Program Reports

The program write ups as they appear in the meeting bulletins.

Program Report – Shelley McPhatter – BridgePoint Construction

The Durham Circle of Business

Today’s program was about another enterprising person who left a very secure position in private industry to assume the risks of going into business for oneself. Shelley McPhatter has created a highly successful consulting and construction business in the Triangle. Todd Taylor introduced Shelley whom he got to know through her work for Duke Corporate Education.  Todd pointed out that she had a degree in Ocean Engineering from Florida Institute of Technology. Naturally, he had to point out that building things on land was “piece of cake” compared to building on the ocean.

Shelley has been in the construction business for twenty one years. Early years were spent working out of trailers supervising subcontractors for large construction firms.  She spent eight years as a project manager at Skanska, one of the world’s leading construction and development companies. She called herself a “company girl.”  She was on the “A-Team” with a secure job. She had three young children. Why would she ever leave a job like that?

Nonetheless, she struck out on her own in 2007, founding BridgePoint Construction Services working out of her home. At the time, her twin daughters had just finished day school. She felt rich.The time felt right. But once she got out on her own, “it got scary.”

Her first project was serving as Owner’s Agent on the GreenBridge project in Chapel Hill, a mixed development of commercial and residential space. At the time it was hailed as the “greenest” project in North Carolina. BridgePoint Construction Services works as a consultant with developers, architects, construction firms and others to manage successful and sustainable projects.

Shelley lives in Wake Forest. There are too many family connections to leave, but she loves Durham.  In 2008 she started looking for office space in Durham. She loved the downtown.  She loved the energy. She loved the architecture. And she wanted her business to be part of the community. How often have we heard start-ups and entrepreneurs say the same thing?  South Duke Street has become home for her Durham offices.

In 2013 Shelley founded BridgePoint General Contracting. Projects have included an expansion of American Underground and improvements to the lobby area of Bronto Software.  She has twenty-two clients that are based in Durham.

In 2016 Shelley co-founded BridgePoint Civil, located in Goldsboro, that provides earthwork and site utility service for the Triangle and eastern North Carolina.

Shelley modestly failed to mention that Triangle Business Journal ranked BridgePoint General Contracting as twelfth on the Fast 50 List  of the fastest growing companies in the Triangle in 2016.She attributes BridgePoint’s success to “our people” who treat all professional relationships as partnerships. Personally, she has discovered that “her time is better spent working on the business rather than in the business.”

When asked how, as a woman, she fits into the traditionally male-dominated construction industry, Shelley admitted that coming up through the field there was a lot of cursing and jokes. “I’m good at that!” she retorted.

Submitted by Allen Cronenberg

Program Report: Jennings Brody – Parker and Otis

I was taking notes for this write-up when Jennings Brody, the force behind Parker and Otis at Brightleaf and Chet Miller and Tiny on Parrish Street Downtown, abruptly ended her remarks at 1:00 o’clock. But anyone who was worrying that they might have to go back to work a half hour early, had nothing to worry about.

That was not a problem. The audience of Rotarians was filled with many of the legion of fans of Ms. Brody and her retail savvy, and they were full of questions.

One of those fans was new Police Chief and newer Rotarian C.J. Davis who had discovered Parker and Otis before her family had joined her from Atlanta. She implied this helped her convince them that Durham was a good place and she liked it.

Chief Davis also made it clear that her guys were not responsible for enforcing the parking limits on Parrish Street. This was in response to Ms. Brody’s criticism of the new one hour limits for her new stores on Parrish St. Her point was that such a short limit was counterproductive to creating a vibrant retail environment Downtown. She pointed out that they always encourage their customers to visit other stores in the area and have lunch in many of the new cool places.  A three-hour limit would be her recommendation.

