Contracting in a crisis: 16 voices of Northern California builders about coronavirus impact on the industry’s future

NORTH BAY BUSINESS JOURNAL

July 17, 2020

North Bay general contractors face new job safety guidelines to control the spread of the coronavirus.

The Business Journal asked top executives of the largest local companies about what’s changed in their project pipelines since the beginning of this year because of the pandemic. Here’s why they still see bright spots for the future of the industry.

Robert Cantu

President

Western Builders

1400 N. Dutton Ave., #19, Santa Rosa 95401

707 542-3213

westernbuilders.info

How much revenue growth are you anticipating this year? What is contributing to that?

$10 milllion. Backlog of project commencing.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

Escalating building codes. Rising costs of materials and labor.

What is the outlook for your construction specialty in the region?

It expected to remain stable for select markets. Hospitality will not trend well.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

It is still early to tell but hospitality and tourism associated work will trend down over the next five years.

Beyond the COVID-19 safety protocols common to all industries, how much has the pandemic affected your operations?

It has forced some beneficial efficiencies in permitting and inspections for some jurisdictions. A welcomed change. Job site protocols have dampened some efficiencies and has raised costs to comply.

What are your biggest jobs right now? What's interesting about them? Redwood Credit Union

Mark Davis

President

Wright Contracting

3020 Dutton Ave., Santa Rosa 95407

707-528-1172

www.wrightcontracting.com

How much revenue growth are you anticipating this year? What is contributing to that?

We are not expecting growth this year.

Our goal is to maintain our current revenue and overall staffing, and not pursue work just to show growth. We have a strong backlog of work for which we will provide service to the standard our clients have come to expect.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

1.The requirement/desire for people to work from home, or not conduct in-person contact.

In my career, construction has always been a face-to-face, hands-on type of industry that requires all parties to meet, collaborate and resolve issues as they arise. The inability or unwillingness to collaborate other than through the virtual platform, I feel has added another impediment to an already rapidly changing method of doing business.

2. Quickly absorbing and adapting to the rapidly changing information coming at us about COVID-19 and implementing protocol and safety measures has certainly been the greatest challenge in recent months.

We are committed to the safety of our employees and everyone else who enters our job sites, so ensuring that training, equipment, documentation and cleaning supplies are in place on every site has been critical.

3.The uncertainty generated by the pandemic and its effect on the economy has created a certain level of hesitation by some of the owners we are working with on hospitality-related projects.

Owners are taking a very cautious approach to furthering design and starting some projects until there is a clearer picture of the pandemic and its effect on the economy.

What is the outlook for your construction specialty in the region?

Fortunately, we do not have a singular specialty or target market for the types of construction projects we perform.

We try to stay diverse so that when the economy changes and/or we are challenged with things like the current pandemic, there will be certain types of projects that will continue, and we hope to be in position to offer experience in that particular type of construction.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

Fortunately, much of our backlog was previously funded and permitted work, so our forecast for the balance of this year has not been drastically affected.

We are however detecting some hesitation from owners, especially in the hospitality industry, about the viability of their project in the immediate future.

Beyond the COVID-19 safety protocols common to all industries, how much has the pandemic affected your pipeline of projects, job scheduling, pricing, permit and inspection time frames, financing, etc.?

The pandemic has certainly presented challenges in most every aspect of construction. Fortunately for Wright, our pipeline of projects has not been affected as some of the other aspects described.

We have had to adjust to virtual inspections on some projects, or inspections without interactions with the inspector, which inhibits immediate answers or ability to address concerns.

Scheduling of subcontractors or our own workforce has to be closely coordinated and monitored to ensure compliance with the CDC guidelines. Sometimes this means extended durations, which then have to be discussed and addressed with the project’s owner(s).

What are your three biggest jobs right now? What's interesting about them?

Montage Luxury Resort, Healdsburg: This complex project located in the hills north of Healdsburg consists of 41 separate guest cottage buildings; a main hotel building including restaurant, bar, conference spaces, meeting rooms, and offices; a spa building; swimming pools, pool bar and numerous outdoor events spaces.

