By Spencer Campbell – Reprinted from November 2013 Business North Carolina
Terrence Holt doesn’t want his team to come across as contrived choirboys, so while he and Leonard Barrier sport white shirts, he told Mike Pritt to wear a black one. Besides, Pritt quips, he looks thinner in black. In about an hour, they will pitch why their company should get a piece of the $35 million renovation of N.C.StateUniversity’s William Neal Reynolds Coliseum. Holt isn’t nervous — “No, no, no, no, no. I’m excited. More excited” — but for two days the president of Holt Brothers Construction LLC has been running through rehearsals. This morning is the last chance to perfect their presentation.
Reynolds was the largest arena in the Southeast when it opened in 1949 but is now an elderly edifice that doesn’t even have air conditioning. (It got so hot during President Barack Obama’s speech there in 2011 that at least six in the audience fainted.) Holt Brothers isn’t vying for general contractor; the project is far too large. It wants to be the protégé in a university program that matches smaller, typically minority-owned companies with larger, more experienced ones. It’s like an internship. Holt Brothers had to apply for it, and now it’s one of three finalists.
The coliseum is important to Terrence and his older brother, Torry. The vice president of the company also might be the best football player in N.C. State history, a wide receiver who went on to accumulate accolades that have him knocking on the door of the Pro Football Hall of Fame. Now 37, he fondly recalls students streaming from dorms and marching down Cates and Dunn avenues toward each other, meeting inside the arena abutting the railroad tracks. Terrence, 33, also played at State and professionally. “To be honest, I had a goal of playing 10 years in the National Football League. I didn’t make that goal. I had a goal of not only being an All-American my senior year, I wanted to be Player of the Year in the conference.” His brother did that; he didn’t.
And he didn’t bond with Reynolds Coliseum as a student — the men’s basketball program moved to an off-campus venue his sophomore year. But participating in its renovation would be a big step toward another goal he set for himself: running one of North Carolina’s largest general contractors. “This, for me, is another opportunity to continue to reach the goals that I set for myself.”
So despite his protestations, he’s somewhat edgy as the final run-through begins at company headquarters in Raleigh. (“I know he was excited this morning,” Torry says later. “He’s been prepping for the longest.”) He whistles an indistinguishable but sprightly tune while moving a speakerphone from the counter to the conference table to patch through Torry, who won’t make rehearsal or the presentation but wants to wish them luck. “Trust one another and have a good time,” he says. Four employees have funneled in from their offices down the hall to serve as stand-ins for the interviewers. “This is probably a tougher crowd than we’ll face today,” says Pritt, the company’s chief estimator. He’s seated on Terrence’s left. Barrier, vice president of operations, is on his right.
“I want them to be,” the boss responds. He sets the timer on his iPhone — they’ll have 20 minutes to present — and makes sure everyone has muted their ringers. “Critique us. Here we go…..”
….Thank you for having us here for this iconic project. I’ve been to many games here at N.C.State’s campus, sweated through many games here.” Terrence talks a lot with his hands. When he pauses, they hit the table with a thud. “We founded the firm in 2007 and acquired A&M Construction in 2011.” Technically, he’s right. They incorporated Holt Brothers Construction six years ago, intending to focus on residential work such as flipping houses, but the business went untended. “Buildings were losing value at the drop of a hat because of the state of the economy,” Terrence says. They spent a few years researching different fields and attending trade fairs, deciding on commercial construction after talking with a builder at the National Minority Supplier Development Council’s 2010 conference. The Holts — who both studied sociology at State, with Terrence earning his degree and Torry falling a few credits shy — concede that the idea of entering construction back then, when the industry was mired in the rubble of the recession, sounded crazy.
But they possessed assets that made their foray less foolish than it appeared. In 2000, North Carolinians passed the largest bond referendum for higher education in U.S. history, raising $3.1 billion for the UNC and community-college systems. Two years later, the General Assembly passed a statute requiring public construction projects to include at least 10% participation from “historically underutilized businesses.” Public universities and the community colleges had to at least try to hire women- and minority-owned companies. In fiscal 2012, HUB participation in public projects in North Carolina was valued at $476.3 million — 15.6% of the total. (At state schools, it was more than 50%.) But while white female-owned firms raked in $54.1 million — 11.4% — black-owned ones accounted for $11.9 million — 2.5%.
The Holts’ deep pockets set them apart from most black-owned construction companies. The U.S. Department of Transportation has a Disadvantaged Business Enterprise designation, similar to HUB in that it seeks to disburse at least 10% of funds for transit construction projects through minority-owned businesses, but their owners’ net worth can’t exceed $1.32 million to qualify. HUB certification, under the N.C. Department of Administration, has no such ceiling. “Clearly, that’s an advantage,” says Andy Snead, N.C.State’s director of design and construction services. “It just means if they run in the red for the first year — or if they make a couple of mistakes and bid too low or if they don’t manage the project very efficiently in that first year — they can probably absorb that kind of loss.” It also means they have an easier time getting performance bonds, which takes into account the financial profile of a company and its owners.
“It was a steep hill to climb,” Snead says. “There are a lot of people out there that know an awful lot about construction that were closing their doors” — especially considering that the Holts wanted to start at the top. “That’s kind of what Torry and Terrence said when they walked in.” N.C. State University Associate Vice Chancellor of Facilities Kevin MacNaughton referred the Holts to Snead, who, along with people from some of the state’s largest general contractors, became advisers to the brothers. One thing they pressed upon them was the importance of acquiring experienced management. It was through this network that the Holts learned about A&M Construction Co.
