Ray Garfield shares how his firm has revolutionized public infrastructure development by creating faster, more efficient alternatives to traditional government building processes. Helping public clients bypass lengthy referendums and inefficient bidding systems, Garfield Public Private has delivered nearly $3 billion in essential facilities through innovative financing and development strategies.
• Established in 1997, Garfield Public Private specializes in developing infrastructure for public clients like cities, counties, universities, and healthcare campuses
• Traditional public projects face delays through separate architect selection, design phases, and low-bid contractor requirements that often lead to budget overruns
• Their approach identifies alternative funding sources that don't require voter approval, significantly accelerating project timelines
• The company created innovative financing for Atlanta's courthouse using existing fine and forfeiture revenues rather than waiting years for a referendum
• As project leaders, they bring together architects, contractors, financial advisors, and bond counsel to deliver turnkey solutions
• Their portfolio includes convention centers, headquarters hotels, performing arts venues, courthouses, and other public infrastructure
• New ventures include Garfield Asset Management for ongoing facility oversight and Garfield Clean Energy for municipal solar projects
• Ray's background as a Navy pilot, Wall Street executive at Solomon Brothers, and public company CEO provided the expertise to create this specialized development model
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to another episode of Timeless Building and
Business Strategies.
This is Tony Johnson.
Today, I'm here with RayGarfield.
Ray, thank you so much forjoining us, sir.
Speaker 2 (00:15):
Pleasure to be with you.
Speaker 1 (00:17):
Ray is with Garfield, public, private and Ray could
you tell us a bit about yourselfand what you guys do?
Speaker 2 (00:26):
Yeah, I'd be happy to .
It's been an interesting careergetting to this point.
We've had this company now forthe last 28 years and our firm
is fairly unique in the realestate development business.
We call ourselves GarfieldPublic Private because the great
(00:49):
majority of what we developaround the country is for public
clients, public agencies likecities, counties, state agencies
, universities, health carecampuses, airport authorities,
etc.
So we geared up in the late1990s to help deliver essential
(01:12):
public infrastructure to thesepublic clients that wanted a
faster, more efficient way ofmoving their projects forward
than traditionally that theywere allowed to do.
Speaker 1 (01:30):
So could you break that down a little bit?
So, in essence, are you sayingthat, as opposed to them going
through the full designiteration process and putting
projects out to bid, you guysare coming in at the concept
stage and doing a design buildoption for them?
(01:51):
Is that what we're saying?
Speaker 2 (01:54):
I think that pretty well describes it.
You know, certainly a couple ofdecades ago almost three
decades ago now, when we startedthis firm, the traditional
manner of delivering publicprojects was first advertised
for an architect and thendesigned the building and then,
once the designs were there,they put the designs out for
(02:16):
contractors to bid on and they'dhave to take the lowest bidder.
They'd have to take the lowestbidder, you know.
I mean conceptually they'reprotecting the taxpayers and
making sure that they hire theleast expensive option.
(02:37):
That proved to be veryinefficient because after a
while contractors knew that theycould bid low and then expect a
lot of change orders in theprocess.
So you'd hardly ever have abuilding that was built on time
or on budget.
And as you described it withdesign build when that came into
(02:59):
fashion, beginning in the 90s,we were there to help create a
different model where thesecommunities could select a team.
We could have the contractorand the architect designing and
perfecting the designs ongoingas you went through concepts to
schematics, to design documents,to construction documents.
(03:22):
So when you got a guaranteedmaximum price quote from the
contractor in a schedule, thatcontractor knew the drawings he
was evaluating.
They knew that they coulddeliver this property in a
certain period of time at acertain budget.
So the end result was muchsuperior to the old model, and
(03:44):
that's a part of what we've done.
The other part is that also thetraditional way of doing it is
that if you want to build acourthouse, as an example, you'd
put it on a public referendum.
So you go to the voting boothMay or November, whenever that's
going to be and it's on theballot.
(04:06):
So you're going to vote yes orno.
Do you allow the county to sellyou know a $200 million bond to
build a courthouse, or do youallow the school district to
sell a billion dollars in bondto build high schools and et
cetera?
And if the vote's no, then theycan't do it, et cetera.
(04:28):
And if the votes no, then theycan't do it, and if the vote is
yes, then they'll go throughthis process.
We've never developed a buildingthat has been approved with
general obligation bonds, forexample, when we developed the
courthouse for the city ofAtlanta, for example, when we
developed the courthouse for thecity of Atlanta, it was not on
(04:48):
a ballot.
It wouldn't be on a ballot forfour or five years at the time,
according to the mayor.
So we were invited there and wediscovered that they had $25
(05:09):
million a year in fines andforfeiture revenues coming into
the city and most of it leviedby the judges, the court.
So we just needed about $4 or$5 million in a lease back so we
could sell the bonds that wouldbe used to design and build a
new courthouse, and so we founda different funding mechanism.
(05:32):
We create innovative, veryefficient structures from a
financing standpoint that willhelp these deals move forward
much faster generally.
I mean, if we'd had to waitfour or five years for a public
referendum in Atlanta you can'tpredict interest rates, you
(05:52):
can't predict inflation it wouldbe a much more costly
development in four or fiveyears than what we were able to
do within a year.
So and that's just an exampleof one of the close to $3
billion worth of developmentsthat we've done- that's
interesting and I love that.
Speaker 1 (06:15):
I think you know some .
An instant question that comesto mind when I hear you say that
is so you, I'm assuming did youalready have a relationship
here established.
So I can't, I guess what I'mtrying to ask is did you go in
(06:37):
there when they're wanting tobuild a courthouse and them say
it's going to be four to fiveyears, not knowing anything, and
say, oh well, let's look atsome of your other sources of
revenue and we'll put thispackage together and we'll get
this thing built in a year?
Or did you have a pre-existingrelationship already with that?
Speaker 2 (06:58):
We had a pre-existing relationship through our
general contractor.
Garfield Public Private wasreally created in 1997.
That was the year after I hadclosed a merger.
I was chairman of a publiccompany Up until 1996, we sold
(07:21):
the company to SyntexCorporation, which is the second
largest home builder in theUnited States at the time, and I
found myself without a job.
I was out of a job, you foundyourself out of a job, yep, yeah
.
