Jamie Jamison, owner of Brandywine Nurseries in Wilmington, DE, recalls a saying in his region: “When the market starts going over the cliff, we pray for either a very short cliff or a very long chain, because I can hear that chain clanging out and I look at the other end and it’s wrapped around my ankle.”
It’s been either “sink or swim” in the wake of the downturn in residential housing construction for erosion control companies that once relied on that market. For those like Jamison, the downturn has been an indicator that it’s time to redirect the company’s equipment and efforts into other market segments. There is work to be had in erosion control, but not so much in the single-family home sector, says Jamison, whose company provides erosion control as part of an overall suite of landscape services.
“What we do now is modification enhancements around houses,” he says. “We still hydroseed around them or sod. Now you see townhouse developments being converted to apartments.”
Jamison’s company has met each challenge it has encountered since it first started in 1946. Beginning as a garden center, the company grew into landscape design and then into construction, which mushroomed in the 1970s.
“We bought our first hydroseeding machine, a Finn Bantam 800, in 1976 and still have it,” Jamison says. That purchase was in response to outside construction firms coming into the region to build and requesting hydroseeding services that were being performed elsewhere in the United States. “When the housing boom started in the late 1970s, they were building like crazy everywhere. Hydroseeding was the way to go,” says Jamison. “With that little 800-gallon machine, we could knock out a couple of houses a day easily.”
The market has now shifted from single-family houses to multifamily housing, some of it marketed as adult communities in response to an aging US population.
Providing services for roadwork projects also continues to be a revenue stream for the company. While most of the roadwork involves repair and maintenance, Jamison’s company is currently working on a large interchange project as well.
Most contractors such as Jamison are noting that the primary “hot spot” for erosion control these days is in environmental work, especially remediation. Superfund sites have been a significant source of erosion control and seeding work for Jamison’s company, as has wetland restoration.
“We’ve been doing more environmental work-repair work on secured landfills and wetland work,” he says. That type of work has picked up in the area with the Chesapeake Bay Initiaitive, he notes.
“We do the hydraulic seeding in wetland restoration; sometimes it’s just a lot easier to pull hose out because you can’t get equipment on these areas,” Jamison says. “The higher-end machines will pump a real good distance.
“We worked with guys in Maryland starting up our sediment and erosion control program here,” he adds. “Hydroseeding has always been a big part of that. We have also moved into erosion control matting.”
In the wake of the BP Gulf oil spill, there has been a lot of work with large companies where environmental concerns exist, such as providing erosion control for wetlands. As hydroseeding work for new construction has dropped off, he says, “The guys who did our hydroseeding are now doing our environmental work. Stream stabilization is fun. Where else can a grown man get paid to play in the mud?”
Brandywine Nurseries is working on a number of flood control projects as well. “Now stormwater management is starting to pick up steam. It’s where sediment and erosion control was in the 1980s,” says Jamison. “There’s more technology-you see the wattles, the socks, the silt bags. Before, you stuck some straw bales on a storm drain.
“We’ve gone from dry ponds to detention ponds to the full wet ponds now that carry water all of the time.”
At one time, only three companies in Delaware had hydroseeding machines, he says, “but then everybody got on the bandwagon in building machines, and everybody got a hydroseeding machine. The problem with hydroseeding is it looks good. The higher you lift that nozzle in the air, the prettier it looks and the worse it works. But when it’s done properly, it will stand up to a lot of abuse.
“Hydroseeding around here works well during certain times of the year, like in the spring before the heat starts to come in again, and in late summer and early fall when the temperatures start to drop and dew points come up at night. But in the dead of summer, you’ve got to put down straw if you’re going to get anything to come up.”
Jamison says the companies that are keeping busy in erosion control are the ones that work with large contractors. Although his crews will travel for contractors with whom the company does business, “we have contractors we don’t bid to because we know they shop our price,” Jamison says. “In today’s economy, some companies are doing it for next to nothing. We’ve been doing job costing since the 1980s, and we know what it costs for our equipment to sit in New York. It costs me less to have it sit there than to go out and barely cover my material and labor costs.”
