SNOHOMISH — According to a report from the U.S. Labor Department, the nation’s construction industry unemployment rate fell last month while the U.S. Census Bureau reported a slight increase in total construction spending.
This positive news comes as no surprise to Corstone Contractors LLC co-owner and Vice President Erin VerHoeven. “We’re definitely seeing it,” she said. “Our customers are starting to spend money again and are starting to plan jobs.”
But the improvement is only just beginning, VerHoeven cautioned. Nevertheless, she feels optimistic about the future of her Snohomish business, which recently celebrated its 10th anniversary.
The milestone is an important one for both VerHoeven and Corstone co-owner and President Mark Tapert. In the last decade, the company managed to weather the recession and, with adaptability and strategic planning, maintain enough work to keep their core team of employees intact.
Of the company’s 23 current employees, 15 have been with Corstone for more than five years and seven have been present for nearly the full ride that began in 2002.
At that time, VerHoeven and Tapert worked for another Snohomish County contractor. They were happy with that job but eager to get out and see what they could do with a company of their own.
“It was a sweat equity approach at first,” Tapert said.
He spent a lot of time running back and forth between estimating, project management and work in the field. VerHoeven ran the office and marketing. But it all came together quickly and they were soon able to add employees.
“For the first five years in business, we doubled our volume every year,” VerHoeven said.
Their company strategy from the beginning was to cultivate repeat clients. They knew they had to provide a high level of customer service and have the ability to adapt with those clients as their businesses evolved.
One of those earlier projects turned out to be a favorite for Tapert on many levels. Himalaya Homes hired the company to build their office.
“Which I thought was pretty cool as they are capable and they know how to qualify a contractor,” Tapert said. “So when we were selected that was pretty rewarding.”
The project proved to be a test for Corstone. Partway into construction, Himalaya said it needed to move up the completion date significantly. The Corstone team had to figure out how to meet this aggressive new schedule. Tapert said he’s proud of the way his business rose to the challenge and completed the project.
It was not long after that VerHoeven and Tapert began to notice a strange phenomenon in the industry. They had bid and won a particular job three different times, but it kept getting delayed because the customer couldn’t get financing. This happened on a few other jobs. Each time they went to bid on a project, they found more contractors were competing for the same work.
The recession had set in and it became clear to the Corstone owners that they would have to change their business strategies in order to survive.
“It was hard,” VerHoeven said. “We had to jump into the public market for a year. We had always done some public work but we had to increase it when the economy first went south in order to keep everyone on. But that wasn’t really the thing for us.”
What saved the company and soon became its trademark was a niche market in occupied remodels.
“It’s a unique service that a lot of contractors don’t provide,” Tapert said. “A lot of contractors want to build from the ground up, new construction.”
Occupied remodels are those that happen while the businesses remain open. That makes for some serious scheduling issues and can be a challenge to coordinate. A lot of time has to be spent in the pre-construction phase to plan the construction work around the business’s operating hours.
Plans and structure have to be scrutinized and every eventuality has to be anticipated. Many times, existing structures offer surprises such as utilities that aren’t where the original plans say they are.
Once construction has begun, coming up with solutions on the fly is critical.
“Time is money,” Tapert said. “There is an operator who is waiting to get his building back up so he can sell burgers. It’s not just about the sticks and bricks. It’s working with people and understanding what they need.”
Corstone also decided to specialize in certain types of businesses. They are known for their work in veterinary clinics and restaurants. These two niche areas have their own challenges in regard to ventilation, health and other requirements.
Working in occupied remodel doesn’t win the company many awards. Corstone is confined to the building’s footprint and is limited in how it can put its own stamp on the project.
“If you’re looking for sexy glamorous jobs, we do that, but it’s not our focus,” Tapert tells his employees.
But this strategy is what kept the business open when so many of its competitors closed their doors. It also allows them to give back to the community that has supported them so much.
Corstone has donated to Cocoon House, the Imagine Children’s Museum and Archbishop Murphy High School. They have sponsored a table for the Boys &Girls Club auction and every year the company adopts a needy family through the ECAP program.
The company also puts on golf tournaments. In honor of Corstone’s 10th anniversary, a golf tournament for clients and contractors is set for Aug. 2.
Information about Corstone Contractors LLC can be found at www.corstonellc.com. For information on the company’s golf tournament, call 360-862-8316.
A construction spending uptick
Total construction spending in the U.S. appears to be on the upswing. A July 2 report from the U.S. Census Bureau confirmed a 0.9 percent increase in residential and nonresidential construction from April to May. The figures are 7 percent higher than the same period one year ago.
Construction subsectors that are showing the biggest increases are in the areas of manufacturing, commercial, health care, power, public safety, transportation and lodging.
A July 6 employment report from the U.S. Labor Department suggested that the U.S. construction industry unemployment rate fell from 14.2 percent in May to 12.8 percent in June.
Associated Builders and Contractors chief economist Anirban Basu said that continued improvement would depend on investor and developer confidence and that these could be affected by actions in Congress and developments in the European debt crisis.