 100 meter freestyle, and the 100 meter backstroke Just for fun, he would in some swim meets put me in the 200 meter individual medley, that's all four strokes, which I hated that because I couldn't, I sucked at breaststroke and I was no good at butterfly. So, get me on the starting block and make me do four laps in the pool and I'm going to give you 1000% all day long.
Matt: Do you remember specifically how he was inspirational and how he was encouraging? Do you have a story around that?
Mike: I do remember the guy's name. His name was George Steves. There's a way about a human being when you encounter them that they're just such a good guy. And he immediately earned my trust. And he would take time to talk to me about not just swimming, I mean, he was one of these guys that would talk to you about a lot of things. He rewarded me like, if... He was was one of these guys, "Hey listen, man, you showed to practice two days. I know you like to surf. You can skip practice on Friday go surfing with your buddies." I said, "Dude, I'm all in." You know, and everybody liked him.
There was not a single member of our swim team who just didn't think he was a great guy. And great leaders have the uncanny ability to bring out the best in people, right? Mr. Steves just made us feel good about ourselves. He certainly, if he saw a slacking or, you know, he knew what everybody's splits ought to be when you're in the pool. And if he sees you're not giving your best he's gonna say something to you about it, but he's not going to do it in a way that's demoralizing. So, I'm personally, that's the way I'm wired. I'm a chemistry guy. I'm a person who, you know, I try to bring out the best in people through those same techniques that he used. I'm not a guy who is going to sit there and tell you how bad you're doing and beat my fist and scream and yell. Those are archaic techniques for leading people.
Matt: Yeah. Okay. So, after high school, you ended up going to the University of Florida and you studied building and construction there. Is that correct?
Mike: Yeah, I did.
Eric: Do you think your education at Florida in the building construction program prepared you well for the construction industry?
Mike: I'm a guy who will readily admit that the education I got kind of determine the career path that I would follow. What I've learned being in the construction industry, most of what I've learned is, it comes from being in this industry. And I don't think that I've used a lot of what I learned in college. I think college generally teaches people how to think. And how you do in colleges is a result of how hard you work and how disciplined you are. But I've learned more by studying other great leaders and great people that have influenced my life and relied less so on what I learned in college.
Matt: If you were to go back and be like a visiting professor in the same program and you could just instill wisdom that you've learned on the job, what would the course name be and what would you teach them?
Mike: I think the course name would be that construction is a team sport. The construction industry is a service industry and therefore so much of what you do to achieve success is through interpersonal skills less so technical skills. Listen, the technical skills are clearly important. It's easy to teach people the technical side of the business. But the people who get elevated to the C-suite, if you're going to be successful, the people side of this business are way more important, in my view, than the technical skills.
Eric: I've always thought that the concept of a GPA is like a funny one. You know, like one number that represents your academic ability, right?
Matt: I've always thought like, it'd be funny if you had like a social GPA. Like, your ability to interact with people. How good are you at it?
Mike: It's everything. I mean, a 100% if I had to pick a new employee based on how technically adept they are or how socially adept they are I'm going for the guy who has good people skills.
Matt: Yeah. You see it time and time again and it's fascinating that our entire education system is built around the other one.
Mike: It is. You know, it's a numbers-based world. And listen, our business has numbers in it, a lot of numbers. But again, if you go back and say, let's look at the fortune 500 companies that are in this service sector, pick Nordstrom, pick Starbucks, pick Disney and there are many others. If you do a deep dive into those organizations and what their DNA is made up of, their ability to be at the pinnacle of the service provider level is all about culture. It's all about creating an organization where people want to come to work and they... You know, when you have happy employees the person on the other side of the counter is going to get a great experience. And that's sort of the... If I have to be the chief cast construction cheerleader, that's the sermon that I give every Monday morning and every Friday afternoon to my people.
Eric: Did you have a group of friends that you felt, like, that you had, like, education in, like, social group dynamics or is these things, lessons you learned, like, on the job later on?
Mike: I have to give you sort of two different answers. So, yes, I do have... It's funny and I think it's quite rare actually, probably ten life-long friends that I met when I was growing up in my little neighborhood of Hollywood, Florida. Many of us go back to elementary school together. Most of us went to high school and college together. We're in the same fraternity together. You know, we all were in different industries. One guy is a managing partner at Deloitte. Another is a big-time attorney. Another one is a dentist and very successful entrepreneurial people and they are still today, absolutely, bar none, my brothers, my best friends. I was probably the shyest person. These are some massive large personalities. I think I'm actually an introvert and I'm usually the guy that's probably the least, you know, the quiet guy in the group most of the time unless I have a couple of rums.
The idea of culture and the critical nature of interpersonal skills didn't really kind of dawn on me as a concept until I worked for my first employer, a company named McDevitt & Street who's been bought and sold several times. But the main guy that owned the company was a guy named Bob Street. And this was back in the 1980s when you didn't hear a lot of discussion about culture and people business. But Bob was a brilliant guy who figured out how to build a construction company around the concept of having a great culture. And this guy was a marathon runner. So, he'd take a group of us out. At lunchtime every day, we'd go run six miles together, come back... And he had this like 20,000 square foot employee cafeteria where every employee in the company ate free every day. And we're in there all sweaty and just talking about, you know, "How'd you run? How'd you feel today?" To me it's sort of the same thing you see at companies like Google and Amazon. You know, it was the first environment that I've ever had where I go, "Man, what is going on here? Why is this? Why do I love my job?" And you know, I think back on it, it was because of all the things he did and the culture he created.
Matt: Yeah. It's incredible how important that is and how that can kind of make or break a company. You know, you can have a great product or service, but if you have a terrible culture, you're not going to be successful.
Mike: Yeah. Yeah. That old saying, you know, you hire for attitude and teach the skills, it works about a 100% of the time.
Matt: Yeah. Yeah. So, okay, so you referenced your first job at school. Do you have any good work stories from that job? What type of work were you guys doing? And then what did you like, dislike about it?
Mike: I joined that firm in, I want to say in 1982. I was at the very, very beginning of my career. My position was a, it was an entry-level position called a project engineer. So, basically you were hired as a almost a functional equivalent of an intern and that's where you start learning the business from the ground up. So, my first assignment was on a very small shopping center in Atlanta, Georgia. It had a crusty old superintendent on the job. And I remember his name. His name was Jim Ussery. He was a country boy and I think he called me "College Boy." And I walked on the job site the first day. He goes, "Let me see your hands." So, I showed him my hands. He goes, "Yeah, those are perfect fit." I go, "What do you got? You got some gloves?" He goes, "No. See that wheelbarrow over there, grab it." And it was filled up with dirt. And he goes, "I need you to go take that pile of dirt and put it out in the middle of that slab out there.''' He goes, "Is that okay, College Boy?" And I go, "Well, not what I thought I was going to be doing but..." So that was my grotesque introduction of leaving college with a bachelor's degree in construction.
Over time, we were a company that was building all over the country at that time. And I was assigned to a gentleman named Tom StocksDale, who I'm still friends with today. And he was my boss for about 15 years. And so I work an account for a big developer called Trammell Crow building Wyndham hotels pretty much all over the country. So, we did our first hotel in downtown Atlanta. I had just gotten married in 1982. So, I was there for about two years to finish that hotel. Then we moved to Austin, Texas, Houston, Texas, Miami, Florida, Palm Springs, California, Indian Wells, California, San Diego. So, that traveling gig I did was where I kind of learned that... You know, and I grew in my position from project engineer to assistant project manager to project manager to senior PM. And by the time you're, you know... These jobs are 50, 60, 8,000 million dollar, big, big hotel resorts. If you really look at it, every project is like running your own company. You know, when you're the senior PM on a big project like that, you got P&L responsibility, you have safety responsibility. Everything I do today as CEO of this company, I mean, I was doing that on a micro basis on multiple projects.
