Episode 38 // Mike and Chris Talk Arizona’s Construction with Steve Kovach

Mike Jones:
This is the AZ Brandcast where we explore Arizona’s brand and the brands that make Arizona. I’m Mike Jones.

Chris Stadler:
I’m Chris Stadler. Today we have with us, Steve Kovach, the founder of Kovach.

Mike Jones:
Kovach. Yeah, that’s a tough one.

Chris Stadler:
Good. Based in Chandler, Arizona, Kovach’s one of the nation’s largest integrated designers, manufacturers and installers of high-quality panel and glazing systems for commercial building enclosures. Kovach offers a complete line of services to meet the most demanding application.

Mike Jones:
Yeah. Steve, we’re really excited to have you on today.

Steve Kovach:
I’m glad be here. It’s awesome.

Mike Jones:
You guys have been on our radar, mostly through Sam, for a long time. We’ve seen some of your work and it’s awesome, pretty amazing. We’ve heard lots of great things, so I’m really excited that you’re actually coming on the podcast and we get to chat with you one on one more.

Steve Kovach:
Alright. Thank you.

Mike Jones:
Give us a little bit of background about you and how you got started with Kovach.

Steve Kovach:
Well, that’s pretty easy. That’s a softball there. My dad started the company years ago. I’ll just tell you, this is our 50th anniversary this year.

Mike Jones:
That’s awesome.

Steve Kovach:
That’ll give you an idea of how long this has been going on, but we started with my two brothers and worked our way out of a garage to a small office warehouse. After a few years, we bought the building and after a few years the Scottsdale Airpark kicked us out because crates and nails don’t really work really well in an airfield. So, we closed it, bring it inside for a couple of days, and man, just trucks would show up. We had about five or six buildings rented all over Scottsdale Airpark. I had a stack, at the restaurant where they got the pin where they put the ticket on, I had a stack of tickets on my desk with a pen of tickets literally.

Chris Stadler:
You were like a short order cook?

Steve Kovach:
Yeah. Then finally we were going to call them. But the whole time we were scrambling to buy a new and build a new facility, which we did down in Mesa on the 60 N Mesa Drive. We ended up with about 300,000 square foot of manufacturing facilities there. We are as much a manufacturer as we are a constructor. We stayed there from, gosh, till from the early ’90s to the 2000. In 2000, we sold our manufacturing side to a company out of Pennsylvania who was going to build a plant here. I got wind of that and I said, “Hey, we don’t need another competitor. We are constructors.” And our manufacturing just supported us up until the mid ’90s when we started selling to other people with our products. ’95, ’96, we were named the largest metal roofing manufacturer in the United States based on tonnage.

Steve Kovach:
We were manufacturing literally 1,000 projects a year. We were installing many of them, but many of them we sold to outside vendors. We grew that model into the wall system trade. In 2005, we did our first composite wall panel system, and in 2007, we developed our own system at Kovach. Our team has always been innovative to the point where we like to fabricate and be pretty much vertically integrated taking product to market. We enjoyed that for quite a while, and continue to this day with that model. It seems to work real well and we have more control over the end result.

Mike Jones:
Yeah, it’s really interesting how you guys … because you guys started as a constructor, is that right?

Steve Kovach:
Correct. We started buying products from various manufacturers throughout the country. Architectural metal roofing back in the late ’70s was basically non-existent. It was heavy industrial metal panels for walls and roofs and a group of folks out of Pittsburgh. Pittsburgh’s was the hub of America in the day, in the ’20s and the ’30s, steel, coal. Then it evolved into PPG. You’ve heard of PPG Pittsburgh Plate and Glass. Well, that was Pittsburgh Paint and Glass, it gives me paint and glass. So, they got into the paint business and it evolved from there. Some of those fellows in the early 70s moved to Los Angeles and started their own architectural firm. My father worked for those guys and with those guys and we brought it to Arizona. About the time, Palo Verde nuclear power plant was built. It was about the time we started providing product.

Mike Jones:
That’s cool. What led you guys to decide to go from just a constructor using other people’s products to actually creating your own?

Steve Kovach:
Oh, that’s a good one. So, we’re doing a project in the West side of Phoenix. One of the things you like in a metal roof is not to have seams in the roof. Seams end up coming apart and leak. It’s a metal building technology, which is a structural panel and this is, getting into the details here, but the joints are screwed tight and you see those exposed screws up in an industrial building and who cares? But in a beautiful architectural project, you like to have continuously long roof panels. Well, as I said over in Los Angeles, we had a company that would form the panels and ship them to us. Well, I had this one project, I think it was Abbott Labs in the West side, I believe they’re still out there. A beautiful big building, but it was a 90-foot-long roof panel. We got the job because we told them we could provide a 90-foot-long roof panel shipped from Los Angeles.

Chris Stadler:
Then you had to go figure out how to make a 90 foot long roof.

Steve Kovach:
Well, you can extrude as long as the coil is. They have these big coils and you run them through a machine, imagine an old movie projector. It runs through all of those little rolls, and it comes out the other end a finished product shaped and formed, and then the machine sheers it to length. Well, typically, it’s a shippable length, 40, 50 feet. Then, if the roof’s longer, you put a lap in it, but the laps are unsightly, and also had the tendency to leak. We pride ourselves on no leaks and innovative construction, so we’ll ship this over. So, they built these amazingly long wood crates and got a stretch trailer and we shipped them to this project. Well, we got the … and then the trick is creating that big 90 foot long crate full of steel panels onto a roof. Well, you have to get a big spreader bar and a big crane while these are wooden crates shot together with nail guns.

Steve Kovach:
We got the first one up there and things were going fairly good and we lifted the second one, and it was like a cannon went off and the crane snapped in the middle and it’s swung and we didn’t lose the crane, but it swung and took out all the trusses and the plywood. Nobody got hurt. It was just, I’m looking at this big hole in a building. It ruined bundle of panels. They’re like noodles when they’re not structurally … they’re not a structural panel. That was it. I threw the camera down, threw the hardhat down, kicked it, it dented my truck with my foot. We reordered, got them in there. This time instead of a crane, I built a ramp and we worked them up from the truck, took forever. It was just like Chinese labor. We have 50 people trying to do the task without-

Chris Stadler:
I have this picture of Egyptian pyramids being made.

