Building an Industry

Sarno Lifetime Achievement Award winner Dick Rizzo talks about a career in casino construction

When Richard “Dick” Rizzo was chosen as the recipient of the 2013 Sarno Lifetime Achievement Award for Casino Design, it marked the first time that someone from the construction end of the design process had been honored since the award originated in 2003.

Rizzo, the vice chairman of Tutor Perini Corp., says it’s an honor that reflects well on the construction trades.

“Having been brought up in this business, I always recognize that the contractor was not on an equal professional level with the others that we work with,” he explains. “It always bothered me that that wasn’t happening. I didn’t feel we were getting the respect that we deserved for what we add to the team. We worked very hard to build that level of professionalism up, to be respected on a par with an architect or an engineer, because we’re all engineers. We all get the same training; it’s just that we’re in a different part of the business.

“The fact that the design industry has recognized us as being at their level, makes me feel good.”

Convincing Start

Rizzo’s beginning in gaming dates back to the mid 1970s, when then-Perini Construction did a few public projects in Las Vegas.

“We had done some work at McCarran Airport and successfully bid for the Thomas & Mack arena and Cashman Field,” he explains. “I realized that there were lots of other opportunities in Las Vegas if we could just put it together.”

Rizzo proposed to the Perini board that the company bid for some of the upcoming casino projects in Vegas.

“They were very reticent to aggressively pursue it,” he says, “for a lot of reasons, but most prominently because the image of Las Vegas gaming, at that point in its history, was not as clean as it should have been for a public company like Perini to get involved.”

But Rizzo persisted and got the approval of the board to work on a project for another public company, Ramada, which had recently purchased the Tropicana, and was planning large-scale renovations.

“I called my friend Dick Snell, who headed up the company at that time, and asked if we could get involved,” says Rizzo. “He agreed, and a small kitchen remodel turned into a major $50 million-$60 million project.”

Another significant element of the Tropicana project was that it was a “design-build” effort, meaning design and construction occurred at virtually the same time.

“This was the first time anything like this had been done in Las Vegas, and it was immediately noticed,” says Rizzo. “The first full design-build project we did from the start was the Luxor, and Circus Circus (later Mandalay) Corporation immediately became one of our best clients.”

Perini’s success with these projects led to many others, including Paris Las Vegas, Green Valley Ranch and Wynn Resorts’ Encore.

Caesars Palace has also been good to Perini. The company was first awarded a project to renovate one of the casino towers 15 years ago.

“We never left,” he laughs. “We started in one corner, and went through the entire building; remodeled it all, the entire outside, added two towers, added the Colosseum theater, then built an addition to the Forum Shops. That really put us on the map as being a real player on the Strip.”

But it was CityCenter and Cosmopolitan that has truly made an impact on Tutor Perini. The adjacent projects were owned by different companies, but Tutor Perini built each of them simultaneously.

“These were the best and biggest kinds of things we had ever done, and both got huge recognition by everyone that comes to Las Vegas as being another iconic piece of the town,” he says.

These projects led to the contract to build New York’s Hudson Yards, which will be the largest construction project in the history of the U.S.

“CityCenter and Cosmopolitan gave us the credentials that we didn’t have before in doing very large projects,” he explains. “Between the two, it was more than a $10 billion investment.

“We would have never been qualified to do Hudson Yards, and never been invited to even go there, if it weren’t for our experiences in Las Vegas.”

Gaming as a category has often sustained Perini during difficult economic periods.

“In the last 10 years, up through ’08 at least when we had the slowdown, gaming represented probably close to 50 percent or 60 percent of the total revenue of the corporation. We’re now probably a third,” Rizzo says.

Tribal Tributes

The success of Perini in Las Vegas led to projects in gaming jurisdictions across the country. The company has been active in Atlantic City, Detroit, Biloxi, Tunica and many other regional markets. But the place where Rizzo is most pleased to participate is in Indian Country.

“The first big tribal project we did was Soaring Eagle in Michigan,” he says. “And at that point, very few people understood what it took to do work on native projects. There were unique challenges that had to be addressed.

“Because they’re sovereign,” he says, “you need to make sure you understand what rights you have, and which rights you should have, when dealing on sovereign land, no matter who it is. And we take pride in the fact that we figured that out. We developed what is now standard in the industry, a limited waiver on sovereign immunity for any significant construction, which most tribes are willing to sign.”

Other challenges include the need to get most of the tribal factions to agree on a design, budget and timetable, says Rizzo.

“As a result of that, the process becomes very burdensome,” he says. “It sometimes can drag out for endless months, for no real reason other than they just can’t reach a consensus. So understanding that, and being patient with them, and respecting that, is probably the most important part of understanding how to do business with them. And the other thing that we learned, overall, is that it’s all about trust. They don’t trust many people, and they have good reason not to, because they’ve been abused over the years, and as a result of that, we, as the outsiders coming in, are immediately a suspect.