So, I feel like I really, really learned the essence of the construction industry, you know, during that 10, 15 year period where I was actually onsite learning how to build. You also learned a lot about people, right? Because you're dealing with hundreds of subcontractors. You're talking to CEOs of your customers, you're talking to architects, engineers. That's where I really fell in love with the construction industry because, you know, I got to build projects, I got to build teams, I got to build... I felt like I was part of building a great company. So, it was a tremendous learning experience for me.
Eric: Who do you think in that first experience was your greatest mentor at that company?
Mike: Well, I would tell you, kinda the macro level was Bob Street, the owner of the company. And I didn't really interface with him that much, but you know, I got acquainted with their culture when I was first hired and that culture never got diluted the entire time Bob was alive. Maybe once a year he would get on his plane and fly wherever he had to go say, "Hi," to the people on the job sites. You know, he'd walk in the office, meet the top guy, the superintendent, the PM, and then he would walk down to my office. And like, you know, I'd get a little nervous and, you know, he'd sit with me and we'd have a great conversation for about 10 minutes. And then he would leave. And about a week later, I'd get a personal handwritten note from Bob that said, "Hey, Mike, you know, it was so good seeing you. You really need to know you're making a huge difference in our company." And over the years I actually saved those notes, because I never wanted to forget how good that made me feel.
And today, you know, I use personal notes when somebody has a baby, one of our employees does something wonderful. I'll send a note to somebody's wife and say, "You have no idea what a stud your husband is," you know, "Here's a little gift. Take your husband out to dinner and tell him how proud you are of him." The personal nature of recognition was one aspect that I think Bob taught everybody in the company, not just me. Then my direct boss, Tom, that I had mentioned earlier, Tom was a tough dude. I first met Tom and I first, you know, I got handed off to him, you know, he looked at me with a kind of a scowl on his face. He goes, "I expect you to be the first guy here in the morning. I want the coffee on when I get here. You better not leave before me." So, 15 years working for this guy, I never felt that I could do enough to please... Like, I'm a pleaser, right? I mean like I'm the kind of person I want somebody to say, "Hey, man, you're doing a great job. I appreciate you." And I was so hungry for that.
It wasn't until I had my first kid and I'd probably been working for Tom for about 10 years. I invited him over to my house and we were having some barbecue out in the backyard. He was holding my daughter and he goes, you know, he looked at me, he said, "Hey Mike, I want you to know how proud I am of you." And he goes, "You're doing great things." And what he did for me was show me the right way. You know, his standards were so high and so exacting and the pressure of fulfilling his standards absolutely made me a better builder. He focused way more on the technical side of things and the risk management. And you know, "If you're going to be in the construction business, you better do it like this." And so he shaped that part of me. I think technically. I always respected him, but I didn't like him too much. But now I think, I look back and I go, he probably gave me one of the greatest gifts ever, and that was just by being demanding.
Matt: I want to go back a little bit and talk about Bob Street. So, do you think people like Bob Street who are great leaders, interpersonal, need people like Tom around them?
Mike: Well, yeah. I mean I... Listen, we all have to have a different clubs in our bags. I mean, I'm generally considered a pretty a nice guy. But if I need to put the leather to somebody and let them know that they are way off the reservation, a leader has to have the courage to do that. I got to a point one time where I was looking at everybody's annual reviews. You know, you've got 300 or 400 people that are getting reviewed every year. And I spot check them and I go, "How come everybody's getting like, you know, five on a scale of 1 to 5 on doing... There's nobody here has any need for improvement?" So, I sat down with all my leaders and I say, "Guys, do you think you're doing people a favor by being a coward and not telling them what they need to do to improve? Are you making a difference in our company by just telling everybody they're great? If you don't give people feedback, and it doesn't have to be in an ugly or mean way, but if you don't have the courage to stand up and tell somebody, 'Hey, there are two or three things I'd like you to work on next year,' you're being a lousy leader." So, I think Tom was kinda comfortable doing that.
Eric: Yeah the other question about Bob Street, how did he pick who got to go running with him? Was it an open invite and he was, like, "Hey, I'm Bob. I'm fast. I'd like you to come run with me?"
Mike: I don't know the answer to that question, but I know he was... You know, this was the corporate headquarters in Charlotte, okay. So, that's where Bob's office was. We had 20 or 30 offices around the country. But I got to spend a few years in Charlotte and that's when I got my greatest exposure to, I would say, the heart of the company and where all this greatness emanated from. So, it was, you know, a lot of the people, the CFO was in that group. There were a lot of the division managers. And listen, Bob didn't say, "Hey,"... It wasn't, like you, you, you, and you. It's like, "Hey, I'm going out and running today. It's 87 degrees and we're going to go. If you want to go, fine, if not, stay here and have a hamburger."
Eric: And my follow up question is you're a decent aerobic athlete, right? You're a good swimmer?
Mike: I was.
Eric: Okay. Did you have to take it easy on him or was he fitter than you were or what was the dynamic on the runs [inaudible 00:29:31]?
Mike: Listen, by far I was probably on the C team, but Bob was a... I would, you know... Anybody who could run multiple marathons, you know, New York Marathon, Boston Marine Corps... He was an elite athlete and it just turned out that most of the... It's interesting. I think back now. Most of the C-suite people, they were very thin. About 100% of them were very good athletes, very good runners. Some of them were cyclists. Bob was into it. And I think a lot of people just said, "Hey, man, this is, not only is a smart to be fit, but you know, I want to be like Bob."
Matt: Okay. So, he was the one pushing the pace. It was no, no you didn't have to dance around the dynamic of like not going too hard. Not...
Matt: Don't be the boss.
Eric: Yeah. Don't beat the boss.
Mike: Again, like I said, I would say I wasn't able to see people's faces from where I was. I was looking at their backsides. But I'd be, you know, right in there with the pack.
Eric: All right. So, you grew up on the beach and then you had these two-year assignments in the middle of the desert. What did you do with yourself there?
Mike: Actually, the desert was where I learned how to cycle. One of the guys that worked for me, a young, probably an entry-level guy from Dallas, you know, showed up to the job site with this really cool road bike. And I go, "Man, that's nice." He goes, "Yeah, yeah, it's awesome. You ought to got to get one." And I go, "How much do they cost?" He goes, "You can afford it." So, I bought my first road bike and it was in Palm Springs, California. That was a great place, too. The traffic was pretty low. We had some great hills. So, I did that. And I think that's where I did my first-century ride was out in the desert. The most memorable ride was there was a race, you guys probably heard it is from Rosarito to Ensenada, Mexico. And that was a really awesome experience. It's up a mountain and then down a mountain.
Matt: Oh, wow.
Eric: That's cool.
Mike: At the bottom of the mountain there are about a 100 ten-foot tall Corona bottles. So, yeah, we did that and we'd go up to Ottawa. There was a tram that went up to the top of the mountain there in the desert. Played a lot of golf while I was there.
Eric: Okay. And then that big kind of long sloping hill up toward Joshua Tree from Palm Springs, would you cycle up that thing?
Mike: Joshua Tree was probably a little bit far. But I'd get up and do, you know, and I was like, I was a morning guy. I got up early in the morning and got out there and just did my 15, 20 miles. But there was the tram hill that went up to the tramway road and that was a, probably the most obscene incline that I tried to climb, you know, kept on going a little further up each day. And then coming down it was white knuckle.