What makes this project interesting is that the location and terrain dictated the numerous types of construction used throughout the project. Due to the site being located in the Wildland Urban Interface Zone, all construction types and materials had to meet the fire resistant requirements.

Further the project is being developed in hilly terrain dictating numerous different types of structural designs for the various structures.

Joseph Phelps Vineyards: The Joseph Phelps Vineyards project, in an effort to improve quality by enlarging and reconfiguring production space, includes the construction of a new refrigerated barrel storage room with attached offices, shop and truck dock, and a new 10,300 SF covered crush canopy and mechanical building.

The project also includes a substantial amount of site work and utility relocation, and is “solar-ready.”

Some interesting aspects of the project are that it began with the excavation of a roadway leading to the site and the subsequent construction of a 700-foot long soil nail wall to retain the hillside. The excavated material was processed on site to create the building site itself.

In total, 22,000 yards of material was moved. Additionally, the winery’s entire process waste treatment systems were relocated on site without closing down production.

Novato High School Performing Arts Center and STEM Building: This project involves constructing a new 450-seat, 18,000 SF Center for the Arts, including gallery space, classroom/greenroom spaces and support spaces.

This balcony-style seating facility will support district-wide arts programs, as well as Novato High School’s Marin School for the Arts.

Also part of the project is a new 15,000 square foot Center for the Sciences to replace aging portable classrooms. The new building will house 10 lecture rooms/labs, a demonstration area, breakout spaces, staff support space, as well as outdoor learning areas. The building will be home to the school’s chemistry, biology, sciences, engineering, and physics departments – all ushering in 21st century learning environments.

There are a number of interesting aspects of this project.

For example, the new facilities are being blended into a campus that was primarily built in the 50s.

Also, prior to the COVID-19 shelter-in-place order, the project, which covers a large portion of the school property, was taking place on a very active campus.

Another challenge was that as the project began, portables had to be quickly relocated and reconnected to make ready for the start of the school.

Finally, the campus topology is such that the entire surrounding area drains toward the site of the Performing Arts Center site. In order to mitigate issues caused by this drainage pattern, Wright Contracting added extensive drainage systems to the site and has to carefully manage water during the project.

Thomas Dawson

CEO

Precision General Commercial Contractors, Inc.

300 Turney Street, second floor, Sausalito 94965

415-332-8390

www.precisiongc.com

How much revenue growth are you anticipating this year?

What is contributing to that?

Lower than expected due to COVID-19.

What are the three biggest challenges facing your business this year?

All COVID-19 related: Building inspections; consistent manpower; changing health regulations.

What are you doing to overcome them?

As we continue to adapt to the current environment, which changes by the week, if not the day, we expect efficiencies to improve from our end as well as across the industry.

We will continue to revisit plans as new information becomes available. The most important thing we can do is keep ourselves, vendors, subcontractors and every person in our sphere of work and play, safe.

What is the outlook for your construction specialty in the region?

Will build primarily multifamily. The outlook is good due to long term demand.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

20% reduction in production and increased staff costs due to COVID-19-related items.

Beyond the COVID-19 safety protocols common to all industries (distancing, wearing masks, and hand washing and sanitizing), how much has the pandemic affected your pipeline of projects?

The pipeline is still there from permitted projects. Our projects are getting done slower; about 20% are delayed. No effects yet on pricing. Permit and inspection time frames - Sonoma has done a great job in keeping the inspection moving along in a timely fashion.

What are your three biggest jobs right now? What's interesting about them?

Dutton Flats, new construction: Dutton Flats is an urban infill project with tight site constraints. This Santa Rosa project consists of a 5-story, mid-rise building with 41 units ready for occupancy in early 2021. The project is a wood-framed and concrete structure with cutting edge design and construction methods.

Old Elm Village, rehabilitation: Old Elm village is an 87-unit community of apartments and townhomes in Petaluma. The rehabilitation includes interior and exterior updates, ADA conversions, new roofing, upgrading the heating/cooling and electrical systems, and refreshing the landscaping/grounds.

Jerry Eddinger and Nancy Eddinger Madarus

Founder; project manager

Eddinger Enterprises, Inc.