Steve Kovach:
Exactly. That’s a better analogy.

Chris Stadler:
Steve just answered our icebreaker question.

Mike Jones:
Yeah, he did.

Steve Kovach:
Well, I don’t know what that is, but so that day I said we got to figure out a better way and a better way was to buy a machine that extruded the panel to roof onsite, and hence Kovach actually innovatively took over that market in the Southwest.

Chris Stadler:
That’s very cool.

Steve Kovach:
We’ve grown at into that philosophy of roll forming large, long panels onto roofs. We did that for many, many years. My middle brother, Rick Kovach who owns the Bemo Roofing Company, he took it too, and he’s on steroids with it now. They have huge million dollar machines that hang on boxes that roll 16 gauge stainless steel 300 feet long for airport projects. It’s just amazing.

Mike Jones:
That’s insane.

Steve Kovach:
Yet, it’s the way to get a very high quality, never have to worry about it 100 year roof system. We’ve evolved here at Kovach. We’re not doing as many roofs, but we’re doing more wall systems. We’re bending over, putting panels down on a roof. Now we’re standing up on wall. It’s a lot easier on the back. A lot of my senior folks have been working here forever are so glad that we’re standing up instead of bending over. Anyway.

Mike Jones:
That’s awesome.

Chris Stadler:
Should we do the ice breaker?

Mike Jones:
We should do the ice breaker.

Chris Stadler:
It’s a fun one.

Mike Jones:
Yeah, go for it, Chris.

Chris Stadler:
Okay. I’ll go for it. All right. What is your favorite, and you have two choices with this ice breaker.

Mike Jones:
Multiple choice.

Chris Stadler:
You have two directions you can go with it. It’s extra fun. So, favorite construction saying and/or your favorite construction story about a screw up.

Steve Kovach:
Well, I kind of hit that one.

Chris Stadler:
You nailed it on the head. Nailed it.

Steve Kovach:
Well, I got a couple of them.

Chris Stadler:
[crosstalk 00:10:38] Mike.

Mike Jones:
I’m sure you got more than one though.

Chris Stadler:
Any more construction analogy? Any more construction …?

Mike Jones:
No.

Chris Stadler:
Just nailed it.

Mike Jones:
No, let’s just leave it there.

Steve Kovach:
But the construction saying is basically our motto here at Kovach. It’s work hard and play hard. We do work hard and we do like to do a lot of events. This week is the Phoenix Open, Waste Management Phoenix Open. We, each day, have about 30 or 40 people customers, vendors, friends that we … each day’s a new day and I’m there every day and hopefully survive this week.

Chris Stadler:
Aren’t you going to the Phoenix Opening, Mike?

Mike Jones:
Yeah, I’ll be there on Thursday.

Chris Stadler:
Yeah, cool.

Mike Jones:
Yeah, I’m excited.

Steve Kovach:
I think it’s a golf tournament.

Mike Jones:
I think so. There’s a whole lot of other things going on though. That’s the challenge. Do I watch the golf or do I hang out?

Steve Kovach:
What were you going to say?

Chris Stadler:
All right, Mike. What’s your construction screw up or favorite, and/or favorite saying?

Mike Jones:
Thankfully not my screw up. I benefited from it majorly, which is why it’s my favorite. So, we remodeled our house, was like four years ago, three years ago. The GC that came in and did it, we talked through all the plans, we had architectural plans, we worked with an architect and figured everything out and had it all lined up. He’s getting going and they do all the demo and they’re starting to … We had some doors in the back of the house that we wanted to replace. There was a sliding glass door in particular, and we just said, “Hey, we’re just going to flip it out with a new sliding glass door.” He’s like, “Great, no problem.” So, I get a call that same day. That was the day where they were going to knock the doors out and I get a call. I had about like 2:00 in the afternoon. He’s like, “So, we made a mistake.” I was like, “Oh, what happened?”

Mike Jones:
He’s like, “Well, we took the doors out like we talked about, but my guys weren’t paying close enough attention and they put in French doors instead of a sliding glass door. So, you got nice new French doors, Merry Christmas in July.” I was like, “Yeah, I can live with that.”

Steve Kovach:
Nice, there you go.

Mike Jones:
I was like, how do you mess up and put in something a lot nicer than what I had specked out. But that’s my favorite script story. There were other scripts in that project that were less to our favor.

Chris Stadler:
Yeah. So, it was a wash in the end.

Mike Jones:
It was actually. It was interesting. I think if that hadn’t happened, it would’ve been harder to swallow some of the other issues we had. The biggest one was … that was the first point of realizing this GC’s crew is maybe not the most like detail oriented. There was a one later where we had contracted with another company to build a custom countertop and they installed it, and his guys, the GC’s guys came back in to hang lighting above it, and of course, they get up and it was quartz, the countertop. They get up on the countertop to hang the lighting above it and not thinking … got their nice like big heavy boots on and someone had probably picked up a nail or a really nice rock in the bottom of their shoe and there was gouge marks in the brand-new countertop we never even used in like two spots. You could tell it was like directly under the lighting, and it was like, Oh my goodness, ouch. It was like just put like a piece of cardboard down or something. Just not thinking.

Mike Jones:
That was the downside of that one. But at the end, it’s like one of those … Now, in the moment, it felt really painful and emotionally hard. Now it’s like, I don’t even notice that spot anymore. We’re banging on that countertop all the time, so whatever.

Chris Stadler:
You have kids, so it’s like you can’t have nice things anyway.

Mike Jones:
It’s like no, it’s going to get ruined eventually anyway. That’s my, somehow I snuck two in there, Chris.