Ms. Brody received many compliments on the selection things in all three stores and was asked how she selected them. Her answer was that she personally selected everything and went on buying trips to nine to eleven trade shows a year.  Just coincidently, Steed Rollins was next to me at my table and our reaction was similar and we looked at each other with big grins. Steed and I once were partners with two other guys in a company that was trying to sell our lines of figurines at these shows.  We weren’t terribly successful, but these shows, if you have never been to one of them, are quite an experience. Ask Steed about the shows and were we stayed in New York, Atlanta and Dallas. Anyhow, we have an appreciation for Ms. Brody’s ability to create the environment she does in her stores with the thousands and thousands of options that she has at these shows.

Ms. Brody also deftly and candidly fielded questions about the business side of starting a retail store. One break that came with its own risks was that she could take over the Fowlers space that had closed after its third owner had given up and was already up-fitted for what she wanted to do. She also praised Self-Help for not only taking a risk in and near Downtown but also for requiring a detailed business plan.  She talked about the proceeds from the Self-Help loan and another $200,000 on credit cards that brought a gasp or two from the audience.

The initial inventory in a new store is a big lump to swallow, of course, and she pointed out how helpful it was to have landlords like Past President Arthur Rogers, who introduced her, that give a break at the beginning of a lease.

On how she got in the retail business, she talked about first selling shoes then as a rep for a candy company and then three years working for Sara Foster running the Fosters in Chapel Hill.

Since I’m a notoriously bad note taker, I usually go to the web to try to fill in the gaps. What I found was an interview of Ms. Brody on the Durham Magazine’s podcast, where she tells a lot of the same story. That can be found at http://durhammag.com/2016/11/18/episode-35-parker-otis-and-chet-millers-jennings-brody/.

If you’re new to town or have never been to Parker and Otis, their website gives you a good idea of what you’ve been missing. It can be found at http://www.parkerandotis.com/store/.

One thing I did find hard to believe was Ms. Brody’s claim that Parker and Otis went through 71 gallons of Duke’s Mayonnaise every week making their signature pimento cheese.  Come on, really?

Submitted by Jay Zenner

Program Report – Joe Colopy- Founder of Bronto Software

The Durham Convention and Visitors Bureau’s Annual Tribute Luncheon this month celebrated the start-up culture in Durham. The keynote speaker was the founder of MapQuest, Chris Heivly. Chris is also involved in the start-up culture here and started by asking everyone to imagine themselves as 10 year olds who decide to build a fort. His point was that you didn’t do a lot of planning then, you just went out and looked around and built that fort with whatever was available. MapQuest started as an attempt to improve on the trip planners we used to get from AAA.

Listening to Joe Colopy tell the story of how he started and built Bronto Software, my first thought was that I was beginning to see a pattern here and building forts was a good analogy. Bronto was the leading provider of email marketing software for the top 1000 email retailers from 2014 to 2016. Joe sold the company to NetSuite for $50 million in 2015 and it was subsequently acquired by Oracle. By that time Bronto Grew to over 300 people and $50 M in revenue across 5 offices, with headquarters here in Durham on the American Tobacco Campus and other offices in New York City, Los Angles, London and Sydney.

Before sharing all this, Joe told the story of how he and his wife to be, Karalyn, ended up in Durham. When they were both college students in Massachusetts they headed off to Florida for spring break and Durham happened to be where they stopped halfway down. After college, they joined the Peace Corps.

[Read more…]

Program Report: Dan Berman – Carolina Theatre

My wife and I have been volunteers at the Carolina Theatre for the past 8 years, as part of a group of over 300 Theatre volunteers.  We have come to love the Carolina as do the other volunteers.  As we worked shows, we became aware of the growing difficulties at the Theatre.  We heard good things about Dan Berman when he became the volunteer CEO in January, 2016, and his speech confirmed the faith many placed in him to put the Theatre on a more solid financial footing.

Rotarian Treat Harvey, Director of Development at the Carolina, introduced Dan Berman, her boss. He was the founder of MainQuad Group, that acquired and operated radio stations in NC and VA.   Treat said “ As a volunteer, every day for 14 and 1/2 months, he has come in to the Theatre as if he were a paid employee, working long hours.    I admire what he has done for the Theatre, taking it from the brink of disaster to a stable organization that continues to provide the best of arts education and entertainment for Durham and beyond.”