62 West North Street, Healdsburg 95448

707-433-5113

www.eddingers.com

How much revenue growth are you anticipating this year?

Between 6% and 8%

What is contributing to that?

Low interest rates and natural growth in Sonoma County.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

COVID-19 Virus is our biggest challenge.

We’ve implemented and require best practices on all sites for cleaning and safety. Reliability on the supply chain and available work force is difficult as we’re all dealing with this pandemic. With this unprecedented experience, we are consistently adapting to keep people healthy and projects moving forward.

Success in the construction industry has always required adapting quickly, working efficiently and strong organization skills so we are as prepared as can be.

Slow planning and building response times are challenging even in the best of times.

As advocates for our clients, we are well versed in building and land use codes and work closely with qualified architects and engineers as well as various city and county departments to shepherd our projects from planning to completion. The government process can be very slow.

Finding qualified labor continues to be an issue.

We support local training through Career Technical Education Foundation of Sonoma County and North Bay Construction Corps and currently have an intern from the program. We’re happy to train those with a good work ethic. We’d like to see the schools put more energy into teaching students the benefits of a career in the building industry. Government and privately funded training programs would create more trade schools for carpenters, welders, plumbers, electricians, pipe fitters and so on. Sonoma County is ready to hire; we just need capable applicants.

What is the outlook for your construction specialty in the region?

Our expertise is in custom building, both commercial and residential. We’ve been building here in the county for over 50 years and are a three generation, family-owned firm. We work very hard building relationships and helping our clients get the final product they desire at a fair price.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

Current projects have experienced scheduling delays due to closures in the supply chain and the health orders not allowing us to work and we’ve had to postpone some new starts. We have a great team of employees and subcontractors who are willing to go the extra mile to get us back on schedule but it is a steep climb.

Beyond the COVID-19 safety protocols common to all industries (distancing, wearing masks, and hand washing and sanitizing), how much has the pandemic affected your pipeline of projects, job scheduling, pricing, permit and inspection time frames, financing, etc.?

With the closing of the city and county building departments it has taken longer to get permits and necessary inspections. Each agency is trying very hard to do all it can with dedicated staff working from home, performing “virtual” inspections with the help of technology, and trying to be flexible with scheduling but it has really slowed the process.

Most banks have been overwhelmed by the PPP loans and other government loans and like all of us have been caught off guard and just do not have the employee base or expertise to handle the surge in requests. The interest rate is at an all-time low for construction so that should be some help moving forward.

What are your three biggest jobs right now? What's interesting about them?

The Matheson: A new three story building on the Healdsburg Plaza with a restaurant, roof top bar and housing – all owned, operated and built by locals. Built within the constraints of the original Garrett Hardware building on the Healdsburg Plaza, this is a large job in our active downtown and we’re trying very hard not to disturb our local businesses during construction. This will be a downtown jewel when completed.

Healdsburg Lumber Company: This new headquarters allows HLC to continue their 100 year plus tradition and remain in Healdsburg. The site is in the city limits but, without some typical city utility infrastructure, the location is challenging and interesting.

Capital Lumber remodel and expansion: Adding and remodeling office and conference room spaces for this growing Healdsburg business.

Two custom homes (another of our specialties): Both utilizing well planned construction methods and materials with the least amount of impact on the land around them.

The West Dry Creek residence overlooking the entire valley: The Alexander Valley residence has an amazing view and is one of many constructions projects we’ve done with this local couple.

Kevin Ghilotti

President and co-founder

Team Ghilotti, Inc.

2531 Petaluma Blvd. S., Petaluma 94952

707-763-8700

www.teamghilotti.com

How much revenue growth are you anticipating this year? What is contributing to that?

We anticipate revenues of $32 million. We work primarily on public works projects. Some of the public works projects that we are working on have received funding from the additional gas tax that was authorized.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

The three biggest challenges facing our businesses are the labor shortages of skilled and qualified journeyman, evolving safety/human resources/legalities of COVID-19, and California Air Resources Board compliance.

We have incentives in place for existing staff members to refer skilled workers to help with the labor shortage.