So on my board of what was VistaProperties that merged with
Syntex was a fellow that was onthe board of Turner Construction
(07:42):
Company in New York and hebecame the CEO, chairman and CEO
of Turner in 1996.
And in early 1997, he invitedme to talk about solving one of
the issues that they had.
So I worked for him for a yearand sold a subsidiary of their
company for them, and thefollowing year he asked me to
(08:06):
create what is now GarfieldPublic Private.
He didn't want to own any ofour company because they're a
great general contractor andthey do lots of construction for
private developers all over theworld.
So he didn't want a no-namefirm called Garfield, which no
one had ever heard of, firmcalled Garfield, which no one
(08:28):
had ever heard of, you know,seeming to have a close
relationship for privatedevelopments.
So we specifically targetedpublic developments where, at
the time, private developers didnot get involved.
In fact they still do to anextent stay away from it because
they can't invest in and ownpublic properties.
So they'd rather, you know, dotheir private developments
(08:49):
apartments, shopping centers,office buildings, industrial
buildings, et cetera.
So we just focused on forTurner.
For about four years we were ona retainer with them and we
created this business.
So Turner's office in Atlantawas one of the ones that we they
had 44 offices nationally.
(09:09):
Their Atlanta office called usand said hey, we were at an
Atlanta Falcons football gamewith the judges and they were
complaining about being in a50-year-old building and this
was a great need of theirs.
So Turner brought us to Atlantaand introduced us to the judges
and to the city and then we wereable to, in a few days,
(09:33):
determine that there were goingto be avenues to pursue to help
them solve the problem, get outof a 50-year-old building into a
modern, secure, safe buildingand avoid that four to five-year
delay of getting a referendumon the ballot for the voters to
(09:56):
agree to or to turn down.
So you bet 80% of our business,I think, is referred by either
a general contractor, anarchitect engineering firm, a
big hotel management companylike Hyatt or Hilton or Marriott
, big management firm forperforming arts centers or
(10:18):
arenas like ASM or OVG OakviewGroup, the largest in the
country, or OVG Oakview Group,the largest in the country.
So, consultants, many of theopportunities come through us,
through people that we've beenon teams with before, that know
our skills and how we're able tocome up with some solutions
(10:41):
that are greatly needed by theseclients.
Speaker 1 (10:46):
Yeah, I find this extremely interesting.
So you know me, we're on the GCside, so we're a commercial
general contractor nowhere nearthe size of Turner, obviously,
but you know, yes, so we're.
But yeah, so this, we run intothis same challenge all the time
.
So with what you're saying it'sgreat to hear, and I don't know
(11:12):
, even with you being around for28 years there's definitely
probably a lot of expansionopportunities still today for
what you're doing, because thiscan be used anywhere.
If you've got a system of goingin and now have a track record
of being able to put thesecreative projects together, that
(11:37):
is definitely appealing tocontractors.
So I could see contractorsbeating down your door.
Of course, you have to have acontractor that is established,
that is able to perform and hasyou know this the county or the
city wanting to partner withthem.
So for the public side, Icompletely understand that.
(11:57):
And then you can find thepublic funds and you I'm
assuming just your, your guiseis upside is a developer fee
established with puttingeverything together?
Is that how you're structured?
Are you in and out before theproject breaks ground or are you
involved throughout?
Speaker 2 (12:16):
We're involved throughout.
I mean, we really are adevelopment firm but
distinguished by the fact thatour clients are in the public
sector and, of course, inAmerica.
We're the only nation in theworld that has legislation
that's been on the books for acentury or more, allowing the
(12:40):
sale of municipal bonds,tax-exempt bonds.
The sale of municipal bonds,tax-exempt bonds for cities,
counties, schools, Federalgovernment's not tax-exempt, but
anything other than the federalgovernment.
You can do tax-exempt financingwhich is less expensive than
conventional financing, right?
So, unlike a private developer,we're not often asked to make
(13:01):
an investment.
In fact we just can't and stilldo something tax exempt.
So for most of our developmentswe are an owner's rep, if you
will, kind of an owner's rep onsteroids, but we're the team
leader.
We bring the architect and thecontractor to the table.
We bring with the contractorhis subcontractors.
We also interact with thefinancial advisors, the bond
(13:27):
councils, the underwriters, theattorneys and once we sell the
bonds, of course we are helpingto oversee the designs.
We have a couple of verywell-established architects
within our firm that don't drawanymore, but they did for years
and now they interact with ourarchitects and we have some
(13:48):
great construction managementpeople coming out of the
construction industry that areon site with the general
contractor every day, makingsure things stay on track, on
budget, on time.
And we're there when we open thebuilding, cut the ribbon, have
the grand opening and in certaincases and we're best known for
(14:12):
doing convention centers andtheir headquarters, hotels or
performing arts centers, eventcenters, expo centers, museums
and so forth.
So particularly with performingarts centers and hotels, we're
able to stay on as the assetmanager.
So if Marriott runs the hotel24 hours a day, seven days a
(14:33):
week, we're there monthly,quarterly, annually.
We're there to help sort of bean early warning radar with the
general manager and so forth,make sure it's performing.
Early warning radar with thegeneral manager and so forth,
make sure it's performing, makesure it's maintained, report to
(14:56):
the bank trustee for the bondsor standard and poor's if those
bonds are rated.
So we do have a continuing rolein a number of the properties
that we complete.
Thank you.
Well, you know we're a teammember, tony.
Speaker 1 (15:11):
Yeah, absolutely.
Speaker 2 (15:12):
And that's why a general contractor or an
architect would refer somethingto us and say, hey, we know of a
city here that needs X Y Zpiece of infrastructure.
They're scratching their headson how they can do it in a year
or so.
Could you guys come in and joinus and talk to them?
And that's the introductionthat helps us move forward on
(15:37):
projects.
Speaker 1 (15:39):
Yeah, this is you know.
What I say a lot of times, ray,is you have to open your mind
and you know you can't everbreak barriers and do bigger
things, or you know, if youdon't first envision on how to
do it.
And I'm going to be honest,I've been building going on 20
(16:01):
years.
At this point, this, to me, isNever heard of it.
It's you know.
This is absolutely amazing.
So, yeah, when I look at yourportfolio, yeah, with your
convention centers, conferencecenters, you've worked for
multiple hotel chains, right.
