New president of Latin Builders Association to expand organization’s scope
(Daily Business Review) In its 40-year history, the Latin Builders Association has been one of South Florida’s most powerful trade groups. Now, Bernie Navarro, the new president of the largest Hispanic construction association in the United States, wants to expand the group’s influence beyond the nation’s borders.
Navarro’s first act as LBA president was to schedule trade missions to Peru in March and to Mexico in May. The missions are a first for the association. The goals of the trips, Navarro said, are to make the LBA less “insular” by making contacts in Latin America and help find new work opportunities for members struggling to find steady construction jobs in South Florida.
When not presiding over the 750-member LBA, Navarro works in Coral Gables as the founder and president of private equity mortgage lender Benworth Capital Partners. He launched Benworth in 2008, right before the recession took hold. “People thought we were crazy,” Navarro said. But Benworth has successfully established a niche by providing short-term, high-interest bridge loans ranging from $40,000 to $4 million to borrowers who need financing much quicker than banks can accommodate. The firm hopes to ramp up construction lending soon.
Navarro is also involved in residential development. He owns several residential parcels, including one in West Miami approved for 132 units and 50,000 square feet of commercial space. Navarro said he plans to bring in a partner and develop the site in the near future.
Navarro spoke to the Daily Business Review last week about the LBA’s goals for 2012 and his company’s current approach to lending. The interview has been edited for length and clarity.
Has the Latin Builders Association changed its focus following the economic collapse and real estate downturn?
There has been a shift. The past two years, we have been in hunkering down mode. We had a lot of solid members who have gone through a lot, lost a lot. This year is a point where we can change a little bit on how we do business and the way we do business. We have to move forward. The way we network and go to our consumers has to change.
How does the LBA plan to carry out this shift?
One of my major initiatives is the LBA has always been insular. We do business in Miami-Dade, Broward and Palm Beach counties. This is our sphere of influence. We’re going a little international this year with two trade missions: one to Peru and one to Mexico.When I started talking about it, I didn’t know the reception I was going to get. It was very warm because some builders in our organization have already gone outside [the region] to look for new markets. We will go to different countries. Peru is a good country to start with. There has been a lot of strong growth, and it is still — by many accounts — virgin. There is a lot of construction going on in Peru. I’ve been to Peru three times to scope it out, and I’m gung-ho about it.
All of this international stuff came because I’m a friend of [Under Secretary of Commerce for International Trade] Francisco Sanchez, who told us that international trade is the only bright spot in the economy. In my research I found that proximity [to South Florida] is very important. We will go to Mexico and the Yucatan Peninsula, which is a close plane ride. We are partnering up with U.S. Commercial Services, the city of Miami and the Mayors International Council [for the missions]. Both places have been sisters to the city of Miami, which was another factor that played into my decision.
Was there any resistance to such a dramatic change in the association’s scope from the old guard?
The old guard was concerned. I said, “you have to trust me that this is where we should be.” I’m thinking about the tile guy, the window manufacturer. We have a couple of those in our organization. Let’s go to South America and see how we can sell our windows over there. We have the strongest hurricane grade windows in the world.
What are some of the other goals for the LBA in 2012?
We have a lot of goals. We just moved to Doral [from Coral Gables], so we want to expand in that area and make sure our demographics change so we have a good cross-section of different nationalities at the LBA. Not everyone has heard of us. Immigrants who came here 5 to 10 years ago — fleeing whatever situation in their countries and starting a little business in Doral, Miramar or Medley — we have to reach out to them and tell them who we are. They have to understand the value proposition the LBA is giving. We represent their interests in Tallahassee and Washington, D.C. Our membership has suffered a little bit [during the recession]. The beauty of the LBA is that we always have strong, young, vibrant business people coming. We’ve lost some and gained a lot. At the LBA, we put a lot away. We didn’t get fancy digs or add more staff. Our balance sheet is strong. We are also working with the Florida International University School of Engineering and the University of Miami to make sure we are giving scholarships to up-and-coming business professionals in our industry. For new graduates, we give a free membership. Another idea I have is I would love to establish a construction trade charter high school. It would serve as a business foundation for any student. We have our own foundation and seed money to start it.
Where does the association stand on the possibility of casino resorts in Miami-Dade and Broward counties?
We were the first ones to take a stance. When we started hearing about casinos, we started having a lot of meetings. There were three weeks of three or four meetings a day with different stakeholders. We met with [the Miami-Dade Expressway Authority], the Archdiocese of Miami, the legislators proposing it and some of the players in the gaming world, including Genting and Caesars. I traveled to Sinagpore [on a Genting-sponsored trip] to see Genting’s projects there. In our final analysis, the LBA supported it, but we wanted to make sure a short-term gain wouldn’t be a long-term detriment. We already have the worst kind of gaming, where a bus goes to somewhere like The Palace at Kendall and takes senior citizens to these places [tribal and parimutuel casinos] and they spend their Social Security checks there. What these folks are proposing are a different thing. We can talk about scale, but this city can’t have enough 5-star hotels.
One thing we made sure of when we drafted our resolution is that 100 percent of the jobs, the construction contracts, must stay local. There is no technology we don’t have in Miami-Dade, Broward and Palm Beach. We went to Tallahassee, met with the Senate and House, and handed them the amendment we wanted to see.
As for Benworth, are there any real estate sectors the firm is currently avoiding? Any sectors the firm is looking to aggressively expand in?
We don’t refinance primary residences. If someone comes to us and says they want to get some cash out of a property, we say no. We don’t do second mortgages. We don’t do land. If it’s a condo [building], it has to be [Federal Housing Administration] approved because our loan terms are so small. In those two years we want to have an out. Two questions we ask before underwriting are, “Why are you coming to us and how are you leaving?” We want to do more construction lending. We want to be that boutique firm for a builder who has had a rough time in the past but has the skill set and wants to get up on its feet.
(January 10, 2012)