Chris Stadler:
I have a saying in the story. The saying is if you fall from the scaffolding, you’re fired before you hit the ground. That’s what I got when I was in construction and I was a laborer. Then there was other time where we were rolling trusses on a big fire station, a new fire station. They were just trying to hurry because they just wanted of the cranes for the day. They didn’t want to pay for two days, so they were in a hurry man. The carpenters were up top. They were basically, you roll truss, you roll another truss. You have to connect them together with them with some … I can’t remember what they call them, but it’s just like a two by four, whatever. You just tack them together.

Mike Jones:
Some tires, yeah.

Chris Stadler:
Some tires. Right, so you tie them together. Pretty soon I’m looking up and I see one of them wave a little bit and the other waves the other way, and then it waves the other back the other way again, like all these trusses was a wave of trusses doing this little dance. Pretty soon, they all just crash, crashed down to the ground. Every single one of them.

Mike Jones:
Dominoes.

Chris Stadler:
Yeah. Everybody jumped down from a four … It was probably like a 12, 14-foot plate at the top of the walls, the stone walls. Nobody got hurt at all.

Steve Kovach:
That’s amazing.

Chris Stadler:
But I’m pretty sure that they had to call the insurance because that’s a lot of trusses and they couldn’t use a single one of them because they were now like compromised.

Mike Jones:
Yeah. The real downside is the crane’s coming back tomorrow.

Chris Stadler:
It didn’t pay off.

Mike Jones:
It didn’t pay off.

Steve Kovach:
And they had to clean it up. Not in the budget.

Chris Stadler:
And they had to pay for all the truss. Yeah. [inaudible 00:16:27]. It was a mess. The first question, Mike, do you want to unveil?

Mike Jones:
You’re in construction, you’re in manufacturing here in Arizona. Is this a place that caters to your kind of business? Has this been a good place?

Steve Kovach:
I call it Disneyland. We’ve never been wanting for work here in Arizona. I can say that all the way back basically since high school and we’ve always had work or people asking us to do work. It’s all about performing. If you put together a viable company, somebody’s going to want you to help them out. It’s been that way. A lot of people have come here, tried it. You got different cultures in different areas don’t always fit in here and its unique environment, but basically because of the heat in the summer, a lot of crews that come from the North really can’t handle it. They go scrambling back anyway to the snow. When there’s no snow, they go back. They dilute the market here when they come here. The field guys love working in this good weather right now.

Mike Jones:
Sure.

Chris Stadler:
So, they’re like snowbird construction company.

Steve Kovach:
Unbelievable. You set their last check on a day that it hits 50 in Minnesota. When it hits them at 50 in Minnesota, they’re gone. That’s where they live, and not all of them, but we get a lot of weather transient construct, and we plan for it and we stay in contact with the fellows. It’s hard to predict when you’re going to get a job and when the job’s going to go based on so many variables. It’s called the 711 theory. You go by 711 every day on your way to work, to get a cup of coffee. Normally, you walk in and get your coffee, there’s one person in front of you and then the next day there’s two people in front of you, but all of a sudden you go there one day and there’s 12, 14 people standing right in front of you and they’re all either buying a lottery ticket, a pack of cigarettes. By the time you get to your coffee’s cold, and you say, “What happened today?”

Steve Kovach:
It’s random. It’s random. So you get your jobs, you put numbers out there, the owner finally gets his financing, they call you. It’s time to go and you have to say no. Then if you do say no, you’ve got too many jobs. What happens is some of those jobs drag on. Very seldom, do you ever get a job that accelerates. So, you’ve got to calculate the drag or the scheduled delays. Everybody’s very aggressive in the front end. They’re excited about the job. You’ve got great energy at the beginning, and then you start hitting those brick walls as you move forward. Oh, permitting, oh city, oh, there’s a water main we didn’t know about, oh, there’s a hole in the ground, oh, the soils are ridiculous.

Steve Kovach:
You get into all that and the job starts dragging down. We plan for that. We think about that. But invariably you’ll get a couple of really sharp general contractors that have done their due diligence and they’re out ahead of that and it stays on track. Baseball stadiums, they’re going to swing a bat on this date two years in the future, that job will be on time. Case in point, years and years ago, the Diamondback Stadium was built in under a tough schedule and everybody got it done and nobody was happy, but they got it done.

Mike Jones:
Besides the heat, what are some of the uniques here that have been to your guys’ benefit?

Steve Kovach:
Affordable labor. Where you have affordable labor, you’re going to have hotter economies. I used to really think that that was the case. However, currently in Anaheim, it’s going nuts over in Southern California in the construction market. The labor over there is quite expensive. Cost of living is quite expensive, so basically goes with their cost of living. I think overall in the last two or three decades, Arizona has sustained its growth based on a very good labor pool at a very reasonable price. We don’t send you know guys in Los Angeles Glazers Union from LA into Phoenix. They’re used to making quite a bit more, and they’re out of town. They still have a house to support and family to support, so we don’t travel between those markets.

Steve Kovach:
In the rest of the Sun Belt between Arizona and Texas, Tennessee, those are all pretty much equal labor markets.

Mike Jones:
That’s cool. Have you guys ever thought about moving?

Steve Kovach:
Never the base company. We have offices now in Anaheim, Dallas, Austin, are pretty big in Austin and Nashville currently. I think that’s pretty good for our size of the company we want to be and to be able to perform. There’s a sweet spot. You can have too much, too little, you try to keep it right in the middle, and that has to do with sales, the type of jobs you’re looking at, owners, contractors, developers. It’s an equation that you have to stay on top of to keep that even flow. Very difficult for even flow for cash, for employees and backlog in any construction, especially trade like we are.

Chris Stadler:
How’d you stay, so even through like 2010 with the big recession and everything and construction was just in the toilet, was that just a like family housing and it didn’t affect the commercial as much or were you guys just that ready for that kind of thing to happen?

Steve Kovach:
That’s a great question. No, we weren’t ready for that to happen. It started in ’09. There just wasn’t anything to build commercially, industrially. Nobody knew what to do with their money. They certainly weren’t going to spend it. Coming into 2010, we were just scrambling. That was probably the smallest employee group and smaller revenue we had in the previous 10 years, was 2010. So, fairly unique for our company. We always, as I said, had been busy and we actually were pretty busy. Ownership side, it was my son and my business partner. Now, we had about 60 field installers and we had to keep them busy. I remember one job in ’09, all I had working were foreman on one house. We kept everybody else at bay.