(16:23):
And so not only are you guysdoing great things, you've
niched down, you've created aspecialty and I can 100%
guarantee there is a strongdemand for your services
wherever you guys can get astronghold.
And I'm sure once you get inthere, it then becomes a client,
(16:47):
a repeat client or a referralto other near townships where
relationships are then movingyou over, right.
So it's beneficial not only forthe contractor, for that
initial connection.
I'm sure that that contractorand you then can grow and expand
, because if you're able to dothis for one area and that gets
(17:12):
out, I'm sure you know anyonethat they know in the next town
over who's now never experienced, that wants to see if it can be
utilized in their area to getsomething through.
Because the reality is, all ofthese local governments are in
need of infrastructure upgradesand changes and waiting for
(17:34):
referendums, and so if you'reable to come in and really speed
up that process, man, you'rebenefiting the town and the
community and you know you'reproviding work for the community
, and so I love the idea thatyou guys are then also coming in
as an asset manager.
(17:54):
On the backside, you have theknowledge and understanding of
the bonds and how to manage thewhole process.
When you say you got into thisin 97 after you went and joined
Turner, did you put thistogether while you were at
Turner from 97, 96 to 97?
(18:16):
Is that when you establishedand kind of put all this
together?
Speaker 2 (18:23):
Yeah, I want to distinguish something you said.
I didn't go to work for Turner.
They retained our firm.
We were arm's length.
Speaker 1 (18:32):
Oh, okay, so sorry.
Speaker 2 (18:33):
Yeah, Turner didn't.
Turner did not want to own adevelopment company, they were a
contractor.
So we were retained by them tobe an outside provider of this
particular skill of helpingdevelop more design, build
business for them, helpingtargeted clients of theirs to
(18:56):
figure out how they couldfinance new big construction
projects.
So we were absolutely allied.
I mean, for four years we werealmost exclusive to Turner
because they're such a bigcompany.
Four years we were almostexclusive to Turner because
they're such a big company.
And then Turner was sold to aEuropean organization.
(19:19):
Our retainer lapsed.
We still do business with Turnerbut we do business with many of
the top call it 30 or 40 of theor 40 of the ENR 400
contractors around the country.
So I wanted to distinguish thatand I think that, as you've
(19:52):
seen, we couldn't get hired inTexas.
We were a Texas company but noone had heard of us.
So we were hired by theCommonwealth of Puerto Rico to
develop their new headquartershotel for their convention
center, their new headquartershotel for their convention
(20:12):
center.
We were hired by St Joseph'sHospital in Patterson, New
Jersey, and the state of NewYork to do a Department of
Transportation office buildingand by Los Angeles schools.
So we really had to sort of bethe expert from afar and develop
some some history.
And then we won our first dealin Texas back in 2000, I guess
(20:34):
seven and delivered a greathotel and conference center for
Lubbock, Texas.
We then were hired again byLubbock and in 2021, we
delivered $160 millionperforming arts center, the
Buddy Holly, which is aworld-class acoustic performing
(20:55):
arts facility that serves thecommunity.
We're just completing somedesigns for the Lubbock County
for an expo center of over $100million.
Um and um and you know I yousaid uh, repeat business this.
(21:15):
Certainly we're proud of thefact that not just lubbock but
uh other communities have hiredus a second time and even a
third time, uh, to do newprojects.
Once we performed on that firstproject on that first project
and at least after now, 28 yearsin the business, we're pretty
(21:36):
competitive in.
Speaker 1 (21:38):
Texas as well.
But, still focus around thecountry.
So what is the goal of yourcompany?
Speaker 2 (22:02):
How large are you trying to grow?
How far are you trying to reachand how are a goal to protect
our reputation and continuallybe successful, and whatever that
means in terms of growth, interms of employees and volume,
we'll accept that as it comes.
Garfield Asset Management aboutthree years ago, because we
(22:35):
were turning out so manyperforming arts centers and you
know Durham's Performing ArtsCenter, utah's Echoes Theater in
downtown Salt Lake and theBuddy Holly, et cetera, all the
hotels we've developed forcities around the country we
just felt like there was a goodbusiness model there to create.
So we established GarfieldPublic Private Asset Management.
(23:00):
A couple of years ago wecreated a company called
Garfield Clean Energy and one ofour repeat clients, a city in
Central Texas energy, and one ofour repeat clients, a city in
Central Texas, had about 2,000acres that they own and that was
being farmed, and the mayor andcity manager told us that they
(23:21):
were hopeful of greater revenuefor the city and something other
than cotton farming.
So we've been working for thelast year now on getting this
property approved for solar andso, coincidentally, the Stargate
(23:42):
program that was announced byMusk and the president and so
forth, this half a trilliondollar investment in AI.
Their announced first bigdevelopment is in this city in
Central Texas, where we havethis effort going to get
(24:05):
approved for three or four or500 megawatts of a solar farm.
So we're optimistic about that.
But it's a natural extension ofour public-private business.
In other words, cities needmore than just a new courthouse
or a new convention center andhotel or Performing Arts Center,
(24:27):
and Solar is one of the moretopical growth industries that
you see as well.
So we're doing that.
We're talking about ourexpertise in hotels goes back 40
years or more when I was onWall Street, capitalizing
(24:52):
financing for major hotels, andso we are talking seriously
about establishing an investmentprogram to acquire existing
hotels that need significantproperty improvement programs.
So if we can buy them right inthe right location, the right
(25:14):
market, make those improvements,we can probably have a pretty
effective capital investmentprogram as well.
So I think we just take let'sjust say we're a cautious
organization, thoughtful andwant to take steps when we
(25:38):
really feel like they're theright steps to take.
Speaker 1 (25:41):
Yes, sir, yeah, I think any you know it speaks
volumes when, whenever we have acompany that's, you know, been
in business almost three decades, right that you guys have
stayed true to your core values.
So I love hearing thatprotecting your reputation,
because reputation is all thatwe have and you know you've
(26:16):
clearly defined something thatgives you an advantage in the
marketplace and niche down and,you know, rinsed and repeated,
and that is the key to successwith most businesses and that
create longevity.
So that's amazing.
