John Rusk, with partner Mary Kocy, operates Rusk Renovations, a company that specializes in renovating New York apartments. He also teaches residential project management at Columbia University and is the author of a book about remodeling best practices called On Time and On Budget. Their company was named one of the Best Places to Work in New York State in 2012 by Best Companies and was a REMODELING Big50 company in 2009.
REMODELING: Most of your work involves renovating co-op and condominium apartments in New York City. Why that highly challenging niche?
John Rusk: It’s essential to figure out what you’re good at, and focus on a need that’s not easy for a competitor to come into. In our case, for instance, we’re in the midst of our 13th project at the Plaza. These are private residences and some incredibly expensive real estate. There are so many challenges: access to the job site, working with building personnel, all the rules that govern working in these buildings. We carry $16 million worth of insurance. We’ll always be competing with companies of similar size, which makes for a better playing field.
RM: People contact your company mostly through referral, is that right? Why do clients choose Rusk Renovations?
JR: When we’ve asked why they hire us their reasons are that we’re honest and transparent. Our bids can be 30 pages long, and we list every price in the bid. So if they ask for a credit there’s no monkey business. We cross off the line item. If we have to add something, we just add that line item. So they rely on our pricing. And we have a liquidated damages clause of as much as $2,500 a day as well as a two-year warranty.
We have a 35-page best-practices manual that lists all the tricks of the trade we’ve created over many years of doing this kind of work. Architects and designers can look at that and see that our standards are higher.
RM: How does the liquidated damages clause work?
JR: We’ve made a promise, and if we don’t meet the promise by being late, we’re going to be paying that money.
RM: How do you consistently fulfill the promise?
JR: It’s not one thing, it’s many. But for instance, we have our own crews who train extensively and have to pass tests based on our best practices manual. Many general contractors subcontract their carpentry work. Our clients know they’ll be working with the Rusk crew.
RM: You’ve said that a big part of the success of a Rusk Renovations project is matching the client to the right architect. How do you know who would be the right architect for the job?
JR: Sometimes architects come to us with projects. Sometimes the clients come to us for guidance on the design end and we find the designer or the architect, or both, for the client.
When you’re matching the client to a design professional, you’re looking for an aesthetic and personal match. I’m pretty good about making the right marriage.
You’re also looking for a firm that’s the right size. If it’s a simple project, you don’t need a big firm. We look at the types of projects [the firms is] accustomed to handling.
Many of our projects are designer-led, not architect-led. The client might be working with an out-of-town designer and need us to find a New York architect to work with.
The nature of our company is to build great collaboration. We’re always trying to build a great team that works together in a horizontal rather than hierarchical way.
RM: Staging must be a big challenge when you’re renovating a co-op apartment in NYC. What are those situations like and how do you manage for them?
JR: For instance, when we’re working in the Plaza, it takes 30 minutes to go from the apartment to the street. It’s two elevator trips. So a round trip out and back for something you forgot wouldn’t be practical even if you could park a truck there. But there’s no parking anywhere near the Plaza. We have to give building management a five-day heads-up before we can get any deliveries into the building. So we need to think five days ahead if we need something.
Sometimes the challenges are formidable. For instance, we just cut out two structural columns and we’re installing a 40-foot beam that weighs 4,000 pounds. This is on the 20th floor. We couldn’t get the beam into the building in one piece, so it had to come in 6-foot sections, each weighing 570 pounds, then be welded together.
Since the welding took place on the premises, we had to shut down some sprinklers, and have a fire watch person there to make sure there wasn’t a fire. We had to work in four-hour increments because of noise restrictions and we had four HEPA-filters running so neighbors wouldn’t smell the welding. If someone had smelled it and complained, the apartment owner, who lives in Mexico, would have to come back to New York to get the job restarted.
Getting Building Managers Onboard
RM: How cooperative, generally, is building management? And how do you manage a situation in which a building manager is not giving you what you need to get materials and trade contractors to the jobsite?
JR: One of our specialties is being a really good friend of building managers. About half the items in our best practices manual are about making building managers happy; taking out the garbage, dealing with hazardous substances.
For instance, many contractors, when they pull out a sink, will put a hose and bucket there, which works 99% of the time. But 1% of the time that bucket fills up and overflows and causes a leak. So we put in a temporary slop sink.
We have all kinds of company rules so that we interfere with the building as little as possible. And if we make a mistake, we take responsibility for it.
We had a sprinkler burst in an apartment we were working on in the Plaza. It rained on a $15 million apartment downstairs. Arguably it was not our fault. But rather than argue, we took responsibility and fixed that apartment with no questions. Many other contractors would have been kicked out.
We admit mistakes and take corrective action, and we find that building managers build up faith in us over time. They become comfortable with how we operate and let us do what we need to do. Building managers are far more concerned about getting fired because they let some contractor do a stupid thing than they are in getting a Christmas tip.
RM: Have you seen a quickening of interest this year in projects?
JR: Yes. This has been an awesome year for us. We’ll be up 20% or 30% this year. We’re seeing bigger projects and more of them. We’re negotiating to install 100,000 pounds of steel on a roof in Tribeca for a roof garden with full-size trees. That involved drilling a 100-foot test pit into the ground from the basement to make sure the structure could sustain that load.
Read more REMODELING articles about best practices:
Best & Brightest Practices — How super-successful remodelers use certain business practices to achieve dramatic results
The Seven Essential Systems — From financial files to project warranties, a look at procedures that facilitate best remodeling practices
Defining Your Niche to Help Ensure Consistent Profitability