Steve Kovach:
They were [inaudible 00:23:41], but for one week there, just to keep all my top, top guys being productive, they’re all in one big house. I said, “Man, this is nuts.”

Chris Stadler:
Was it in an awesome quality house [crosstalk 00:23:52].

Steve Kovach:
This is in Paradise Valley, so it helped out. It was the lowest low of manpower that I can imagine. With that, we learned a little bit. I said, well, you know what? Kovach had always done fairly well, and we had some doe. The three of us as partners decided to build our own personal homes in 2010, and not only did we get good value, they got done quickly, and so we did. That kept a lot of our people working that were really used to working on residential. Little did I know I had framers working for me in the sheet metal world, and they framed our homes.

Steve Kovach:
That was part of it, but I was sitting on my desk here in Phoenix, going through a magazine, looking at architectural projects, what are coming up, what’s the new work coming? And I saw this job that had our product all over it, and it was in Nashville, Tennessee. I said, “Whoa, that’s a stretch.” But wow, look at this job. So I said, why not? I bought an airline ticket and went out there, and sure enough they had scraped the property and they were just doing site work and it was a job trailer and it was Clark Construction, Bell Clark. It was a local, flavor was Bell, the local contractor. Clark’s the national guy. Went in a job trailer. I just start thumbing through drawings like I owned the place, and this guy, “Can I help you?”

Steve Kovach:
I said, “Maybe. I’m an enclosure contractor and just wanted to know a little more about the job. Is this job been bid out?” I didn’t know anything about it, and I had a very talkative superintendent who gave me all the info I needed and I was off to the races. Met the architect, met the general contractor, met the business development guy and work my way in, prequalified and we’re allowed to give a price on this job. There was a tough competition for the job coming out of the recession, everybody was hungry. But we’re a blessed company, we got awarded the Nashville Music City Convention Center.

Chris Stadler:
Nice.

Steve Kovach:
It was the largest muni that that was issued. I won’t mention the company, but the company in New York that issued the public bonds was the largest bond over half a billion. It was $680 million. They saw something in Nashville and they absolutely did. Once this convention center was built and that took all our resources here in Chandler to build this project. We had over 180 trucks shipped there of finished product. We had invented new systems to fit the budget. It was a great job for us overall. We didn’t have a lot of people to send there. So we hired locally and we got an award for the company that had a contract for over $10 million that hired the most local people. I only had four people there from Arizona that ran this large project. Today, if you go look at it, it’s just still stunning and amazing. That was the start of the Nashville construction boom.

Mike Jones:
Yeah, it’s been just going nuts over there.

Steve Kovach:
Yep.

Chris Stadler:
All I hear about is Nashville.

Mike Jones:
Nashville.

Chris Stadler:
Which is why this morning I was like, is it Nashville or is it Nashville? Because Louisville is Louisville.

Mike Jones:
Yeah, we had a big conversation about this.

Chris Stadler:
Big conversation. Knoxville or Knoxville.

Mike Jones:
It’s Nashville.

Chris Stadler:
Steve, anything?

Steve Kovach:
No, I’m a Yankee. It’s build to me.

Chris Stadler:
I’ve just been told how to not …

Mike Jones:
I’ve spent time in Nashville and I’ve never heard anyone say Nashville.

Chris Stadler:
Yeah. I haven’t either.

Steve Kovach:
It’s Nashville.

Mike Jones:
It’s Nashville.

Chris Stadler:
It’s Nashville.

Mike Jones:
If anything, it’s Nashville.

Chris Stadler:
Yeah. Yeah, probably.

Steve Kovach:
That got us through, the answer of your question, 2010. That got us through 2010, ’11 and 1’2. And that was the catalyst we needed to move forward and economy just started picking up from there. Actually, in 2020, it has not stopped since 2012, it has been growing. The growth has been … the tax situation last couple three years has changed dramatically at the federal level to the benefit of construction and employment obviously. Lowest unemployment rate in the history of Arizona right now. It’s a tough job market to grow your company. If you’re coming in here to grow, you better bring some people with you. Yet, Maricopa County is about the fastest growing if it is not the fastest growing County in the United States. Davidson County and Nashville is in the top 10, but those are just the ones I’m familiar with.

Mike Jones:
Do you feel like you guys have benefited quite a bit from companies moving here and wanting to do new builds and establish headquarters and that kind of thing?

Steve Kovach:
Oh my gosh, yes. A good example is Intel. Right now we’re in Chandler here on the Price Corridor. With the fiber optic lines in their transmission devices, that we have more connectivity almost as much as Simi Valley, second most about in the country for connectivity. Therefore, with Intel, who drove all that, at the dead end of price road, basically, that is just a small example. You got Northrop Grumman next door that just came in and I don’t know how many people there. They’ve got to have 1,000 people next door. West side, the distribution market has just gone crazy on the West side of Phoenix. It’s been doing that forever. A million square foot freezers. You ever heard about million square foot freezer? I’d hate to get lost in that thing because …

Mike Jones:
You ain’t getting out.

Chris Stadler:
It’s going to be like 10 years before someone finds you.

Mike Jones:
It’s a pretty cool building though.

Steve Kovach:
Exactly. Yeah, a lot of people move to Arizona for the climate, for the economics, for the tax base, you name it. Another hotspot, Austin, Texas is a very growth market. We think we’re blessed enough to be in these four really hot markets, Anaheim, Phoenix, Austin, and Nashville.

Chris Stadler:
It’s very strategic. Yeah, so one thing I heard you say you were talking about being able to go to Nashville and then be able to use local people. How’d that work with the quality that you guys look for? The quality you guys look for in your finished work? Was it a challenge to get local people to be integrated in your culture enough to where they express your values in their workmanship and stuff?

