Louis Coletti is a busy man. The president and chief executive officer of the Building Trades Employers’ Association of New York City has 27 contractor associations and 1,800 union construction managers, general contractors and subcontractors under his umbrella. His 30 years of experience in New York City’s construction industry was started by the unlikeliest of catalysts—a riot in a correctional facility in New Jersey.
Coletti recently sat with Commercial Observer to discuss the current challenges faced by BTEA members, and walked us through his career, the heavy hitters who helped to shape it and what the true test of success is.
Commercial Observer: You have so many different parties to answer to at the BTEA: How do you keep everyone happy?
Coletti: You should ask them if I do! I’ve been here for 19 years, and I’ve enjoyed a tremendous amount of support from the community. But I think part of the success of the organization is that you’re always going to get a straight answer from me. You may not like what you hear, but I’m going to tell you: “This is our position, and I hope we can agree. But if we can’t, we can’t.” I’m a man of my word, and I take that very seriously.
How did you get your start in the construction industry?
I was working in law enforcement in Union County and going to school at night for my masters degree in public administration. I moved up from being in the sheriff’s office to the head of criminal justice to head of economic development. On one fateful evening, I was put in charge of a correctional facility six hours after there was a major riot. It was your typical overcrowded facility—built for 200 people but holding 600, no air-conditioning and 200 years old. I remember standing on the roof watching flames coming out of the windows. [The inmates] had 12 hostages. I was watching state troopers charge the facility and hearing bullet shots careening off the wall, and I said to my boss at the time, who was the county manager, “Do you realize that we’re in charge of that building in an hour?” and he looked at me and said, “What do you mean ‘we?’ ” I ended up running that institution for a couple of years, and that’s how I got into construction because part of the plan I was tasked with was building a new jail under a federal court order.
The whole place was corrupt. We heard that there was going to be an escape attempt, and one inmate told me, “I can walk out the front door.” Now this was a convicted rapist and murderer. He told me that the officers left the control center when they went out for beer and pizza. I said, “What?!” I didn’t believe him, and so he said, “Well, give me your home number.” So I gave him it. Sure enough—he calls me up. I said, “Where are the six officers?” He said, “I told you—they went out for beer and pizza, and I’m in the control center.” Again, I said I didn’t believe him, and he said, “OK—listen to this.” Then I heard him opening all of the jail cells, and there is only one place in the institution that this could have happened. So I call the county police, we go down and surround the facility. I hide in the back until these six officers return. I come out of the back, I say, “Finish your beer and pizza, punch your cards, you’re all fired.” We turned that institution around. That established a reputation for me as “a fixer,” which ultimately led to my appointment as the youngest county manager in the history of New Jersey.
You went from this Union County government role to president of the New York Building Congress in 1986. How did this come about?
I answered an ad in The New York Times. After the interview, I came home and said to my wife, “This is a joke. This job is lined up for someone who has all of these New York City political contacts”—but I kept getting calls to come back. My wife went crazy when I told her I took the job because I was being interviewed on Wall Street to go into public finance, and she said, “I thought you told me this organization had no money!” I told her it didn’t—but you had to sit in that room and sense the level of commitment.
Jack Rudin [vice chairman of the board of directors at the time] basically adopted me and led me around and introduced me. John Tishman—I remember coming out of the interview in his office, and he said to me, “Are you sure you can get this job done?” I said “yes, I believe I can.” He said, “Well, you better.”
Next, Peter Brennan, who was the head of labor unions at the time came to me and said, “Can you do this job?” “Yes,” I said. “You want it?” he asked. I replied, “yes.” And as he walks into the conference room I hear him say to everyone, “Alright, enough with this interview stuff. We want Coletti.”
What gave you the confidence to know that you could do the job to their expectations?
Because I didn’t have a job at the time [laughs]. I was unemployed, and someone who was a mentor to me said the true test of success in life isn’t how many times you reach the pinnacle of success in your career; it’s how you react to it when you get knocked off that pinnacle. It’s how you get on your feet and fight your way back.
