A Better Way to Build: A History of the Pankow Companies

Chapter 3: Pankow in Hawaii, 1965–1984

115 In May 1967, at the end of Charles Pankow, Inc.’s (CPI’s) first project in Hawaii ,anofficebuildingfortheJamesCampbellEstate,CharliePankowflewto Honolulu to meet with George Hutton for a final briefing on what had been a difficult engagement. So the story goes, Hutton asked Pankow what he wanted himtodonext.Pankowsuggestedto HuttonthatheremaininHonolulutosee if he could develop additional business. Hutton asked Pankow how he should proceed. Pankow replied only that he had a plane to catch.1 Overthenexttwodecades,GeorgeHuttonestablishedHawaiiasthefirm’s most successful region. In fact, from 1970 to 1985, Charles Pankow Associates (CPA), a subsidiary, accounted for the entire increase in CPI’s net worth. What was going through Charlie Pankow’s mind when he left Hutton on the tarmac isunclear,butthedecisionseemstohavebeenintuitive.Certainly,therewasno businessplantoestablishabranchinHonolulu.Thecompanywouldhavetopay Hutton’s salary and overheads associated with a new office. Since the local constructionindustrywasbooming ,however,Pankowmusthavefiguredthatitwas worth covering these expenses to see if Hutton could line up additional work.2 BothGeorgeHuttonandCharliePankowenjoyedthefortuneofgoodtiming . In May 1967, Hawaii was in the midst of a construction boom. From 1966 to 1970, construction in the state increased in value from $370.9 million to $783.8 million, a level that, in real terms, would remain unsurpassed until the Japanese-fueled boom of the late 1980s. In the context of a chronic shortage of affordable housing, residential construction nearly doubled, to $234.6 million. Chapter 3 Pankow in Hawaii, 1965–1984 CHAPTER 3 116 New multi-unit residential structures on Oahu, which would fill the bulk of CPA’s order book, more than doubled, to $94 million. At the same time, nonresidentialconstructionroseinvaluefrom $82.4millionto$187.4million.The robust demand for construction services may have been a factor in Pankow’s decision to leave Hutton behind.3 Former president Dean Stephan believes that leaving Hutton at the airport withnoinstructionsorobjectiveswasthebestthingthatCharliePankowcould have done for him. It reflected Pankow’s role as a leader, rather than as a manager , of an effective group. He gave his men plenty of room to work as they saw fit. They either succeeded or were shown the door. Hutton succeeded beyond anyone’s expectations, including his own. In doing so, he personified “the underlying thesis of the company,” according to Stephan.4 Hutton ascribes a large share of this success to the culture that he brought with him to the Islands—the culture that had been forged within the Kiewit buildingdivisionandtransplantedinthePankowfirm.Huttonwasperhapsthe most enthusiastic disciple of Charlie Pankow’s approach to concrete construction . He also had the highest regard for the founder as a leader. In this context, the alienation of their relationship in the 1980s would be especially dismaying and disappointing to him. The James Campbell Building and the Revitalization of Downtown Honolulu In the summer of 1965, Charlie Pankow called George Hutton at the MacArthur Broadway job site and instructed him to pick up the plans for a new project at the company’s cramped “office” in Crystal Tower. Pankow charged Hutton with analyzing the documents with a view to producing a material takeoff, or MTO—an inventory of the amounts and weights of materials and their types that would be needed to build the design—in support of the company’s bid. Only when he unrolled the plans the next morning did Hutton note that the project was located in Honolulu. His first reaction: This is an exercise in futility.5 The plans of architect Leo S. Wou called for a combined office and parking structure for the James Campbell Estate to replace the 2-story office block on Fort and Merchant Streets in downtown Honolulu. The Campbell Estate was one of Hawaii’s leading developers, with some 70,000 acres of land in its portfolio,morethanhalfofwhichCampbellhaddevelopedassugarcanefields. The existing structure had served as the Estate’s headquarters since it was built PANKOW IN HAWAII, 1965–1984 117 early in the twentieth century. (The Estate was established upon the death of James Campbell in 1900.) At one time, it had also housed the offices of the Hudson’s Bay Company. As initially announced in October 1964, the project consisted of a 5-story building that would extend along Fort Street between Merchant and Queen Streets. Wou’s design provided for parking below grade and on portions of floors two through five. The estimated cost of construction was $1.2 million. With CPI’s involvement, Wou revised the design to include a sixth floor and additional parking. The new configuration nearly doubled the rentable office space, to more...