“So the ability for us to prove that we could be trusted was the key in our growth in that industry.”

Because of that trust, Perini gets a majority of the business in states with multiple tribes, like California, where Rizzo says Perini gets 80 percent of the tribal construction business.

Big Wheels

In the process of becoming the major builder on the Las Vegas Strip and in all of gaming, Rizzo has had the opportunity to work with the major players in the industry. He says typically the involvement of the presidents and chairmen of the casino companies is more hands-on than in other industries.

“Any of the big, big guys—Caesars or MGM or Steve Wynn—they’re very into the process, personally, right from the very top. Steve Wynn is a classic example of that. Sheldon Adelson is another one. And we’ve done work for every one of them. And every one of them is uniquely successful because the attention to detail starts at the very top. We have to allow them the flexibility that they need, because many times they get into these projects and they really don’t know what they want. As you build it, they develop it, and they change their mind many times—all the time!”

Like with tribes, however, Rizzo says understanding and patience are all part of the game.

“Work with them and in concert with them, in that kind of a fast-track, change-your-mind, almost build-and-design atmosphere has made us uniquely qualified to do that, because most of our clients work that way. And other contractors that have tried to get into the market have a very difficult time understanding that part of it. Those are the kinds of owners that end up being the leaders in gaming. They are very creative individuals; they’re very trend-setting, and they’re also very competitive with each other. So they’re always trying to create the next big thing.”

Rizzo says, however, that Wynn is the standout example of a great owner and a great collaborator.

“He created Las Vegas,” he insists. “Everything that you see in Las Vegas today, somehow, Steve Wynn has touched in his history. He has created the trend toward fine dining, the trend toward stunning entertainment, the trend toward nightclubs. Everything that you see now that’s really matured in Las Vegas has really been touched by and ignited by Steve Wynn. He is the leader.”

Technology and People

When asked if there have been big changes in the construction industry since he started, Rizzo says there have not.

“The biggest change is in the technology we use to share the plans and changes as construction goes forward,” he says. “Everything that we design now is on BIM (building information modeling). If you and your subs are not integrated and they don’t have the ability to utilize BIM, they can’t play with you. So you educate your subcontractors. ‘These are the tools of the trade,’ you tell them, ‘and you need to understand what you need to do to help us with those tools, and utilizing those tools yourself to make the process work.’”

But building is still building, according to Rizzo.

“I just don’t think there’s anything else that we’re doing today that we didn’t do 20 years ago.”

One of the things that hasn’t changed over the years is the need for skilled workers.

“We believe in the quality of our workers,” he says. “We’re a union contractor, because we believe that they can produce the quality of worker and the training that’s necessary to do the kinds of things we’re being asked to do.”

Because the workload is so large and the schedule so tight, there isn’t much preparation of workers occurring.

“Training is lacking throughout our industry, and the union has really played a significant role in making sure that we are getting well-trained and well-educated plumbers, electricians, carpenters and so forth, because the kinds of things we’re being asked to do now are much more sophisticated,” he says.

Giving Back and Learning

Tutor Perini has a corporate philosophy of community involvement and charitable giving, Rizzo says. He has received numerous awards from charities and civic organizations for his participation in causes.

“This is built into our culture,” he says, “and if you look at our mission statement, it says part of our responsibilities as leaders is to give back to the communities in which we live and prosper. So I took that seriously.”

Rizzo says it’s not only the leaders that live by this philosophy.

“In any company, you set the trend from the top, and it’s amazing how many people follow,” he says. “And our company is very committed, from the very bottom to the top, in terms of giving back whenever they are given the opportunity to do so.”

Learning from other companies is also central to Tutor Perini’s culture, says Rizzo.

“I have to give credit to MGM at CityCenter for their efforts in inclusion and diversity, because they got us really focused on that,” he says. “As a result of that program and what we learned from that, we received national recognition for the accomplishments that we had achieved there. We have now incorporated that kind of philosophy in almost every project that we do. And I have to say MGM really got us focused on that.”

Another initiative MGM Resorts insisted upon at CityCenter was achieving an LEED (Leadership in Energy & Environmental Design) Gold certificate for the project.

“Our corporation is ranked No. 2 in the country in terms of green right now,” he says. “And that was the biggest LEED Gold program in the history of the United States. So we took advantage of that as well, and learned a lot from that process. That has allowed us to look at a lot of other opportunities that have that same requirement, and be uniquely qualified for that work because it is a unique process you go through in getting LEED certification. And if you don’t understand the paperwork involved and the way it needs to happen, it can be very burdensome and costly.”

Rizzo has passed the day-to-day activities at Perini to Craig Shaw. The two have been working together from the start, but Rizzo believes Shaw’s talents have benefited the company.

“It has now made my life much more tolerable,” he says, “in terms of understanding what I can do to continue to add value here, without having the day-to-day burden or running the company.”