When I first came to New York, the New York Building Congress was a social club. It was very small, but you had visionary thinkers. You had the Jack Rudins, the John Tishmans, the George Foxes of the world who saw that in order to have an impact on public policy you had to do more than have a Christmas show and a golf outing.
How has the construction industry changed over the past 30 years?
It was obviously much easier when the union industry controlled the market, but what’s really worse is cash flow. This is a high-risk business, and contractual terms, whether they are in the private sector or public sector, just take risk and push that risk down. The owner pushes it to the contractor; the construction manager pushes it to the subcontractor. This used to be a business that was based on trust and relationships. You shook hands on a $500 million job. Now it’s all formal and all legal, and you need all of this documentation. Paperwork has replaced relationships and trust. Globalization has also changed things.
What needs to change?
We’re not consolidating. I still have 27 associations; the unions still have 56 different unions. That model doesn’t work. It’s not efficient. For a lot of my members it’s a very difficult, emotional change to make. Many of them are second- and third-generation owners, and it’s really hard for them to accept change. Change is constant, but this is not an industry built for change. Someone once said it’s like trying to turn around an aircraft carrier. But in today’s world you don’t have that time. Not if you want to survive.
Another element is that you believe that labor unions need to be more competitive with regard to pricing?
Yes. I believe there is really a value to union construction. And not just from a real estate or construction standpoint but from a social standpoint. At this point in time, the only blue-collar industry that is left that can provide a middle-class living is the union construction industry.
That’s why I push so hard against labor [unions] to reduce their costs, and a lot of them may view me very differently than they did before. But I do it because I want them to be successful and to thrive, and the only way that is going to happen is if they reduce their cost and change their business model. This would accomplish two goals—it would serve the BTEA membership they work for, create more union jobs and help grow New York’s middle class for a new generation of city residents.
If the union shops want to stick to the 100 percent building model, then 100 percent of them have to change and be competitive.
There are a number of open-shop general contractor associations that have been created. We’re having conversations with them about possible membership. I would never have believed it five years ago. Open shops comprise 50 percent of residential market construction.
Who have you learned the most from in your career?
Because we are such a diverse industry and the specialties are so different, I have learned so much from so many different people. Jack Rudin, George Fox [the chairman of Cooper Union], Peter Brennan [former president of the Building and Construction Trades Council of New York], Ed Malloy, Mike Bloomberg…
What did you learn from Bloomberg?
From Mike Bloomberg I learned how to be a successful businessman. When his election came around, we had a breakfast, and he came to it and gave a speech. He comes in, carrying a zoning book, and flings it onto the floor. He said, “When I get elected mayor, we are going to build and not with this [book].” We loved him, but we thought, “This guy can’t win.” Well, he won. One night I was at a dinner when Mayor Rudy Giuliani was going out [of office] and Bloomberg was coming in, and [both Bloomberg and Giuliani] walk past the table I’m at and start talking to people at the table. I stick my hand out, and I congratulate Bloomberg and say, “I’m Lou Coletti, I represent the BTEA. I’m looking forward to working with you. I wish I could tell you I was with you, but I wasn’t.” He starts laughing, and he says to me, “Give me your business card because you’re the only honest man in the room.”
A couple of weeks later I’m sitting in my office, and the phone rings and my assistant comes in and says it’s the mayor’s office. So I pick up the phone. It was the mayor’s appointment secretary saying, “The mayor would like to know if you and your wife Janet would be available to have dinner at his home in two weeks.” I said, “No, really—who is this?” thinking I was being pranked.
He would bring together 10 couples, two or three times a week from different industries—people he knew did not know each other—because he wanted to build a consensus across the board of people who were going to be supportive of policies.
I was seated at the end of the table, and my wife was sitting right next to him. This is when he was trying to take over the [New York City] Board of Education. He put my wife next to an assemblyman whose vote he wanted as he knew that she was a teacher, and he tells my wife “Your job tonight is to get his vote.”
What is the most memorable project you’ve worked on?