Founded in 1979, the Raleigh builder led by Leonard Barrier had completed midrange work in the public and health-care industries, two sectors the Holts wanted to focus on because of their relative stability. A&M had handled an $8.4 million renovation of the east wing of D.H. Hill Library at N.C.State, so it knew how to traverse red tape at public schools. Its sweet spot, however, was the $2 million to $5 million range. Before the recession, large general contractors deemed projects that size too trifling to bid on, and small builders often couldn’t get enough bonding capacity to win them. That minimized A&M’s competition. “Well, when the market turned,” Terrence says, “everybody started to bid on everything.” By late 2011, the company was on the verge of closing its doors.
Holt Brothers bought A&M for an undisclosed amount. With it came a small team that had more than a century of experience. And the company had a job straight out of the box — a roughly $80,000 office renovation in Raleigh — and was soon certified to bid at N.C.State, where it has three projects ongoing. (For those crying nepotism, all of Holt Brothers’ jobs there have been “informal” — less than $500,000 and automatically awarded to the lowest bidder.)
Its largest project so far is a 95,000-square-foot, $55 million 911 center in Raleigh that will handle emergency calls for much of WakeCounty. As would be the case with the Reynolds Coliseum renovation, Holt Brothers is a junior partner, working with Raleigh-based Clancy & Theys Construction Co. and a second large general contractor. “There’s a real shortage of minority-owned firms,” says Scott Cutler, a Clancy & Theys vice president. “Particularly African-American firms in general contracting.” He first heard of Holt Brothers about a year ago and sought a meeting. “Terrence’s strength as a person — his personal commitment to this — that’s most impressive.” Plus, Barrier had experience building a communications tower similar to the one this project requires. Construction won’t begin until at least July 2014 and will last about 18 months. Holt Brothers will collect a fee from the general contractors — plus plenty of fodder for its résumé.
“It’s really cool to sit back and watch him run the company and operate it,” Torry says of his brother. “He’s been very strategic with how he does things. Who he wants to hire. When he wants to hire them. Why we need to hire them. Getting more intel on what our company needs. What do some of the owners want to see from us. We take that information and apply it directly into the company. It’s a credit to him. It’s funny, he’ll be talking to me sometimes, and I’ll be looking at him like … really?”
But one of the six people Holt Brothers hired during the last year — it now employs 12 — is less impressed with Terrence’s performance. “Before we jump into questions,” Mary-Ann Baldwin says, “I’m going to tie your hands down.” Casting a chagrined eye at the offending fists, he replies, “You’d better.” More important, the new vice president of marketing and business development says, is that he’s not conveying how important the Reynolds renovation is. “‘This is a transformational project for our firm,’” she says. “That’s how you start out.” “Transformational project for our firm …”
He half-runs, half-walks through the lobby. As he passes the door to his company’s office, Terrence knocks on the window and gives a quick thumbs-up. A few days later, the university confirms that Holt Brothers will be the protégé of Dayton, Ohio-based Danis Group of Companies. “It was a very, very, very tough competition,” says Cameron Smith, the university’s director of capital management. But Holt Brothers’ presentation was clearer about its organization and what it hoped to achieve. “And then they just came to the interview very prepared.”
Terrence doesn’t have much time to celebrate. He’s heading to Pinehurst to attend a meeting of the Greater Raleigh Chamber of Commerce board, which he just joined, but before leaving, he and his brother grab lunch at an Italian restaurant. While discussing some of the investments they’ve made in preparation of the company’s eventual rise from pupil to player, a waiter — not theirs — approaches the table. “Are you Torry Holt? Can I get your autograph?” Torry hesitates a split second, then reaches for the pen and paper. Terrence keeps talking. “Estimating. We needed an estimating department, so we created an estimating department.” They hired Pritt from D.H. Griffin Construction Co., a Raleigh general contractor that handled nearly $100 million worth of projects in the state last year. He asked for an upgrade of Holt Brothers’ estimating software, a significant outlay. They don’t have investors, because investors bring opinions; they do have a revenue target, but he won’t share it or what they generated last year. The waiter thanks Torry and walks away.
From a walk-on, Terrence turned himself into an all-conference football star and from a late-round pick into a starting NFL safety. Still, he’s the family afterthought, at least to outsiders. “I would be not totally telling the truth if there wasn’t some underlying motivation there,” he says. “I always had my brother there as a litmus test to surpass, either his records or something that he’s done. And that’s nothing that he held me to. It was just something, just personally, what I think a younger brother should do.”
There’s no malicious sibling rivalry here; they’re best friends. Torry calls Terrence to let him know when he’s out of town, working with the Rams’ receivers or broadcasting preseason games, and when he’ll be home. He, his wife and three kids live about 5 miles from where Terrence resides with his wife, who is expecting their second child, and their little girl. “I enjoy being in business with my brother,” Torry says.
Terrence adds, “The goal is to do that with someone you love.” His 3-year-old has a pink Little Tikes basketball goal, maybe 2 feet off the ground. Sometimes the brothers play one-on-one, taking five shots from each side. Whoever makes more, wins. Sometimes they play best two-out-of-three, sometimes three-out-of-five. It’s not much different than when they were kids competing at slaps or basketball or one-handed catches. “We’ll take anything and make it a competition,” Terrence says. Read More.