Companies like Western States Reclamation
have diversified into soil surveys,
vegetation surveys, and noxious
weed surveys for the mining industry.
The labor costs are the company’s most significant expenses, he adds. In the tri-state area of New Jersey, Pennsylvania, and Delaware, laborers make from $38 to $50 an hour, Jamison says.
At the same time, finding work for the company is tougher. “It’s more competitive now than it has been in the last years because there was so much work out there all of the time,” Jamison says. “I don’t like financing construction projects. There are contractors we just won’t work for because it takes too long to get the money. We’ve also seen general building contractors just close their doors.”
One of the challenges the company faces in Delaware relates to changes in rules regarding seeding. “They’re trying to put the onus on us doing the seeding, but they don’t give us any control of the site,” he says. “That’s like saying, “˜You can keep the peace, but we’re not going to give you a gun to do it.’ Once it’s turned over to seeding, it’s all on you.
“Once the contractors get done running over everything with bulldozers for six months, how am I supposed to grow grass on that?” he adds. “Now it’s gone from 45 cents a square yard to $4 a square yard, and they scream bloody murder. If I put a guy on a tractor with a ripper, that’s $45 an hour.”
Brandywine Nurseries has gotten leaner over the years. At one point, the company had 60 employees; now it has 30. “We’re doing more with fewer people, but my guys don’t mind, because at least they have work,” Jamison says. He says the company has become more vertically integrated, with employees moving from one division to another to follow the work trail. “But it has everyone working,” he adds.
Finding New Revenue Streams in Minnesota
At one time, Vicky Dosdall’s turf establishment and erosion control company, Lawn and Driveway Service, in Morris, MN, was busy doing residential erosion control work.
“We used to sod a lot of lawns, but as that went by the wayside, we began doing more roadwork-any place that’s been disturbed and needs to have grass planted in it,” she says.
That includes doing seeding in conjunction with grading, reconstruction, boulevard restoration, and installation of water and sewer pipe in roads. The company also provides seeding at airports and landfills and has been involved with a road-resurfacing project funded by the American Recovery and Reinvestment Act (ARRA).
Lawn and Driveway Service also performs drill seeding. Some 75% is straw mulched, 20% is covered with erosion control blankets, and 5% is hydromulched, she estimates.
Dosdall has an additional revenue stream as a distributor for Western Excelsior Products and ERTEC Environmental Products, including silt fence, floatation curtains, and other products. She also generates revenue by renting small equipment to the residential market: “If they’re semi-retired or retired, they want to do it themselves,” she says, adding that many people in western Minnesota take satisfaction in doing projects themselves. “They know they’re going to save money,” she adds.
The advantage the property owners have going through Dosdall rather than a retail operation is that she spends time explaining what needs to be done to ensure the success of their projects. “The soil prep is a major part of it; you have to get that ground loose enough to get the soil contact for the seed,” she explains. “They have to know how to take care of it afterward as far as the watering and not mowing it too short. People get weeds and want to know if they can spray, but you can’t spray when you’ve got a new lawn. You have to be patient. The weeds are going to be there because they were in the soil and they’re usually annual, so if you plant in August and you’ve got weeds in October, those weeds are going to freeze out during winter. People don’t understand that, so you have to hold their hand through this process.”
She rents out a small tractor and a 5-foot Brillion seeder as long as the property owner buys the grass seed and erosion control blankets from her. “If they’ve put in a new garage, driveway, or something else, they need some blankets,” Dosdall says. “The erosion blankets are not only for erosion control but also to help promote the growth and hold moisture in the ground. A lot of homeowners will come out and get one or a few more rolls of blanket. I sell to a lot to residential people.”
