Strober-HaddonďŹ eld Kohl Products Lezzer MRD Strober-HaddonďŹ eld Irwin J.H.Building Brubaker, Inc. Lezzer Lumber Lumber MRD Lumber Lumber Co. Co. Irwin Builders Builders Supply Supply Group AllAll8 Locations Locations All Both Irwin Group All Locations Locations Both Locations Locations Irwin Easton www.kohlbp.com www.lezzerlumber.com 570-366-0578 www.ibspa.com Easton 800-723-5546 www.lezzerlumber.com 570-366-0578 www.ibspa.com 610-252-6190 800-578-5645 800-326-9562 724-863-5200 610-252-6190 800-326-9562 724-863-5200 Kohl Building Products Shelly’s Lumber The Moyer Lumber The Lumber Lumber Yard Yard All 8 Locations Moyer Lumber Building Supplies All Bethlehem All Locations Locations www.kohlbp.com Bethlehem All Locations www.thelumberyard.com 610-868-2010 www.thelumberyard.com 800-578-5645 610-868-2010 215-723-5108
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16 Industry repair
Keeping our focus on what matters most.
Critiquing today’s construction industry for tomorrow’s profitability.
7 Housing economy offers test of bravery An end to the downward cycle and a few glimmers of opportunity may be in sight.
8 Know concrete … it’s not that hard Uses for concrete are nearly endless.
10 Partnerships built on trust Building long-term relationships with customers is important when trying to improve sales.
12 Boosting your sales and marketing efforts Industry leader shares quarter century of expertise in public relations and marketing.
13 Consumer service founder shares thoughts on building industry Founder of online consumer network reveals how builders can strengthen reputation.
17 Taking what you have coming Lawyer explains what businesses need to do to collect on debts.
19 Uncertain about certification? NAHB expert answers questions about green building program.
20 Reinventing your business Entrepreneurs often get the itch to try something new.
21 Learning on the road Expand your business knowledge traveling to and from job sites or at your computer.
22 Endangered species, endangered development Builders and developers find ways to work with regulations and keep projects on track and on budget.
25 Member spotlight
15 Entrepreneurship: The short answer
Great-grandfather inspires Clemleddy Construction.
Helping business owners do their best.
Concrete City is still standing decades after it was abandoned.
26 Final word
Member Insider Member briefs . . . . . . . . . . . . . . . . . . . . . .A On the hill. . . . . . . . . . . . . . . . . . . . . . . . . . . B
Keystone Builder cover illustration by Gene A. Suchma.
Keystone Builder
4 President’s message
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Find the solution with PBA Expert Insights. This series of question-and-answer articles covers a wide range of topics from marketing strategies to whether you will have to pay mileage to a Green Build Program verifier.
ASSOCIATE VICE PRESIDENT ÂˆÂ“ĂŠ ˆÂ?Â?iĂ€]ĂŠ ĂŠÂœvĂŠ >˜V>ĂƒĂŒiÀÊ ÂœĂ•Â˜ĂŒĂž SECRETARY
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4ĂŠ ĂŠ iĂžĂƒĂŒÂœÂ˜iĂŠ Ă•ÂˆÂ?`iÀÊUĂŠMay/June 2008
President’s message
VICE PRESIDENT i˜iĂŠ Ă€iÂˆĂŒĂ˘iĂ€]ĂŠ iL>Â˜ÂœÂ˜ĂŠ ÂœĂ•Â˜ĂŒĂžĂŠ
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Keeping our focus on what matters most
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hen it comes down to it, Pennsylvania Builders Association’s core mission is to keep the housing industry strong. Many of the things we do — ďŹ ghting burdensome regulations, providing professional development, informing members — are intended to meet that primary association goal. So, at a time like this, when homebuilders are slowed by a weak economy, it’s fair to ask what PBA is doing to help the situation. For starters, consider member beneďŹ ts, like reduced PA One Call costs. Through this beneďŹ t, PBA saves you $50 each year. Our Member Rebate Program pays you back for your loyalty to certain suppliers’ products, many of which you already use. The average rebate for the third quarter of 2007 was more than $300, which equates to more than $1,200 annually! Builders BeneďŹ ts Inc., the state’s ďŹ rst self-funded health insurance program, offers competitive rates, as does our endorsed workers’ comp program through E.K. McConkey and our endorsed general liability insurance program through GCIRS. All these programs help your company run leaner, so you are better positioned for good and bad economic times. In the government affairs arena, PBA’s role as a watchdog on government saves our members hundreds of thousands of dollars each year. Each bad regulation rewritten and each bad bill blocked saves you not only headaches but cold, hard cash. In 2006-07 alone, PBA led efforts to defend against more than 100 court and municipal challenges to Uniform Construction Code standards that would have imposed more requirements and fees. We were successful in 99 percent of those cases. On the public relations front, PBA is hard at work, too. Our staff handles press calls daily, and they remind reporters that national housing statistics do not necessarily reect conditions in the local housing market. Through positive press stories, we’re educating consumers that now is the best time in years to buy a new home. Plus we’ve renewed our “Buy Nowâ€? advertising co-op program for 2008, making available $45,000 in matching funds for locals running consumer-oriented housing spots. Most of us have been through up-and-down business cycles before. We know the market will turn. With your continuing support and involvement, we will boost consumer conďŹ dence and rebound from this downturn sooner rather than later. â–˛
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Providing the tools necessary to increase your profits and fulfill your residential lending needs
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6Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
Housing economy offers test of bravery by M.H. Morrison ith the housing numbers looking worse almost daily and doom-and-gloom pundits filling the airwaves with bad news, there may not be much positive in the economy to the casual observer. However, experts who watch the ups and downs of the markets see an end to the downward cycle and a few glimmers of opportunity.
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Where we are In 2007, the total dollars spent on residential construction (which also includes major renovations and additions to existing homes as well as rental properties) went down 18 percent, according to Ken Simonson, chief economist for Associated General Contractors of America in Arlington, Va. At the same time, nonresidential building was up 15 percent in terms of total dollars spent on construction. On the financing end, Richard Moody, chief economist and director of research at Mission Residential in Austin, Texas, said that borrowing money got tougher. Lenders want to see homebuyers put down 10 to 20 percent and have a credit score of 680-700. They also will be verifying income and employment, something that was lax during the worst of the subprime lending run.
What the numbers say For the experts, the number that should matter to homebuilders assessing the economy is the inventory of houses. At the end of December, the National Association of Realtors was reporting a 10-month supply of homes. Simonson said that for housing demand to improve and building to pick up, the current inventory needs to drop into the five-month supply range, which will probably take a year. When looking at the available inventory, Moody said companies must put more weight on the total number of new homes not occupied. “Clearly right now the main issue is record inventories … at the same time that you have a severely restricted mort-
gage market and a drying up of secondary mortgage markets,” he said. Moody said an additional problem in the financial markets is that there is some disconnect between actual and perceived risk, so that lenders are becoming “too severe” in their lending practices. James Diffley, managing director of Global Insight’s U.S. Regional Services Group, including the Regional Core Macroeconomic Service and the Global Insight Real Estate & Construction Service, said that builders should look at changing demographics to provide what the greatest number of buyers may want and need. With boomers aging, for example, there may be a shift back to smaller homes from the large executive-style construction.
