Lunch with Mary and Al Giaquinto of Plum Builders

By Dawn Watson

R

esidence recently met with Al and Mary Giaquinto—the husband-and-wife team who founded East Hampton-based Plum Builders more than 25 years ago—for lunch at the Living Room restaurant at the Maidstone Inn in East Hampton.

Over extravagant, but inexpensively priced, $20 lunch prix fixes (order coffee and it arrives in an individual four-cup French press! And the dessert course alone could cost $20 at some places!) and salad, the former college sweethearts discussed how they have survived and thrived in the sometimes volatile East End building business since the early 1980s.

Mr. Giaquinto, who is president and chief executive officer of Plum Builders, started out his career as an architecture student at Brooklyn Technical, but he also ended up pursuing an accounting degree, which he received from Baruch College, before earning his master’s degree in business from Xavier University. Additionally, he is a Certified Graduate Remodeler, Certified Green Professional and Graduate Master Builder.

Ms. Giaquinto, who oversees marketing efforts, advertising and event management for the company, has earned a certificate in Construction Project Management. She and her husband have been married for more than 40 years and have three grown children.

Q: Tell me a bit about yourself and how you got started in this business.

Al: My background is accounting and finance. But I also did study construction and got a degree in architecture from Brooklyn Tech. My father was a builder and contractor. And since we came from a working-class background, it was important to make a living, which is why I went into accounting. But I always wanted to build houses. I started drawing models when I was 16.

Mary: There is never a number he doesn’t know, and that is really one of his strengths.

Q: So how did Plum begin?

Al: We moved to East Hampton [from Cincinnati] in 1982 and started our company. My business background kept us in business, my number-crunching abilities. We were one of the first to build the larger spec houses: the first mega-specs were built by us in the late 1980s. We had developed a look that was a mix of a post-modern and contemporary.

Q: What is the typical Plum house?

Al: The answer to that is there is no typical Plum house.

Mary: I think that’s totally accurate. But I do have to say that there is one signature and I think that’s a good value.

Al: The value is there because of the business model. The business model makes it work. Numbers don’t lie. Figures don’t lie—though liars can figure. You just have to look at the numbers. Our business model is like a health and fitness model for the client: we cut off the fat, we give them the healthiest, the most organized, most straightforward. And yet, there is a richness that they can’t achieve anyway else.

Q: How has the building business changed since you started Plum?

Mary: Builders 20 years ago, all you needed was a truck and a black Lab.

Q: As in a dog?

Mary: Yes, you had a dog, and you were in business. That may have been the romantic vision 20, or 30, or 40 years ago. Today, there are much higher barriers to being a professional—there’s far much more complexity for life in general. There’s far less competition. In many ways, it’s much more sophisticated, but there’s much less of it.

Al: The guys with the pickup trucks working in the low range—there’s still a few of them around—there’s always a place for them. But it’s getting smaller.

I’m one of two Graduate Master Builders on the East End. Designations, credentials, they separate the professionals from people less professional.

Q: So how has this recent economic downturn affected the business now? There seem to be a lot of stalled projects and not nearly as much construction as we’ve seen in recent years.

Al: Every so often, we have a recession. The people who have not built their businesses properly go out of business at that point. It’s a natural cleansing cycle. We’re in that cycle now. There’s probably a third [fewer] contractors out here than there were in 2007. That’s a good thing.

And technology is getting so much more sophisticated. Even at the lower levels and the mid levels. Even today, between 22 and 28 percent of construction cost is being spent on technology, which didn’t compute 10 years ago.

Q: What distinguishes you from other East End builders?

Al: Construction out here, let’s relate it to dresses. You could buy a dress for $19.95. You could buy a dress for $119.95. You could buy a dress for $19,095. You could probably buy a dress for $119,000. So if you could picture that spectrum, that rainbow of numbers, that rainbow of dresses ... That rainbow is the same rainbow of pricing that you can have in houses out here. Everything from $200 a square foot to $2,000 a square foot. What the difference is—the architectural concept, the architectural detail, the quality of the workmanship, the quality of materials and the overall scheme and theme of the project. It’s easy for someone to say, ‘Two thousand dollars a square foot? That’s ridiculous! Why did they spend that kind of money?’ But if you want what you want, it’s probably the only way to get there. Where we fit in: Our business model is that we work at a number of different price points with architects. In today’s mid-range, we’re very, very effective and competitive.

Q: Mid-range being ...?

Al: About $400 a square foot. In the upper ranges, in the $600 to $800 a square foot, we are extremely competitive. We have developed a business model that is very efficient. We focus on communications, construction management tools and understanding materials to the extent that in our office, we have designated teams who become experts in certain phases. For example, I am designated the window and door expert in our firm. So one of my jobs is to learn everything out there about windows and doors.