And once you have that stablefoundation to speak to what
(26:44):
you're saying, then you can, youknow, expect to add different
levers that complement whatyou're already successful, in
which it sounds like you guysare planning for and continued
growth.
And so I love to heareverything that you're saying,
because there's there's never amagic bullet.
With any successful business, nomatter the industry, it is
based on reputation, longevity,and being great at what you are
doing successfully and thenbeing able to replicate it over
(27:06):
and over again is what createsthe long-term success.
So I love to hear all that,something that you know as we
look through, you do otherthings as well.
It looks like you're in sportsand entertainment, and so you
know doing parking garages.
You guys have done other thingsas well.
(27:26):
I think it's at office.
So, besides those, could yougive us an example of a private,
a couple of private ones thatyou've done, or is everything
that you're, I know, with thehotels?
Obviously, a lot of thosearen't private, right.
So is there what are someprivate projects that you're
working on now?
Speaker 2 (27:45):
Well, yeah, over the last 28 years, each of the
hotels that we've done has beena public-private partnership.
Only one of those hotels hasbeen financed in a conventional
manner.
The city wanted us to do that,so we brought in our own money
(28:06):
and other people's money friendsof the firm and developed the
hotel.
But the city and, let's say,high net worth individuals or
foundations made significantcontributions on the public side
in this public-privatepartnership in order to do that.
In order to do that Now, in thelast year and a half, two years
(28:28):
, we have led the design of aprivate hotel in the North
Dallas area for a Japanesecompany.
Toyota's North Americanheadquarters is located in Plano
(28:50):
, texas.
This Japanese company wanted tobuild a Japanese-style hotel
near Toyota, and so we havecollaborated with them, sort of
taken over the leadership ofworking with the architect and
the contractor, helped selectthe contractor you know, taking
this thing through concepts andschematics and DDs, et cetera.
So, yeah, if we find a clientthat has substantial capital,
(29:16):
doesn't need the kind ofpublic-private skills that we've
got, but really wants to buildan impressive project, whatever
it may be, we can act as afee-only developer for them in
these areas where we have thisexpertise, as I mentioned.
Now, we're really well known fordoing these convention hotels
(29:40):
and you could say also that thatsame public-private model can
be done for airports, airportterminal hotels, college campus
hotels, healthcare campus hotelsand, of course, the city or
municipal conference orconvention hotels.
So there's a pretty broad swathof the hospitality industry
(30:03):
that's there.
But in the cultural arts area,where we started by being the
developer of the DurhamPerforming Arts Center, which is
hugely successful, and thenwent from Durham to Salt Lake
City and helping to lead thedevelopment of the Eccles
Theater, and then back toLubbock after we had developed
(30:26):
their hotel to be asked to helpdevelop their performing arts
center there, we've brought onsome outside talent that had
worked for a competitor in thiscultural arts area.
So you know we have a reallydeep resume of not only
performing arts, arenas, eventcenters, museums and so forth.
(30:52):
So that's at least half thebusiness that we do around the
country right now Working inSarasota with the Sarasota
Orchestra Development, workingon the Phase II of Rothko Chapel
in Houston, texas, and othercultural arts undertakings a
(31:15):
major art facility, art museumin the country where we're going
to help expand and modernize avery large facility.
They've been in for 100 years.
Those things are real targetsof ours as well, so go ahead.
Speaker 1 (31:39):
You've obviously been extremely successful in
business and you've taken onmassive projects.
When you look at your run up towhere you are now, was there
anything pivotal in your careerthat really helped you skyrocket
and get to the next level?
Speaker 2 (32:01):
A couple of really important events, really
important events.
You know, I started my own firmwhen I was, I guess, probably
around 27 years old, after Ispent the first number of years
(32:24):
in the Navy as a pilot.
But then I and I worked forRoss Perot for a couple of years
in the Navy as a pilot.
But then I worked for RossPerot for a couple of years in
his electronic data systemscompany and learned a lot there
because I had a great role ofinterviewing and recruiting
clients all over the country.
But I wanted to stay homebecause I had a young family.
So I started my own little realestate company and in 1981, I
(32:49):
sold that firm to Merrill Lynch.
That was one of the definingmoments in my fledgling real
estate career of being able tolist properties in the $3 to $5
million range at my littleGarfield firm, to having a
Merrill Lynch business card andall of a sudden listing $50
(33:10):
million properties becauseautomatically you're looked at
as maybe somebody that's moresuccessful.
Solomon Brothers recruited mefrom Merrill Lynch back in the
1980s when they were the king ofWall Street inventing
commercial mortgage securitiesthe 1980s when they were the
(33:31):
king of Wall Street inventingcommercial mortgage securities.
That was the second realdefining moment in my real
estate career is working withyou know, the mover and shaker
on Wall Street at the time andinnovating commercial mortgages.
So that was sort of my PhD inreal estate finance.
(33:52):
So I've been able to use thatvery effectively in this
particular company.
And I guess the last role Imentioned that I was CEO of this
public company that had takenout of bankruptcy I was really
the turnaround CEO and when Isold it to Syntex Corporation in
(34:12):
1996, and an interesting pointof it I took this company out of
bankruptcy in early 1992.
And of course that was at thedepths of a recession that we
had in the country.
The catchphrase was stay alivetill 95.
Yes, I did so.
(34:36):
I turned this company aroundand sell it successfully in 1996
.
And the irony is that in 1997,every CEO in the country,
whether they were great orwhether they were a doofus,
(34:58):
looked like they were greatbecause of the economy and so I
figured well, I had a greatsuccess as a CEO of a public
company.
I'm sure another public companywill hire me and in 1996, 1997,
I got offered a lot of numbertwo jobs and I just didn't want
(35:21):
to do the number two job.
So I started my own company andso 97 was our first year with
Garfield Public Private if youwill, but certainly built on all
the experience that I had and Iguess particularly at Solomon
Brothers understanding WallStreet and the capital markets,
(35:43):
understanding public bondofferings, understanding public
bond offerings, municipal bondofferings, et cetera.
That was certainly the keybuilding block of doing this new
company that I didn't reallywant to do, but I also didn't
want to be a number two anymore.
Speaker 1 (36:01):
So you know I love that.
Well, I mean, that's it.
That's what I always say.
If you understand yourstrengths and weaknesses in life
and what you will do and whatyou won't do for me, I will be
reaching back out.