Looking at the sunny side Diffley explained that nonresidential construction did much better into 2007, because it is on a different business cycle. While its numbers have dipped recently, commercial building “is not going to collapse. It didn’t have the irrational froth [of residential construction].” Simonson said the market has already seen subcontractors switch from homes to other types of construction, such as schools, hospitals and retail spaces. Builders of single-family homes cannot as easily move into the nonresidential markets that are doing well, such as hospitals, cell towers, data centers, refineries, biodiesel plants and electric power plants. However, Simonson said that the robust higher education market may be a possibility. With the drop in demand for materials, the cost of lumber, plywood, and gypsum board has decreased. On the other hand, the cost of diesel fuel is setting records. Other materials
such as copper and steel also have risen sharply. The result is not necessarily a net decrease in the cost of materials for homebuilders, Simonson said. In Pennsylvania, not all of markets were subject to over-building as in some of the other markets, Moody said, so “The supply side is healthier, but the demand is not as robust.”
Government intervention As housing prices fall, Moody said there could be between 1 million and 1.5 million people who lose their homes through foreclosure. This would certainly have an effect on the broad economy. Still, for Diffley, any time the government gets involved there is a potential for making it worse. He pointed out that any programs or regulations that penalize lenders in anyway will come back to hurt consumers by depressing the willingness of lenders to lend in the future. “The consensus is that when prices are down far enough, homes will begin to sell,” Diffley said.
Bottom line Correcting the market and getting housing back on track will be a long process, continuing to be a drag on new construction, Moody said. “Homebuilders will have a tough 2008 and probably a tough 2009,” he said. Simonson’s take is that the housing market will turn around selectively. “We’ve just seen first wave of price reductions. Those will accelerate thorough the next several months. They may stabilize over summer, but it will be well into 2009 and maybe 2010 before prices bottom out,” he predicted. ▲
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May/June 2008 UÊ iÞÃÌ iÊ Õ `iÀÊ
Shotcrete is a verb that describes the spraying of concrete or mortar. (Photo courtesy of American Shotcrete Association)
Know concrete … it’s not that hard by M.H. Morrison he new generation of concrete options give homeowners and builders a chance to use an ancient product in walls, on floors, as part of water conservation … it’s almost endless.
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From the ground up Insulating concrete forms are as straightforward as the name. Forms or molds are used that have built-in insulation for accepting reinforced concrete. The end result is a high-performing wall that is structurally sound, insulated, strapped, has a vapor barrier and is ready to accept final exterior and interior finishes, according to the ICF Builders Network. The organization reports that in cold climates up to 40 percent of a home’s heat loss is through the ground, so ICFs can create the perfect basement walls for locking out winter. On the green scale, every ICF home saves approximately 8.5 trees and reduces construction waste.
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8Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
Take a walk on the concrete side John Muldoon, president of Concepts in Concrete, Bristol, specializes in creating “dream” floors as well as personalized pools and patios. If someone can walk on it, his company can make it special. Concepts in Concrete transforms concrete into attractive and decorative surfaces, and once sealed, the floors clean up easily. Over an existing concrete floor, for example, the company can install a thin layer of polymer into which patterns can be created with water-based or acid stains, or they can install concrete that has been colored to the client’s specifications. The company does its magic in basements, kitchens, dining rooms, living rooms and retail spaces. And when someone gets tired of one look, the concrete can easily be transformed into another color or style. Because the process does not disturb the existing concrete, Muldoon said the process is green, and environmentally friendly sealers complete the project on a green note.
Concrete ‘en’counter For countertops, “Concrete is a Ferrari from a design standpoint,” said Jeff Peticca, owner and president of Paco Originals in Carlisle. The material allows for a lot of creativity from colors to textures with every countertop mold custom built. Also, anything can be embedded into the top during the fabrication phase, such as decorative metal pieces or even a cutting board. Peticca said that the majority of his business is in Philadelphia where homeowners and designers are taking out granite countertops and putting in concrete. Many customers appreciate the look concrete achieves over time as well as the cracking. “It gives it a distressed look,” he said. Since the concrete is stone product, it is more green than some other manufactured countertop surfaces. Also, Paco uses sealers with reduced or low levels of volatile organic compounds on its products.
Leaks like a sieve The ability of concrete to leak is a distinct advantage in some applications. Porous concrete, which can be used in parking lots, walkways or similarly paved areas and allows water to pass through it, is used primarily in commercial applications, because this material must be “vacuumed” once a year for it to retain its full permeability. Another option for a concrete product that allows for water flow is permeable pavers, which have a solid surface but allow natural drainage and migration of water into the earth. There are also porous pavers that have a surface with holes that can be filled with vegetation or aggregate, which can allow an area to resemble an unpaved space yet provide many of the same benefits of paving. According to the Concrete Network, porous/permeable pavers provide the same advantages as traditional concrete pavers, including resistance to heavy loads, flexibility of repair and low maintenance. Both porous concrete and porous/permeable pavers are a green alternative to asphalt or traditional concrete because they reduce the total amount of impervious surfaces on a project.
Tight as a drum In the mid-1990s, research from the 1950s led to the creation of Hycrete, a water-stable, environmentally safe and soluble admixture that is highly effective as a moisture blocker and an anti-corrosion agent within concrete. The product, Hycrete Admixtures, reacts with metallic ions and calcium molecules to seal the capillaries in concrete, waterproofing it from the inside out and eliminating the need for an external membrane. Additional benefits of Hycrete include shortened project schedules due to fewer man hours, reduced risk of leaks and repairs associated with moisture penetration and zero VOCs. Also, the concrete can be recycled because it does not have a membrane on it. Hycrete Inc., which manufactures and sells the product, is focused on large projects, however, residential work may be considered.
Paco Originals in Carlisle uses concrete to create one-of-a-kind countertops. (Photos by Paco Originals)
Ready, aim, shotcrete Shotcrete is a verb, according to Thomas Adams, executive director, American Shotcrete Association. An all-inclusive term that describes the spraying of concrete or mortar that does not require forms, shotcrete provides a more dense concrete than a poured product and is less susceptible to water penetration. Shotcrete places the product at high velocity to build up walls, foundations or even stabilize slopes. While this installation method is used primarily in commercial applications, more residential projects are using it for foundation work. Adams said that in five to 10 years, its use will be widespread in homebuilding. “What is great about concrete is what is great about shotcrete,” Adams said. ▲
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May/June 2008 UÊ iÞÃÌ iÊ Õ `iÀÊ
PARTNERSHIPS
built on trust
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10Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
by Arden Bortzfield ometimes it is difficult for companies to put profit aside and focus on the needs of their customers. However, building long-term relationships with customers that are centered on trust can be just as important when trying to boost sales. Often, companies waste valuable resources trying to decipher the needs of their customers, spending time and money attempting to sell products and services to customers who may not need them. Although this may provide an initial jump in sales, the company loses the long-term benefit of building lasting relationships. Once the customer sees that the primary goal of the company is to fulfill a sales quota, the customer will likely take his business elsewhere. Companies that make the extra effort to build trusting relationships with their customers quickly realize that their effort does not go unnoticed. Mike Merrill, author of “Dare to Lead!,” said, “Even though you may make less money in the short run, creating a climate of trust with your customers is far more valuable in the long run.” Customers who feel as though they can trust the intentions, advice and reputation of the company supplying them with products are more prone to use that company again. Rob Jones, 2006-07 associate vice president of Pennsylvania Builders Association, agreed. He said customers have followed him because they trust his opinion.