Dan’s presentation verified what we read in newspaper accounts.  Financial reports through 2014 indicated two profitable years in a row.  Thus the CEO expanded the number of live events from 68 in 2014 to 108 in 2015.  However, this expansion created a financial crisis with unprofitable shows. The 2015 review showed a a bookkeeping problem, with a net deficit instead of a profit.

Dan says “I anticipated keeping the job until the Theatre’s finances could be stabilized and a new CEO hired – maybe a few months max.  Within a day of starting, it was apparent that things were much worse.”   He immediately put a hold on additional bookings and provided a new business plan to the City.  In March, 2016, the City agreed to a one-time payment of $600,000, if CTD could match this with private donations by June 30, 2017.  This was completed by Thanksgiving, 2016, 7 months ahead of schedule.   Dan’s evaluation is that CTD is now thriving with a reduced net deficit and 14 profitable months in a row.

This has helped CTD develop partners with Duke Performances,  Cat’s Cradle, Motorco,  Full Frame, Art of Cool and Moogfest, as well as continuing to host local organizations.  CTD continues with its award-winning independent film programs and festivals such as the NC Gay + Lesbian Film Festival, the Nevermore Film Festival, the Retro Film Series, and the new Anime-Magic Film Fest that became the highest-grossing film festival in the history of the nonprofit.

In summary, Dan said “CTD has implemented a new business model focused on tightening financial controls, identifying and executing operational efficiencies, quantifying and minimizing risk, and increasing fundraising. This disciplined business approach, combined with innovative and diverse programming choices, strategic partnerships with other presenting organizations and a re-dedication to arts education and community outreach, has transformed CTD – creating a sustainable fiscal model and ensuring its place as a beacon of culture in downtown Durham.”

Submitted by Brady Surles

Program Report: Habitat for Humanity: Home is Where the Heart Is.

From the show of hands at the Monday, March 27 meeting, Habitat for Humanity is an organization that is well-known and supported by Rotarians in our club. Speaker Randy Lanou, co-founder of BuildSense, elicited chuckles from the attendees when he commented, “Well, I can see that promoting Habitat to the Rotary Club is like going hunting at the zoo.”

Many of the hands came down, however, when Lanou asked who knew Habitat’s vision statement. Efficiently and eloquently stated, it consists of just nine words: “A world where everyone has a decent place to live.”

Contrary to the perception of many, Habitat doesn’t give houses away. Potential homeowners have to qualify and demonstrate their commitment to maintain a mortgage on the home, participate in financial training, and contribute hundreds of hours in sweat equity assisting in construction of the house. Since 1985, Durham Habitat has helped over 600 families with housing upfits or new construction. Habitat’s administrative costs are commendably low, with 91 percent of all dollars donated “hitting the ground,” so to speak.

BuildSense, a top-rated full service architecture and construction firm, is one of five local builders partnering with Durham Habitat on this year’s 2017 Builder’s Blitz. Other companies, many of whom had representatives at the meeting, include B. Wallace Design and Construction, Garman Homes, Durham Building Company, and Thayer Homes. This year’s goal is to build five homes in just seven days.

The blitz will begin Friday, June 2, with the dedication of the homes set for Friday, June 9. Durham Habitat is seeking donations to help support the blitz, largely with what Lanou terms “hospitality needs.” Contributions can be a small as $60 – $75 per day (coffee or snacks for the workers) to $500 – $1,000 (lunch for one day or bottled Powerade/Gatorade), and up to $20,000 for the major underwriting sponsorship. Those interested can contact Development Officer Jennifer McFarland at jmcfarland@durhamhabitat.org.

The one-week build schedule is “mildly accelerated,” Lanou says with a wry smile, holding up a spreadsheet to demonstrate the complexity of the ambitious project. “We are very fortunate that these builders contribute their time and labor unselfishly, and subcontractors donate or discount materials whenever possible, from the time the first shovel goes in the dirt through the completion of construction.”