Matt: Yeah. Oh, that's fine. Okay. So, you found a different sort of outdoor activity to spend your time, your leisure time doing?
Mike: Yeah. Yeah. And so my kids were young, so I had a lot of daddy duty back in those days as well.
Eric: Yeah. We know what that's like. All right. So at Devitt & Street. And then they were purchased, is that right?
Mike: Yes. So, Bob... It was, I want to say in 19, it might have been 1990, '91 or thereabouts. He ran the Marine Corp Marathon, I think that was in October. And shortly, like, within a month after that, he was diagnosed with Lou Gehrig's disease.
Eric: Oh, man.
Mike: In February, the following year he passed. I mean, it just took him that fast,. So, yeah. And I'm not sure I'm giving away any confidential information here. But the story goes, his family did not want to stay in business, so they hired an investment banker and sold the company to Bovis, which was an international firm based in the UK.
Mike: So, they owned [inaudible 00:33:40] McGovern up in New York. They owned a company in Chicago. And we were the third acquisition in the U.S. And, you know, they kind of left us alone for as long as I was there. And then after I left in I think '99, a company called Lend Lease out of Australia I think purchased Bovis.
Matt: How did that transition go from, like, a personal leader that you all felt very connected to a bigger company? That management was probably a little bit different. Any big changes or not really?
Mike: The entire company was just in shock when Bob passed. I mean, he was sort of the spiritual leader of the company. He was that important to the organization. People move on. And I do recall that that Bovis must have seen something in our organization and they said, "Hey, this is working." So, they really didn't mess around with the culture at all. I think, you know, they brought their balance sheet and maybe some of their business relationships and then, you know, we had a connection to New York and to Chicago. So, I think the synergy of being part of that organization probably enhanced our ability to acquire new and different work. It's interesting, I have two or three buddies that are still in the business and then every year on the date of Bob's passing, somebody sends out an email saying, "Hey, man, just thinking about Bob." And this happened 25 years ago.
Matt: That long.
Mike: And there's a big fraternity of guys that came out of McDevitt & Street that are CEOs, COOs, of really great companies around the country. We all still think about him.
Eric: Yeah. Wow. Sounds like a special guy. You said you were promoted to VP of healthcare division at Bovis. Can you talk about that transition from the kind of traveling position to that?
Mike: Yeah, yeah, that was a great time in my life for a lot of reasons. It did get me and my family off the road. We finally bought a house up in Charlotte and you know, my kids were still in elementary school. So, it was great for my wife and my family. Now off the job sites and had a position. I can't remember how somebody decided, "Hey, Mike Neal you're gonna oversee." I think this is when they decided, well, we gotta have a business unit leader for a health care group, one for industrial, one for commercial and one for education or whatever. So, my job was to build the healthcare group. So, I had a wingman, a guy named Jeff Thompson, who was a phenomenal business development guy. And I hadn't done much business development, you know,. So his whole deal said, "He,y man, we kill." He had some pretty good relationships in the healthcare space in South Carolina and North Carolina and Georgia and Virginia.
Pretty much every Monday morning, you know, Jeff and I jumped in his car with five starched white shirts and our best Brooks Brothers suits and went on the road for three, four, or five days at a time going to see all these hospital administrators and talking to them about McDevitt & Street and how we're the greatest healthcare construction company you'll ever want to do business with. And we together, I mean, it was phenomenal that the friendship and the synergy that developed between Jeff and I, but, you know, I kinda felt like I learned a lot about how to influence a sale, how to build great relationships with my customers. Because now I'm not just focused on one customer, I'm focused on several customers. We built a really nice business unit around our little healthcare group. And we had a, I think we are one of the dominant players in that industry and you know, that entire southeast U.S Region. I got to build a team of project managers and superintendents who, I became very, very fond of. And you know, these guys, this was my family, you know. So, this is really where I had my first real opportunity to understand what it took to build and grow a business, fine-tune it, tweak it, you know, have full P&L responsibility. And I was having a blast,. That was probably one of the highlights of my career.
Matt: Building the hotels kind of taught you about how to manage a project P & L...
Eric: And then this VP healthcare position kinda taught you about how to grow a business and look at a broader business unit, right?
Mike: Yes. That's exactly right.
Matt: What makes a great healthcare construction company?
Mike: I would say it's the same factors that go into making a great construction company. Number one, you have to have people who understand the needs of their clients, right? And a healthcare business is actually very unique. These are people who have facilities that help them serve people who are having families, delivering babies, having horrible trauma going on their lives. So, you have to... A lot of our business was renovating existing buildings and then some of them were building brand new stand-alone hospitals. So, first and foremost, you know, understanding the needs of your clients and understanding what they go through every day and how you are a part of that and how you disrupt that in some ways. And specifically in a hospital situation where you're renovating two or three floors at a time adjacent to a surgery center or adjacent to an imaging center, you work around them, they don't work around you.
And you have to maintain a sterile environment at all times. You have to coordinate your activities around procedures being had in the hospital.So, that's the understanding part. And then I think the rest of it just comes back to the service part of making sure you have the right people on the job that understand healthcare construction, make sure that you are going and seeing them. I'm big on following up with my clients on a monthly basis and going and sit down and say, "Hey, how's our team doing? Are we meeting your needs? Are you hearing anything from your head nurses or from your physicians about anything that we can do to improve our business? How can we be less invasive or less disruptive to your day-to-day operation?" It's really just understanding what providing a good service really means to that specific customer.
Eric: Interesting. After Bovis, what was your next job after that?
Mike: So, the final stop at Bovis was from the healthcare group in Charlotte to assuming responsibility for an office that was not doing so well up in Richmond, Virginia. So, I'm going to stop short of saying I cleaned up somebody else's mess. But I will say that I was asked to go up and rebuild an office that was once one of their most important regional offices in that part of the country.
Matt: What did rebuilding it entail?
Mike: Reputation repair. Because I think the folks that were my predecessors were maybe not quite as sensitive to the needs of their clients and they were, hadn't delivered on the promises that were made. So, we had a little bit of a rough reputation in that region. I think the subcontractors up there were maybe not treated as well as they should've been treated. So, it was almost a kind of re-inventing that office taking a several year period to re-establish ourselves in the community, going back to some of the clients we had worked for in the past, and talking about what didn't go right and begging them for an opportunity to get a second chance. Many of them did give us a second chance. Some of them, you know, said, "Hey, listen, we found other people to do business with and you're not going to be one of them." But, hey, listen, that happened to me. This is a tough business. And you know, again, it's not assigning blame to anybody. But just sometimes you know, a fresh face with a different perspective is just what a business needs, right?
Eric: Yeah, sure. Was that tiring to you or did you enjoy that part of the business?
Mike: It was a kind of part of what I asked for in my whole career. I mean, a lot of people refuse to do the traveling gig. And if I look back, I was always a guy that would be the stupid guy to raise my hand, say, "Yeah, I'll go do that." Because I was seeking out new opportunities, new way to test myself, new way to build my skills. Because I assumed that someday this is preparing me to do something bigger, something better, something more challenging. So, anywhere you could run to, to see and unwind,maybe mistakes that were made is an opportunity to learn, right?
Mike: So, we left Richmond in a pretty good shape. I left there, I want to say in 1998 and then I hadn't been home to Florida in 17 years. So, I had an opportunity to come down here and join a firm in Miami that was a developer builder. And they specialized in these big high rise condominiums. They had a vacancy for a vice president in construction. What was interesting to me was the fact that, "Hey, these guys are developers." So, I got an opportunity to understand and be part of an organization that was doing real estate development. But we built our own stuff. That was another way, okay, now I can take my construction skills, you know, stand next to the guy who's doing the development, learn how he goes and buys land, how they design buildings. You know, what makes the economics of development deal lucrative. I was exposed to high rise luxury condominium construction, which I had not done in the past. And that was a place where I learned so many great lessons that I think complimented my construction skills, made me a better businessman. And ultimately I ended up together with another guy buying that company.