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Lasting trust can be established in a variety of ways, including showing customers how to help themselves. Lasting trust can be established in a variety of ways, including showing customers how to help themselves. Companies can do this by helping customers delineate their needs and directing them to products that will best satisfy those needs. Steve Black, PBA immediate past president and experienced builder, said long-term relationships with a supplier lead to company loyalty, better assistance and improved customer relations. Jones said the same, emphasizing customer loyalty as a major benefit. Companies that service their customers, rather than just sell to their customers, have adopted a mentality encourages relationships built on trust. Assisting customers in building their own business is another way to promote trusting relationships and ultimately increase sales.
When a company is helping its customer’s business operate more efficiently, the customer realizes that his supplier values his business. This, in turn, makes the customer more likely to use the product or service in the future. From his experience, Jones said that builders also will try to work out problems — such as pricing — with him first, before thinking about changing suppliers. Finally, one of the most important aspects of building relationships is for companies to treat customers like partners. Merrill wrote, “Most people view partnerships from the perspective of ‘What’s in it for me?’” Instead, companies that move away from the selling mentality and consider the needs of the customer are more able to view them as partners, selling customers only products and services that will further the growth of their business. Black mentioned that the biggest advantage for builders is that suppliers know what the builder expects. This means that deliveries are faster, and products are always in stock. “[Suppliers] take better care of us because we are partners,” he said. In the end, customers are satisfied and companies receive consistent business. Companies who create a level of service that customers cannot find elsewhere are sure to enhance customer satisfaction, increase sales, and improve and maintain long-term relationships. But getting to this point takes patience, Jones said, “It takes time, it takes contact; it’s just not something that happens overnight.” ▲
2591 Route 6, Suite 102, Hawley, PA 18428
570-226-5005
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May/June 2008 UÊ iÞÃÌ iÊ Õ `iÀÊ
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Boosting your sales and marketing efforts: An interview with Jerry Rouleau by Eric Wise, Editor erry Rouleau with 25 years experience working alongside the building industry with his public relations and marketing firm, J. Rouleau & Associates, provides top-notch sales and marketing advice. More than 8,000 housing-industry professionals have attended his sales and marketing seminars, and he offers free advice at www. BuilderRadio.com. Additional materials, including Rouleau’s books, are available at www.jrouleau.com and at www.BuilderBooks.com. Q. The housing recession has gotten builders’ attention, and many keep tabs on how their local market is doing vs. others. Instead of waiting and worrying, what should builders be doing? A. Builders need to: Ê U />À}iÌ >` ` >ÀÃ Ì Ì i À } Ì i` >° Ê U -«i ` Ài Ì i v Ü } Õ« Ü Ì new leads. Ê U Ài>Ìi ÜiL à Ìi vviÀÃ Ì >Ì }i iÀate activity and traffic from their web site. Ê U 1Ãi i > >À iÌ } >à > Ì Ì generate more b-backs. Ê U >Ûi Ã> ià «i « i ëi ` Ài time doing a “walk-through” of model homes. Ê U *À Ìi º iÜ i * > } Seminars” — now is the time to buy! Ê U 1Ãi VÀi>Ì Ûi > ` iÝ«i à Ûi Ü>ÞÃ Ì drive traffic to models or sales offices. Q. Most Americans live in houses or condos, yet many seem apt to complain when a new housing development is proposed. Can you think of ways for builders to answer the complaints of locals who seem to want to be the last ones in?
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12Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
A. Builders need to understand the concerns of locals. Once they understand those concerns, builders should be able to show how the new project or development will help create more jobs, generate more income for the community, provide more services and contribute to an overall better community. When the complaints are understood, it’s a matter of getting the community involved for its members’ greater good. Most of the time, the problems lie in wrong information. Developing a strong public relations campaign can overcome miscommunication. Q. What is the smartest thing a builder can do when meeting a potential client for the first time? A. Most builders spend way too much time trying to sell a potential client, instead of taking the time to ask questions and listen. When you make it about the customer, instead of you or your company, the sales process will flow much easier. This process helps the potential client feel much better, knowing that the builder understands their wants and needs. Q. Can you think of an instance where a home improvement contractor or builder had a chance to do something truly memorable for you? Did he or she succeed? A. Yes, we have had some very good experiences with builders. Some of the items that come to mind are going the extra mile and providing more than you bargained for, and taking the time to show the customer that you appreciate their business. Simple little things like returning phone calls can go a long way. Customer service in this country is so poor that it’s easy to excel! Q. Builders often fixate on building homes with the broadest appeal.
Simple little things like returning phone calls can go a long way. Customer service in this country is so poor that it’s easy to excel! They realize their customers want something that appreciates and isn’t hard to sell. How can a builder break through these constraints and offer something truly exceptional? A. Understanding the current trends and consumer needs can make a big difference. Little design elements and options can make a big difference. Developing floor plans that are women-centric and using green-building products can set you apart from your competition. Selling the concept of the “lifestyle,” along with how the ongoing cost of heating and maintenance of the home will save them a lot of money over time, will sell value over price. Q. If you invited a contractor to make a proposal for remodeling your kitchen, what would make the proposal unforgettable and memorable?
