PROGRESS: Local builders weigh in on prospects for 2010
The Nevada Appeal asked two local builders, Bill Miles of Miles Construction and Tom Metcalf of Metcalf Builders, Inc., about their thoughts on the local construction market and their perspectives on 2010 and beyond.
Nevada Appeal: Looking back on 2009, what were the challenges and what were some of the things that went right?
Bill Miles: One of the biggest challenges was from a supply standpoint as many of our competitors or suppliers were reducing staff or going out of business. One area that continued to go right for us was our ability to stay true to our business philosophies, core principles and business plan. We did not let uncertain times dictate our position or stance in these areas. We were able to make sure our company was a good fit with any potential client, which in turn minimizes potential risk in many areas. We also tightened our belts to reduce all possible costs, direct or overhead, and each member of our staff was as productive as possible and worked harder for the overall team in 2009.
Tom Metcalf: We have had to cope with a shrinking project market. Bank lending has almost come to a complete standstill, affecting project starts; therefore we have had to adjust staff accordingly. (As for what went right) private owners like Mr. Francis Carrington at the Carson Mall and Mr. Gene Burger at the Carson Bowling Lanes believing in their properties and expending their own capital to improve their properties. Private/public partnerships like the Hohl Motor Company and Carson City providing the opportunity of hundreds of construction jobs and insuring that car dealerships will stay in Carson City.
Nevada Appeal: What were some of your company’s accomplishments from 2009?
Miles: This can be summed up with our two best accomplishments. We have maintained our field and office staff. We also have continued to increase our market share.
Metcalf: Metcalf Builders, Inc., was able to branch out and obtain work in other states with good solid clients, not only providing employment for Metcalf Builders, Inc., staff but also local subcontractors and suppliers.
Nevada Appeal: How did the construction industry change in Northern Nevada in 2009? What does that mean for the region looking down the road to 2010 and beyond?
Miles: Our industry has suffered significantly with the continued downturn in the economy. The residential market started its decline almost two years ago, followed a year later by the commercial market. We’ll continue to see companies fail. As the economy turns, the survivors should see increased business, if for no other reason than so many of their competitors will have evaporated. The free market will correct itself. We just have to believe in ourselves.
Metcalf: In 2009 project availability has reduced dramatically. We have lost some good resources including subcontractors and suppliers that have closed their doors and we have lost good quality labor sources. In 2010 we will feel further downward pressure in the first and second quarters. If the banks start lending money again and failed projects trade hands, I see an uptick starting in third and fourth quarter 2010.
Nevada Appeal: As for 2010, what will be some of the potential projects that Carson City residents can expect?
Miles: The finalization of the Carson City Airport expansion in 2010 should have a positive impact on the city. The redevelopment plan to build the town center plaza has the possibility of becoming a significant infusion of dollars and revitalization to downtown. The city center should stay recognizable but a fresh coat of paint, so to speak, always makes everything look and feel better. There will be another school bond and, if it passes, it will not only improve our school facilities, but it will put many local people to work. Interest in the area is picking up, and if banking institutions start lending money, business and growth will come to Carson City. It will be vital that fees stay reduced, tax incentives be given and new business is welcomed as a partner to the community.
Metcalf: We have already seen the beginning of an exodus of companies from California that will help. We will see the completion of the Honda and Subaru dealerships and their respective openings in the spring of 2010. We will also see the commencement of phase three at the Carson Bowling Alley and its opening in the spring of 2010.
Nevada Appeal: Do you think Carson City’s decision to reduce water and sewer connection fees by 90 percent will help spur growth in Carson City? Are there other policies, in your estimation, that would help attract more growth?
Miles: It may take some time for the fee reductions to be realized simply because there are so few buildings being built right now. The fee reductions will become significant when banks start lending money for construction again. Fee reductions allow more dollars to go toward actual construction costs, which is what business needs right now. Fee reductions contribute to lower construction cost, which also means consumers will pay less for goods and services. We need the tax base to be from what businesses provide through the sale of goods and services, not from one-time construction fees and taxes. Business development focusing on clean manufacturing is the key to a strong economy for our area. Without development of this kind our communities suffer as they are now.
Metcalf: The 90 percent reduction of sewer and water fees in Carson City has helped dramatically in my opinion. Metcalf Builders, Inc. is personally involved in several projects in which this reduction has made the difference between a “go” and “no go” decision. I see companies being attracted from out of town and out of state that will further spur construction jobs and long-term employment here in Carson City. While the Carson Nugget master plan includes a public/private partnership, I feel Carson City needs to further embrace its existing property owners in enhancing and filling up their projects with good quality tenants that will provide good quality employment and services to the residents of Carson City.
Nevada Appeal: Any other comments?
Miles: Staying with the philosophies that got you where you were before the wheels came off will keep you strong through these difficult times. Don’t compromise your principles for what seems like short term gains. We are excited about what 2010 has to offer and look forward to starting the New Year.