Steve Kovach:
Yeah. That’s a really good point. Training is paramount in a sub-trade training, and it’s difficult to trade. In California, the unions do a really good job with their apprentice programs or bring in their carpenters, glazers. Those are the unions we’re associated with in California. They do a great job of training, but in the rest of the states, it’s basically training, on the job training. So, you need to associate that person with the right personality of the other person that you’re working with. It’s quite a dynamic in a construction crew. You have the young fellow that comes on as a laborer. Well, the first thing you got to teach the young fella that’s coming up is safety.

Steve Kovach:
When you’re 19 or 20 years old on a very dangerous job site, you’re not as aware. You guys, I can tell, have been on job sites and worked construction in your early days. They’re sketchy, and you’re scared to death. You hear a boom and you shake. But that boom’s going on all day and it’s a guy with a powder actuated tool shooting a pin. You have to come along and get familiar with a large job site, just basic labor. That’s something I’ve always … Lately, I’ve been a little frustrated with, we don’t have kids coming out of high school and junior colleges that just want to get into the field. There’s a lot of construction management students and that’s great.

Steve Kovach:
That’s also a shortage in our industry is good construction management trained in systems and organizational skills. That is a true need. However, they need people to install, to work, to climb ladders, to bend over, to stand up, to cut, saw, all the things that you have to do with your muscles in your hands. They make a great living. That’s what we’re trying to promote is, it’s a great living, you’re outdoors.

Mike Jones:
Working with your hands.

Steve Kovach:
Working with your hands, you get a sense of accomplishment. The tendency to do that. I’d like to see more of the schools and the trade schools and the welding shops and the automotive shops, a diesel mechanic. He’s the one that keeps the world going around, right? The trucking industry. A good diesel mechanic can make six figure incomes, and there’s no reason that, and we have many people at Kovach in the field at six figure incomes. We do that with overtime incentives and bonuses because there is a demand and the cost of labor has risen based on supply and demand. The lowest, like I said, the lowest rates, unemployment rates in the history of the country. That stymies growth some, so you have to be innovative. I can keep going.

Mike Jones:
I have all these questions now about, is that an area of weakness here, specifically in Arizona?

Steve Kovach:
Nationwide.

Mike Jones:
Nationwide. So it’s not something indicative of just Arizona.

Chris Stadler:
It’s not like people don’t want to work in 114, Arizona, it’s nationwide.

Steve Kovach:
Yeah.

Chris Stadler:
That’s not a …

Mike Jones:
I’m sure to some degree there’s also just …

Chris Stadler:
Is that part of the incentive program?

Mike Jones:
… a lack of people wanting to work like manual labor. It’s manual labor at some level. It can still be very rewarding in ways I think that maybe people don’t understand until they do it, but yeah. As I think through generational shifts and kind of cultural influences and stuff. Most people are like, yeah, what’s my end goal here? Well, it’s definitely at least a bachelors and a cushy office job.

Chris Stadler:
That’s what’s expected. Right?

Mike Jones:
Yeah, and especially in our startup worship culture that we live in right now, where like, who are the rock stars of the professional world? It’s people who program, people who build software, people who are running and building startups, tech startups.

Chris Stadler:
Well, and follow your dreams. Right?

Mike Jones:
Yeah. That’s a Pandora’s box for you.

Steve Kovach:
Well, they need a building to work out of.

Mike Jones:
Yeah, exactly.

Chris Stadler:
Yeah, exactly.

Steve Kovach:
And who built that building?

Mike Jones:
Yeah.

Steve Kovach:
One of the things, so we work with that and we try to still get these projects, get them up in the air. I can’t put 20 guys on the walls on the project because just the lack of people. We at Kovach have an extremely innovative of doing more in a shop environment, more in the manufacturing facility. It’s a little easier to get someone to work at a spot that is … you go to work at the same place every day and it’s a job shop. Your job’s different every day, but you’re at one place. At least you’re in the shade, right? You have some air moving around you, you got the swamps and AC and that kind of thing. Not a lot AC, but the fellows are innovative.

Steve Kovach:
They have these unique units. They pull them right alongside where they’re working. We’ve got about 120 some fellows working and girls working in the shop, but they make their own cooling in air. We give them these little coolers and they put them right where they’re working that week. And then, a new product comes out and takes another configuration, it’s roll this stuff around. It’s pretty neat to watch how they …

Chris Stadler:
That’s very cool.

Steve Kovach:
But in the field it’s a little different story. You’re on the sunny side of the building, it’s beating down on your back, you’ve got to get this wall up, yet you’re getting paid a premium to do that. At the end of the day, your work hour’s early, you get home early. I do really appreciate the working guy in the field where they can do that. And yet, we’re seeing … I was lucky. I had my dad brought me up and then my son. He came on board and actually was the president of the company here up to a few years ago. And then, he’s got a Steve at 10 years old, so who knows where he’s going. You had somebody to mentor you, as a family member, I felt like it provided a job and then they took it and they ran with it. I don’t know how much of that’s going on where you have the dad, and the son follows the dad into that trade.

Steve Kovach:
It’s less than we’ve seen, but I still have a father-son teams. I moved the father-son team from Dallas, just recently, to Monterey, California to install big glass panels. So we’re trying to unitize more in the shop, do more of the labor hours in the shop. We have done some incredible projects with different materials in a unitized manner that just locks into the wall and we don’t have to assemble it in the field like we used to do.

Mike Jones:
That’s very cool.

Chris Stadler:
I wonder if Arizona’s rugged cowboy heritage, I wonder how that flows into the construction industry in Arizona or if it does.

Steve Kovach:
I see it in Texas a lot in the oil fields. A lot of oil fields and those holes have been drilled now. We’re not drilling a whole lot of new holes there. There are certainly oil fields being developed. And then, of course, we move them off shore. It’s a good living to do that. You get a lot of time off working on an oil platform. But those are the fellows we look at to bring into the construction market where they could stay at home, work on a project near their home. But that’s also another adage of construction and our trade is you go where the work is, and that work may be in Tennessee. Quick story, we were talking about phonies.

