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North Bay Business Journal

Monday, October 10, 2011, 7:00 am

One steel-frame factory shuts; others expand

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    Codding Steel factory floor

    The 50,000-square-foot plant at Sonoma Mountain Village, seen here during full production in December, employed more than 20 before it closed in late June.

    ROHNERT PARK — Codding Enterprises LP shut down a 5-year-old Rohnert Park factory for making light-gauge steel framing panels for rapid construction, but panelized construction ventures in Napa and Vallejo are expanding.

    In late June, the Genesis Steel Frame Solutions plant at Codding’s Sonoma Mountain Village redevelopment on Valley House Road closed to make way for part of Innovative Molding’s 120,000-square-foot expansion relocation from Sebastopol, according to Brad Baker, president and chief executive officer of property owner Codding Enterprises LP, which also is a major investor in the plant’s licensor, Genesis Worldwide, based in the Toronto area. The plant’s closure was announced in an Aug. 26 Canadian regulatory filing.

    “We did some big projects, but we needed a lot of projects to make the business profitable,” Mr. Baker said of the 50,000-square-foot plant.  

    Meanwhile, Napa-based startup Healthy Buildings Technology Group is scouting locations in Sonoma, Napa and Solano counties for a main panel production plant. Massachusetts-based Blu Homes plans to start fabricating its fold-out panelized homes this fall in 250,000 square feet on Mare Island in Vallejo.

    The Rohnert Park plant supplied panels for a major facelift at Sonoma Mountain Village, the Whole Foods Market store in Coddingtown regional shopping mall in Santa Rosa, several Crate & Barrel stores nationwide as well as a number of large commercial and multifamily projects in the North Bay and Northern California. As recently as December, the Rohnert Park manufacturer told the Business Journal that a second shift could be needed to handle demand.

    Problem was, there was too much time between big jobs to keep the plant crew, numbering more than 20 at peak production, profitably busy, Mr. Baker said. When approached to lease space for 100 of Innovative Molding’s production, design and administrative employees, he opted to divest of the plant venture and shift resources to more profitable Codding investments. Those include the nearly completed renovation of Coddingtown, which is jointly owned with Simon Property Group and being overseen by Codding Construction; continued redevelopment of Sonoma Mountain Village, including planned hospitality, retail space and nearly 2,000 homes; and rapidly growing Encinitas-based Community Fuels.

    “It was a victim of the softness of the construction industry,” Mr. Baker said of the steel-frame venture. “It was deeper than we anticipated.”

    Codding launched Codding Steel Frame Solutions in early 2007 with a $5 million investment in licensing equipment, software and processes from Genesis Worldwide. Codding and Mr. Baker became increasingly involved in the finances of the Canadian company as its finances suffered. Codding now is a majority owner of Genesis stock, partly by purchasing debt incurred during Genesis’ divestiture of other panel-building operations.

    Mr. Baker is one of the three directors of the board, owning nearly 24 percent of the stock. He owned a third of the stock when he served as chairman of the then-four-member board for a year starting in mid-2009.

    Genesis Worldwide has been restructuring itself just a developer of specialized CAD software tools — FrameBuilder for panel factories and QuoteBuilder for panelized construction bidding, according to CEO Richard Pope, a Sonoma County resident. A new version is set for release by year-end.

    The equipment formerly in the Rohnert Park plant is being marketed for sale, with potential buyers from the U.S. and abroad. The company is looking for 5,000 square feet in the county to relocate its branch office.

    “There is a lot of demand internationally,” Mr. Pope said. Genesis Worldwide has licensed a plant in Hanoi and has ones pending in Saudi Arabia, United Arab Emirates and Brazil.

    In Napa, Bob Massaro had been using steel panels in construction for more than a dozen years, including purchasing some of the first Codding Steel panels, before starting Healthy Buildings Technology Group in 2010. Currently, the venture has a small plant in south Napa building panels for two demonstration OHome units set to be complete in the city by year-end and a new 15,000-square-foot plant in the Los Angeles area.

    “The closure of Codding Steel is an indicator that one should try to stay lean,” Mr. Massaro said.

    He’s looking for a 50,000-square-foot main factory in the North Bay. His approach is to buy cold-formed light steel, rather than use floor space for factory-forming as Genesis Steel was doing, and nearly completely finish the panels in the factory.

    The panels also are set to go into $1 million-plus homes in the 12-unit Vineyard Oaks upvalley development nearly ready for construction permits. He’s also getting calls from developers in Brazil, Ecuador and Mexico.

    “If you get out of the U.S., there are interesting opportunities out there,” he said.

    Massachusetts-based Blu Homes started making its seven models of fold-out panelized steel-frame homes in 2008 and in November plans to open a huge plant at Lennar Mare Island’s redevelopment of the Mare Island naval base. 

    The plant would 70 homes next year and up to 500 a year at full production in four to six years, depending on sales, according to a spokeswoman. Initially, 90 to 100 would be employed, growing to 500 eventually.

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