COVID-19 is rapidly evolving and our management members are constantly researching and implementing new methods to ensure the safety of our employees and the public from continued exposures by implementing social distancing and sanitary practices.

We are updating our fleet and selling older items to maintain CARB compliance through the open communication and valued partnerships with our trusted dealerships and vendors.

What is the outlook for your construction specialty in the region?

With COVID-19, we are seeing public agencies and others be more conservative with their funding. Projects that would have been put out to bid for the public works arena have been put on hold due to concerns for funding.

We are still optimistic about the amount of available work for construction with new projects being advertised for paving.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

COVID-19 made a slight impact during the shelter-in-place orders but, we are seeing that our second quarter is making its projections.

We have concerns for next year’s forecast as we believe the construction industry will notice the effects of COVID-19 more in future periods as public agencies and funding sources are limited.

In the beginning, COVID delayed our projects from making the agenda for agencies to issue the notice of award.

We have also noticed that the dollar is going down due to COVID, whether people are buying jobs in fear of lack of work or fears of a down turn, bidding has been very competitive. It is a strange time for jobs as we are mainly a public works contractor, we are hearing from agencies that they have work that’s ready to come out but haven’t seen them been advertised yet.

What are your three biggest jobs right now? What's interesting about them?

Our biggest projects this year include the Kincade Fire Cleanup for Caltrans; The Coffey Neighborhood Park for the City of Santa Rosa; and the 2020 Pavement Preservation Program for the County of Sonoma. Each project we complete presents an opportunity to grow in our skills and perfect our craft.

We pride ourselves in working with our community so, restoring fire damaged roads, building parks, and paving new roadways are necessary for the basic needs and enrichment of our local area.

Michael Ghilotti

President

Ghilotti Bros., Inc.

525 Jacoby St., San Rafael, CA 94901

415-454-7011

www.ghilottibros.com

How much revenue growth are you anticipating this year? What is contributing to that?

Originally, we forecasted a 7% growth in revenue for 2020, however, due to COVID, we are revising our forecast to reflect a 15% decline in revenues. While significant business opportunities are still presenting themselves, production is slowed by delayed processing of the contracts through to start of the projects.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

GBI’s biggest challenge this year is overcoming the reduced revenue while absorbing all of the overhead costs as a result of our commitment to our employees that no one would get laid off. The second biggest challenge is the impact to the GBI Culture. We miss our quarterly Town Hall meetings, team building outings, and just seeing each other and enjoying our co-workers. The remaining challenge would be keeping everyone safe. We are working extremely hard to maintain social distancing and all the other COVID safety protocols.

What is the outlook for your construction specialty in the region?

GBI’s outlook for our specialty of quality sitework for office, warehouse and multifamily construction is very promising. We have seen a 250% increase in bidding opportunities for the forgoing growth of the North Bay.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

The impact has not been significate relative to those issues, again the only thing we have seen an impact to is the process of low bid to actual process of work as a result of the agencies challenges and getting the contract executed and approved.

What are your three biggest jobs right now? What's interesting about them?

Sir Francis Drake Blvd Rehab in Marin - 18.5 Million

Sonoma Country Overlay Project - 9 Million

Adobe Road Winery in Petaluma - 3 Million

Richard Ghilotti

President and Owner

Ghilotti Construction Company

246 Ghilotti Ave., Santa Rosa 95407

707-585-1221

www.ghilotti.com

How much revenue growth are you anticipating this year? What is contributing to that?

We have a decent workload which is mostly backlogged. There is uncertainty in the economy due to COVID but hopefully about the same amount of growth.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

Abiding by the ever-changing regulations associated with COVID-19 in respect to the counties we work in. We are using technology to remotely communicate and to stay in compliance with rules and regulations set forth to keep our employees safe!

What is the outlook for your construction specialty in the region?

The outlook is positive. There are significant numbers of public improvement projects being bid now and in the near future by state and local agencies – many funded in part by SB1 dollars.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

Our work has shifted to lean more towards public works as opposed to a balance between public and private.

While the way we work has been substantively impacted, the work itself remains generally unchanged. The most notable change would be supply-chain interruptions or delays.