She also sells products to others who do residential lawn work. “There are a few young guys in the area who farm, but on the side, they’ll seed lawns,” she says. “Another guy works for a small town as their maintenance man, but on weekends and evenings he’ll seed people’s lawns. I sell a lot of blankets and seeds to these people. They can call me that day and come get the blankets, and they don’t have to keep inventory. It works all the way around. I’ve got customers who pay on time.”
Most of this type of business comes through word of mouth, Dosdall says. She is selective about whom she rents the equipment to, because she doesn’t trust everyone to care for it properly. “I’m usually here when they come and get it,” she says. “I’ve got to make sure it’s secured onto their trailer. My biggest concern is they’re not going to lose it going down the road.”
Dosdall says one of the most difficult aspects of doing residential work is that the property owner wants the job done right away. “All of my other jobs have contracts. If they call me to say I’ve got to get out there to put silt fence in or it’s time to do seeding or I have to do mulching for temporary erosion, that’s where I have to be because I have a contract. It’s hard to drop everything to do a residential lawn,” she says.
She hasn’t added any employees recently to her staff of three full-time workers and seasonal part-time workers, but she says that’s no so much because of the economy as the climate. “We had a very wet spring and summer; it did not look good at all,” she says. “When it stopped raining about the end of July, it never rained. That went nonstop into December. We didn’t miss a day of work, and that’s unusual for fall. So the fall turned out well for us.”
Educating the Customer-and Himself
Frank Brown started CFB Contracting in 2006 to serve the Research Triangle Park area of North Carolina with environmental contracting, erosion control, and best management practice (BMP) inspections. Before that, he’d been doing home repairs and remodeling and a bit of erosion control work. As he watched the housing market collapse, he concentrated his efforts on erosion control, “and it’s been an evolutionary process ever since,” he says.
Brown says he finds that by educating people about the need for erosion control, they make better choices and it helps his business. He starts by teaching fifth graders in local schools about erosion control. He also works with the Neuse Riverkeeper Foundation. The Neuse River has been subject to a number of environmental and public health problems because of municipal and agricultural wastewater discharge and stormwater runoff, as well as fish kills believed to result from increased nutrient levels from the dinoflagellate Pfiesteria piscicida.
“It has a lot of sediment,” Brown says of the river. “As it gets closer to the ocean, there are a lot of pig farms, and the dikes don’t always hold; if they have heavy rains, runoff sometimes ends up flowing into the river, so it causes lots of problems.”
Brown has found that in the years he’s been in business, he’s not done so much erosion control as he has worked on stormwater runoff issues.
One income stream for Brown has been buffer protections and bank restorations for streams that run through homeowners association properties. He’s also doing a fair amount of work in storm drainage because of the way in which some contractors prepare soils.
Brown also is working with local soil and water conservation districts. He’s on a contractor list for the North Carolina Department of Environment and Natural Resources’ Division of Soil and Water
Conservation Community Conservation Assistance Program (CCAP). The program-a response to the increasing urbanization of the state’s land-is designed to improve water quality through the installation of various BMPs on urban, suburban, and rural lands not directly involved in agricultural production. CCAP offers educational, technical, and financial assistance to landowners through local soil and water conservation districts. The landowners submit applications to their local districts and, if eligible, can receive a prepared plan to install a BMP and be reimbursed up to 75% of the pre-established average cost of that BMP. The selected contractor executes the plan.
Approved BMPs include impervious surface conversion, bioretention areas, backyard wetlands, stream restoration, permeable pavement, backyard rain gardens, diversions, cisterns, grassed swales, stormwater wetlands, riparian buffers, pet waste receptacles, critical area planting, abandoned well closure, and streambank and shoreline protection.
“Over the past year, that’s what I’ve been doing more than anything else,” notes Brown. “The environmental work is what I do most of and enjoy most.” He adds, however, “I still get erosion control work from contractors who look at the plans and don’t want to deal with it.”