Steve Kovach:
When I started out, I went where the work was. I had a pickup truck, two pickup trucks and I was kind of a hot shot crew. Went around for this company. They would hire my dad’s company to go fix and catch up or wherever, worked all the way across the Sun Belt. They sent me to a job in Jackson, Tennessee, to do for about three or four weeks. About two, two and a half weeks in the job, Thanksgiving was rolling around and they said, “Hey, Steve you just got married, we’ll fly you home.” And I said, “Well, that’s really nice of you, but listen, I got to get this job done because I want to get out of here, and if I leave, nothing’s going to happen. Why don’t you just let me, instead of traveling and all that, stay here and work,” plus I get the hours, I get paid. “And why don’t you fly my wife out.”

Steve Kovach:
And he said, “Well, that’s fine. Yeah, six of one, half a dozen of the other.” Sure enough, they flew her out. We’d just got married. She’s an ASU student and she got on the plane and I’m waiting at the airport, little airport in Jackson, Tennessee, and she didn’t get off. Oh my gosh. Where’d you go? Where’d you go? She got on the wrong plane and she flew to Jackson, Mississippi. She had to figure this little naive, [inaudible 00:40:07] to say naive, but she married me. She had to get on a bus …

Chris Stadler:
Can you edit that out, Sam? That whole thing.

Steve Kovach:
Just imagine an old bus in 1974 from Jackson Mississippi, having to travel down to Jackson, Tennessee, to meet me. We finally figured it out, but I didn’t see her until the next day. She was not worldly traveled. She was that.

Mike Jones:
But anyway.

Chris Stadler:
That’s how you learn.

Mike Jones:
That’s right. That’s awesome.

Chris Stadler:
So you guys have done some he has done some pretty innovative things and solved some interesting problems. That’s what my sources tell me. Sam, our engineer by the way is my source. Sam’s done a lot of work with Kovach. He mentioned some things, some interesting technologies you guys have had to implement having to do with sandstone. Sandstone to me, I don’t know, I’ve never worked with sandstone, but it sounds like it might be hard to work with.

Steve Kovach:
Yeah. Well, as I said before, we tried to do a lot of panelization here in the shop before we go install it in the field.

Chris Stadler:
Panelization, just to find that.

Steve Kovach:
Okay. When you look at a high rise building, you see squares of glass. They’re in an aluminum frame and sometimes in those squares of glass you have another product, it may be granite, it may be metal, but the architects these days are beginning extremely innovated here in Arizona. We have Los Angeles architects work in here that just are the leading edge of technology and of thoughts. These guys go to bed at night and I don’t know what they dream about because they come up with something, and we have to look at it and say, “Really? What the … how are we going to build that?” But we do. We have taken a terracotta panel, which is like roofing tile. The product is the composite terracotta. It’s a clay, a red clay, and it’s a system and we’ve actually taken those, and there’s a building down in Tucson, HSIB and you can look at that.

Steve Kovach:
It’s amazing how the light hits it. But we panelized that and we put the … it’s a fin actually. So we’ll take these 3,000, 4,000 pound panels and we’ll crane them up. One of the projects, as you mentioned, Sandstone is the ASU law project down at Taylor and 7th Street in Phoenix. That project was quarried here, and we sandstone, especially flagstone is sandstone, compressed sand. And I was always concerned about the material itself as a viable option for the walls. But after much testing and the type of sandstone up by Williams, like I said was the quarry. So we bought locally, we brought it down in slabs, we saw it here. We have a unique patented fastening system that fastens in the back of it to keep it on the building.

Steve Kovach:
We put it into the aluminum frame, into that unit that’s now called … and now it’s panelized. So you have the sandstone in the glass and maybe a louvre for ventilation all in one panel, and that cranes up various means and method of pulling it up the wall of the building and it locks into a track system and you can put 20, 30 of those up a day when you’re rocking and rolling and they lock in. All the work was done here in the shop versus in the field. We didn’t go back over that building. It was a see-through high rise with its slab edges, it’s concrete. You just look right through the building. Then a week later that whole level is enclosed and finished. Done. Not having to drop the outside except to wash the windows.

Chris Stadler:
Did you say 3,000 pounds, these panels?

Steve Kovach:
Yeah, they are 1,500 to 5,000 depending on how much and how many floors you span. When you span a double floor and you have a steel knife blade sticking out of it for a sunscreen system, they get extremely heavy. The average is around 2000 pounds, but they get heavy.

Mike Jones:
That’s incredible. That’s so cool. That concept of prefabbing it before you go out to the job site and having it ready to go in a panel system.

Steve Kovach:
Some jobs have no lay down area. They built to the property line and are existing hustling, bustling downtown, and you’re building a building right in the middle of it.

Mike Jones:
That’s so cool.

Steve Kovach:
It’s like you have to stand where you’re working. The painter’s painting his room, but he’s got to stand around what he’s painting.

Chris Stadler:
And then you got to make sure your 3,000 pound panel doesn’t fall.

Steve Kovach:
Oh yeah.

Chris Stadler:
Like a truss.

Steve Kovach:
Knock on wood. We have granite around and [crosstalk 00:45:09].

Chris Stadler:
Knock on truss.

Steve Kovach:
Knock on truss.

Chris Stadler:
The same little birdie who told me those things also told me that you created a Canyon wall.

Steve Kovach:
Wow. That’s an amazing project. Co Architects out of Los Angeles came to us and asked us about a metal wall system that looked like Lake Powell. And we said, “What? What are you talking about?” Lake Powell. Look at the walls and … my son and I, Steven, we flew over to their office and we walk into their big meeting room, and the entire wall, they had printed on their big printer, a big wall section, somebody had taken a picture, one of the architects, at Lake Powell of a wall of all the strided sediment. It was just amazing picture. It was just paper. It was wrinkly. We walked in and said, “We want to duplicate that on the HSEB building down, again, on 7th Street.” Quite a unique street though for driving up and down, seeing all the architecture that’s happened down there.

Steve Kovach:
There’s amazing buildings. We did iterations and iterations and they wanted to do it out of copper. And we said, “Okay, well, copper is natural and it’s going to change colors over the years. It’s going to not be all the same when it goes up and it’s going to have a variegated finish.” Yet, metal is straight lines. When you bend something, you can’t bend it, so we talked about dyes and all kinds of shapes, but it’s extremely expensive.