Just I've had about 15opportunities rolling through my
(36:33):
head as we're speaking today.
So, you know, I can onlyimagine where your company can
go and I sincerely appreciateyou taking the time and spending
with us today and sharing someof your experiences.
So thankful for that.
And thank you for joining ustoday and sharing some of your
experiences.
So thankful for that.
And thank you for joining ustoday, ray.
Speaker 2 (36:52):
Thank you a lot, tony .
I enjoyed it as well.
All right, you have a great day, appreciate it Right.
Bye-bye.
Welcome to another episode of Timeless Building and
Business Strategies.
This is Tony Johnson.
Today, I'm here with RayGarfield.
Ray, thank you so much forjoining us, sir.
Speaker 2 (00:15):
Pleasure to be with you.
Speaker 1 (00:17):
Ray is with Garfield, public, private and Ray could
you tell us a bit about yourselfand what you guys do?
Speaker 2 (00:26):
Yeah, I'd be happy to .
It's been an interesting careergetting to this point.
We've had this company now forthe last 28 years and our firm
is fairly unique in the realestate development business.
We call ourselves GarfieldPublic Private because the great
(00:49):
majority of what we developaround the country is for public
clients, public agencies likecities, counties, state agencies
, universities, health carecampuses, airport authorities,
etc.
So we geared up in the late1990s to help deliver essential
(01:12):
public infrastructure to thesepublic clients that wanted a
faster, more efficient way ofmoving their projects forward
than traditionally that theywere allowed to do.
Speaker 1 (01:30):
So could you break that down a little bit?
So, in essence, are you sayingthat, as opposed to them going
through the full designiteration process and putting
projects out to bid, you guysare coming in at the concept
stage and doing a design buildoption for them?
(01:51):
Is that what we're saying?
Speaker 2 (01:54):
I think that pretty well describes it.
You know, certainly a couple ofdecades ago almost three
decades ago now, when we startedthis firm, the traditional
manner of delivering publicprojects was first advertised
for an architect and thendesigned the building and then,
once the designs were there,they put the designs out for
(02:16):
contractors to bid on and they'dhave to take the lowest bidder.
They'd have to take the lowestbidder, you know.
I mean conceptually they'reprotecting the taxpayers and
making sure that they hire theleast expensive option.
(02:37):
That proved to be veryinefficient because after a
while contractors knew that theycould bid low and then expect a
lot of change orders in theprocess.
So you'd hardly ever have abuilding that was built on time
or on budget.
And as you described it withdesign build when that came into
(02:59):
fashion, beginning in the 90s,we were there to help create a
different model where thesecommunities could select a team.
We could have the contractorand the architect designing and
perfecting the designs ongoingas you went through concepts to
schematics, to design documents,to construction documents.
(03:22):
So when you got a guaranteedmaximum price quote from the
contractor in a schedule, thatcontractor knew the drawings he
was evaluating.
They knew that they coulddeliver this property in a
certain period of time at acertain budget.
So the end result was muchsuperior to the old model, and
(03:44):
that's a part of what we've done.
The other part is that also thetraditional way of doing it is
that if you want to build acourthouse, as an example, you'd
put it on a public referendum.
So you go to the voting boothMay or November, whenever that's
going to be and it's on theballot.
(04:06):
So you're going to vote yes orno.
Do you allow the county to sellyou know a $200 million bond to
build a courthouse, or do youallow the school district to
sell a billion dollars in bondto build high schools and et
cetera?
And if the vote's no, then theycan't do it, et cetera.
(04:28):
And if the votes no, then theycan't do it, and if the vote is
yes, then they'll go throughthis process.
We've never developed a buildingthat has been approved with
general obligation bonds, forexample, when we developed the
courthouse for the city ofAtlanta, for example, when we
developed the courthouse for thecity of Atlanta, it was not on
(04:48):
a ballot.
It wouldn't be on a ballot forfour or five years at the time,
according to the mayor.
So we were invited there and wediscovered that they had $25
(05:09):
million a year in fines andforfeiture revenues coming into
the city and most of it leviedby the judges, the court.
So we just needed about $4 or$5 million in a lease back so we
could sell the bonds that wouldbe used to design and build a
new courthouse, and so we founda different funding mechanism.
(05:32):
We create innovative, veryefficient structures from a
financing standpoint that willhelp these deals move forward
much faster generally.
I mean, if we'd had to waitfour or five years for a public
referendum in Atlanta you can'tpredict interest rates, you
(05:52):
can't predict inflation it wouldbe a much more costly
development in four or fiveyears than what we were able to
do within a year.
So and that's just an exampleof one of the close to $3
billion worth of developmentsthat we've done- that's
interesting and I love that.
Speaker 1 (06:15):
I think you know some .
An instant question that comesto mind when I hear you say that
is so you, I'm assuming did youalready have a relationship
here established.
So I can't, I guess what I'mtrying to ask is did you go in
(06:37):
there when they're wanting tobuild a courthouse and them say
it's going to be four to fiveyears, not knowing anything, and
say, oh well, let's look atsome of your other sources of
revenue and we'll put thispackage together and we'll get
this thing built in a year?
Or did you have a pre-existingrelationship already with that?
Speaker 2 (06:58):
We had a pre-existing relationship through our
general contractor.
Garfield Public Private wasreally created in 1997.
That was the year after I hadclosed a merger.
I was chairman of a publiccompany Up until 1996, we sold
(07:21):
the company to SyntexCorporation, which is the second
largest home builder in theUnited States at the time, and I
found myself without a job.
I was out of a job, you foundyourself out of a job, yep, yeah
.
So on my board of what was VistaProperties that merged with
Syntex was a fellow that was onthe board of Turner Construction
(07:42):
Company in New York and hebecame the CEO, chairman and CEO
of Turner in 1996.
And in early 1997, he invitedme to talk about solving one of
the issues that they had.
So I worked for him for a yearand sold a subsidiary of their
company for them, and thefollowing year he asked me to
(08:06):
create what is now GarfieldPublic Private.
He didn't want to own any ofour company because they're a
great general contractor andthey do lots of construction for
private developers all over theworld.
So he didn't want a no-namefirm called Garfield, which no
one had ever heard of, firmcalled Garfield, which no one
(08:28):
had ever heard of, you know,seeming to have a close
relationship for privatedevelopments.