What are your three biggest jobs right now? What's interesting about them?

Yerba Buena Island; Point Reyes National Park / Sir Francis Drake Rehab; and Caltrans Hwy 101 Petaluma.

They are all distinctly different, but they all allow us to do what we love to do – build improvements to infrastructure that increases the quality of life for those communities that we serve.

Seth Maze, Josh Grigg and Dan Hannan

GMH Builders

901 Broadway, Sonoma

707-757-5050

www.gmhbuild.com

Seth Maze is co-founder and CEO; Josh Grigg, co-founder; and Dan Hannan, co-founder and chief operating officer.

Tell us how much your business is expected to grow this year (percentage growth in revenue over last year).

GMH Builders is on track for a 50% growth rate. This growth is attributed to the cultivation of reoccurring clientele over the last 12 months that are now reaching the construction stage.

What are the three biggest challenges you face this year, and how have you addressed each?

1. Responsibly controlling growth.

During busy times, there is the initial knee-jerk reaction to take every job you can. We see so many contractors do this, and then under perform with mismanagement.

During the coronavirus pandemic, the pent-up demand is causing the same as activity ramps back up. We’ve grown quickly and thoughtfully by targeting clients with whom we can form lasting partnerships and keep in constant communication with all of our resources. When we decide what projects to pursue, we look at the staff we have available and determine if the project would be a good fit for our company and our people.

We aren’t taking on jobs and then scrambling to hire an unknown player to run it for us.

2. Managing subcontractor costs and availability.

We hear it so often that subcontractors are so busy and that they don’t have time to adequately review projects and/or responsibly price it. They throw out an inflated number on the project and if they get it, they will “figure it out.”

To maximize value to the clients, we identify a select list of subcontractors for whom the project is “right in their wheelhouse.“ We thoroughly scope the project for them, provide a schedule and, most importantly, we provide bid results to them once the job is awarded. A couple inflated numbers can kill a project. We strive to get the best value for the client.

What is the outlook for your construction specialty in the region?

GMH Builder’s has a diversified project portfolio. Therefore, we do not specialize in a single industry, rather multiple industries. This approach allows us to minimize business risk.

When one industry performs poorly over a certain period, other industries may perform better over that same period, thus reducing potential losses. The most significant impacts of the COVID-19 pandemic occurred in the health care and hospitality industries. We anticipate hospitality to largely remain reserved in capital investment and health care will return as revenues return later on in 2020.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

Fortunately, new project backlog did not stop during this crisis; it simply slowed down activity.

Now that businesses are safely getting back to work, we are operating at near full capacity. As mentioned above, the most significant impacts of the COVID-19 pandemic occurred on our health care and hospitality projects. We anticipate hospitality to largely remain reserved in capital investment and health care will return as revenues return later on in 2020.

Beyond the COVID-19, safety protocols common to all industries (distancing, wearing masks, and hand washing and sanitizing), how much has the pandemic affected your pipeline of projects, job scheduling, pricing, permit and inspection time frames, financing, etc.?

Outside of taking additional safety measures, COVID-19 has not greatly affected our project pipeline.

Project scheduling was affected and completion dates on non-essential work was pushed out. In addition to the lull in our health care and hospitality project pipeline mentioned above, other projects have pushed several starts by at least four months. We feel it will be a wash in cost escalation, i.e. added cost of pandemic protocols will wash out with labor forces being reduced to its remaining higher productivity workforce. Permitting has slowed, however, with few exceptions, the building inspections have not been held up.

What are your three biggest jobs right now? What’s interesting about them?

Russian River Health and Wellness Center, Guerneville – $11 million: Located in Guerneville, the Russian River Health and Wellness Center is located just 20 minutes away from Santa Rosa. Interestingly, the project is perceived to be “remote.”

Confidential Health Care Client, Facility Upgrades $10 milllion

Our confidential health care client projects are interesting because they are small in size but involve working in and around an existing and operational facilities. We thrive on the heightened attention to scheduling and sequencing to mitigate the impacts to staff and patients.