Environmental work calls for being versatile, Brown points out. “With this work, you can go into a lot of different areas. You just have to be open and available if somebody asks if you can do something. If it’s anywhere close to a possibility that you can do it, you do it,” he says.
Brown-who mostly works solo-does most of his work with two pieces of equipment. One is a Komatsu PC18 excavator. “It’s my favorite machine,” he says. “I can get it through a 38-inch opening, so I can get it through most people’s fence gates and get in their yard to work. It’s got plenty of power. I’ve also got a Takeuchi TL130 skid-steer, and that’s my machine for digging, leveling, and driveways. If I need something other than these two machines, I just call my dealer and rent something, and they’ll deliver it to me.”
Brown is engaged in an ongoing effort to get various certifications to expand his service offerings. “North Carolina State University has a biological agricultural engineering [BAE] department. A lot of people who teach there are also doing erosion control. In order to do any roadwork, you have to be certified to do that and you have to go to North Carolina State University to get those certifications as well as BMP certifications. Just about anything you want to do, if there’s a license for it, you’d get it through BAE.”
Brown holds a variety of licenses and certifications. He has a North Carolina State contractor’s license. His LID certification enables him to set up a low-impact-development plans. The NCDOT Level I and Level II certifications means he can install or oversee installations of BMPs on department of transportation jobs. He is a certified BMP inspector (and installer) and is a sediment and erosion control and stormwater contractor, a stream restoration contractor, and a member of the International Erosion Control Association.
“The biggest thing now is you have to be really versatile,” says Brown. “You have to continually take classes. What I love about it the most is I get to experiment with different designs to see what works and what doesn’t. The other day I got a call from a contractor in Oregon with a question. Everybody has a different approach, and sometimes it’s nice to get different ideas from other people to see what works.”
Changing Focus, Investing in Employees
David Chenoweth, president of Western States Reclamation, an environmental contracting company, says 2011 was the best financial year his company has experienced in 28 years.
At one time, Western States Reclamation was heavily active in residential construction projects with respect to seeding and erosion control on large landscape construction projects on the rights of way and
Western States Reclamation has taken on new work in the mining industry.
deeded park areas the developers had to construct. “Before the market crashed, we were probably doing more in landscape and irrigation construction than the actual reclamation,” says Chenoweth. “Half of that was in seeding and erosion control, and that’s why we pursued that market.”
That-and the highway market-had once provided a decent revenue stream for the company. But as Chenoweth observed the residential construction market taking a hit, he sat down with his staff in early 2011 discussed the types of projects that would yield the profits.
“We basically said we’re not going to pursue any of the landscape bids or the housing market because it’s so tight,” Chenoweth says. “We felt pretty much the same way with the highway work as well. The margins oftentimes were just below our costs”
Chenoweth attributes his company’s most successful year to engaging in a substantial amount of negotiated work. “We’re a little different than the average contractor because my background is in soil science and reclamation planning, so we turned to the oil-and-gas market, which we were already active in before the housing markets went down,” he says.
Another revenue stream came through the mining market, in which Chenoweth has been involved since he worked for a mining company right out of college. The company also pulled in $4 to $5 million in aerial fire restoration work.
As for ARRA work, Western States Reclamation was involved in only one such project, an entryway to a resort town. “We’re creating our own “˜stimulus work,'” Chenoweth notes.
For the oil-and-gas industry, Western States Reclamation conducts soil surveys, vegetation surveys, and noxious weed surveys. “I’ve found what I consider a design/build philosophy of doing the baseline work and doing reclamation planning and following through and doing the execution,” says Chenoweth. “Large energy companies like that, because they don’t like to parcel out the work to several different contractors. That’s also allowed us to get into more of the earthwork in terms of reclaiming the pads-doing the dirt work, the revegetation, and the stormwater management.”
Diversification, following trends, being licensed and bonded, and covering large geographic areas have been critical factors in Western States Reclamation’s success, Chenoweth notes.