So we specifically targetedpublic developments where, at
the time, private developers didnot get involved.
In fact they still do to anextent stay away from it because
they can't invest in and ownpublic properties.
So they'd rather, you know, dotheir private developments
(08:49):
apartments, shopping centers,office buildings, industrial
buildings, et cetera.
So we just focused on forTurner.
For about four years we were ona retainer with them and we
created this business.
So Turner's office in Atlantawas one of the ones that we they
had 44 offices nationally.
(09:09):
Their Atlanta office called usand said hey, we were at an
Atlanta Falcons football gamewith the judges and they were
complaining about being in a50-year-old building and this
was a great need of theirs.
So Turner brought us to Atlantaand introduced us to the judges
and to the city and then we wereable to, in a few days,
(09:33):
determine that there were goingto be avenues to pursue to help
them solve the problem, get outof a 50-year-old building into a
modern, secure, safe buildingand avoid that four to five-year
delay of getting a referendumon the ballot for the voters to
(09:56):
agree to or to turn down.
So you bet 80% of our business,I think, is referred by either
a general contractor, anarchitect engineering firm, a
big hotel management companylike Hyatt or Hilton or Marriott
, big management firm forperforming arts centers or
(10:18):
arenas like ASM or OVG OakviewGroup, the largest in the
country, or OVG Oakview Group,the largest in the country.
So, consultants, many of theopportunities come through us,
through people that we've beenon teams with before, that know
our skills and how we're able tocome up with some solutions
(10:41):
that are greatly needed by theseclients.
Speaker 1 (10:46):
Yeah, I find this extremely interesting.
So you know me, we're on the GCside, so we're a commercial
general contractor nowhere nearthe size of Turner, obviously,
but you know, yes, so we're.
But yeah, so this, we run intothis same challenge all the time
.
So with what you're saying it'sgreat to hear, and I don't know
(11:12):
, even with you being around for28 years there's definitely
probably a lot of expansionopportunities still today for
what you're doing, because thiscan be used anywhere.
If you've got a system of goingin and now have a track record
of being able to put thesecreative projects together, that
(11:37):
is definitely appealing tocontractors.
So I could see contractorsbeating down your door.
Of course, you have to have acontractor that is established,
that is able to perform and hasyou know this the county or the
city wanting to partner withthem.
So for the public side, Icompletely understand that.
(11:57):
And then you can find thepublic funds and you I'm
assuming just your, your guiseis upside is a developer fee
established with puttingeverything together?
Is that how you're structured?
Are you in and out before theproject breaks ground or are you
involved throughout?
Speaker 2 (12:16):
We're involved throughout.
I mean, we really are adevelopment firm but
distinguished by the fact thatour clients are in the public
sector and, of course, inAmerica.
We're the only nation in theworld that has legislation
that's been on the books for acentury or more, allowing the
(12:40):
sale of municipal bonds,tax-exempt bonds.
The sale of municipal bonds,tax-exempt bonds for cities,
counties, schools, Federalgovernment's not tax-exempt, but
anything other than the federalgovernment.
You can do tax-exempt financingwhich is less expensive than
conventional financing, right?
So, unlike a private developer,we're not often asked to make
(13:01):
an investment.
In fact we just can't and stilldo something tax exempt.
So for most of our developmentswe are an owner's rep, if you
will, kind of an owner's rep onsteroids, but we're the team
leader.
We bring the architect and thecontractor to the table.
We bring with the contractorhis subcontractors.
We also interact with thefinancial advisors, the bond
(13:27):
councils, the underwriters, theattorneys and once we sell the
bonds, of course we are helpingto oversee the designs.
We have a couple of verywell-established architects
within our firm that don't drawanymore, but they did for years
and now they interact with ourarchitects and we have some
(13:48):
great construction managementpeople coming out of the
construction industry that areon site with the general
contractor every day, makingsure things stay on track, on
budget, on time.
And we're there when we open thebuilding, cut the ribbon, have
the grand opening and in certaincases and we're best known for
(14:12):
doing convention centers andtheir headquarters, hotels or
performing arts centers, eventcenters, expo centers, museums
and so forth.
So particularly with performingarts centers and hotels, we're
able to stay on as the assetmanager.
So if Marriott runs the hotel24 hours a day, seven days a
(14:33):
week, we're there monthly,quarterly, annually.
We're there to help sort of bean early warning radar with the
general manager and so forth,make sure it's performing.
Early warning radar with thegeneral manager and so forth,
make sure it's performing, makesure it's maintained, report to
(14:56):
the bank trustee for the bondsor standard and poor's if those
bonds are rated.
So we do have a continuing rolein a number of the properties
that we complete.
Thank you.
Well, you know we're a teammember, tony.
Speaker 1 (15:11):
Yeah, absolutely.
Speaker 2 (15:12):
And that's why a general contractor or an
architect would refer somethingto us and say, hey, we know of a
city here that needs X Y Zpiece of infrastructure.
They're scratching their headson how they can do it in a year
or so.
Could you guys come in and joinus and talk to them?
And that's the introductionthat helps us move forward on
(15:37):
projects.
Speaker 1 (15:39):
Yeah, this is you know.
What I say a lot of times, ray,is you have to open your mind
and you know you can't everbreak barriers and do bigger
things, or you know, if youdon't first envision on how to
do it.
And I'm going to be honest,I've been building going on 20
(16:01):
years.
At this point, this, to me, isNever heard of it.
It's you know.
This is absolutely amazing.
So, yeah, when I look at yourportfolio, yeah, with your
convention centers, conferencecenters, you've worked for
multiple hotel chains, right.
(16:23):
And so not only are you guysdoing great things, you've
niched down, you've created aspecialty and I can 100%
guarantee there is a strongdemand for your services
wherever you guys can get astronghold.
And I'm sure once you get inthere, it then becomes a client,
(16:47):
a repeat client or a referralto other near townships where
relationships are then movingyou over, right.
So it's beneficial not only forthe contractor, for that
initial connection.
I'm sure that that contractorand you then can grow and expand
, because if you're able to dothis for one area and that gets
(17:12):
out, I'm sure you know anyonethat they know in the next town
over who's now never experienced, that wants to see if it can be
utilized in their area to getsomething through.
