The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian chief executive-elect of a $1 billion company yesterday told Tribune Business that it was examining several potential real estate development projects in this nation, adding that his achievement showed “ordinary people can do extraordinary things”.

Fred Perpall, who will assume the top executive post with the US-based Beck Group on January 1, 2013, said the company had a Bahamian joint venture partner and was hoping to announce the first project within the next three months.

Speaking following his promotion from the post of Beck’s eastern US managing director, Mr Perpall said he and the company had “a big eye” on opportunities in the Bahamas and wider Caribbean, and aimed to bring in new strategies and business models.

Pointing to construction of Princess Margaret Hospital’s (PMH) Critical Care block as an example of the business model Beck was looking to bring in, Mr Perpall said the typical fee structure split between Bahamian and foreign companies working on such projects had been completely reversed.

He told Tribune Business that foreign companies leading such projects, as Beck was in this case, typically took home 70 per cent of the fees with a minority share going to professional Bahamian firms and service providers.

But for the PMH project, on which Beck is serving as the lead designer, Mr Perpall said it had ensured some 73 per cent of the project fees would stay in the Bahamas with local firms.

And, rather than construct hotels and tourism plants that grew visitor arrivals and created jobs, Mr Perpall said Beck was looking at what the Bahamas - and its population - needed. Through adopting such a strategy, Beck would instead create Bahamian ownership.

Alluding to Beck’s future plans in the Bahamas, Mr Perpall told Tribune Business: “We’ve got a joint venture partner and we’re looking at some real estate development projects.”

While declining to go into specifics on these projects, and identify Beck’s Bahamian joint venture partner, Mr Perpall said of the plans: “They’re on the drawing board. We’re hoping to be in a position within the next three months.”

Confirming that Beck was “heavily focused on the Latin American” and Caribbean market, Mr Perpall said the Bahamas and other small island states heavily dependent on tourism “suffer from what I call a wedge”.

This, he added, was the huge demand for them to put in world-class infrastructure to support the tourism industry on one hand, but the inability of their relatively small populations to support and finance such developments.

Noting the scale mismatch, Mr Perpall said: “We think we can come in and help fill that gap, not only investing ourselves but bringing in the right investors, the right partners, to make that happen.

“We do have a big eye on the region.”

Beck is a vertically integrated real estate developer, designer, construction and project management firm, its main goal being to “drive waste out of” real estate asset development.

It has 11 offices, being based primarily in the US sunshine belt from west to east coast, and also has offices in San Paolo, Brazil, and two in Mexico. Mr Perpall said it employed around 1,000 staff, and was a ‘Top 50’ company in its industry.

Mr Perpall described the PMH Critical Care Block model as “game changing” and an example for how foreign companies should partner with Bahamian firms and split the fees.

The Beck chief executive-elect said the normal model was for foreign companies to “demand 70 per cent of the fees, 70 per cent of the revenues. We’d really be looking to demand the lion’s share of the price”.

But, on the PMH project, Mr Perpall said Beck had worked with Public Hospitals Authority (PHA) managing director, Herbert Brown, to determine what materials could be sourced in the Bahamas, and the capacity/ability of Bahamian professional firms and service providers.

Ultimately, Beck had embraced them and brought them into the project, “engaging them in a way they can show off their capabilities and talents”.

Bahamas-based professionals were brought to Atlanta and worked out of Beck’s offices, aiding in the skills and knowledge transfer.

Bahamian companies working on the PMH project include The Design Group and Veritas Consulting, and Perpall said of the end result: “Seventy-three per cent of the fees for this building were split with local companies, which is complete reversal of what went before.”

Through foreign companies “complementing” and working with Bahamian firms, Mr Perpall added that instead of the final result being “1+1=2” it was “1+1=4”.

He also disclosed to Tribune Business that Beck planned to bring a fresh development perspective to the Bahamas going forward.

“Everyone who comes to the Bahamas thinks:’It’s so pretty; let’s build another hotel’,” he added. “One of the things we’re trying to figure out is what the Bahamas really needs that the Government does not have the appetite and capital to build.”

While many developers sought to drive increased visitor demand, Beck was examining the needs of the Bahamian and resident population, and “what is not being met” by current capital investment.

And, while hotels might create jobs, Mr Perpall told Tribune Business: “There’s another strategy, and one we’re pursuing, that creates Bahamian ownership. What are the things that are needed by the local population, but the skills, appetite and resources are not there.

“We continue to move beyond a jobs based environment for Bahamians to more of an ownership involvement by Bahamians.

“If we’re really going to develop as a country, Bahamians need to have more ownership of the economy. If the country is going to be the kind of country it needs to be, we need more ownership. No one gives you that; you have to go out and earn that.”