And then there are those enthusiastic Rotarians, who contribute time, money, manpower, womanpower, and kidpower year-round to Habitat builds. Don Stanger, a downtown Rotarian who, along with his wife Bettina, have supported Habitat for years, including major sponsorship of the last Habitat home that the club sponsored.

Lanou showed a time-lapse video from blitzes in 2014 and 2016, when two houses were built on lots in East Central Durham. The sites for this year’s build are close by each other on Angier Avenue and Bingham Street. Habitat keeps a “land bank” of potential building lots, and they choose the sites according to need and suitability of the project.

And while the blitz doesn’t formally begin for another two months, the builders are engaged in intense planning and preparation with their employees and partners, developing an elaborate system of checks and balances in the event of a rare unexpected occurrence – a delivery doesn’t arrive on time, or the product specifications were incorrect, for example. “We are working with subcontractors who we use regularly, and we know we can depend on them,” Lanou explained. “We have committed to working with them on other jobs throughout the year, so we feel very confident about these partnerships.”

He also gave a shout-out to Durham City for their flexibility in building inspections and issuing certificates of occupancy in a timely manner, particularly given the time sensitivity of the building period. The City also makes land donations and helps homeowners secure mortgages at a reasonable rate.

If you’ve never worked a Habitat build before, don’t worry – every work day starts with a safety orientation, and they’ll supply you with plans, tools, and training every step of the way. You can volunteer to help serve meals to the volunteer workers, or make a tax-deductible donation. Whatever way you choose, you’ll be helping eliminate substandard housing and help foster thriving communities in Durham. www.durhamhabitat.org.

Submitted by: Carver C. Weaver

Program Report: Art Pappas – Pappas Ventures

Editor’s note: There were technical problems with the camera and I did not get any photos from Monday’s meeting. OK, it was really my failure to notice that the memory card in the camera was full. Anyway, this picture is from a presentation that Mr. Pappas gave at Wake Forest. I’ll retake the other photos. One of the best pictures was of Mr. Pappas, Don Stanger, who introduced him and Paul Feldman, who was a guest of Past President Stanger and has addressed the club twice before and whose company was helped to launch by Pappas Ventures. www.Pappsventures.com has more about the company.  -JZ

Club member Art Pappas filled us in on the latest developments in his 30 years of experience in the pharmaceutical and biotechnology industries–including Glaxo, Abbott and Dow–and as a venture capital investor in the life sciences.  After leaving Glaxo-Smith-Kline, Art founded a venture capital business in 1994.  Since then Pappas Capital has managed nearly half billion dollars and invested in more than 70 life science companies.  These companies are developing drugs and devices. to combat and treat melanomas, pneumonia, spinal injuries, among other medical problems.

By focusing solely on life science companies, Pappas Ventures has developed expertise in development, clinical trial strategies and networking to find talent and capital.  Of particular interest are startups or established companies whose products have market potential and are ready for phase one or two clinical trials.  Approximately 70 percent of the venture capital is invested in drugs and the remainder in devices and diagnostics.

The Translational Medicine Initiative was created to help university scientists to translate academic projects into viable licensing products or promising startups.  One of these cooperative ventures is with the medical center at Wake Forest.

Art’s passion is developing and mentoring entrepreneurs and helping them build companies that will make significant contributions to the life sciences.

There are two developments or trends that make the life science field so exciting and promising.  One is the phenomenal growth worldwide that shows no sign of abating.  And, second, groundbreaking strides in science, particularly biology.  Another trend Art noted is the increased outsourcing of R&D by major companies.

Conceding that the San Francisco/Palo Alto/Menlo Park and Cambridge areas are the principal hubs of breakthroughs in life sciences, Pappas is convinced that the outlook for North Carolina is bright.

Responding to a question about the FDA that has sometimes been accused of placing roadblocks to approval of drugs and devices, the FDA, in his view has become more transparent and helpful.

He pointed out that Pappas-assisted products approved by the FDA have accounted for several billion dollars in sales over the past five years.

Submitted by Allen Cronenberg