Because the reality is, all ofthese local governments are in
need of infrastructure upgradesand changes and waiting for
(17:34):
referendums, and so if you'reable to come in and really speed
up that process, man, you'rebenefiting the town and the
community and you know you'reproviding work for the community
, and so I love the idea thatyou guys are then also coming in
as an asset manager.
(17:54):
On the backside, you have theknowledge and understanding of
the bonds and how to manage thewhole process.
When you say you got into thisin 97 after you went and joined
Turner, did you put thistogether while you were at
Turner from 97, 96 to 97?
(18:16):
Is that when you establishedand kind of put all this
together?
Speaker 2 (18:23):
Yeah, I want to distinguish something you said.
I didn't go to work for Turner.
They retained our firm.
We were arm's length.
Speaker 1 (18:32):
Oh, okay, so sorry.
Speaker 2 (18:33):
Yeah, Turner didn't.
Turner did not want to own adevelopment company, they were a
contractor.
So we were retained by them tobe an outside provider of this
particular skill of helpingdevelop more design, build
business for them, helpingtargeted clients of theirs to
(18:56):
figure out how they couldfinance new big construction
projects.
So we were absolutely allied.
I mean, for four years we werealmost exclusive to Turner
because they're such a bigcompany.
Four years we were almostexclusive to Turner because
they're such a big company.
And then Turner was sold to aEuropean organization.
(19:19):
Our retainer lapsed.
We still do business with Turnerbut we do business with many of
the top call it 30 or 40 of theor 40 of the ENR 400
contractors around the country.
So I wanted to distinguish thatand I think that, as you've
(19:52):
seen, we couldn't get hired inTexas.
We were a Texas company but noone had heard of us.
So we were hired by theCommonwealth of Puerto Rico to
develop their new headquartershotel for their convention
center, their new headquartershotel for their convention
(20:12):
center.
We were hired by St Joseph'sHospital in Patterson, New
Jersey, and the state of NewYork to do a Department of
Transportation office buildingand by Los Angeles schools.
So we really had to sort of bethe expert from afar and develop
some some history.
And then we won our first dealin Texas back in 2000, I guess
(20:34):
seven and delivered a greathotel and conference center for
Lubbock, Texas.
We then were hired again byLubbock and in 2021, we
delivered $160 millionperforming arts center, the
Buddy Holly, which is aworld-class acoustic performing
(20:55):
arts facility that serves thecommunity.
We're just completing somedesigns for the Lubbock County
for an expo center of over $100million.
Um and um and you know I yousaid uh, repeat business this.
(21:15):
Certainly we're proud of thefact that not just lubbock but
uh other communities have hiredus a second time and even a
third time, uh, to do newprojects.
Once we performed on that firstproject on that first project
and at least after now, 28 yearsin the business, we're pretty
(21:36):
competitive in.
Speaker 1 (21:38):
Texas as well.
But, still focus around thecountry.
So what is the goal of yourcompany?
Speaker 2 (22:02):
How large are you trying to grow?
How far are you trying to reachand how are a goal to protect
our reputation and continuallybe successful, and whatever that
means in terms of growth, interms of employees and volume,
we'll accept that as it comes.
Garfield Asset Management aboutthree years ago, because we
(22:35):
were turning out so manyperforming arts centers and you
know Durham's Performing ArtsCenter, utah's Echoes Theater in
downtown Salt Lake and theBuddy Holly, et cetera, all the
hotels we've developed forcities around the country we
just felt like there was a goodbusiness model there to create.
So we established GarfieldPublic Private Asset Management.
(23:00):
A couple of years ago wecreated a company called
Garfield Clean Energy and one ofour repeat clients, a city in
Central Texas energy, and one ofour repeat clients, a city in
Central Texas, had about 2,000acres that they own and that was
being farmed, and the mayor andcity manager told us that they
(23:21):
were hopeful of greater revenuefor the city and something other
than cotton farming.
So we've been working for thelast year now on getting this
property approved for solar andso, coincidentally, the Stargate
(23:42):
program that was announced byMusk and the president and so
forth, this half a trilliondollar investment in AI.
Their announced first bigdevelopment is in this city in
Central Texas, where we havethis effort going to get
(24:05):
approved for three or four or500 megawatts of a solar farm.
So we're optimistic about that.
But it's a natural extension ofour public-private business.
In other words, cities needmore than just a new courthouse
or a new convention center andhotel or Performing Arts Center,
(24:27):
and Solar is one of the moretopical growth industries that
you see as well.
So we're doing that.
We're talking about ourexpertise in hotels goes back 40
years or more when I was onWall Street, capitalizing
(24:52):
financing for major hotels, andso we are talking seriously
about establishing an investmentprogram to acquire existing
hotels that need significantproperty improvement programs.
So if we can buy them right inthe right location, the right
(25:14):
market, make those improvements,we can probably have a pretty
effective capital investmentprogram as well.
So I think we just take let'sjust say we're a cautious
organization, thoughtful andwant to take steps when we
(25:38):
really feel like they're theright steps to take.
Speaker 1 (25:41):
Yes, sir, yeah, I think any you know it speaks
volumes when, whenever we have acompany that's, you know, been
in business almost three decades, right that you guys have
stayed true to your core values.
So I love hearing thatprotecting your reputation,
because reputation is all thatwe have and you know you've
(26:16):
clearly defined something thatgives you an advantage in the
marketplace and niche down and,you know, rinsed and repeated,
and that is the key to successwith most businesses and that
create longevity.
So that's amazing.
And once you have that stablefoundation to speak to what
(26:44):
you're saying, then you can, youknow, expect to add different
levers that complement whatyou're already successful, in
which it sounds like you guysare planning for and continued
growth.
And so I love to heareverything that you're saying,
because there's there's never amagic bullet.
With any successful business, nomatter the industry, it is
based on reputation, longevity,and being great at what you are
doing successfully and thenbeing able to replicate it over
(27:06):
and over again is what createsthe long-term success.
So I love to hear all that,something that you know as we
look through, you do otherthings as well.
It looks like you're in sportsand entertainment, and so you
know doing parking garages.
You guys have done other thingsas well.
(27:26):
I think it's at office.