A. The proposal should be personalized and show that thought and effort went into the estimate. The builder should not assume the customer knows all the right things to ask and say. Finding out their concerns and expectations up front will make it easier to create a strong working relationship. Explaining the timelines for the project, along with the expected pitfalls, will help assure customers that you have their best interest in mind. Q. What’s a builder’s best weapon against low-ball bids from unrealistic competitors? A. Understand that not all customers buy on price. Some consumers start off asking about price, however as you find out more about them, you will discover that they have other items that are important to them, such as quality, warranty, reputation, brand name and service. Take time to find out about your customer. Find out what’s important to him or her in the purchase of a new home. If price is going to be the only consideration, and the customer is not interested in quality, service, reputation, warranty and brand names, then maybe you are talking to the wrong person. Selling value that matches your customer’s profile is key. You can’t sell projects by the square foot price, unless you are building the least expensive product on the market. Q. Can you share any stories of builders engaging customers on the web and capitalizing on this opportunity? A. Successful builders need to understand how to use their web site to their benefit. Creating a web site that creates a great first impression is key. Most consumers will only give your site six sixx to eight seconds before they move onto nto to another site. Selling the lifestyle and nd having an interactive web site that gets ets t the consumer involved and asking for for more information is critical. Your web eb b site is an excellent opportunity to list ist s testimonials and to tell them about who ho you and your company are. Promote otte open houses and other activities. Create ate a place for them to book an appointntment online to visit your model or to si sitt with you. Give them three choices and nd accommodate them accordingly. The key ey to web-site marketing is learning how ow to turn your invisible visitors to visible ble consumers. This is done with web offers ers er rs and calls-to-action. ▲
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Consumer service founder shares thoughts on building industry by Eric Wise, Editor ngie Hicks, founder of the online consumer grading network, Angie’s List, reveals how builders can improve their service — and ultimately their reputations. Her list at www.angieslist.com receives about 15,000 consumer reports each month from its 600,000 members. Q. Angie’s List reported that 38 percent of consumer reports about home warranty companies graded them with Fs. What was the breakdown for homebuilders? A. Unfortunately, with 34 percent of reports falling into the negative range, homebuilders did not fare much better than home warranty companies on a national level. On a brighter note, only 17 percent of the reports we received on companies in our remodeling categories received a negative grade. Q. Can you share how well Pennsylvania homebuilders and remodelers did in comparison with your national figures? A. The number of negative reports we received on Pennsylvania’s remodelers came in at 19 percent, close to the national percentage. Also, 43 percent of the reports we received on homebuilders in Pennsylvania were negative, but homebuilders actually don’t rank in the top 10 most complained about services in Pennsylvania. Q. What is it that the best-ranked homebuilders or remodelers are doing well? (Why are they earning top marks?) A. The best service providers listen to their customers, no matter what service that company performs. The same goes for homebuilders and remodelers. Also, customers are at their happiest when their expectations are met — and that begins with a timeframe and budget. Everyone knows that these things can change, but the best companies let their customers know as soon as possible. Q. What are the major types of complaints about homebuilders? A. Some of the most common complaints about homebuilders have to do with the job’s timeframe and budget. No consumer wants to be surprised by last-minute budget overages, and no consumer wants a partially finished kitchen five or six months down the road. Q. What can homebuilders do to avoid negative ratings from their customers? A. Keep Kee eep p in mind that you will be building your customers’ d ea dr am home, hoome m not your own. Let them know right away if any dream of their ex expectations won’t work out and suggest alternative v s. Also, Alsso, o keep the communication lines open. Keep your tives. cust cu stom omer mers informed of progress and be sure to let them know customers you run run iin n any problems that will need more money and if you into time to to solve. s lv so lvee time Wha W hatt can builders learn from other types of busiQ. What ness ne ssse to improve their customer service? nesses A Many service providers use the posted reports on A. Ang An Angie’s List as a customer satisfaction survey of sorts. ’ a great way for them to be able to get a feel for It’s wh h customers like and which areas need some work. what Ho However, the basics still apply. Return messages; s sh show up for appointments on time; and let your c cu customer know as soon as any plans change. ▲
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More Expert Insights on page 15
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May/June 2008 UÊ iÞÃÌ iÊ Õ `iÀÊ
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14Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
MEMBERINSIDER May/June 2008
.FNCFS briefs
PBA funds program to restore homebuyer confidence
Just as it did in 2007, Pennsylvania Builders Association is funding an advertising cooperative program for its locals to help support the promotion of commercial messages aimed at reviving consumer confidence in the housingmarket. PBA is making available on a first-come, firstserved basis $45,000 to help locals buy commercial time that promotes a “Buy-Now” message. For every dollar spent on related advertising, PBA is providing a dollar match, effectively helping locals to double their ad budget. There is a $5,000 cap per local on the co-op funding. With interest rates low and plenty of new homes from which to choose, consumers should be reminded that this is the best time in years to make that new home purchase. PBA’s 2008 co-op advertising program will run throughout the year, as long as funding remains available. For more information, please contact Chris Anderson at PBA at (800) 692-7339, ext. 3011, or at canderson@ PaBuilders.org.
FCC bans exclusive phone deals for multiple tenant properties Exclusive telephone service agreements in apartment buildings and multiple tenant properties are prohibited following a recent Federal Communications Commission ruling. The ruling applies to existing and future contracts in apartment buildings and other multiple tenant properties. Many housing and real estate groups have expressed their concern over the ruling, contending that the FCC is overextending its regulatory reach.
Pittsburgh to provide tax credits for visitability The city of Pittsburgh recently announced that up to $2,500 in property tax credits will be available for homes meeting criteria designed to provide better access for people with disabilities. The credit, which will be awarded over five years, may be earned through the construction of new homes or renovations to an existing home. Visitable homes include no-step entries, 32-inch wide doorways and bathrooms with wheelchair access. PBA
advocated for the statewide visitability law that allowed municipalities to offer these credits.
PBA, opponents testify about homebuilder registration PBA member Ken Kurtz testified March 13 in opposition to House Bill 1821, which would require the registration of new homebuilders. The association opposes registration of homebuilders as there is no evidence of a widespread problem with homebuilder fraud in Pennsylvania. It also is PBA’s position that the building standards in the Uniform Construction Code provide consumer protection against poor quality construction. In addition, Kurtz refuted the need for a guaranty fund in which all builders would contribute to cover losses by victims of fraud. PBA opposes a tax on reputable builders to pay for scam artists and asserts that a guaranty fund does not prevent illicit activity. The association continues to promote consumer education as the best safeguard against construction fraud and maintains a popular public outreach program. Please contact your PBA field service director for more information.
Nominate PBA’s 2009 officers The deadline to nominate a PBA member to hold state office in 2009 is May 16. PBA is accepting nominations for the following offices: President; vice president; secretary; treasurer; associate vice president; National Association of Home Builders state representative; builder state director to NAHB; alternate builder state director to NAHB; associate state director to NAHB; alternate associate state director to NAHB; and representative to NAHB executive committee. If no nominations for president-elect are received, a motion will be considered during the July board of directors meeting to name Gene Kreitzer as president-elect of PBA. The positions of regional vice president and regional legislative officer will be elected at the regional level. Any member who wishes to be considered for nomination should notify Mary Ann Jackson in writing at PBA no later than May 16. Her e-mail is mjackson@PaBuilders. org. Elections will be held during the November board of directors meeting. Member Insider UÊ iÞÃÌ iÊ Õ `iÀÊ AÊ
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Building moratorium legislation still facing House vote
On the hill
Building moratoriums are still on the legislative agenda in 2008. The current bill would allow for a building “time out” of up to three years while a municipality develops a new comprehensive land-use plan. Background: House Bill 904, sponsored by Rep. Robert Freeman, D-Northampton, adds provisions allowing municipalities to enact temporary building moratoriums while they revise the municipal comprehensive plans, zoning ordinances and subdivision and land development ordinances. The moratorium, as defined in this bill, would stop all subdivision and land development approvals with a few narrow exceptions. Update: This bill was sent to the House Appropriations committee and is scheduled for a vote in the spring of 2008. Reaction: Since writing about this legislation in the November/December 2007 edition of Keystone Builder, PBA has not changed its position. Its members still oppose efforts to halt homebuilding, which generates millions of dollars annually for the state’s economy. PBA members argue that elected officials’ failure to act in the past does not prove a moratorium is needed, since municipalities do not use the planning code to its full potential.
Mortgage reform bills created to protect borrowers in the future The state Department of Banking has proposed a package of bills in regard to mortgage lending. These were developed by the Department of Banking to toughen licensing standards for people who sell mortgages, reduce loan fees and impose higher penalties for appraisers who are caught inflating home values. Background: Sen. Pat Browne’s, R-Allentown, package of bills (Senate Bills 483-489) recently passed the Senate and was forwarded to the House Commerce committee. These mortgage reform bills are an effort to prevent a replay of the current sub-prime crisis in which people are losing their homes as the interest rates on their loans soar. Proposal: One provision in the package would require people who sell mortgages to be licensed by the state. Under current law, only the companies are licensed. Another provision would increase the maximum fine to $10,000 for appraisers who violate the professional standards of their license. Another would ban prepayment penalties on loans of $200,000 or less. Current law bans prepayment penalties only for loans of $50,000 or less.
