Merritt & Harris Construction Consultants (M&H)
Imagine riding on one of the biggest wheels in the world that you helped to become a reality, or the honor of participating in the construction of the new World Trade Center when you had done work on the original Twin Towers, or watching from the bleachers in your home team’s stadium that you assisted in building. Merritt & Harris Construction Consultants’ (M&H) project managers do this every day and they have been doing so continuously since 1937.
It wasn’t always so. Recognizing the possibility of being defrauded, the now defunct Bowery Savings Bank turned to John Merritt and his son-in-law Elliot Harris II, to start the country’s first construction monitoring firm. In the late 1970s, after Harris’ son, Elliott “Buzz” Harris III had joined the business, M&H added its Property Condition Assessment (PCA) Group in order to meet the assessment needs of lenders and institutional investors seeking to purchase or sell existing buildings.
Harris III took leadership of the business as president in 1978 and served in that role until 1996, when he sold his stake to a group of principals, including current president and CEO, Manny Kratsios. The firm continued to thrive under Buzz’s and the principals’ leadership, opening branch offices in Los Angeles (headed by Ricardo Flores, principal) and South Florida (headed by branch manager Jim Mako, P.E.), serving clients all over the U.S., Canada, Caribbean, Mexico, and Central and South America. Sadly, longtime staff as well as new mourned the death of Harris III in January 2011 at the age of 65. Buzz left a longstanding legacy that has shaped the company’s distinct culture.
Today Kratsios works alongside 40 colleagues, including principals, project managers, structural engineers, mechanical engineers, cost analysts, LEED APs, administrators and other skilled members. Every employee is considered part of the M&H family, a factor that shines through both in the office, and in relationships with clients. On average, the employees have been with the firm for over 14 years, a remarkable statistic in today’s workplace environment.
Protecting the interests of lenders and real estate investors is still the pinnacle function of M&H. The mainstays of the firm remain its Construction Monitoring and PCA Groups, who regularly provide expertise to high-profile projects throughout the Western Hemisphere. The firm’s Sports, Owner’s Rep, Workout, Latin America and Caribbean Groups provide high-level consulting to their respective clients.
M&H’s primary clients are lenders and equity investors. These can encompass traditional commercial real estate lenders, insurance companies, pension funds, REITS, bondholders or institutional property portfolio managers. “Our work is diverse,” says Kratsios. “We do all types of buildings: residential, office, hotels, retail, sports facilities, gaming, medical, parking structures, entertainment, airport and industrial buildings — any type of structure.”
William McCallion, manager of Training and Quality Control for M&H, puts it in laymen’s terms: “The people who lend money to build or to buy buildings don’t keep a technical staff large enough to monitor the size of their portfolio which varies year to year, so they rely on consultants like us. The developer proposes a project to the Lender or Purchaser, and then we will get information from the developer or owner, including documentation such as the drawings, cost information and construction schedules, to name a few.”
As part of the Construction Monitoring division (headed by principal, Jim Cockinos, AIA), the Plan and Cost Review Group (headed by Mike Dwyer, principal) also reviews the development team, design documents, entitlements, contracts, schedules and budgets.
The Construction Monitoring services encompass a monthly site observation to review conformance with design documents, quality of workmanship, acceptability of payment requisitions, adequacy of remaining funds and adherence to the construction schedule.
The firm’s PCA division (headed by principal, Ed Bellavigna, AIA) determines quality and condition of an existing building’s structure, systems and equipment; identifies Items that require repair or replacement; estimates associated costs of remediation, and prepares capital expenditure schedules.
The firm’s services not only serve the financial participants of a project, but also developers, contractors and sub-trades. Monthly monitoring ensures that adequate but prudent funding is allotted, thereby providing consistent monetary flow so that builders can cover materials costs and pay subcontractors.
High-profile protection for investors
Each year, M&H oversees approximately $50 billion in investments. Projects range from the purchase of existing multifamily residential properties to the new construction of state-of-the-art professional athletic stadiums. The firm is currently involved in a construction monitoring capacity with eight major stadium projects for the Minnesota Vikings, Atlanta Braves, Atlanta Falcons, Sacramento Kings, Milwaukee Bucks, as well as the Las Vegas Arena, Los Angeles Football Club soccer stadium and Nassau Coliseum. The team has completed the monitoring of over 50 ballparks, arenas and stadiums.
The firm recently wrapped construction monitoring for 4 World Trade Center, which presented unique scheduling challenges. Some of the more current high-profile projects that the firm is involved with include Tower 3 at the World Trade Center in New York City; Towers A & C at Hudson Yards in New York City; Manhattan West Office Tower in New York City; American Dream Mall in East Rutherford, New Jersey; Cornell Tech on Roosevelt Island, New York; West Village Residences in New York; NY Wheel in Staten Island, New York City; Newark Airport United Terminal in Newark, New Jersey; Transbay 8 in San Francisco; Silvery Towers in San Jose, California; Park Grove Towers in Miami; and Hyde Resort & Residences in Hollywood, Florida.
Another recently completed project is the San Francisco 49ers Levi’s Stadium, which stands out by nature as a major professional sports project. “Initially we reviewed all construction documents to make sure it was properly designed, the budget was adequate to build the project, and the construction schedule was reasonable,” says Kratsios. “Early on, it is critical to identify red flags at the design stage. We produced an upfront plan and cost review report that covered all aspects of the project: the drawings, construction schedule, budgets, permits, contracts, et cetera.”
“Once construction began, we went out to monitor construction once a month to make sure it’s being built in compliance with the construction documents, to ascertain that the remaining funds are adequate to complete the project and that it’s within the construction schedule,” he adds. “We review lien wavers to make sure that all subcontractors are getting paid in a timely manner, we review change orders and test results, and stay on top of permitting issues and any other potential issues that may impact the project. We typically recommend funding every month to the Lenders.”
While M&H’s portfolio of services is financially oriented, Kratsios says the end goal isn’t necessarily a fat margin. “Our greatest key performance indicator is satisfactory completion of a project,” he explains. “That way, everyone involved is happy — the lenders, investors, developer, contractor and the professionals. We value the opportunity to be a part of the overall team and see a project through to the end in a positive way.”
This approach to third-party monitoring has long kept M&H growing profitably. The firm sees on average 10 to 20 percent growth annually, which keeps employees busy and fulfilled while offering reliable, highly resourced service to clients. In the years ahead, Kratsios is looking forward to building new relationships as Merritt & Harris Construction Consultants extends its well-honed third-party consultation services into new markets.
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