Eric: Let's talk a little bit about the move back to Florida and your personal life. Was that, like, a goal that you had had all along is to get back to Florida or was that just something that happened to come about?
Mike: It wasn't really a driving factor in me making that change. I felt that I had run my course at my previous company. I didn't see any really new horizons for me at Bovis at the time. I was hungry for something... You know, I'd been there a long time. I mean, I was there a really long time. So, I just felt like it was time for a change and a set of new challenges. And maybe that was just my career pattern where I'm always seeking new ways to challenge myself and new ways to grow, new ways to learn. It was a lot of mixed blessings involved in coming back to Florida. Number one, it was, I got to spend time with my parents who were, you know, pretty late in their stage of life and I was living very close to my mom and my dad,. So I got to stop by their house every morning and have breakfast with them. And it was probably some of the greatest time that I ever got to catch up with my mom and dad later in life. And got to tell them about what I was doing and learn more about, you know, how they were doing and just have some great conversations, great time with family. And at the same time, on a personal basis, you know, it was kind of nice to be back in Florida. You know, I mean, when you're gone for a long time, you come back down here and all these old memories about fishing and being near the water, you know, kind of come rushing back to you. And it's once I got back here, I kind of felt like, "Man, I'm back home."
Eric: Okay. So, you started with this firm. You guys do these like high rise, luxury, condominiums.
Matt: And then there's a ownership situation where they're wanting to exit the business and then you and a partner decide to make an offer for it. How does that come about? And can you walk us through some of that stuff?
Mike: I will preface this entire story by telling you, I think it was just one of those rare, very rare things that happen in somebody's life where you're in the right place at the right time because it doesn't happen very often. But in retrospect, I thought about this a little bit not too long ago, but this was in 2003, about three years prior to the great recession. This Canadian parent who had been in Florida for a long time doing this high rise, very risky, high rise residential, condominium development and construction. Somehow for some reason and you know, there's a reason decide, you know, they want to exit the Florida market or maybe reinvent that business model down there to go from high rise construction to single-family homes, which was never going to happen. The president of our company and myself, you know, who'd become ultimately became partners in the business together, we were kind of thinking, "Wow," I mean, "Are they gonna just close this thing down? What's our exit strategy?"
We actually had the presence of mine and good fortune to speak to a number of folks who, I'll just call them great business advice type people who were in the real estate industry down here. And one of them just said, "You know what, why don't you guys just make them an offer and buy them out? I mean, they know everything, you know?" Okay. There's a reason why they want to get out." And I don't think anybody could have foreseen the great recession coming, but there was some very light chatter about the market is oversupplied, there's too much condominium inventory growing down here, what's that going to look like in four or five years? You know, we weren't worried about that. We were actually more, like, worried about what are we going to do next as people? "What's my next gig going to be?" We mustered up a little bit of courage and we went back to our office one afternoon and got the CEO of the firm on the phone.
He was up in Toronto and we just said, "Hey listen, we've heard you, we heard your idea about trying to wind down the high rise residential and try to find single family tracks of land down here where we're competing against Lennar, GL homes, all the national homebuilding firms. We don't have a chance. We don't have a chance of being successful in that venue. We don't have the skillset. We don't have the knowledge. We don't have the people. So, we're thinking just thinking maybe here's an idea for you, why don't you allow us to buy this business unit down here? That will give you an exit." We had no idea what we were talking about. So, the phone got quiet for about it felt like for five minutes, it must've been, maybe 30 seconds and this guy, he says, "Why don't you guys fly up to Toronto tomorrow? Let's spitball some ideas." And we're going, "Oh, God." So, we jumped on a plane, went up Toronto and we sat down with this guy. And listen, this is a brilliant guy,.He has a big water recycle papers and you know, he's scribbling down all these ideas. He's talking like this, "Why don't we do this? Why don't you and Al buy this business for us?" And it was for ridiculously low number. It was a big number to me and big number Al. But in retrospect, it was a ridiculously low number.
We will stay in. We had two more 30-story towers to complete. He goes, "We'll stay in as your equity and your loan guarantee guys. You can earn some really nice fees on that and then you guys can go launch" You know, we've been trying to launch you know, take our construction company and build for third party clients, which we never were able to do under the previous deal. Long story short, it was probably the best thing that could ever happen to two, you know, Florida rednecks. It put us in a position of owning our own company, both of us for the first time in our lives, being in a position to make a great living. We already had a great brand. So, it wasn't like we were a startup. We were already one of the best-regarded firms in south Florida. Now, by the way, I could build for other developers. So, our construction business just exploded. We had two great 30-story towers going down in Aventura, Florida, another two and a half years of business out ahead of us. And man, it was a very magical thing. And I just remember back how nervous we were the day we made the call, and how elated we were on the plane coming back.
Eric: Yeah. You had some mechanics, you had to kind of work out. Did you have to get a loan to do the buyout or did they kind of allow you to finance it over some of the fees that you were going to get [inaudible 00:51:20]?
Mike: Yeah. There wasn't a lot of leverage in the deal. Yeah, there's a little bit of an earnout through some of the development fees. There was a uncomfortably large check that each of us had to write going into it. You know, we mortgaged our kids, put our homes up on an auction block. They wanted out bad enough to make us a fair deal that was a, walk away, win-win for them. They were a publicly-traded company. They didn't want the exposure to the south Florida condo market. Thinking back, I believe that these guys saw the recession coming. I really do. I think these guys are smart enough to have a ton of Harvard MBAs working for him, you know, market analysts and they were a large national home building company. So they knew something that or believed something about two to three years earlier than most people were willing to say, "Yeah, this things gonna have really turn ugly."
Matt: Yeah. Oh, that's interesting.
Eric: You and Al.. That was your partner's name, right?
Matt: Was it a pretty natural partnership? Did you guys work well together or was it just kind of the circumstances that he had this position and you had this other position that, like, made sense to be together?
Mike: Well, we became fishing buddies and he was a guy who taught me, he got me in the fly fishing. So, we had a better relationship than we had with our wives. We never had a disagreement. We didn't agree on everything, but we had very specific parts of the business that we were responsible for dealing with. So, he's more of a CPA development guy with a lot of development experience. He was into the sales and marketing of the units. He was a guy who was talking to the banks about getting loans. And I was really pretty much mostly on the construction side of the business, overseeing all our construction activities. And then, you know, all major decisions in the business, you know, we would sit down daily and talk about, "Okay, yeah, we're going to go buy this piece of land," or we're going to do this, we're going to do that. And in fact, you know, we're still friends today.
Eric: Yeah. Well, yeah, that sounds like a great opportunity and a good timing and... So, let's talk through after that. So you do the next couple of jobs and then you're like, "All right, we can start selling into to third party." And was that a whole new thing for you, too, or was that a pretty natural...
Mike: Well, yeah, it was thestuff that I was doing back at my old job, right? And I was out-selling new work, acquireng new clients. January 1st, 2003 was the official date that we drove the new company off the lot. It was our company legally. And you know, we did a press release and then within one to two weeks, I was being inundated with, there was so many new condominiums being developed and planned. And frankly, there was a shortage of contractors. So, I mean, I had work falling out of the sky from 2003 all the way through 2006, four years of, you know, just having so many great opportunities. And we were building some of the largest, you know, 50, 60-story towers, along Miami beach.