So, besides those, could yougive us an example of a private,
a couple of private ones thatyou've done, or is everything
that you're, I know, with thehotels?
Obviously, a lot of thosearen't private, right.
So is there what are someprivate projects that you're
working on now?
Speaker 2 (27:45):
Well, yeah, over the last 28 years, each of the
hotels that we've done has beena public-private partnership.
Only one of those hotels hasbeen financed in a conventional
manner.
The city wanted us to do that,so we brought in our own money
(28:06):
and other people's money friendsof the firm and developed the
hotel.
But the city and, let's say,high net worth individuals or
foundations made significantcontributions on the public side
in this public-privatepartnership in order to do that.
In order to do that Now, in thelast year and a half, two years
(28:28):
, we have led the design of aprivate hotel in the North
Dallas area for a Japanesecompany.
Toyota's North Americanheadquarters is located in Plano
(28:50):
, texas.
This Japanese company wanted tobuild a Japanese-style hotel
near Toyota, and so we havecollaborated with them, sort of
taken over the leadership ofworking with the architect and
the contractor, helped selectthe contractor you know, taking
this thing through concepts andschematics and DDs, et cetera.
So, yeah, if we find a clientthat has substantial capital,
(29:16):
doesn't need the kind ofpublic-private skills that we've
got, but really wants to buildan impressive project, whatever
it may be, we can act as afee-only developer for them in
these areas where we have thisexpertise, as I mentioned.
Now, we're really well known fordoing these convention hotels
(29:40):
and you could say also that thatsame public-private model can
be done for airports, airportterminal hotels, college campus
hotels, healthcare campus hotelsand, of course, the city or
municipal conference orconvention hotels.
So there's a pretty broad swathof the hospitality industry
(30:03):
that's there.
But in the cultural arts area,where we started by being the
developer of the DurhamPerforming Arts Center, which is
hugely successful, and thenwent from Durham to Salt Lake
City and helping to lead thedevelopment of the Eccles
Theater, and then back toLubbock after we had developed
(30:26):
their hotel to be asked to helpdevelop their performing arts
center there, we've brought onsome outside talent that had
worked for a competitor in thiscultural arts area.
So you know we have a reallydeep resume of not only
performing arts, arenas, eventcenters, museums and so forth.
(30:52):
So that's at least half thebusiness that we do around the
country right now Working inSarasota with the Sarasota
Orchestra Development, workingon the Phase II of Rothko Chapel
in Houston, texas, and othercultural arts undertakings a
(31:15):
major art facility, art museumin the country where we're going
to help expand and modernize avery large facility.
They've been in for 100 years.
Those things are real targetsof ours as well, so go ahead.
Speaker 1 (31:39):
You've obviously been extremely successful in
business and you've taken onmassive projects.
When you look at your run up towhere you are now, was there
anything pivotal in your careerthat really helped you skyrocket
and get to the next level?
Speaker 2 (32:01):
A couple of really important events, really
important events.
You know, I started my own firmwhen I was, I guess, probably
around 27 years old, after Ispent the first number of years
(32:24):
in the Navy as a pilot.
But then I and I worked forRoss Perot for a couple of years
in the Navy as a pilot.
But then I worked for RossPerot for a couple of years in
his electronic data systemscompany and learned a lot there
because I had a great role ofinterviewing and recruiting
clients all over the country.
But I wanted to stay homebecause I had a young family.
So I started my own little realestate company and in 1981, I
(32:49):
sold that firm to Merrill Lynch.
That was one of the definingmoments in my fledgling real
estate career of being able tolist properties in the $3 to $5
million range at my littleGarfield firm, to having a
Merrill Lynch business card andall of a sudden listing $50
(33:10):
million properties becauseautomatically you're looked at
as maybe somebody that's moresuccessful.
Solomon Brothers recruited mefrom Merrill Lynch back in the
1980s when they were the king ofWall Street inventing
commercial mortgage securitiesthe 1980s when they were the
(33:31):
king of Wall Street inventingcommercial mortgage securities.
That was the second realdefining moment in my real
estate career is working withyou know, the mover and shaker
on Wall Street at the time andinnovating commercial mortgages.
So that was sort of my PhD inreal estate finance.
(33:52):
So I've been able to use thatvery effectively in this
particular company.
And I guess the last role Imentioned that I was CEO of this
public company that had takenout of bankruptcy I was really
the turnaround CEO and when Isold it to Syntex Corporation in
(34:12):
1996, and an interesting pointof it I took this company out of
bankruptcy in early 1992.
And of course that was at thedepths of a recession that we
had in the country.
The catchphrase was stay alivetill 95.
Yes, I did so.
(34:36):
I turned this company aroundand sell it successfully in 1996
.
And the irony is that in 1997,every CEO in the country,
whether they were great orwhether they were a doofus,
(34:58):
looked like they were greatbecause of the economy and so I
figured well, I had a greatsuccess as a CEO of a public
company.
I'm sure another public companywill hire me and in 1996, 1997,
I got offered a lot of numbertwo jobs and I just didn't want
(35:21):
to do the number two job.
So I started my own company andso 97 was our first year with
Garfield Public Private if youwill, but certainly built on all
the experience that I had and Iguess particularly at Solomon
Brothers understanding WallStreet and the capital markets,
(35:43):
understanding public bondofferings, understanding public
bond offerings, municipal bondofferings, et cetera.
That was certainly the keybuilding block of doing this new
company that I didn't reallywant to do, but I also didn't
want to be a number two anymore.
Speaker 1 (36:01):
So you know I love that.
Well, I mean, that's it.
That's what I always say.
If you understand yourstrengths and weaknesses in life
and what you will do and whatyou won't do for me, I will be
reaching back out.
Just I've had about 15opportunities rolling through my
(36:33):
head as we're speaking today.
So, you know, I can onlyimagine where your company can
go and I sincerely appreciateyou taking the time and spending
with us today and sharing someof your experiences.
So thankful for that.
And thank you for joining ustoday and sharing some of your
experiences.
So thankful for that.
And thank you for joining ustoday, ray.
Speaker 2 (36:52):
Thank you a lot, tony .
I enjoyed it as well.
All right, you have a great day, appreciate it Right.
Bye-bye.
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If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
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The latest news in 4 minutes updated every hour, every day.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.