From the December 21, 2001 print edition of The Business Journal

Building a retail niche

Repeat business a key to contractor's growth

Ken Elkins   Staff Writer

Bob and Debbie Marolf have their own twist for the saying, "Think globally, act locally."

The owners of Marolf Construction Inc. are headquartered in Charlotte, but most of their work is done in other areas of the country. So in a way, the Marolfs live locally but build globally, or at least nationally.

"I've found that my niche is traveling," Bob Marolf says.

He contracts with a relatively small number of developers to construct shopping centers, freestanding pharmacies and other commercial buildings. Then he relies on the relationship with those prolific developers for repeat business.

Because that arrangement means Marolf goes where his customers want him, much of the company's business is out of town. Marolf is licensed in the Carolinas, Georgia, Tennessee, Alabama and Virginia. And he's built as far away as Ohio.

"A lot of developers don't like to hire locally," he says. Instead, they choose to rely on a builders who have done work for them before.

"It is so much easier if you know the people you work with," he says.

Edens & Avant, a Columbia-based shopping center developer that recently opened a regional office in Charlotte, has been an important source of jobs for Marolf, accounting for as much as 70% of the contractor's annual revenue.

Marolf has done renovations and new construction for Edens & Avant around South Carolina, including projects in Anderson, Clinton, Sumter and Columbia.

Marolf also has built as many as 10 Stein Mart stores around the Southeast, earning the respect of Mike Allen, Stein Mart Inc. vice president of real estate.

"Through them doing such a good job, we added them to a small list of customers who we use often," Allen says. "We're happy with their work. Their prices are reasonable, and they always hit deadlines."

The company's out-of-town jobs combined with a few Charlotte projects such as a series of International House of Pancakes restaurants, have pushed annual revenue to $6 million this year.

It's a clear success story -- especially considering that Marolf started his professional career as a package courier for United Parcel Service of America Inc. after dropping out of college. He subsequently turned to construction, working for a roofing company, after growing bored with the delivery business.

Moving to Charlotte from Nebraska in 1981, he worked for McDevitt Street, now Bovis Lend Lease. But he wanted a business of his own and founded Marolf Construction in 1989.

"My goal was to own a company -- I like having my name on the building," he says. "I sort of fell into construction."

He almost fell out of it soon after he began. In 1992, he took a job to construct an office building at Coffey Creek, near Charlotte/Douglas International Airport.

Brought in by the vice president of a prominent Charlotte contractor, Marolf agreed to the job at a set price. That price turned out to be lower than the cost of construction. "We agreed to do the job too cheaply," he says.

To get through the troubled project, Marolf cut crews doing other jobs and concentrated on completing the Charlotte project. He also moved his office into his home to save on expenses.

But he learned a valuable lesson: Trust your instincts.

He had told the vice president the job couldn't be done for the set price, but the executive promised him otherwise. Because Marolf didn't believe his own gut feeling about the job, the company lost money and could have gone out of business, he says.

That lesson learned, Marolf has re-built the company to the point that he's ready to break away from his normal routine. Now he's focused on landing larger projects and taking equity in the deals.

Marolf plans to bid on a $3.2 million Edens & Avant retail center called Shops at Cityside, a Bi-Lo-anchored development to be built on Eastway Drive at The Plaza

"I guess I have about a 40% chance of getting the job," he says.

There are two factors that may prevent Marolf from winning the bid, though. He has never built a Bi-Lo supermarket, and he's never been the general contractor on a project that large.

Among his company's other jobs, Marolf has built renal dialysis facilities for Fresenius Medical Care, a subsidiary of German health-care corporation Fresenius AG.

Marolf expects to develop other such facilities soon, retaining the ownership of the buildings and leasing them to Fresenius.

"It's hard to accumulate wealth just from construction projects," he says. "You need the equity ownership."


From the December 21, 2001 print edition of The Business Journal
Building a retail niche

5015 Idlewild Road North  Charlotte, NC 28227   phone: 704-563-7410  fax: 704-563-9636

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