Chris Stadler:
You can bend it on one axis, right?

Steve Kovach:
Correct.

Chris Stadler:
And not more.

Steve Kovach:
Like a punch of a round shape. You can do that. Actually, we always say in construction you can do anything, it’s just going to cost you a fortune to do it. We came up with a unique idea to have all the lines collect … these random lines of bent material. So, it’s like an accordion. A big sheet would be bent like an accordion, but not even aligns the little Vs, little Vs in accordion that have the right same depth when they’re expanded, they’re the same width. All these are different depths, different whips on different angles. We actually procured a machine, which we still use to this day and we did phase one about, I don’t know, six, seven years ago, and then phase two, we did in ’16, about two to three years after phase one. We were able to utilize the same technology on the second project. We did the first one. It’s also a really nice in construction when you can build two projects that are similar. The first one you get all the bugs worked out. Second one you …

Chris Stadler:
Second one you make money on.

Steve Kovach:
… make money on. That’s right. That’s right. Yeah, that was at downtown and it’s just an amazing project to drive by in the time and effort and energy of, like I said, a collaboration of a lot of people to come up with that design and make it a workable product. We have three disciplines in our trade. The first discipline is aesthetics. Everybody wants it to look cool, look good, look clean look as they expected. The second one is structurally. The discipline has to be structurally sound enough to handle extreme high wind loads, hurricane wind loads in many cases that material cannot come off the building, period, the end. Last but not least is it has to be weatherproof in waterproof. Every one of those disciplines is a challenge, and if you put them all in one bucket and then stick them on a wall, I’m not even talking about constructing it.

Mike Jones:
Those are a lot of boxes to check.

Steve Kovach:
Yup.

Mike Jones:
Incredible. Is that the photo behind you? I believe is that project, right?

Steve Kovach:
That is it. You can see the one that was done first is darker and it’s weathered and the other one is a little shinier and it’s catching up. I like to say it’s Arizona copper, but Arizona has these big ingots and they go into the black hole and it gets melted down in whatever the country bought at, whether it’s in the states or out of states. And who knows? It may have come back to us and we wouldn’t know.

Mike Jones:
Maybe it came back.

Steve Kovach:
We have to do a DNA check.

Chris Stadler:
It’s very cool.

Steve Kovach:
But we are the copper state and that’s why we use a lot of copper around here. It just looks so good. We like to say it’s a 100 year product, but we know it’ll last much longer.

Chris Stadler:
Yeah. So you mentioned the architects. You’re giving them a lot of credit for the innovation. So they’re basically like, they come up with their dreams at night, they write it down on their little pad by their bed or whatever and then hand it to you and now you’re supposed to make it pretty structural and weather and waterproof. Right?

Steve Kovach:
Right. They draw the pretty picture, and they consult along the way to get to a designed set of drawings, actual drawings. It starts with an SK, a sketch. That’s where we were on that project. That was a pretty cool way to start off one at that level, where we were able to figure the design. Then they had the contractor saying, budget, budget, budget, budget, budget, he had a budget. We can go crazy with budget. If you throw the budget to the wind, we could do all kinds of crazy stuff. It’s that nice dance, to dance right to the budget and get everything that everybody wanted within the budget, and it takes a long effort to do that and with a cooperative crew. No one personality runs it. It’s just a really great way to do a design, build a design [inaudible 00:51:09] project.

Chris Stadler:
Where are these architects coming up with these idea? Are these Arizona, a lot of these guys or girls, a lot of them are they like Arizona based and get a lot of inspiration from Arizona?

Steve Kovach:
Some of the craziest stuff, I just attribute it to medical marijuana. I don’t know where they come up with some of these thoughts. It’s crazy designs and yet … that’s the cool part. They draw it. They come up with it. That’s their trade craft and we help them figure out how to build it. “Is this even doable, Steve?” Can we even do this? Then we go, “Yeah, yeah. Budget.” But no, it’s the dance.

Chris Stadler:
Do you ever say no?

Steve Kovach:
We say no a lot. The contractor say, “Can you bid this job?” And we said, “Man, we’re booked.” That’s the hard part. It’s hard to say no. My father always had a saying, when somebody asked him, “How’s it going Steve?” He goes, “Fighting to stay small. Fighting to stay small.”

Chris Stadler:
What about the architects when they come up with their marijuana induced inspirations, medical or otherwise?

Steve Kovach:
Yeah, California, right?

Chris Stadler:
California.

Steve Kovach:
They’re our lifeblood, the architects. We support their ideas every which way and try to make it work for them. I don’t know an architect that’s drawn a building the first time that’s been within the owner’s budget, period. Our job is the middle guy, to help get it within the owner’s budget, still keep the architects intent in design and get what he thought in the very beginning without having to throw that out. Every once in a while, it’s just over budget, and that’s what the owner wanted, that’s what the architect wanted. He just can’t quite afford it yet, but you see him come back alive all the time.

Mike Jones:
It feels like there’s a lot of creativity demanded of you and your teams to get these projects done. Do you feel like that’s the case?

Steve Kovach:
Well, again the designer primes the pump, and then once it’s primed, now the engine takes off and we got to go with it. I’ve got a great staff here. These guys are amazing and design assist and that’s what it’s called as you move forward with the project. We’re awarded the job, but the drawings aren’t done, so we have to help them finish the drawings with where the clips go, the gauge, the thickness, the type of fasteners. Then ultimately, how far it sticks off the building. They want it this far, but engineering is not gonna allow it to be that far, but you can do this a little differently. It’s just a collaboration of ideas at that point, but he’s already come up with a concept and he’s pretty much sure the material he wants to use.

Steve Kovach:
So, we’d start with that, sometimes we change material. The Music City Center in Nashville had a cement panel all over it, a million square feet, and we came in and said, first of all, we didn’t say it, but they said, by the time they got the numbers in from all of us competitors, we can’t afford this. And I said, I knew you couldn’t afford this, so here’s our idea. It was just because of the innovative ideas we had that we got the job.