Scrap metal theft bill passed by the House; hopes for action by Senate Theft of materials from job sites that can be sold easily at scrap facilities, such as copper piping, is on the increase and tracing the stolen materials is difficult. Background: House Bill 1742 recently passed the House and has been forwarded to the Senate’s Environmental Resources and Energy committee. PBA is working to make sure this legislation is considered before the summer break. Proposal: The bill would require scrap buyers to record information on sellers when the transaction is more than $50. When the material is taken to a junkyard or scrapyard, the seller would have to show ID and the buyer would have to tag the item so it can be linked to an individual. What builders are saying: “PBA supports the entire bill the way it is written. What the bill is trying to do is evaporate the market for stolen scrap metal. If thieves can’t sell it, why steal it?” commented PBA Secretary Chauncey Wirsing of Wirsing Builders of Somerset.
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BÊ Ê iÞÃÌ iÊ Õ `iÀÊUÊMember Insider
IT FEELS SOMETHING LIKE THIS WIN A PBA AWARD, THEN YOU’LL SEE New for 2008, PBA will mail entry packets to interested entrants in order to streamline the application process. If you’re interested in entering any of the 10 member award categories, contact PBA at (800) 692-7339 or visit www.PaBuilders.org to request an entry packet. Entry deadline is Aug. 8.
Want to feel like you’re on top of the world? Compete to win one of PBA’s 2008 Builders Gala awards. Not sure about entering? Lou Tepes, winner of two 2007 Builders Gala awards and owner of Tepes Construction, had this to say: “These awards immediately earned me news coverage in my local newspaper I would never have gotten without entering. It’s a great opportunity.”
Come on and enter. Last year’s winners will tell you — the view is pretty good from up here!
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Nov. 7, 2008 Pittsburgh Marriott North Cranberry Township More information available at http://BuildersGala.PaBuilders.org
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Member Insider UÊ iÞÃÌ iÊ Õ `iÀÊ
E M O C L E ous W l u b a TO F
E G E L L O C E T 25 A Y T L U S J
The PaCAH fundraiser has gained some glitz. PBA invites you to a fun Las Vegas-themed evening Friday, July 25, at the Nittany Lion Inn in State College. A thrilling Las Vegas-style show, games of chance, auction and more await you. Keep watching for registration details. Always remember, what happens in State College ...
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Entrepreneurship: The short answer by M.H. Morrison ince 1996 Pamela Slims of Ganas Consulting, LLC, in Mesa, Ariz., has worked with hundreds of professionals and entrepreneurs. She brings that expertise to questions about starting and succeeding in business ownership. Slims offers advice for entrepreneurs online at www.ganas.com, including her free monthly electronic magazine, Get a Life. Q. What common mistakes do entrepreneurs make when starting out on their own? A. There are many possible mistakes made by new entrepreneurs, but a few that stand out are jumping in too fast without a plan; planning too much and never testing an idea; underestimating the amount of money and time it takes to get a venture off the ground; and working in their business as opposed to on it. Q. What are the most important issues that someone should plan to address when he/she is considering starting a business? A. My husband owns a construction business, so I have learned a lot by personal experience. You need to have a good way of tracking income and expenses, evaluating the profitability of jobs and demonstrating your financial viability to outside entities. You also should define the fundamentals of your business such as: what is your market; who are your target customers; what products and services will you offer; what are your financing and marketing plans; what equipment, people and resources will you need to get up and running; and what are your three-year financial projections. Contractors should make sure to put the time and energy into building relationships with general contractors, developers and other construction business owners. They will be a great source for referral business. Q. Why do you think entrepreneurship is such a boon for an individual’s personal growth? A. I just did a podcast on the subject. I explained that entrepreneurship is a full-contact sport that will wake up all your senses. Additionally, you own your successes. Your hard work
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and creativity made success happen. On the flipside, you own your failures. I’ve made some poor business decisions. At times like that, you must honestly assess your situation, acknowledge when you are in over your head and get help right away. Finally, you have to be both your business and totally detached from it to survive its successes and failures and maintain your self-esteem and dignity. This is a great skill that will make you a better friend, parent and partner. At the same time, you must constantly reinvent your business. There is no coasting when you own a business. And if you don’t keep up with change, the market will do it for you. Q. How should a startup construction business promote itself? A. As I said in an earlier point, referrals are one of the greatest ways to build your construction business. Let your peers and partners know you are opening your business. Look for another business that may offer complimentary services such as a kitchen plumbing company that would compliment your kitchen sink and tile installation business. If you do residential construction, you may want to look into the increasingly popular online referral sites that pre-screen vendors and make it easy for homeowners to find reliable contractors. An example is www.servicemagic.com. Study your competitors’ marketing strategies and note what works and doesn’t work. Q. What are the advantages and disadvantages of trying to start a business with a limited scope — like only remodeling kitchens and baths — in comparison to accepting all types of residential construction work? A. I am a big fan of choosing a niche when creating a business. It helps to identify particular customers and avoids being overwhelmed as a new entrepreneur. A well-defined niche includes a well-defined market that you can describe specifically (for example, homeowners in the 17043 ZIP code with homes more than 20 years old with a median household income of $80,000). As your business grows, you can expand your niche and services. But to start out, a clearly defined niche will get you more customers more quickly than trying to market to everyone. ▲ More Expert Insights on page 16
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Industry repair Critiquing today’s construction industry for tomorrow’s profitability by Eric Wise, Editor arry LaPatner, founder of LePatner and Associates, which serves clients in construction and construction-related industries, discusses his views on homebuilders based on his latest book, “Broken Buildings, Busted Budgets.” His work documents construction-industry problems and recommends solutions, and is available at www.brokenbuildings.com or www.amazon.com. Q. In your book you bemoan wasted labor time when one group of hourly workers waits for another crew to complete its work. How can small homebuilders address this type of wasted labor? A. Homebuilders building multiple residences will find their role models in the Levittowns of yore, and the large homebuilders of today who use technology and tight control over
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manpower to achieve high levels of efficiency. Using [purchasing power] to buy in bulk will also make for more profitable and wellmanaged projects where workers do not need to stand around and wait for late deliveries. Q. What are the best investments a homebuilder can make in the future of his/her company? A. The answer here lies in the term “interoperability.” This term is used to highlight the importance of meshing the design and construction of a project into as seamless a process as possible. Utilizing the latest design software and incorporating the simultaneous use of pricing software for checking ongoing costs is critical to ensuring the right pricing for the final product. Add to this cost-effective building information modeling software that assists in avoiding conflicts and interferences to ensure
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16Ê Ê iÞÃÌ iÊ Õ `iÀÊUÊMay/June 2008
better coordination of the trades, and today’s smart homebuilder will clearly find himself ahead of the competition. Q. Where do you see the biggest opportunities for small residential contractors today? A. If you look at the problems that the large homebuilders are experiencing today, you will see that a large part of their losses are from the need to mark down the huge inventories of real estate they need to stockpile for approvals that often take years to secure. Small homebuilders need to maintain tight control over the lots they purchase to build on. Next, they can seek to be designersbuilders who have total control over the design as well as construction processes (where subcontractors are forced to perform on time at the contract price). Q. Can you explain how the complex web of laws and regulations stymies innovative breakthroughs in construction? A. Compliance with the myriad of building regulations and codes is a complex process. Contractors learn over time to do precisely what the local inspectors expect of them in the manner that the code envisions from decades of use. Such laws place a large obstacle in the way of innovations and technology as contractors are loathe to suggest means and methods of construction — however more efficient or profitable — as it often is met with reluctance by local officials, married to longstanding or outdated codes and regulations. Q. Can you explain how your book suggests mutable cost contracts prevent true competition in construction? A. Today, contractors have every reason to bid low — bid at or below cost — in order to get the opportunity to make claims that hopefully will become the profit earned on the project. This lowbid system hurts the better managed firms who know the true cost of pricing the job, but know they cannot win the bid in the face of more inefficient firms who will low bid merely to get the job. The use of fixed-price contracts that include a fair profit will eliminate, over time, the truly inefficient contractors, who will go out of business as they fail to perform on time, and enable the better managed contractors to grow larger and more profitable and retain the best performing workers. ▲