Matt: Oh, that's incredible.
Eric: Yeah. I looked up some of those facilities that you guys built. So, like, the Artek and the Jade Ocean.
Mike: Yeah. Yeah.
Eric: Those are like big, high-status buildings and...
Matt: Did they come with unique challenges to them?
Mike: I can't say that they were unexpected challenges. I mean, the thing, maybe on the... For example, on Jade Ocean, you have to deal with settlement. So, we drive piles down a 150 feet into the ground and these engineers calculate the estimated settlement is going to be let's say five to seven inches. We have to hold off on building the adjacent parking deck until the building fully settles. And sometimes... Thank God it didn't really happen on our job, but we were a little worried that the building was gonna settle more than we expected it to because it was settling faster than expected at first, but then that is slowed down and finally stopped. But you know, the challenges in South Florida, you know, we deal with hurricanes, bad weather, seasonal type things. But there was really nothing that comes to mind at the moment that I can tell you an exhilarating story about. But they both were tremendously successful projects.
Matt: Can you describe the moment when you guys first realized or thought to yourselves, "Uh-oh, the construction is kind of drying up here," before the great recession?
Mike: Yeah, it hit first in our new development side where, you know... We had made a decision because we were a little nervous about the high rise condominium market. So, we kind of steered the development side of the business more into the three-story garden style, walk-up townhome communities. So, we had two pretty nice townhome communities going and sales were off the chart. Man, we were just going, "Oh my God, I can't believe how good we are." You know, "These are our first standalone development deals and man, people are lining up to buy them." And then I just remember Al coming back like two weekends and Monday morning and we were having our, you know, our pipeline report and our status report. He goes, "Man, sales centers, there's nobody coming in. People are freaking out." And he go, "Ah, yeah, it'll get better. It'll work."
And then I started seeing, a good bit of slow down on the new opportunities coming in on the construction side. Thank God we had three or four really large projects going that probably had one to two years to complete. So, we still had a lot of income coming in. But I mean, the development side, it came to a screeching halt. Then bad news it feeds on itself. And all of a sudden you just, you know, every Monday morning the South Florida Business Journal, the Miami Herald, we'd go, "Aw, man." You know, overbuilt economy. You know, the buyer' are walking away. You know, instead of closing on their units, they're leaving their deposits on the table. They're walking away. And it just became a cascading effect of more bad news begets more bad news. And so we're sitting on two pretty significant projects that we started. We already broke ground on but we're still selling. And then all of a sudden, nobody's buying the rest of the units.
So, what we ultimately... You know, I think we rode it out for about a year and you know, at this point in time, no new construction sales. So, at this point in time, we kind of said, we've got two choices here, we could continue. You know, we had a... I want to tell you about a $20 million a year G&A nut. We had a lot of employees. We had already gone through one round of you know, salary cuts. And we kind of came to terms with the fact that this recession was going to be a really, really bad recession for an indeterminal amount of time. So, we made a decision to close the company. So, we had to go back to our banks, do workouts with the banks. We didn't have enough sales to pay the construction loan. So, these are banks that we had been borrowing from for many years actually before I got there and Al had great relationships with them. They understood. We settled up with the banks. The real estate, you know, went into receivership and then we finished all of our construction projects, told everybody, "This is the end of the dynasty." I retired. I want to say a right about 2009 when we finished the last project. Al and I kinda took the what cash we had left, which was enough to, you know, retire on. And I went down to my house in the Keys and fished my tail off for two years. And then 2011, I had an opportunity to come here to Cast.
Matt: When you look back on the some like the finance stories around the recession and everything and you tie it back to your business experience and you watch, like, a movi... Have you ever seen the movie, "The Big Short?"
Eric: Do you end up having just a perspective on that that is you think different from the average person's because of how it affected you or...
Mike: No. No, I don't. I mean, I think we are right in the middle of it. And I think it was a problem that had a lot of different dimensions to it. I think the lending environment was reckless. I think that there were a lot of people who, when you go into a restaurant and your waitress is flipping condos,making, you know, eight bucks an hour and she say, "Yeah, I just bought a new condo contract and I'm going to flip it." I mean, that was rampant down here.
Eric: Yeah. Especially that area.
Mike: Oh, yeah. So, I mean, listen, banks got annihilated. A lot of people lost everything they had. I think that, you know, if you look at why the multi-family space is so strong today, I think a lot of the people who are renting now are either people whose credit was decimated because they were living beyond their means and they couldn't make their mortgage payments or they are kids who saw their parents lose everything they had. And they're definitely afraid to buy a house, right?
Mike: I think the good news is banks are smarter. I spend a lot of time with my customers and I see how hard it is to get a construction loan now. I mean, there are so many boxes that need to be checked. I mean, people are underwriting deals wa, way more conservatively and properly and making sure they're not lending money to somebody who doesn't have the wherewithal to get a deal done.
Matt: So do you think we've generally solved a lot of the problems?
Mike: I think so. I really do. I look at where we are in the cycle right now and if we didn't do all the things post the great recession that we did, if we just allow those same policies to continue, I don't think we would have this kind of still have pretty strong tailwinds in the economy down here in South Florida. The lending environment... It's not easy to get a loan, but people are still writing construction loans for big construction projects down here.
Eric: Yeah. Okay. Interesting. Okay, so, you fished a bunch?
Mike: Yeah, I think one year... One of those two years, I fished over 200 days.
Matt: Wow. So, you've been out fishing much yet for the summer? Gotten good time out there on the water?
Mike: I've had not a great season this summer. I've been tarpon fishing several days and just have not caught the quantity of fish that I've typically I'm accustomed to. And I can't explain to you why. I thought, I think I'm fishing very well, but there are certain conditions where fish just don't want to eat and if they're spawning or if they're thinking about other things in their lives. But these are not friendly fish that I encountered this year. And I just put my fly rods away,.I'm going to go get them next year.
Eric: Oh really? So, what's the window that you normally try to fish in?
Mike: So, I don't know how much you know about Florida. So we have a migration. The tarpon start migrating down south along the Atlantic coastline, typically starting in April, May of the year. And so we typically get them in pretty good quantities migrating on the ocean, May, June, and July,. They call that the prime time to catch them along the ocean. And it's just an exciting venue. You and your guide on a little 17-foot skiff. You're out there and all this fly fishing stuff that we do here is all visual, very you know. It's called sight fishing. So, you've got a lava artificial fly out in front of 150-pound fish and get it literally, you know, two to three feet away from his face. And if you strip just the right way and get the fish excited, he'll open his mouth and then it's game on, you know. It's fantastic.
Matt: That's awesome. I'm not as familiar with saltwater fly fishing. So we, we do some freshwater stream fishing fly fishing up here. And I've been down to Arkansas a couple of times to do it on the white river. But I went to South Carolina one time to fly fish and it was in high school. We had this great set up at high school where after Christmas we had three weeks where we could take these, like, half fun experiential classes and I got a chance to take fly fishing and fly tying.
Mike: Oh, wow.
Eric: And our teacher took us out to South Carolina for a long weekend to fish. I was, like, 16 years old, sophomore in high school. So, we go out two guys to a boat, one teacher and maybe, like, 14 kids.
Matt: We were fishing in kind of, like, a bay. I don't remember where it was in South Carolina. Bbut there were these, like, little islands. And after about 30 minutes of not catching anything it quickly degraded into high school kids fighting boat to boat. That's my experience with saltwater fly fishing.
