Building Vets, Jay Paul launch Level 10
Source: Silicon Valley Business Journal
Level 10 — majority owned by Jay Paul — will be headquartered out of Moffett Towers in Sunnyvale. Moving into construction was a natural extension for the developer, who had been considering going in this direction for several years but only recently felt that the timing was right, according to Jay Paul COO Janette Sammartino.
Dennis Giles, former COO and executive vice president at Redwood City-based Rudolph and Sletten, has been tapped to serve as president. In addition, former Rudolph and Sletten vice presidents Doug Collins and Paul Moran, chief estimator Joe Francini and CFO Jim Evans have been recruited to the new company.
All executives had worked at Rudolph and Sletten for 16 years or more, with both Francini and Giles having spent more than 30 years with the company.
Giles said he was approached by San Francisco-based Jay Paul after being in charge of his account for the past 25 years.
“He wanted to own a construction company and thought this was a good idea,” Giles said. “I thought it sounded intriguing to get back into a company that is a startup and privately held where we could control our own destiny.”
In 2005, Rudolph and Sletten was acquired by publicly traded Tutor Perini Corp., one of the country’s largest construction services companies with $3.2 billion in revenue..
Teaming up with Jay Paul on a new venture was Giles’ chance to get back into a smaller construction environment “and have our own identity and an opportunity to work very closely with clients.”
In a written statement, Rudolph and Sletten President and CEO Martin Sisemore said such spin-offs are “a natural occurrence” in the construction industry.
“Some people will always have an entrepreneurial spirit working for a construction company, and as any long-standing construction firm knows, people leave and form new businesses over time, although the reliability and integrity of Rudolph and Sletten as a company will be hard to match,” he said. “While we wish our ex-coworkers well in their endeavors, we do want to thank the developer Jay Paul, for allowing us to build over 9 million square feet of his projects over the last 30 years.”
Rudolph and Sletten co-founder Ken Sletten, who is now retired and no longer legally affiliated with the firm, will be a managing director of the advisory board of Level 10.
For Jay Paul, being able to control the quality of his company’s development product was appealing, Sammartino said.
“We also have a pretty good track record for quality and execution and part of the reason is the construction team we have used over the last two decades,” she added. “We believe the team can successfully deliver the same execution and quality to other clients so why not capture this profit center.”
Paul, as majority owner of Level 10, is working on a plan to provide executives with minority stakes in the firm, Giles said.
However, Level 10 will operate as an independent, standalone company that so far has a total of 10 employees.
“As we get some of the construction projects rolling, we’re going to be doing more hiring,” Giles said.
Moving forward, Sammartino said Level 10 already has a significant backlog of projects and that it is “actively seeking projects from potential clients as well.”
“Similar to any other full-service general contractor, the intent of the company is to have a broad and diverse client base and not just focus on Jay Paul projects,” she said.
Those projects include $300 million worth of projects in Jay Paul’s pipeline such as construction of a 350,000-square-foot office building at Moffett Towers in Sunnyvale, a 220,000-square-foot office building at Technology Corners in Sunnyvale where Google Inc. recently signed a major lease, and an additional 600,000 feet of office space at two different sites in Palo Alto and San Diego. Specifically, Jay Paul is in the process of getting entitlements to build two buildings totaling 240,000 square feet at an existing site on 395 Page Mill Road in Palo Alto where AOL Inc. has its headquarters (see sidebar, right).
Looking ahead, Giles said Level 10’s goal is to build $400 million to $500 million worth of projects annually.
The company won’t be just focusing on office construction. “We’ll be doing commercial office, medical office and clinics, biotech labs, educational buildings,” Moran said. Level 10 will initially primarily target Bay Area technology and biotech firms, he added.
“We picked the name Level 10 because if you can achieve a 10 in any endeavor, it’s known to be excellence and perfection,” Giles said. “We tied that to construction with the world ‘level’ to tell our clients and employees that we are trying to achieve excellence in all aspects of our business.”
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