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Taking what you have coming by Eric Wise, Editor obert Bernstein of the Bernstein Law Firm in Pittsburgh explains what businesses need to do to collect on debts. His book, “Get P.A.I.D.,” helps businesses reframe their credit policies, improve customer loyalty and increase their profits. “Get P.A.I.D.” is available at www.getpaidsystem.com and www.amazon.com. For more information, contact Bernstein at (412) 456-8101 or rbernstein@bernsteinlaw.com. Q. How can businesses get in trouble by not planning for a delay in getting paid? A. Very simply, a delay in collecting for sales means less cash flow into the business. Less cash flow means the business has to use its own capital (or credit) for the people it has to pay. If it uses up its cash, its capital and its credit, it cannot pay for what it needs. Q. Why should a business have a written credit policy if most customers pay on time? A. If the business is like a fast food restaurant, it probably doesn’t need a written policy. It doesn’t grant credit. Every business that lends money (extends credit) ought to have agreed rules for when and how that is done. As a sole proprietor, you may not need to have it written. But at some point, there is someone who is required to follow the credit rules the owners (or managers) set out. At that point, things should be written down. This doesn’t mean you need a 100-page manual, but you should at least write it down so people can find it when making decisions. Q. How should a business offer incentives for fast payment? A. Extending the right to pay over time is an incentive. Not having to pay cash in advance (or on delivery) is worth something in and of itself. Whether the seller needs to offer discounts, prizes or anything other than the right to credit depends on the market, the competition, the profit and the size of the sale. A 2 percent cash discount may be expected in some industries, and it does represent a significant cost to the seller. Q. What common mistakes do small business owners make that lead to problems in collecting what is due?
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Very simply, a delay in collecting for sales means less cash flow into the business.
A. Too often sellers try to increase sales volume with easy credit. If they don’t follow the basics of good lending practices (preparation, assessment, implementation and defense — P.A.I.D.), they will have failed to help the customer clearly understand the value he or she is getting, what is due and when, and the costs to the customer of a late payment. Not clarifying the deal, not getting good credit information and documentation, and not having good follow up and collection policies are also common mistakes. Q. If a company in financial trouble owes another business money, what can be done to improve the chances of collecting on the debt? A. One way to reach into the debtor’s pockets is to get the written personal guaranties of payment of principals of the debtor company including partners, shareholders and spouses. Agreement of the principals’ spouses is important, since Pennsylvania law adopts the concept of “tenancy by the entireties,” where creditors of only one spouse cannot ordinarily attach jointly held marital property to settle the one spouse’s debts. ▲ More Expert Insights on page 19
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Uncertain about certification?
NAHB expert answers builders’ questions about its green building program. by M.H. Morrison ou want your home certified as green, but you’re not sure where to start or what’s involved? Carlos Martin, assistant staff vice president of National Association of Home Builders, answers concisely and directly these and other questions about the National Green Building Program. For more information about the program, visit www.nahbgreen.org. Q. What do I need to do to get started with the green building program? A. The first thing is to go to www.nahb green.org and score your home before you start building. This will help you know whether the design will meet the designation you are trying to achieve. After scoring, you can then request a third-party verifier for certification. This request can be made up until the dry wall is installed. Q. How many meetings, inspections or verifications are needed to have one of my homes certified? A. There are a minimum of two on-site inspections. One is during the construction phase before dry wall but after framing and rough plumbing and electrical. The other is after installation of all flooring, appliances and landscaping, but before closing. There could be more meetings and inspections depending on how the builder works with the verifier prior to and during the construction. For example, builders who want a higher score will want to work closely with the verifier to receive that designation, making sure that they are meeting the requirements along the way. After the final meeting, the verifier sends all documentation to NAHB
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and the association issues the certification. By the way, all of the NAHB verifiers go through a training process and their work is audited so that each maintains the standards set by NAHB. In other words, one verifier is not more lenient than another. Q. Do I have to pay travel expenses for the person who verifies my home? A. The builder must hire the verifier, however the payment of travel expenses would depend on the contract that the builder negotiates with the verifier. The verifiers on the list from NAHB are local to the home they will be inspecting. Q. Do the NAHB guidelines/standards recognize my efforts to use locally produced materials that eliminate the environmental costs of transporting building supplies? A. There are mandatory requirements and points for specific materials. Local materials and transport are in the optional points. Q. How do the guidelines/standards handle site improvements outside the home itself, i.e., are landscaping choices rewarded? A. Water conservation for landscaping is rewarded. This water conservation includes low-volume irrigation systems and/or irrigation systems that are zoned for turf or beds, for example. Other outside improvements that can earn points include planting of trees to increase shading and using species appropriate for the region. Q. Can a builder or a homebuyer earn tax credits for building a home that is green? A. On a national level, there are no income credits for green homebuilding.
There were some for energy efficiency, but those are being [reconsidered] right now. Q. In what ways will I have to train my employees and subcontractors to incorporate techniques recognized in the guidelines/standards?
If your employees or subcontractors need training, there are a lot of educational resources available. A. If your employees or subcontractors need training, there are a lot of educational resources available. There is the Certified Green Professional Designation that NAHB has created. The core course work is Green Building for Building Professionals. NAHB University of Housing usually coordinates with local home builders associations to offer the courses throughout the country. Q. What advantage does NAHB’s program offer over the LEED-h standards? A. First, the NAHB guidelines as adopted by American National Standards Institute are the first-ever ANSI standard for green building. That aside, when you look at the NAHB program, it is as stringent as LEED-h but more cost effective. Also, the certification for LEED-h is more expensive. However, I understand LEED-h is changing the cost. ▲
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Reinventing your
business by Arden Bortzfield pending a lifetime in one particular business is no longer ideal. Often, entrepreneurs get an itch for change after perfecting their trade and decide to reinvent their business. Joe Mackey, Jeff Long and Scott Cannon have done just that. After building homes for the past two decades, Joe Mackey, owner of J&S Homes and Target Homes of the Poconos, decided to rethink his business. He decided to test the waters by adding a modular housing business. He had considered building modular homes for about a year and spent some time researching local factories before he made the switch. In addition to researching local suppliers, Mackey researched the labor market and labor resources. After the process began, Mackey realized that there was no substitute for proper planning. “There is nothing better than well designed organizational systems within your business,” he said. Though no longer in the modular housing industry, Mackey left with valuable experience, ultimately strengthening his homebuilding business. Before completely reinventing a business, it is essential to complete in-depth research, along with intensive planning and to evaluate the systems within the existing business. Mackey said, “Stay with what you know, improve on that.” Like Mackey, Jeff Long has been building all over Pennsylvania for nearly three decades.