Mike: Well, actually at the end of the season, the tarpon migrate back up into the South Carolina shoreline. In fact, I fished for the first time in the Charleston regionthe first part of May. And we went red fishing up there. But the guide was telling me that they sight fish for tarpon up there and they get some real, very large fish. And it's at a specific time of year, you know, usually, he said September-ish they're back up that way and its game on. It's a great fishery.
Eric: That's cool.
Matt: I think you mentioned in your bio, you kind of got your son into fishing, to. So it's something you guys get to do together?
Mike: Yeah. You know, going through high school, he really wasn't into fishing in the same way I was. I'd been a kind of a freak about it almost all my life. My daughter is, lik,e hardcore. She'll go out in 10 to 12-foot seas with me and sailfish.
Eric: Oh, that's great.
Mike: Yeah. She's a maniac. But my son just didn't have a lot of interest. And once he graduated from college moved first up into New Orleans, and then now he's in Houston. I typically go up to Venice, Louisiana every year. And in the wintertime, the big redfish come in. So, I invited him out and... This was going back six, seven years ago. And he finally caught his first big redfish on fly. Now he's an addict. And he said, "Dad, I want to catch a bonefish on fly." So, we flew over to the Abacos this past spring. He caught his first bonefish on fly there and we stayed at this amazing lodge called the Delphi Lodge, and there's all these hardcore fly fishing around there. So, he felt the camaraderie of all the guys who come in after a hard day and you start drinking some good rum and telling lies.
Matt: Yeah. Telling fishing stories.
Mike: Literally, now, he goes " Dad I got to catch a tarpon now." So, we went down to the Islamorada and fished early June. The weather was just horrific. We had three days of just day lose rains, but we got this one 20 minute, 30-minute window where there's a little hole in the clouds and the sun was able to hit the water and we could see a fish coming. Our Guide said, "Mike,..." He was up on the bow. He says, "2:00, 50 fee. Lob one out there fast, fast, fast." So, he did and the second the fly hit the water, the fish ate.
Eric: Oh, wow.
Mike: It was about 120-pound fish. He fought it for a good half hour and he left there a champion, man. It was absolutely the greatest thing being his father and watching that happen. And he was just thrilled about it. So he'll be back.
Matt: That's awesome. Yeah, that's are awesome. Those are fun stories, fun times to spend with family. Walk us through like your fishing day for us. What time are you getting up? What are you doing in prep?
Mike: All right.
Eric: I want to hear a fishing day for you.
Mike: All right. We'll talk about a fishing day in Islamorada.
Matt: Yeah, how about that?
Mike: Okay, so, you know, up at five. My guide meets me at my dock at, you know, 5:30, 6:00, got my little lunch bag, got my two or three fly rods with me. And we shove off and we head either out to the ocean if we're going to be ocean fishing for tarpon or bonefish or we go way back into Everglades National Park or Flamingo, you know, for either tarpon, redfish, snook, you know, you name it. There's a lot of things that happen during a day when you're sight fishing. So, early in the morning, the sun is not quite at the right angle. So it's a little tougher to see your fish so you know, you're fishing, looking at the top of the water for little rumbles or little pushes, little signs that there may be one fish or two or three fish sitting somewhere.
So, again, we're really focused on sight fishing. So, everything we do is geared towards having the best visibility at the species you're trying to target. And it's not a random thing. So, we typically say, well, we leave the dock, we're tarpon fishing. We're not looking, or trying to catch any other type of fish. If we're going bonefishing, same thing. You know, we're targeting bone fish and we stay pretty much hardcore on it all day long. You're out all day on a little 17-foot skiff. You're in the sun, so you're covered up from head to toe, long pants, long-sleeve shirt, hat, a mask on your face. So, you're trying to protect yourself from the elements.
I think the neat thing about that is the relationship and the communication between the guide and the angler. You know, the guide is an extra set of eyes so he's really the guy who's trying to find the fish. There's some amazing guys down in the Keys that they know what spot to be on on a particular time. They know we're fishing this spot on an outgoing tide. We want to be on this spot on an early incoming tide. We don't want to be at this spot until something's going on here. It's really fishing tides. It's really knowing where to be, when to be there. And most of these guys know the fish are going to be swimming around that flat over there because the water is low. So, they have to go around this little crest on a flat. So, they're going to be coming right around there and straight into the bow of the boat. So, that's where you need to be really paying attention. That's how kind of scientific it is. You know, the communication is, you know, he will tell you, "Okay Mike, I got fish coming at 2:00, 75 feet." A lot of times he'll say, you know, "Just hold off. Don't cast yet. I want to see what these fish do. I don't want you to have to recast. We're going to make one cast at 50 foot. It's got to land in the right spot." And then when your fly lands, sometimes it's really hard for the angler to see the fly. So, the guide will start saying, "Okay strip. Faster, faster, faster, or slower, slower, stop." And then he'll say, "He ate it." That's when you do a nice...
Eric: Set it.
Mike: Set the hook. That's right. Yeah.
Matt: And so do this kind of back and forth between you and the guy... You've done it enough and you're pretty experienced. Do you ever kind of give the guide some instruction or you still let them kind of tell you what their plan is?
Mike: Sometimes if there was a wind direction... I'm a lefthanded caster. So, if the wind is coming over my left shoulder, it's very hard for me to cast left because the wind is blowing the fly back into me and possibly the guide. So if we have time to set the shot up, I'll say, "Hey, look, I'd like you to wind spin the boat so instead of casting to a 10:00 position where I'm going to have to be fighting the wind, spin the boat to the left, so I could be casting at 1:00 or 2:00 in the wind, then the wind comes out of the factor." So, most of the time that guide already knows that. But sometimes if he's so fixated on getting in front of the fish, I'll say, "Hey, man, spin me to the left a little bit." And sometimes I'll see a fish before the guide does. And so I'll say, "Hey, I got a fish over here at 3:00, you know, 75 feet." And he'll, he'll try to position the boat to where we're in front of the fish so the fish is swimming, you know, kind of towards us rather than away from us because it's really hard to catch a fish when they're not facing it.
Eric: Did you always take the same guide or did you try out different people?
Mike: I have three or four guides that I have fished with. One of them was a guy that I fished a lot of the bonefish tournament together with. He was a guy I probably fished with most during the period when I was retired. You know, he got real famous and... I don't know if you know, there's a show called, "Silver Kings." If you get a chance to watch it and that's the whole deal about tarpon fishing. So, he's a great young guy named Jared Raskob. So, he and I, you know, we're still friends, but I have another one or two guides that I'm fishing more regularly with. One guy's more of a tarpon guy. The other guy is more of a bonefish guy. I'm picky about them because, you know, the more you fish with the same guide, the better you get. Yeah. So, that's how that goes.
Matt: Are you particular about your gear?
Mike: My wife thinks I am. Because there's nothing that I don't have. And I probably have more fly rods and more flies than I'll ever be able to use in three lifetimes. It's actually embarrassing if you saw how much stuff I have.
Eric: What's your favorite everyday grab-and-go, combination rod and reel?
Mike: Well, again, that's very specific to what you are fishing for. But my go-to reel manufacturer... is this reel made by a company actually in Delray Beach called Tibor Reels. You know, for trout guys like yourself, you know, I can get a four or five-weight bay by Tibor. So, you know, I mean, I fish primarily a nine weight for bonefish and permit a 10 weight for permit and small targeting the 12 weight for big tarpon. And then my go-to rods are our G Loomis, you know, cross current. I went on a trip to Beleves [SP] recently. It was an Orvis sponsored trip and somehow I ended up with two free new Orvis Helio's rods that are actually, I've been using them a lot. They're fantastic.
Matt: So they stand up to your standards?