Chris Stadler:
I want to ask one more question. We have time. Sam, do we have time? Sam’s saying yes. Sam had mentioned the sourcing materials. Is that something that generally the architects come up with or are you guys pretty proactive in saying, hey, we want to use maybe materials from Arizona if possible? Where does that come from?

Steve Kovach:
Yup. Well, the architect usually has a general idea of the product he wants on the wall. He’s seen it somewhere. He’ll, in his specification or early on, he’ll let us know, I want to use this product manufactured by this guy. It may or may not be one of the guys we work with regularly. We may reach out to a brand new vendor and create a new relationship with this new product. Or we say, you know what? We have a better idea that looks the same, that’s much less expensive. You didn’t see this one and we got to show it to you. So that’s what we do. We’ll come in there and give him a shopping list of ideas. And if we want to focus it on something we know we can do and do it quickly and do it right, we’re going to focus him on one or two products.

Steve Kovach:
But they already have a general idea. They want to copper or stone. ASU, they wanted their stone from Arizona and we found that quarry, there was a couple of competing quarries. We went up there and tested which quarry had the best stone for their project. Terracotta job in Tucson, the architect knew exactly what he wanted. Many of these projects, and there’s so many cool products out there these days, new innovative products that you can put on a wall system, a neat louvre design. It’s all over. They actually provided the canvas, the money to do the job, the owner did. And the architect is basically the artist and we are actually the facilitator. We provide everything including the paintbrush and help them put the paint on. Really, it’s their idea and we expound upon that.

Chris Stadler:
Sounds like a fun challenge.

Mike Jones:
Yeah.

Chris Stadler:
Lots of problem solving, lots of exploration of materials and manufacturing methods.

Mike Jones:
I think we’ve got what? Five minutes left, Sam? Four. Great. Perfect time. Steve, if you’ve got anything that you want to plug or that you want to let our listeners know about, this will be a great opportunity for that. Any cool projects you have coming up, you want to take a minute or two to chat about?

Steve Kovach:
Oh, right on. Well, it seems like I’ve been talking all day, but that’s all right. I’ve been told that a lot 10 times a day.

Mike Jones:
It works out well for a podcast.

Chris Stadler:
That’s right.

Mike Jones:
It’s great.

Chris Stadler:
It’s perfect.

Steve Kovach:
It’s awesome. I appreciate you guys doing this. Kovach has been pretty innovative in many projects. We have a really cool project in Austin going right now. It’s the 405 Colorado building, it’s called. It’s a 26 storey building and on three sides. It’s glass on one side. It’s our Kovabond product that’s ICC rated aluminum composite that is specific to our company and we helped develop it, and we’re taking that up 26 floors, one side of the building and the other is a parking garage scrim. We like to specialize in those. That’s a really unique system spanning two floors. 405 Colorado is spectacular. A couple of other ones we have going on in Arizona is a 100 Mill project. That’s really going to be a cool one coming up. The Adeline project, it’s an existing parking structure, 24th Street in Jefferson.

Steve Kovach:
Every one of these towers, we have four towers in Arizona currently, that Kovach is installing. When I say a tower, these are all 25, 26 storey towers in Arizona. Then we have the Wexford project, which I believe is a six or seven storey building, very unique. When you look at these, the sun’s shade structure is really developed with the architecture of Arizona, that we have the glass and then it’s all heat resistant and UV resistant, trying to keep the interior, the building and the environmental concerns of overheating it and a lot of energy efficiencies. But now, they put an architectural fin out. We’ve all seen the Solar One project where the louvre blades change with the sun.

Steve Kovach:
You’re seeing a lot of these permanent blades going vertically on every project we do has some type of sunscreen on these towers, which adds another element to the glass element. The owners are spending the money to do that. They don’t have to, but they do. Like I said, we have several going downtown. This next year, we’re pretty booked in Phoenix for the next 18 months of constructions.

Mike Jones:
It’s fantastic.

Steve Kovach:
Yeah.

Mike Jones:
That’s awesome. Well, thank you so much, Steve, for coming on and chatting with us and just kind of letting us unlock your brain and your experience. This has been really, really cool, really fascinating stuff.

Steve Kovach:
It’s cool to be talking about it. If I have one more thing I could say it’s, we’re definitely in a hiring mode here at Kovach. We have over 400 people and we’re hiring, as I mentioned earlier, good quality a field installers and you could make some big numbers here based on our specialty trade. Project management’s always in demand. We have, as every other good company in Arizona, our website, we are hiring, Arizona is hiring. We have not seen this much construction, future construction in the Arizona market. The career of some of my senior sales and business development folks have not seen what’s on the table coming yet. There’s a lot in … we got gear up for that capacity to be able to handle that work. Arizona wide, we need to do that through our construction industry.

Mike Jones:
Your open positions are on the website?

Steve Kovach:
Yep.

Mike Jones:
That’s what’s the website again?

Steve Kovach:
That’s kovach.net.

Mike Jones:
Perfect.

Steve Kovach:
Just check it out and you’re going to apply online.

Mike Jones:
That’s great. It’s kovach.net. Yeah, and I know you guys have tons of projects photos and really cool stuff. If people want to check that out, they can go on the website as well.

Steve Kovach:
A lot of architects use that as a resource.

Mike Jones:
Yeah, it’s amazing stuff. Thanks, Steve, so much for coming on.

Chris Stadler:
AZ Brandcast is a project of Resound and is recorded in Tempe, Arizona with hosts, Mike Jones and Chris Stadler. It’s produced and edited by Sam Pagel. Music is produced and provided by [Pabrid 01:01:43], an Arizona based music group. You can find us on Twitter, Facebook, LinkedIn and at remarkablecast.com. If you’d like more episodes, subscribe on iTunes, Stitcher, Google Play, or wherever you prefer to get your podcasts. To contact the show, find out more about easy brand cast or to join our newsletter list to make sure you never miss another episode, check out our website at remarkablecast.com. Copyright Resound Creative Media, LLC, 2020.