Novato Unified School District, GMO Building $3 million: Our educational projects, which includes Novato Unified School District’s GMO Building, allow us to be a part of our area’s school modernization projects. We enjoy contributing to the education our students by ensuring well-built learning environments.

Roger Nelson

President

Midstate Construction

1180 Holm Road, Petaluma 94954

707-762-3200

www.midstateconstruction.com

How much revenue growth are you anticipating this year? What is contributing to that?

Gross revenue will continue to grow due to the demands of construction in the North Bay, we expect a 5% growth relating to revenue as well as addition of manpower.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

Finding qualified and available subcontractors with sufficient labor forces is our biggest issue. For the same reason, project pricing has increased to a level which is unaffordable for many developers.

This issue is compounded with the added uncertainty of the pandemic. We mitigate these issues by working with our subcontractors to aid in their growth, reaching out to a broader range of subcontractors, and following the health and safety protocols listed for job sites.

What is the outlook for your construction specialty in the region?

Our outlook is positive with the affordable housing projects, school district projects and public works projects which have received bond funding or tax credit approvals and are targeted to commence construction in the near future.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

We have contracts that have been delayed in execution and loan closings due to the corona virus and the uncertainty of the forecast local economy.

We had projects that were initially delayed, but they have resumed and we are now working full swing while incorporating all safety protocols to continue to keep the sites safe and healthy.

Initially we saw developers and owners hesitant to begin new projects among the uncertainty of the economic state.

We currently have four projects permitted, ready for contract execution and loan close but are on hold until there is more certainty in the economy. We continue to work together with all industries to maintain an efficient and reasonable process for the construction of projects. Additional safety and health protocols are being followed to ensure our projects move forward the safest way possible.

What are your three biggest jobs right now? What's interesting about them?

Sonoma Clean Power- Renovation of office building- $9 million- Santa Rosa

The Altamira- New construction of affordable housing community - $19 million- Sonoma

Lantana Place Homes- New construction of affordable housing- $16 million- Santa Rosa

Jesse Malone

Vice president of operations

Jim Murphy & Associates

464 Kenwood Court, Santa Rosa

707-576-7337

ww.j-m-a.com

How much revenue growth are you anticipating this year? What is contributing to that?

We are looking at around 5%-10% increase in revenue. Similar to last year. We certainly feel fortunate to have avoided to much affect from the COVID-19 Pandemic, however, that really isn’t that much growth considering the market.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

Keeping folks safe and healthy: Our #1 goal is maintaining the health and safety of our clients, our subcontractors and our staff. Maintaining this goal comes with some real challenges. Are best tool in reaching this goal is educating our team and maintaining a culture that prioritizes safety.

Access to skilled labor: We are essentially training from within the company. The job market seems to be lightening up a bit lately, however, we have had great success over the last three years in finding folks who understand our culture and investing in their training.

Communication: 70% of communication is nonverbal. We are getting pretty versed on video conferencing, but there is no substitute for in person meetings.

What is the outlook for your construction specialty in the region?

Generally our overall annual revenue is divided equally between large custom residential and commercial.

We have a solid backlog of custom homes, however, we are seeing fewer commercial projects particularly for tasting rooms and office space. Hospitality seems to be a strong market.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

In terms of our backlog, very little. In terms of construction in general, I think the industry is going to remain cautious regarding developments that are directly affected by COVID, like tasting rooms, restaurants, etc. At this point the market seems surprisingly optimistic.

Commodities like steel and sheet rock have not increased as dramatically as we anticipated. Labor on the other hand has increased substantially. Scheduling is cumbersome, but manageable. Inspections have been fairly seamless and permitting seems to be pretty streamlined with the new digital application process.

What are your three biggest jobs right now? What's interesting about them?

Solage Resort expansion: This project is particularly interesting to me and to JMA. We originally build the resort in 2006 and we are currently building a 12 building expansion including additional cottages, meeting facilities and a new Pool Bar & Grill.

Verite Winery: Not only is it a beautiful building on a beautiful site, we have made it through the wettest winter on record, a pandemic and a wildfire that took out part of the property. We have a very resilient client.