Mike: Yeah. Yeah. I don't know what my standards are. But the feel... I mean, fly fishing is all about the feel, right? It's just how that rod feels in your hand, how fast that it shoots the line. So, they've got it figured out pretty, pretty well.
Eric: Oh, that's awesome. So, it sounds like you're having a great time during retirement, but then you end up going back to work. How'd that happen?
Mike: Boy, I wish I could figure that out. It wasn't like I had made the decision to retire because I wanted to. It was really a situational and quite unfortunate reason to have to do that. We did it intelligently. We didn't suffer in retirement, which was good. We got to travel and have some fun. Actually, the Cast is an affiliate of a development company based in West Palm Beach called Kolter. Back in 2001, we got a call from this was back when we were still owned by Brookfield Properties, the company we bought, was owned by a big publicly-traded company called Brookfield based in Toronto. And they called us up and said, "Hey, listen, we got a guy who's a Toronto based guy. He's relocating his entire development operation to West Palm Beach, very, very strong, wealthy family that had a lot of real estate interest in Toronto.
They're moving to West Palm Beach and they want to start doing some development out there and they would like to have a joint venture partner." And so we went and met with them. We formed a joint venture and we were going to co-develop a big condo in downtown West Palm Beach with Kolter and then Coscan, my company, was going to build it. And so we worked on that deal together with them for a year, did all the underwriting, got the documents, all the construction plans done. And then 911 happened.
The bad news is Brookfield owns most of the property around the World Trade Center. So, probably two or three days later we get a call from the guys in Toronto saying, "Man, we're pulling the plug on West. Palm." We were vastly disappointed. But you know, I mean, it was hard to.. That was such a tragic time in America. And everybody tents were spinning. But you know, Brookfield just had too many distractions in New York to worry about how what they were going to do and what the market was going to look like post-911. So, we pulled out, Kolter ended up doing the deal on their own. Through that year of collaborating with him, I became pretty good friends with Bobby who owns Kolter. We stayed in touch literally after that whole episode. So, I'd come up and meet him, have lunch with him every now and again. And so I get a call down to the Keys. I just got back in from fishing and I got a call from Bobby. He goes, "Hey, man, when we having lunch? What are you doing?" I go, "I'm retired, dude. I'm kind of having a pretty good time."
And the reality was I was anxious. I felt like I needed to do something more than what I was doing and felt like I had a few good years left in me. Drove all the way from Islandrod out to West Palm Beach, had a nice lunch with him. We talked about family, friends, blah, blah, blah, blah, blah. Not once did he say anything about why he called me. I just thought it was a social call, to be honest with you. So, I went back down to Islandrod, and about a week later he calls me and he goes "Oh, I forgot to ask you something." He goes, "You know, I have this little construction company and you know, it's a fledgling little business and I feel like the market's getting better. And you know, I'd like to talk to you about coming in as a partner with me." "You forgot to ask that during our lunch? Because I'm not driving back up here. We're gonna have this conversation on the phone." And he laid it out. Again, you know, the part of me that's attracted to a challenge. And, you know, here I kind of found the stats on the company. You know, "How big is the company?" "Oh, well, we're doing about 25, 30 million a year." You know, it's been really bumpy and choppy, but these guys are hanging on for dear life. You know, because Koltere wasn't even developing anything at that time. You know, this entity was literally surviving on work that Kolter wasn't doing, which is a bunch of small country club jobs, a couple little slick service hotels.
Long story short, I bit. I wrote yet another big check that I didn't want to write to... He says, "Listen, man, you're going to be my partner. You're going to be my partner. You got to have some serious skin in the game" And I talked to my financial advisor and he told me I was an absolute moron. He goes, "Dude, you're on a fixed income. You are a retiree. You don't want to be doing this." And I said, "Yeah, I do. We're doing it." We came to terms and I think I started on October 2011. And I met the team and we sat down and just, we plotted, created a little bit of a blueprint, some mission, vision, values, and all that stuff to just say, you know, "What do we want to look like when we grow up?" And so we put some kind of a rudimentary business strategy together. And here we are in 2019 a, you know, pretty well-established firm doing over a half a billion dollars a year.
Matt: Oh, wow. If you look at your career history as kind of, like, a training ground for then what you've done at Cast, which position best gave you the skills to do what you've done?
Mike: Once I got the Charlotte and was doing more of a formal heading up the healthcare efforts. Because so much of what I do today is business development, is relationship building, it's team-building, trying to forecast where we're going to be in a year or two years or five years. It's something that I rely so heavily on other people that I'm developed, you know, I focus a lot on developing people and talent acquisition, so, that's probably the most important part. But, you know, frankly, I think it's a combination of a lot of things. You know, I mean, like, every day of my entire career, right? Because I still have a sensibility about how to build, but I really don't get too deeply into that. I've got very strong people who are far better at it than I am. But you know, you have to know your industry.
Eric: Throughout your entire career, you've been promoted, you've moved around, you've been in several leadership positions, you end up CEO. If you had a young guy just starting in the construction industry who said, "I want to get into this role. I want to get into a leadership role," what advice would you give him? What track would you say, "Hey, this is really the track you should head down. These are the experiences you should look for." What would you tell him?
Mike: Well, I would tell him first and foremost, you have to be incredibly committed. If you want to be sitting behind my desk someday, you have to be 100% all-in and you know, failure is not an option. And you have to ask yourself, what are you willing to do? What are you willing to sacrifice to get here? Because this is not an easy job by any means. Once upon a time I asked that same question and I remember, I can't remember who it was that answered it for me, but they drew sort of like a peacock tail with all the peacock feathers, and on the far left, the first feather on the left was, he wrote the word technical in it. He said, "This is where you start your career. You have to learn all the technical aspects of the business, and then on a graduated basis, every feather further to the right involved more interface with people, leading teams, managing, you know, building relationships with architects and engineers. And then about halfway through now you're really starting to own client relationships and turning those, a single client, you know, relationship with a client into a multiple project building program. And then the further, further to the right then, you know, you have to really understand the, you know, the P&L, the balance sheet, the income statement, how do you run a profitable business? You know, what do you do? And then you've got planning" So, and I would tell him, "Listen, it's taken me about 30 to 40 years to learn that. Can you do it faster than me? I'm sure you're way smarter than I am. I'm not the brightest crayon in the box but unless you're willing to sequentially learn all the different aspects of this business and of this industry, there are no shortcuts."
Matt: Do you do any Bob Street type of things around the office these days?
Mike: Yeah. All the time. All the time. Yeah, we have a minimum of 10 to 12 employee events every year. We have a crazy lavish Christmas party that is an absolute blast. And somehow me and my wife end up dancing all night long. And she goes, "We've got to stop this someday. You know, we're really embarrassing.The music has changed from the Temptations to 50 Cent. You don't have those kinds of moves anymore." And I go, "Yeah, you're right, we're going to have to find some stand-ins or stunt doubles someday." You know, we have a annual, a great employee picnic that's kind of back-to-back with a massive company meeting where we bring every employee over here and we try to communicate, you know... It's a whole one-day deal in a big convention center where, you know, it's a lot of recognition. Bring in big-time guest speakers. I don't if you ever heard of Jocko Willink?
Mike: Extreme ownership. Oh, my God, you've got to check him out. He does podcasts, but he's written a couple of books. People of that stature. We got Jocko when he was first getting popular, so we got him for the not-too-famous rate. I couldn't afford having him here today. Check him out. It's a way to communicate, you know, the vision, the mission, and values multiple times a year through, you know, we do Topgolf, we go to these things. They have all these old warehouses here that they've converted into go-car tracks and just crazy fun things for getting the C-suite people together with the all the people from the job sites. And you know, I think that's resulted in us continuously being recognized as one of the best places to work in Florida.