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In 1976 he built his own home, so it was no surprise that Long discovered success in the construction industry. By 1980, he had developed his own construction business and was soon finishing up to 30 homes per year. Nearly 10 years later, he decided to sell his homebuilding company to S&A Homes and change his direction. “I was ready for a change and S&A Homes made an offer I couldn’t refuse,” Long said. He began an assisted living facility for the elderly, Colonial Courtyard, in three locations: Tyrone, Bedford and Clearfield. He was successful in his redirection and learned that there was a need for apartments for senior citizens, which led him to build Graystone Courts. “It was an immediate success. We did not realize there was such a demand for quality 55-and-over apartments,” he said. With the completion of six more Graystone facilities, located in Bellmeade, Bedford, Roaring Springs, Hollidaysburg, Clearfield and Ebensburg, Long’s new business was becoming increasingly successful. He is now working on the eighth Graystone apartment building with three more also being built. His advice: “You have to start small, pick the ideal location and form a good relationship with your bank.” Scott Cannon, 2004 PBA president, has also found success through reinventing his business. After spending nearly 30 years in the homebuilding industry, Cannon decided to try residential remodeling. He started
Cannon Kitchen and Bath and partnered with Case Handyman Remodeling shortly after. Although successful at building homes, Cannon believed homebuilding was becoming too risky. “Having all your eggs in one basket is risky,” he said. With a long-term plan to diversify, Cannon jumped into remodeling with both feet. Cannon was excited about the change. “It [homebuilding] got kind of boring. It was the same old thing, same arguments, same concerns. Remodeling is exciting; you have to think your way through it. It’s a little more of a challenge,” he said. But before making the final switch, Cannon did some research and financial analysis. He wanted to make sure there was sufficient business to ensure that Cannon Kitchen and Bath would be profitable. He soon realized the remodeling market is huge and really got a feel for it during his term as PBA president. Although successful, Cannon did see some initial set-backs. The cost of sales and marketing were much higher than he had anticipated, and old business models were not working any longer. “As a rule of thumb, there will be many lessons learned,” he said about reinventing a business. “Over the first year or two, remain very open minded. If you think you’re going to use the same thing you were used to, you can’t,” Cannon said. “A business is a business, but every one has its nuances. Customers are different, attitudes are different.” ▲
Learing on the road Expand your business knowledge traveling to and from job sites or at your computer by Eric Wise, Editor ew people in any profession believe they know all they need to know about their ďŹ eld or business. Unfortunately, many residential builders have little time to ďŹ ll in these gaps with formal education. Builders have a reputation for getting an early start and putting in long days. Itâ&#x20AC;&#x2122;s not only the nature of owning a small business; itâ&#x20AC;&#x2122;s also the culture of being a builder and remodeler. To accommodate its membersâ&#x20AC;&#x2122; busy schedules, Pennsylvania Builders Association sends an educational CD to all builder members near the start of each year. This â&#x20AC;&#x153;Listen and Learn CDâ&#x20AC;? starts with important developments related to the Uniform Construction Code. Other educational topics follow, with tracks provided by nine PBA Premier Partners and endorsed vendors. The ease of popping a CD in a vehicleâ&#x20AC;&#x2122;s stereo when heading to a job site has made these CDs one of PBAâ&#x20AC;&#x2122;s most popular communication tools. Members can create their own educational CDs on various topics as well. For example, from Appleâ&#x20AC;&#x2122;s iTunes store, users can download more than 30,000 educational audio and video ďŹ les. Most of this educational content is free. These ďŹ les may be burned onto CDs for use in a vehicle. Better yet, purchasing a digital audio player (an mp3 player) for about $50 eliminates the cost of discs. Additionally, Appleâ&#x20AC;&#x2122;s iTunesU provides downloads in real estate (Lehigh University), principles of management (Yale University), business management (Stanford University) and smart energy (Stanford University). BuilderRadio.com offers a weekly sales and marketing podcast geared directly to builders. Anyone can subscribe to these podcasts for free and listen to them at a computer or on an mp3 player. (Or the ďŹ les could be burned to a CD.) Also, Harvardâ&#x20AC;&#x2122;s business school provides a weekly â&#x20AC;&#x153;ideacastâ&#x20AC;? at www. hbsp.harvard.edu. Finally, for those who wouldnâ&#x20AC;&#x2122;t mind taking a few hours at a computer to expand their knowledge, free online college-level material is available.
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Open University in England provides free online courses through its Learning Space at http://openlearn.open.ac.uk. Open University in England provides free online courses through its Learning Space at http://openlearn. open.ac.uk. Learning Space offers 29 different units in business, with courses that take from three to 20 hours. When participants join a unit through Learning
Space, they may progress through the material at their own pace â&#x20AC;&#x201D; a few hours a day or a week. Closer to home, Kutztown University publishes a wealth of resources through its Small Business Development Center. Online, the center presents dozens of entrepreneurial self-paced training resources. These short courses may be accessed for free at www.kutztownsbdc. org/course_listing.asp. â&#x2013;˛
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by M.H. Morrison ennsylvania’s land development process moves at what some say is a glacial pace and becomes even slower when habitat for a protected species is found on a developable piece of property.
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Garman Builders
Endangered species, endangered development? Builders and developers find ways to work with endangered species regulations and keep projects on track and on budget.
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Mike Garman of Garman Builders, Lancaster, doesn’t have anything against the small and shy bog turtle, but the amphibian has been the root of trouble for the developer. On one project, an adjacent piece of wetland, which had been created by another developer, was a perfect habitat for bog turtles, although no bog turtles resided there. Still, it took 18 months for the paperwork to be approved for protecting the potential habitat. Garman had to provide a 100-foot buffer between the development and the wetlands. He also had to construct a fence placed along the buffer behind which residents could not mow or use pesticides or fertilizer. It’s not the first time Garman had to install a fence to protect turtles. In another development, he had to add chicken wire to the fence so that the turtles couldn’t crawl into the lawn area where a resident’s mower would be a hazard. Garman said it is frustrating after putting in buffers and fences, there is no enforcement. This means a homeowner might take out the fence or mow the property, because “there are no bog turtle police” to make sure the rules are followed, he said. In general, to make his projects go more smoothly, Garman may include more than one professional on his team, such as a hydrologist or geologist, depending on the issues with the property. “You’ve got to get experts lined up to keep the project moving,” he said. Even with the help of experts and following the rules given to developers, “There is nothing that triggers the agencies to act on the plan,” he explained, adding that if he could change anything in the regulations that would be the top of his list.
Maleno Development About eight to 10 years ago, John Maleno, president of Maleno Development, Erie, encountered a plant that was endangered in the United States but not in Canada, just a few miles away. “It changed things for us, slowed the process,” he said. “DEP is not always on the same timeline as the builder.” The entire project was about 100 acres, with two to three acres affected by the discovery of the sedge-type plant. The vegetation was limited to the wetland areas, which typically property owners cannot fill or drain. Under most circumstances, owners may mow or remove vegetation in wetlands. However, in the areas with the endangered plants, homeowners were prohibited from doing anything to the land or vegetation. Maleno said that his company had to make sure the residents understood this, and during the development, crews had to ensure that the wetland areas remained undisturbed. Maleno said he tried to make it a positive wrinkle by noting that the company was being sensitive to nature and preserving the sedge. To keep the process moving as quickly as possible, Maleno said vigilant communication with DEP was needed. The worst thing to do in a similar situation, according to Maleno, is to ignore or fight the process. “With any government, the more you work with them, the more they work with you.”
