Getting his feet wet with Watt: That's what Kenneth R. Ramsey has been doing for the past few weeks in anticipation of taking over on Monday as president and chief operating officer of Santa Monica-based Watt Industries.
Ramsey, 46, will succeed Angelo Adams, 64, who will continue to work for Watt as a consultant. Raymond A. Watt, chairman and chief executive officer of the firm, said that Adams "has agreed to take on responsibility for the creation of Watt Asset Management, a new entity that will be responsible for the disposition, monitoring and overall management of a large number of Watt assets."
Adams also wanted to step down as president so that he would have time to devote to the expansion of his son Mark's mortgage banking company, Callie Mae Inc.
Ramsey previously was president and chief executive officer of the Boise Co. and chairman of Kingsberry Homes, both headquartered in Idaho.
He was general manager of Boise Cascade Corp.'s housing and construction businesses for five years. "Boise Cascade was purchased by an investors' group in 1981, and then it became known as the Boise Co.," he explained. "Then that company was made up of several businesses including Kingsberry. Kingsberry became the most salable of the assets, so we got some purchasers to buy it and refinance the remainder of the Boise Co. I chose to go with Kingsberry. Then we split that up, and I had time to think about what I wanted to do."
Time stretched into months as he and his family (he has two daughters in college and, he says, "two in pre-college") moved to the Los Angeles area, where he and his wife were both born. He attended the University of Arizona, the U .S. Naval Academy and Harvard Business School.
About the first of this year, he talked with Watt, who also had some experience with Boise Cascade. "He sold his residential business to Boise Cascade in the mid-'60s and then repurchased a portion of that business in the early '70s but had no relationship with Boise Cascade after that," he said. Ramsey had heard of Watt but had never met him until their discussion about Ramsey's new job in January.
Now, Ramsey is ready for his new position, he says, with these goals in mind:
"First, I want to make a contribution to continued quality. I'm pleased with the quality of the employees and the product produced over the years, and I would like to continue with this, because I think that's what brings in the customers.
"Second, I would personally like to grow. My experience has been largely in residential construction with limited experience in commercial and industrial projects, which Watt is heavily into including hotels. This will be a challenge for me.
"Third, I want to help develop the talents of the individual employees." Watt has an estimated 650.
Watt Industries has 18 divisions and is involved in about 300 to 400 legal entities, by Ramsey's count. There were more before the recession, he said, "but with a slowdown of the economy, a natural consolidation occurred."
Size-wise, he doesn't see Watt Industries changing, adding, "It's our philosophy that we should be able to get to a project within an hour or two by plane." The firm has its own twin-engine turboprop. If projects are farther away, he added, "then the management structure gets too large." The firm has a few "wrap-up activities," as he described them, in Arizona but is otherwise developing real estate solely in California.
Ramsey doesn't see a shift in project types for Watt Industries either, he continued, saying, "Ray thinks diversification is appropriate." However, he added, "if anything, the growth will occur more on the industrial and commercial side, I think."
As for resort time-sharing, he said, "We have been a leader, but we want to walk along in it cautiously." He considers time-sharing a "fragile business," "a business still struggling for its identity."
Watt Industries is one of the few firms developing resort time-shares "from the ground up," as he puts it. That means developing new time-share units instead of converting exising condominiums or hotel units to time-share use.
"We believe that to do the business right, it should be from scratch," he said. So Watt Industries is developing its third time-share project like this in the San Diego area as well as some new time-share units in Palm Desert, where the firm is also developing single-family patio homes and condominiums.
The desert is another area to watch carefully, he added, in view of the federal tax proposals that may have an effect on second homes.
Speaking of the tax proposals, he said, "I don't care strongly how it evolves as much as it does evolve." By that, he stressed, the outcome could not be as bad as the wait, the uncertainty about what will be adopted. "It's my personal opinion that whatever the outcome, the market will adapt," he emphasized. However, he added, this lingering question remains: "How long will it take reasonable people to adjust to new programs?"
He is concerned that there may be a softening in the value of homes as a result of the tax program and if so, he stressed, "we as other builders/developers need to be even more conscious of quality and cost."
In view of tax uncertainties, it would be prudent for developers to slow down now, he conceded, but current demand and interest rates have encouraged Watt Industries and other development firms to be what he termed "reasonably positive and aggressive."
So, even in the desert, Watt is continuing to build--"but only as presales warrant," he said, "and we don't have a lot of standing inventory. We're selling very well, certainly better than most."
Ramsey likes to talk business. He said the description of him as a "workaholic, reasonably fits."
"I love to work," he said, "and if I'm challenged, I don't mind the time it takes."
Fortunately, he added with a smile, his wife doesn't mind either.