Matt: I have seen that Jocko Willink guy stuff. I just looked him up. Yeah, I've been on his, like, Twitter and his Instagram before. Yeah, that's great.
Mike: Yeah, he's pretty, pretty intense.
Eric: So, where do you go from here? What's the plan over the next couple of years?
Mike: Well, look, I'm 63 and I feel like I'm 33. So I still have the same level of passion and belief in what I do and what I bring to this company that I've ever had. For the last four or five years, I've identified a few folks here that I think are capable of stepping into my shoes. I've got one young man who I think is probably two to three years away. But I keep on dumping more and more responsibilities on him and he makes it look easy. And what is great about that is, it allows me to focus less on day-to-day issues and try to look out over the horizon to see, "Is there another way for us to get better at what we do? Is there some, you know, can we maybe increase our geographic footprint, taking our business outside of Florida and making the company more valuable, providing opportunities for more people to grow from within our company?" He's been a huge factor in freeing me up to be a better CEO while training him and grooming him to be the CEO that I know he's going to be when I step down.
Matt: That's great. We got two more quick sections here, but we kind of covered almost everything we had in the timeline, chronology area. So, we do one section that we give you a quick topic or a word and you tell us if you think it's overrated and underrated. Maybe a quick word or two on why.
Eric: All right. Overrated orunderrated, carbon bike frame?
Mike: I'm not a gadget guy at that level, but my bike is a carbon frame bike. It's super light. It's super high performance. So, I'm going to say it's underrated.
Matt: Okay. Sometimes you get these people who are very particular about steel or titanium, especially if they've been biking for a long time. So, what do you ride?
Mike: A Cervelo S5.
Eric: Okay. All right. Overrated, underrated. Del Brown's, Merkin.
Mike: Well, listen, it stood the test of time. So, I'd say it's underrated. It's still catching plenty of fish.
Eric: Okay. Yeah.
Mike: I use it. I use it actually.
Matt: Okay. I was reading that some people say it made a permit catchable to some people, that it wasn't catchable before?
Mike: I would tell you that's a true story.
Eric: Okay. Interesting. All right. Overrated underrated, the Breakers Hotel?
Mike: Wow. I would say it's underrated. It may be one of the most fabulous places, hospitality venues in the world.
Matt: Do you have a unique perspective on hospitality after being in the industry? Do you have preferences?
Eric: Do you have a unique perspective on hospitality after being in the industry? Do you have preferences?
Mike: Personally, I like to stay at nice hotels. When my wife and I travel, we kind of go to the higher end of the spectrum. And I think we both feel that's a luxury we've worked hard all our life to earn. And I think it makes a big difference.
Matt: Yeah. All right. Last questioni n this section. Not really overrated, underrated. But since you're a big Florida history guide, do you have a favorite Henry Flagler story?
Mike: I will tell you that my absolute favorite book is about Henry Flagler. It's called "Last Train to Paradise." It's really his life's history after leaving, you know, standard oil company and how he's basically single-handedly changed the state of Florida. I recall one part of the book where they're talking about him trying to get the Merill Brickell who was one of the, I don't know, 10 residents of Miami, tried to talk him in the bringing the railroad to Miami and the banter back and forth between the two very stubborn hardheaded people. I guess it ultimately ended up with he agreed to bring the railroad down to Miami. And that was the last step of the journey before heading down to the Florida Keys and which to me that was a, probably one of the most epic real estate development stories of our lifetime.
Eric: How different do you think real estate development is from those old kind of stories like that? Or are there still some truth to how things are done?
Mike: I'm going to speak from the private sector perspective, which is really way more of what I prefer to be in than the public sector. The thing that I don't think has changed is the tenacity and the willingness of men and women to take unbelievable risks to be a developer. I mean, most people have no idea of the risks involved in these massive real estate projects. I mean, and it's caused many a man and a woman their entire life's fortune. So, if you look back at all the entrepreneurs of the 1920s and before that, doing the same thing today, these people are taking huge risks, putting all their marbles on the table, all in the name of real estate development. Maybe the big difference between then and now is that now there's so much more institutional equity, pension fund money, private equity sharing in the risk. Maybe people are not taking quite as much risks as they used to, but it's still a very risky business.
Matt: Yeah. Do you think that the money not being so much personal money changes the decision making in the whole process?
Mike: Oh, yeah, yeah. Just to give you an example, I mean, if you were developing a multifamily project, you know, rental project and it's your money, are you going to kid yourself by trending underwriting your rents above what the current market is? A lot of people do that, right? You know, they do it with some level of justification. "Well, we're trending them up because rent growth has been this and that and the other." But I mean, the reality is you don't know what rents are going to be tomorrow. But a lot of deals are underwritten that way. It's not dishonest. The only person you're kidding is yourself.
Eric: Interesting. So, what time do you wake up every day?
Eric: How many hours a night do sleep normally?
Mike: About 6.
Matt: So, you're hitting the bike. Dou have a little warm-up routine you go through, or are you on the bike immediately after that?
Mike: No, my feet on the floor, 10 minutes later I'm on the bike.
Matt: Wow. You kind of buzz up and down, like, Ocean Boulevard or...
Mike: Yeah, I live just north of Delray Beach. So, I typically ride south to Boca Raton, go seven and a half to 10 miles each direction.
Eric: Okay. What's your favorite restaurant?
Mike: I like the restaurants in Delray beach. So, I've got a place that we go to kind of probably way too much as a little house just off Atlantic Avenue called Cena, C-E-N-A. And it's just a cozy little quaint Italian restaurant. And they know me when I walk in and I get a good table every time and it's a great place.
Eric: What website do you visit every day that might be surprising?
Mike: There's no surprise. I'm pretty boring in that regard. I get up you know, when I get back from my bike ride, I go cool off and I look at the Wall Street Journal and that's about it.
Matt: I keep asking that question and it, it never gets that kind of bite. I think [inaudible 01:34:06] I mean there's like quirky little like... There's no saltwater fishing forum that you visit?
Mike: All my fishing buddies posts stuff and the guides that I fish with... I'm not proud of it, but I have an Instagram account.
Matt: And is your Instagram account full of pictures of guys holding up fish?
Mike: I don't, I don't overdo it, but I have a couple of nice pictures.
Eric: Okay. Here's another question I have. You see guys taking these pictures with, like, their rod in their mouth holding up the fish?
Eric: But this seems to be like a saltwater fly fishing thing. Unique to that. I feel like a lot of freshwater, you just see them kind of, I don't know, holding it to the side. Is that an inside baseball thing with saltwater fly fishing?
Mike: Yeah, I do it and I have done it. I don't take that many pictures anymore, because I have plenty, I guess it's a way to say, "Yeah, I caught that on fly."
Eric: You got to get it in the frame.
Mike: That's it. Yeah.
Matt: That's awesome. How about, do you have a favorite quote? That quote that you've always kind of find yourself coming back to and telling people all the time?
Mike: The one that I kind of like a lot to one is an Amat Victoria Curam. That's "Victory loves preparation." That's one I kind of shoot to my kids every now and again. They go, "What's this all about, Dad?" I go, "You know, well, success doesn't happen by accident." And I try to remind myself that all the hard work goes on behind the scenes. There's another great one that I like. Ken Blanchard put this out there I don't know how long ago it was. It says, "Profit is the applause you get for taking care of your customers."
Matt: Now, that's a good one.
Mike: Yeah. And that's really germane to us being in the service business, right? And if it's all about the buck all the time, you're not going to be doing a good job taking care of your customers.
Eric: That's a good perspective.