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Commercial Property/The McGovern Family; This Time, Father and Son Get to Build on the Name

IT is hard to believe they are related. Eugene McGovern, 52, is big, brawny, blustery. His head is shaved, his speech peppered with slang and salty phrases, a cigar firmly ensconced in his mouth. His is the middle name of Lehrer McGovern Bovis, the huge construction management company that he co-founded.

His 33-year-old son, Eric, is also big, but conventionally clothed and coifed, quick-witted in the most correct English, and, his civil engineering degree notwithstanding, looking like Hollywood's idea of a businessman. Not many people remember MI Construction Consulting, the short-lived company he started in 1992.

But difference need not breed animosity. To hear Eric tell it, the two have always been best friends. And now they are something else: business partners.

In April, Eric and Gene -- no one calls him Eugene -- McGovern formed a new construction company, GMO International. (Peninsular & Oriental Steam Navigation of Britain owns Lehrer McGovern and the rights to the McGovern name.) Gene is chairman, Eric is executive vice president and another son, Daniel, 31, is a project manager. But GMO, literally and figuratively, is Gene McGovern's Organization.

"The minute P & O stops using my name, it goes on the door," Gene McGovern said.

Whatever its name, GMO faces harsh odds. "Gene's got a real challenge," said Richard M. Kielar, a senior vice president of Tishman Realty and Construction. "He's starting up when construction volume is down and competition is extremely tough."

Still, GMO is starting off well. It has been hired to build HRO International's planned building on Madison Avenue and 47th Street, Skyline Multimedia Entertainment's virtual reality tour of New York in the Empire State building, and five floors of retail space at 1540 Broadway, on 45th Street.

Not bad for a company that is not yet nine months old. But then, the McGovern reputation goes back a lot longer than that.

"It's deja vu all over again," said Larry J. Wyman, head of HRO, whose building at 767 Third Avenue, on 47th Street, was Lehrer McGovern's first job. "Eric and Gene are about the best construction talent in town, and as a new company, they will not have to divide their focus among many, many jobs."

Zalman L. Silber, Skyline's president, is equally effusive. "Eric can sing through a nightmare construction job as though it were his alma mater," Mr. Silber said.

The two McGoverns came to such praise via different routes. Gene McGovern's father died when Gene was in his teens and, as the oldest of seven children, he helped support the family. He took construction jobs, married his high school sweetheart and got a degree in civil engineering at night.

By the time Eric was in high school, Gene McGovern had a steady job at Morse-Diesel. Eric and his two brothers, Daniel and Derek, 30, worked their way through college as summer laborers on Morse-Diesel projects. Their sister, Phyllis Jean, 26, did not have to. "As the youngest and the only girl, P.J. got pampered," Eric McGovern recalls without a trace of resentment.

Gene McGovern met Peter Lehrer at Morse-Diesel, and they formed Lehrer McGovern in 1979. The two partners quickly divvied up the duties. Mr. Lehrer got the deals. Mr. McGovern, with his perpetual cigar and cowboy boots, handled the construction crews and the operational details.

"Gene's forte was at the job site," recalled Stuart Koshner, a former Lehrer McGovern executive and now a partner in R.C. Dolner, the Manhattan general contracting firm. "He not only appealed to the macho in every guy on the job, but he could figure out any engineering problem."

LEHRER McGOVERN did well from the first. But it was not until 1984 that the firm got the assignment that Eric McGovern, who joined it in 1982, refers to as "our Shangri-la": the restoration of the Statue of Liberty. The project was a media darling: a world-famous statue, championed by Lee Iacocca, and the specter of a huge penalty if Lehrer McGovern did not bring the job in on time. It did, and "suddenly we were on the global map," Eric McGovern recalled.

By the mid-80's, Lehrer McGovern had some 400 employees, and such high profile projects as Euro Disney and Ellis Island.

"Gene appeals to the Brits, to the Chinese, to the Malaysians, to the Germans," said A. Eugene Kohn, a partner in the architectural firm Kohn Pedersen Fox. "He doesn't couch his words, and you wonder how he gets away with it in these different cultures." Then Mr. Kohn answers his own question: "He can talk costs, process and schedule, and that appeals to anyone who wants facts."