Megill Homes Wayne Megill Jr., president of Megill Homes, West Chester, has worked with endangered/protected species and habitat regulations in Chester County on a number of projects. While the company has never found an endangered animal on its property, Megill said that they have had to accommodate endangered plants. Generally, protecting the plant translates into adding buffer zones around the plants’ habitat and prohibiting earthmoving activities in the plants’ domain. Megill added that ensuring the protection of the animal or plant is not the
problem, “The real burden is on the paperwork end.” For example, certain letters needed from regulatory agencies have time frames that regularly expire before the subdivision process can be completed. This means going back and resubmitting the paperwork to the agency. In his personal experience, he has been frustrated by how the various regulations from state and federal agencies do not always mesh with local ordinances. There are many layers of governmental regulation to coordinate, Megill explained, adding, “They may have different goals and they are not always in agreement.” Accommodating a specific plant and working within the regulations has not stopped any projects for Megill, but it does cause delays, especially coordinating investigations into the potential endangered species on site. Often these plants and animals are visible or active for only short periods of time, during which the developer must schedule an investigation. Once the process is started, Megill said, reminding agencies that paperwork is in their hands is just good business to keep the file active and the paperwork moving. Five to seven years ago, developments took about 12-18 months to get to groundbreaking stage, he said. Now, it’s 48 months. One of the biggest issues on the horizon that will help is the proposed Data Quality Act, according to Megill. This legislation will help make sure regulations are based on verifiable science and they will not change on a “whim.” Megill said it does not do a developer or builder any good to harm the natural beauty of his land. “That’s what makes an area desirable to new homeowners.” With regard to dealing with endangered species regulations, preserving areas is not necessarily the problem. Instead, the long waits for approvals and the tangle of confusing or contradictory regulations can increase the difficulty of protecting flora and fauna for developers. ▲
Photo credit: George C. Gress
Endangered species, development in harmony As builders seek to balance protection of endangered species and meeting the needs of their customers, they have found some strategies that work for them. A first step should be completing a Pennsylvania natural diversity inventory environmental review. This web-based tool has a user-friendly interface that allows anyone to search this inventory to find out how developing land may affect local habitats. Find this tool online at www.natural heritage.state.pa.us. Having determined the areas that may require buffering, for example, will determine how a builder must proceed. In planning, a developer may want to use the worst case scenario for timelines and the amount of buffer that will be required. Finally, reminding agencies about paperwork on file with them can keep the process moving. ▲
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Clemleddy Construction Great-grandfather inspires business by M.H. Morrison raig Smyth, owner and president of Clemleddy Construction (www.clemleddy.com), honored the most influential man in his life — his great-grandfather Clement Leddy — when he decided more than 20 years ago to start his own business. His great-grandfather’s unwavering sense of duty, honesty and morality forged a clear path for Smyth, who also credits others with helping him along the way. This includes the work ethic he learned while employed at Janalyn Carpenter Contractors, and the confidence he gained in the Army. Smyth’s first real construction job was while he was in the Army in Germany. After being discharged in 1977, he worked with Janalyn for five years on its framing crew. He joined the ranks of the self-employed in 1986 and soon after relocated to Lakeville. When he started as a house framer, Smyth felt a sense of accomplishment when he turned different sizes of lumber into a house frame. Over time, he needed more of a challenge, so he transitioned his company in the early 1990s from framing subcontracting to general contracting. While the company is primarily focused on building and designing new homes and remodeling projects, Clemleddy diversified into light commercial work as a means of maintaining long-term stability. “Since I did not have any formal education, I learned it all the hard way,” said Smyth. “It is not often that I have made the same mistake twice.” Clemleddy’s successes are important to Smyth, but his greatest accomplishment is “being happily married for 29 years.” At the start of the business, his wife, Kathy, worked at Clemleddy, but as the company grew, they made a collective decision to live together and not work together.
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However, his daughter, Melissa, is a part-time receptionist, and his son, Ryan, is a construction manager. This sense of family and a commitment to people has been “without a doubt the key to our success,” said Smyth. In addition to family, there are men on his crews who have been working with the company for decades and office staff who have been on board for many years. In addition to learning on the job, Smyth said that being involved with the state and local builders associations for close to 15 years has benefited him tremendously through the groups’ resources and the representation they provide at the federal and state governmental level. In September 2001, Smyth joined the Remodelors 20 group, which is made up of 12 to 15 remodelers from noncompeting markets, who share their business challenges and help each other find solutions. Smyth is a past board member of the Lake Wallenpaupack Chamber of Commerce and was recently nominated to join the board of the Wayne Economic Development Corporation. “I have always enjoyed building. Becoming a general contractor and integrating all the different facets of home building keeps it interesting. I also enjoy the people. This is a great way to earn a living,” he summed up. ▲
Business quick facts: Clemleddy Construction Owner: À> }Ê- ÞÌ Ê Years in business: ÓÓÊ County of operation: 7>Þ iÊ> `Ê* i Local association: 7>Þ iÊ Õ ÌÞÊÊ Õ `iÀÃÊ Ãà V >Ì Ê UÊ Association involvement: *>ÃÌÊ*Àià `i ÌÊ vÊÌ iÊÊ 7>Þ iÊ Õ ÌÞÊ Õ `iÀÃÊ Ãà V >Ì UÊ Company motto: Õ ÌÊv ÀÊ9 ÕÀÊ vi UÊ UÊ UÊ UÊ
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Final word
Concrete City 1SFDBTU DPODSFUF TIFMMT TUJMM TUBOEJOH NPSF UIBO ZFBST BGUFS UIFZ XFSF BCBOEPOFE by Arden BortzďŹ eld till standing, though almost unrecognizable, Concrete City was built in 1911 by the Delaware, Lackawanna and Western Coal Company. The 20 two-story precast concrete homes housed about 40 coal miners and their families and were originally painted white and dark green. Located in Hanover Township in Luzerne County, Concrete City surrounded a large courtyard that once included a wading pool, tennis courts, playground, baseball ďŹ eld and small pavilion. An experiment in building technology, the cityâ&#x20AC;&#x2122;s homes were an upgrade over the typical miner shanty. With rent costing only $8 per month, Concrete City was affordable but not practical. The homes were often damp and cold. In addition, there were no indoor bathrooms, although concrete outhouses were built behind the homes. In 1924, the township required a sewer system to be installed, costing nearly $200,000. Not wanting to spend the money, the coal company attempted to destroy the homes, however not even 100 sticks of dynamite brought down the structures. Concrete City was quickly abandoned. Over the years, the site was used for law enforcement, military and ďŹ reďŹ ghting training. It was declared a historical site in 1988.
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Serving Pennsylvania Builders Association members from 7 locations. Dial (800) 883-8800 to ďŹ nd the locations that best serve your needs.
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Do you know of a place in Pennsylvania with an interesting role in Pennsylvaniaâ&#x20AC;&#x2122;s history? Send your ideas to Eric Wise at PBA, 600 N. 12th St., Lemoyne, PA 17043 or ewise@pabuilders.org. â&#x2013;˛
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