Q: Are there other builders who designate these spheres of internal expertise?

Al: I don’t know of anyone else that does it the way we do. This is something that we developed internally. We have to constantly hone our expertise.

Q: How many people are on your team?

Al: Altogether, six on the corporate management team. That doesn’t include all the people in the field. That’s what separates the professionals from the rest. That’s the reputation you want to build inside your firm. That’s the kind of thing that puts us in the position that we are in.

Q: And how has that position held in this economy, if you don’t mind my asking?

Al: Through this downturn, we grew our business 20 percent in 2008, we grew it 22 percent in 2009, and we’re going to grow it 26 percent in 2010. The reason for that has to do much with Mary, because she always said, ‘Don’t put all your eggs in one basket.’ She developed a marketing network—we have brokers bringing us business, we have architects bringing us business, and she’s always stayed close to our clients, who also bring us business.

Mary: Thank you. I do think though that your strength in numbers and your ability to discuss costs help people feel secure.

Q: Talk about your business model a bit and how it’s unique.

Mary: Communication is key. Internally and between us and our clients, everything hinges keeping the lines of communication open.

Al: The business model that we’ve developed has a number of different parts. Number one is the expertise of the actual product and materials. Number two is the management tools. We have perfected the use, over the past eight years, of a construction management tool that literally nobody else uses out here. What it does is schedule every single activity from beginning to end. More importantly, it’s internet-based and linked to the clients. It’s a timeline literally for every activity.

Q: I’m interested in the construction management tool and how it works.

Al: What is the single most important activity in our firm? Mary pointed out that it was communication. We must be the ultimate communicators in order to give our clients the best satisfaction. We have photographs weekly on their link, we have their construction schedule, updated weekly, plus their plans, specifications and all of their invoicing. So they can open up their laptops, open the link and see their entire project.

That set of management tools keeps us on schedule. Coupled with that is the budgeting. You have to have a tight, tight, tight line item budget. When we do a budget—which we call a construction financial analysis—we are looking for the best value for the client. We have to prepare the bid according to what the architect asked for but we also include the alternates, always matching equivalent quality or better.

Mary: When you have good communication, then it’s easier to meet the client’s goals and to understand the vision they have for their house. It’s really important for everyone to be on the same page. You can’t do it alone. Everybody needs to be on board.

Q: What do think is the cornerstone of your company’s philosophy?

Mary: Great service.

Al: Mary’s right. And that means to build the right team. Qualified architect, landscape design, pool, interior—that’s the basic team—plus us. What’s really the crux of our business model is that we have found each discipline must be involved at the concept stage for the client to reap the reward of the money that they spend. By bringing that team in from the beginning, the client gets the best value. That way they’re not changing plans in the middle of the project.

Q: Mary, you have been instrumental in developing marketing concepts and relationships within the industry. I remember we first met at a luncheon you sponsored on the future of design with Hermine Mariaux as speaker. In fact, it was right here at the Maidstone. Tell me a bit about that concept and what kinds of rewards you’ve reaped from it.

Mary: I think it has to do with the word ‘design.’ People have espoused it. They want it in their home, in their lifestyle, they want it on their backs, they want to carry it. They want to drink it. It’s infused everything about our life. Today, people very much want to imitate, create and be in charge of their whole personal presentation to the world. And that extends to their house, their car, their dog. That impacts all the choices they make. It makes sense for us to talk about that. Everybody’s interested in design. Good design.

Q: Speaking of design, the big new thing for the last couple of years seems to be green building. Are you seeing more and more demand for sustainable building practices?

Al: That’s an interesting question. Sustainable is a good word. That means it’s going to be here to stay. It’s going to evolve much more slowly than the industry would like it to evolve. The industry is very gung-ho on it and we have a lot of professionals out here trying to make their mark in it.

The fact of the matter is that clients are saying, ‘What’s it going to cost me, and how much money am I going to save?’ Clients want to be green but they’re very practical. If it’s going to cost $100,000 and then take 20 years for them to get their money back, then they’re not doing it.

Mary: Good builders have always sited the house in the right place. They’ve covered the basics, which is about green. It’s the sensible thing to do.

Q: Going forward, what do think is going to happen in the building realm on the East End?

Mary: I think the industry is going to become smaller and more and more professional. They have to up the bar, be more prepared, more qualified, gain more credentials, get more schooling. As a result, it will raise costs across the board. People will deliver a better product ideally.

Q: What is the future of your business?

Al: The future is, we have two brilliant sons in the business, Oliver and Anthony, who will take over the business when it’s time. Not now, but we can’t do this forever. We’ve worked hard. But until then, the future of our business is to continue and build this niche.