Large Napa residence: This is a 16k square foot home that was lost in the Tubbs Fire. It was completed less than a year before it burned and had been recently featured in Architectural Digest. The rebuild is nearly complete. The clients will be back home by Thanksgiving.

Craig Nordby and Tony Simmons

Nordby Construction Company

1229 N. Dutton Ave, Suite C, Santa Rosa 95401

707-526-4500

www.nordby.net

Craig Nordby is co-founder and CEO, and Tony Simmons is president.

How much revenue growth are you anticipating this year? What is contributing to that?

We are currently tracking a 28% growth from 2019. Most of this growth was contributed to backlog we secured during 2019 and new work we secured this year, prior to the pandemic.

What are the three biggest challenges facing your business this year? What are you doing to overcome them?

The COVID 19 pandemic is our biggest challenge, although we have strategically managed to minimize the impact to our company. We see the lack of availability within our subcontractor community has become more challenging during the pandemic.

Our strategy to overcome this has led us to expand our subcontractor reach into other regions of the Bay Area. The pandemic continues to stress the financial models of some of our projects during this time, and some clients have chosen to re-evaluate the pro forma of those projects before moving forward.

What is the outlook for your construction specialty in the region?

We continue to grow with our market segments that we currently hold in our region. With over forty years of history and experience we continue to hone our efforts within in these market sectors and build on our accomplishments, creating an even stronger and diverse presence in our region.

Nordby has had a strong relationship with the hospitality, industrial and commercial office communities and continues to support their needs on numerous projects, both large and small. Along with our Signature Homes Division, Wine Cave Division, Metal Building and Custom Projects teams, we continue to provide support to all of our clients during this trying time.

How much has the coronavirus pandemic changed the forecast from the beginning of the year?

We have seen approximately a 16% decline in projected revenue this year due to the pandemic, most of which has been pushed to 2021.

We have seen some projects in our pipeline be pushed to 2021. We were able to maximize staffing on some of our essential projects during the shutdown due to subcontractors having access to additional manpower during that time. We continue to work to mitigate scheduling & coordination issues as a result of State of California mandated social distancing protocols on some of our projects. We are starting to see some financial impacts related to our projects, but those have been minor thus far.

What are your three biggest jobs right now? What's interesting about them?

Building J at Billa Landing: This project is a 70,000 square foot industrial warehouse nearby the Sonoma County Airport. Unlike a traditional concrete tilt-up, this project is a pre-engineered Butler metal building that provides the developer flexibility for a myriad of various tenants due to its higher insulation values, installation durations, larger bay sizes and high-bay roof clearances.

Inglenook Winery cave: This is a 22,000 square foot drilled cave that will be Inglenook Wineries new custom lot production facility. It boasts 42-foot wide by 24-foot high cave profiles large enough to drive semi-trucks through and will ultimately houses over 120 wine tanks, as well as a wine pressing equipment room, restrooms and a barrel fermentation room.

Park-A-Pup: This is a state-of-the-art, two-story 12,123 square foot “puppy palace” located in Novato. This dog hotel offers luxurious rooms and an indoor spaces that feels like and outdoor park with artificial turf and skylights to allow guests to get their daily exercise. It also includes grooming services and a full retail space for all animal needs.

Paul Thompson

President

Thompson Builders Corp.

5400 Hanna Ranch Road, Novato 94945

415-456-8972

www.tbcorp.com

How much revenue growth are you anticipating this year?

We aren’t anticipating any growth in revenue this year due to the impact of COVID-19.

What are the three biggest challenges facing your business this year?

Unsurprisingly, the new constraints associated with COVID-19 present an unprecedented challenge to operations as does the uncertainty it has presented into the market. In addition, we expect that the loss of tax revenues will impact the number and scope of future jobs in the public sector.

What is the outlook for your construction specialty in the region?

Uncertain

A lot of municipalities are unsure of the budget impacts, and thus a lot of work is not moving forward.

What are your three biggest jobs right now?

360 Fifth St., San Francisco, multifamily mid-rise, $65 million

Humboldt State University, seismic retrofit of the theater arts and library, $23 million

950 Tennessee, San Francisco, 125-unit condominium, mixed use building, $52 million