Creativity keeps contractors afloat
- Published: March 12, 2009
RECESSION IN THE VILLAGE
This is the second in a series of articles looking at how the unstable economy is affecting various aspects of Yellow Springs life, including businesses, nonprofits, the arts, housing and schools.
To visitors, Yellow Springs is a destination place for unique downtown shops, restaurants, delis and outdoor recreation. But ask a local what’s distinct about Yellow Springs, and you are likely to hear about the village’s pool of craftsmen/contractors who have been serving area customers for decades.
Yellow Springs contractors are diverse in their breadth and scope, ranging from individuals skilled with a hammer to those with full-time employees and significant capital investments in equipment.
Illustrating how money circulates through small economies, area contractors can often be found downtown on early weekday mornings and around the lunch hour. When local property owners support local contractors, the contractors in turn support downtown merchants, whether it’s a few extra parts from the hardware store or lunch from the deli.
Amidst a national economic recession that has led to job loss, lower housing values and less-accessible consumer credit, all contractors surveyed in recent interviews were looking at creative ways to stay afloat. While many felt Yellow Springs is spared of the gravest economic fallout, each has encountered economic ripples in some aspect of their business.
Todd Van Lehn, owner of Van Lehn Construction Services, has contracted and subcontracted the repair and replacement of area utilities since 1980. While 96 percent of his work is performed in Yellow Springs and Miami Township, he recently moved both his home and his business operations outside of the village in order to house his equipment.
Like the other contractors surveyed, Van Lehn said spring ends the “traditionally slow” season, and that he is looking at about the same number of job inquiries as he had last year at this time. His services are somewhat recession-proof, Van Lehn believes, in that people generally consider utilities like plumbing, a necessity regardless of the economic climate.
Bruce Parker, owner of Azur Contracting, had his worst winter in 20 years of contracting last year. However, things are looking up this year, Parker said, with new construction going up on North Stafford Street.
The real economic effects will take a while to trickle down, according to Parker, who cited the Yellow Springs housing market as being “somewhat insulated” relative to other areas. In the future, he expects to take on smaller jobs, and hopes that this diversification — and a repeat customer base that accounts for 80 to 90 percent of his new work — will help him weather leaner times.
Juan Rodriguez, owner of Complete Building Service, describes the job market as “not as ferocious as before.” While things have slacked off a bit, he is still busy and is not looking at layoffs for any of his five employees.
However, he has seen a few jobs canceled for lack of consumer confidence, and sees more hesitation to commit to a project from customers than in economically stable times, Rodriguez said.
While four of his five employees are local, Rodriguez is broadening his customer base by taking in projects in neighboring cities, such as Beavercreek, as one means of making up for less local work.
Because money spent with local contractors tends to cycle back through the local economy, Rodriguez encourages local property owners to consider using local contractors from the Red Book before trying the Yellow Pages.
Mike Gray, owner of Gray’s Earthworks, agrees. Local contractors “live here, take good care of their customers, and aren’t going anywhere,” he said. While Gray experienced a very slow winter, the slump in new work was aggravated by rising material costs and a new state-mandated tax that will increase the cost of every load hauled to the demolition dump.
Some contractors will be hit hard by this tax, Gray believes, and could even be forced into laying off employees to balance the extra cost. Gray expects this new tax to hit some tradesmen worse than others, depending upon the type of job and the amount of waste it produces.
Gray’s nephew, Kelly Gray, owns Suburban Construction. Originally focused on roofing, Kelly Gray has also made moves to diversify with services like painting, siding and repairs. His business is good, he said, and for once, local.
Gray has been going to Florida for a portion of the year to follow the work, which in his case, is hurricane-related storm damage. “Everybody has to have a roof, just about everything else can wait,” Gray said.
Gray’s local work bloomed with the damage stemming from Hurricane Ike-related winds in early August, just as the post-Ivan and post-Katrina work in Florida dried up. Still, Gray says things have changed.
“Most work was word of mouth, now you have to advertise and get out there in front of people to get the job,” he said.
Tommaso Gregor, owner of Gregor Construction, cites work as “steady,” partially because his company didn’t grow with the demand for their services. Gregor says booking a year in advance is typical for his company, and his early spring inquiries look to be on par with other years.
Gregor has, however, seen people back out of larger jobs because they lost money in the market or banks couldn’t lend. However, the variety of jobs the company takes in has helped shelter them from a decrease in incoming work overall, he said.
Carl Schumacher has seen a loss in work that was a direct effect of the nationwide economy this year, when his customer faced uncertain job security as a result of new federal regulations.
More competitive bidding may be the result of a tightening market, Schumacher believes. While this year has been launched with a “rough start,” he is confident that there will always be a need for home improvement.
Schumacher stated he remains optimistic, even if it’s a naive optimism. “I feel very fortunate to sustain myself in this town,” he added.
Describing himself as a “one man crew,” Chris Hudson works with longer-term remodeling projects that appear to be stable, and overall, not directly tied to shifts in the economy. Hudson credits weather-related damage as supplying work for area contractors through a traditionally slow season.
Bob Zearfoss, of Z Brothers Construction, is also doing well by taking in a broad scope of work. From new construction in the Stancliff neighborhood to repairing a fixture in a customer’s house, Zearfoss expects the pace of work to continue.
Nationwide booms in building and lending created a “hollow demand” that imploded with the housing crisis, according to Zearfoss, who believes the Yellow Springs housing market was never really part of this trend. As such, he doesn’t expect to see the dire predictions of job loss unfold here.
Regarding consumer response to economic trends, Van Lehn finds that when times are lean, property owners invest in property infrastructure and preventative maintenance.
During a boom, perceived affluence and abundant credit tend to bring about larger ticket expenditures such as new construction, remodels, and additions, Van Lehn said.
Gregor also cites a counter-trend within the bust. For those with job security and certain equity, low interest rates make borrowing against home value very affordable.
Local contractors generally “know how to hunker down and absorb the ups and downs,” Van Lehn said, adding that the beauty of hiring local tradesmen is that property owners have access to their reputation, often over a period of time.
Rather than looking beyond ourselves for a company that will bring in jobs,“we have to create the climate where people are creating the jobs,” he said.
Not only do local contractors support local retail businesses, they often subcontract with each other, giving area property owners the opportunity to further cycle local money through local establishments.