Not surprisingly, Lehrer McGovern got noticed by Peninsular & Oriental, which owned Bovis Construction and wanted an American arm. In 1986, the company bought half of Lehrer McGovern, with an option to buy the rest in 1988.

The two partners felt they had little choice but to sell. They wanted to expand into general contracting, particularly for mega-projects. Most of those require construction companies to post huge completion bonds, and Peninsula & Oriental had access to that kind of bonding power. (Indeed, after the merger the company was hired to handle Olympia & York's Canary Wharf development in London, and St. Luke-Roosevelt Hospital's two Manhattan sites.)

And, of course, there was the money. Gene McGovern won't quote numbers, but he makes it clear the sum was high. "Bovis U.K. seemed to be a compatible partner, and its chairman was a gutsy, down to earth guy," he said. "But if they'd offered me $3, I would certainly have walked away."

In fact, he almost did. Sir Frank Lampl, Bovis's chairman, persuaded him to move to London instead. At Mr. Lampl's urging, he took Bovis International, the company's in-name-only international arm, gave the new company the Canary Wharf and Euro Disney projects that Lehrer McGovern had brought to the deal, and soon expanded it into a company that was doing more than $5 billion in annual sales.

In 1989, Eric McGovern joined his father overseas. McGovern fils spent the next year "flitting around Europe, checking on Bovis projects in general," and then heading a team of troubleshooters at Canary Wharf.

Still, the Bovis connection was no heavenly match for either man. There were reports to write, procedures to follow.

"When the company's running you and you're not running the company, it's just not any fun," Gene McGovern said. "When it gets boring, it is time to move on."

Actually, Eric McGovern quit first. In 1992 he returned to New York and formed MI with his two brothers. MI got some business -- a $25 million upgrade at 75 Pine Street, some small interior jobs for Citicorp and the AIG insurance company and some work on Barney's Madison Avenue store. And, in fact, MI got the Skyline project.

"It seemed the best of all worlds," Mr. Silber said. "Eric had Gene in back of him, but this project is too small to get Gene's full attention. Eric really wanted it."

Indeed, Eric was in constant touch with his father. "My father is the library, and I would take out a volume whenever I had a question," Eric McGovern said.

But the real-estate market was in depression, and, Eric McGovern candidly admits, Mr. Silber's preference for him was an exception. For most potential clients, his name did not carry his father's clout.

"It's tough being in the shadow of an icon," Eric McGovern said. "I was always viewed as Gene's son, and I had my nose dragged through the dirt quite a few times."

SO when Gene McGovern did quit, about six months after his son, he and his two oldest sons started talking partnership. (Derek now manages a ranch his father owns in Wyoming.) There was one problem: Gene McGovern's contract with Bovis forbade him from working in the United States for two years after he quit.

He spent much of those two years in Kuala Lumpur, as a consultant on the building of two office towers. And he formed a new construction management consulting firm, which got the assignment to build a third office tower in the same complex.

On April 1, Mr. McGovern's non-compete clause ran out and GMO was born. And, says Eric McGovern, it quickly developed a specialty: projects with seemingly insurmountable problems.

"How do you hoist huge flight simulators into a landmarked building," he asked, an excited grin spreading across his face. "How do you build an office building above an active Metro-North railroad? How do you build retail space in an occupied building without disrupting tenants? This is fun!"

Already, GMO has grown to 17 people in Malaysia and 18 people here. The McGoverns hope to brake growth at about 200 people, and to expand instead through diversification. On the wish list: Building management assignments, joint venture companies (in fact, GMO is poised to announce its first, with a British and American developer), and developing their own buildings.

"That would give me something tangible to leave my own three children," Eric McGovern said. What about leaving them the company? "To be honest," said the son who lives in the icon's shadow, "I hope they excel at something of their own."

Photo: Eric and Eugene McGovern in theater they are constructing in the Empire State Building for a virtual-reality tour of New York. (Rebecca Cooney for The New York Times)

Source
By CLAUDIA H. DEUTSCH
Published: December 11, 1994