Tight-Knit Numbers Keeps Racanelli Family on Growth Path

Melville, New York – Earlier this year, when Walgreen Co. signed a 20-year lease on a 20,000-square-foot building in Bed-Stuy, Brooklyn, locals weren’t the only ones pleased to hear about their new neighbor.

Martin Racanelli of Racanelli Construction, Melville, New York, routinely stays wired to New York City’s Walgreen grapevine, and he knew that the Bed-Stuy property meant opportunity for his family-owned six-decade-old construction firm.

“Most of the work we do for Walgreen is knocking down old buildings and putting up new 15,000-square-foot stores, but this was an old bank that still had a large vault and we had to convert it,” says Racanelli, who notes that the firm’s eventual role in the Bed-Stuy conversion was in keeping with the family firm’s latest chapter, wherein the firm operates as a “construction management” company rather than as a property developer.

“There’s probably two years of work behind this (conversion) where the developer worked to resolve issues and answer any zoning requests,” explains Racanelli, who says that his firm works closely with three out of four developers that currently serve Walgreen.

And while Racanelli builds for others, others build for Racanelli. Or such is the nature of today’s construction management, where properties are built, renovated, or torn down using tightly integrated teams of subcontractors.

“95 percent of our work is subbed to contractors,” explains Racanelli, who says that the majority of the firm’s 80-plus employees do not wear hard helmets these days, but instead are dedicated to the firm’s administrative processes and the analytical “heavy lifting” that comes when fielding a team of crack estimators charged with producing winning bids.

“It all comes down to getting the work, and even though we may have a good relationship with many owners, we don’t always get it. While our estimating department is really busy, it’s still very competitive, so we are really working to tighten up our numbers and make certain that we get the work,” remarks Racanelli, who observes that the firm currently operates with four estimators each one tasked with preparing bids on three to six projects at a given time.

“Right before an estimator is ready to put a bid in, they will sit down with me or one of my brothers. We finalize the numbers with them and decide what kind of discounting might be involved and better qualify the bid so that we can go in with our best number,” says Racanelli, who believes that the firm’s bidding process has long benefitted from its close-knit relationships with its subcontractors.

He comments: “We try to develop really solid relationships with our subcontractors so that we can go in with price-competitive quotes and be confident that we can get the work.”

The firm’s retreat from development-based construction began in 1992, when Racanelli and his three brothers, Nicholas, Michael, and Richard, became the third generation to manage the firm. Together, the brothers focused on transforming the business’s operations to suit a company that partners with developers rather than competes against them.

“My brothers and I each have our own niche today as far as our customers go, and what you’ll find is that we spend a lot of time building relationships — and we have a lot of repeat business because of those relationships,” says Racanelli, who ballparks the firm’s annual revenues as falling between $60 million and $90 million.

Still, it’s clear that Racanelli and his brothers believe that it will take more than repeat customers to grow the firm beyond the $100 million threshold. In recent years, the company has demonstrated some entrepreneurial verve as it has sprung into such growth areas as pre-engineered metal buildings and new geographic markets, the latter after a group of former employees established a North Carolina satellite operation dubbed Racanelli South.

Meanwhile, closer to home, there’s Conrac Construction Group, established in 2010 as a women-owned and -managed construction enterprise. Led by Connie Racanelli, sister to the current generation of Racanelli brothers, Conrac appears to be have hit the ground running as it leverages Racanelli family’s deep construction experience to target so-called government set-aside contracts for women-owned businesses.

Says Racanelli: “Connie has really opened a whole new market.”

Asked once more about the firm’s standard recipe for growth, Racanelli returns to relationship-building.

“We try to get involved in the preconstruction phase. This means building relationships with architects who really see the projects in the development stage, and this only increases the possibility that we’ll get the work,” says Racanelli, before repeating a favorite catch phrase: “It all comes down to getting the work.”