Grand Central Terminal, when I was with Lehr McGovern Bovis [ Coletti served for six years as a senior vice president for the construction firm, from 1993-1997]. I was part of the project team that won the job, and just watching that facility get cleaned up, modernized and become a transportation Mecca was amazing. I remember walking on the catwalk above the lobby, and the ceiling was so dirty. I didn’t realize it was dirt. I thought it was dark paint.
I love what Gov. Andrew Cuomo is doing because I believe that transportation hubs are critical—they create first impressions for tourists when they arrive. We’re 100 percent behind it, because tourism, real estate and finance are the three drivers of our economy.
Hudson Yards to me is the single most transformational project that I have seen in my career. When you see what’s starting to happen, combined with the rebuilding of the World Trade Center area—I don’t care what the cost of the hub was— it’s worth it. Downtown is a new city. I come back to Midtown and sayto my wife, “I’m in the old part of the city.”
Developers here continue to amaze me because they have to have guts. They have to borrow a lot of money. One person I have a tremendous amount of respect for is Larry Silverstein. On a Monday, Larry signed a 99-year lease for the World Trade Center, and on Tuesday it was bombed. But he was not going to allow anyone to stop the redevelopment. People of that ilk—the Steve Rosses, the Gary Barnetts, the Dursts, the Rudins, the Speyers, the Silversteins—that core of New York City is not only strongly committed financially, but they have a vision of this city.
What is the biggest challenge that you’re facing right now at the BTEA?
One issue is the public policy environment in which we build. “Bureaucratic” is probably too polite a word. It’s where I spend a good part of my time. We work very closely with the city and state administrations in terms of trying to advance legislation and regulations that make the building environment more productive and more efficient. But it’s getting harder and harder to do.
The other issue is the city and state’s minority- and women-owned business goals. There’s a requirement that [contractors] hire MWBs for 40 percent of the work in the city and 30 percent in the state. We don’t believe that capacity exists. If my prime contractors don’t attain those goals, they get penalized with a negative evaluation, which then impacts their ability to bid another job. That was not the way the program was designed, so we’re doing some studies and feel that we’ve been supportive of growing MWB companies. But you can’t do this in a punitive way, and that’s what has happened.
What is one of the proudest moments in your career?
One of the things I am most proud of is a nonprofit that Ed Malloy, past president of the Building and Construction Trades Council, established—Construction Skills, where a New York high school graduate goes to the top of the list of the apprentice programs, and the current building trades president has expanded these efforts. These programs have lists of [5,000] to 10,000 people, and they are monitored very closely. Of the 8,000 apprentices, 65 percent are African-American, Latino or women, and 75 percent are New York City residents. You look at these factoids, and 10 to 15 years ago there was 10 percent minority workers and most of the trades living in Long Island or Connecticut or New Jersey.
What other experiences stand out when you think about your career?
On 9/11, I actually was looking out my window on 28th Street and saw the second plane hit. So I get on the phone and try to call the city to see what I could do. Obviously you couldn’t get through, so I tell my public relations consultant to put me on television. I basically say, anyone who wants to help, here’s my number—call the office. I was getting calls from all over the country and one was from Ken Holden. He was the Department of Design and Construction Commissioner at the time. He said, “Lou. We need masks, we need this and we need that.” I got on the phone with my members, and we delivered them. And that call to arms continued when [Superstorm] Sandy hit. Thank God for the city of New York that this industry was as unionized as it was. Think about how the city would try to organize the hundreds of contractors and thousands of skilled workers they needed immediately at that site. The city made two phone calls—one to labor, one to BTEA , and you had an army of workers and contractors that could respond immediately to help.
What’s next for the BTEA?
Our focus is on contractors. Because of the past strong relationship we had with labor, [people] still confuse me as representing labor, and I have to say, “No. We represent businesses.” I feel a responsibility to the BTEA members who have been so supportive to me throughout my 30 years, and I take my role very seriously as a responsibility and obligation to try to assist them with this direction. Will I be successful? I don’t know. But I’m going to try.