“I’m very proud of my group and my company,” he says. “We have had financial advisors who also help us with the team coaching. That’s one of the things I’ve studied and tried to implement into the company, because years ago I was a lousy manager.
“I was all about the customer and not about the employee,” he adds. “I’ve focused on developing employees. We take the attitude that we are the competition and people are mimicking us because they know we do well. It’s much more about goal-setting and being the best, being the most customer-service oriented and recognizing employees who get the kudos from the client. We pushed quality and training a couple of years ago when this market turned, and now it comes back to us.”
Because 2011 had been such a good year, Chenoweth’s company purchased more new equipment than it typically would “so we could get to the half-million-dollar level to write all of that off,” Chenoweth says. “Through the period we slowed down, we were losing a lot of depreciable base, so we built that back up through more purchases and leases in 2011.”
Unlike other companies that have scaled back, Western States Reclamation entered 2012 looking to hire more superintendents and another estimator. He realizes his motivated work force doesn’t come by accident.
“I’ve got a lot of good people and give them a lot of freedom,” Chenoweth says. “I’ve been looking for several years at becoming employee-owned and looking that over through current and new employees, trying to build the rest of the team out.”
The company has a package for certain employees Chenoweth would like to become part of the company’s ownership.
“Part of their bonus goes into a deferment program, so if they continue with us, they can purchase stock in the future or just simply take that as dividends sometime in the future,” says Chenoweth.
Filling the Gaps
There are still some erosion control companies deriving revenues from the residential construction market. Case in point: Environmental Site Maintenance (ESM) in Simi Valley, CA.
“We’re still very much in residential construction,” says Gil Carrillo, the company’s president. “It’s 80% of our business.” Indeed, ESM has retained that market segment, but has done so by offering umbrella services.
Carrillo concedes that when he bought the company more than two years ago, it was at “the worst time ever.” On the other hand, the company was able to fill in gaps that were created when real estate developers-at least those that did not go out of business-had to lay off employees to stay in business. The need for construction services, particularly those relating to staying in compliance with federal regulations, continued. And ESM had established relationships with clients.
“We’ve survived on Richmond American Homes and Lennar Homes. Richmond American is very big in southern California, and we do all of their erosion control and sweeping work, as with Lennar,” Carrillo says.
ESM is a highly diversified company, offering installation and service for drain inlet filters, filter maintenance, straw and rice wattles, the Wildebeest trenching system for wattle installation, silt fencing, orange safety fence, concrete washout, power brooms and blowers, pressure washing, water sweeping, vacuum truck service, weed abatement, pre-emergent weed control, hydroseeding, dust control, site monitoring, effluent level testing, and stormwater pollution prevention plans (SWPPPs).
“We’ve also been able to help our clients as far as doing prep work, whereas in the past they may have had an assistant to the superintendent who could do prep work,” says Carrillo. “They’ve laid people off, and also, a lot of companies that used to do that work in the past aren’t around anymore, so they would call us to do general labor work.”
That work includes concrete washouts, wastewater removal, fence removal, reclamation, and demolition of slabs.
ESM’s landscape maintenance business is growing as well, Carrillo notes. The company has been doing work for individual senior housing facilities as well as residential clients.
“We’ll mow and blow, do weed removal, and make sure the property looks good and is very aesthetically pleasing for tenants,” Carrillo says.
It’s because of long-established relationships that Carrillo believes his company is able to still garner revenue in the housing construction market.
“Richmond American has about 20 sites in southern California. We handle every one of them from erosion control to sweeping to dust control-everything. Five years ago, they had maybe 10 to 12 sites. But those 10 to 12 sites had 40-plus houses going at a time. Now, they have 20, but there’s only three to five houses going at a time, so we’re not as big as we used to be,” he says.
ESM has downsized from 55 employees to 25 employees. “We’ve been able to scale down, stay semi-busy, and pay the bills,” Carrillo says. “We’re not out to make $1 million overnight. We’re here to make a company happy for the next 20 years.”
On the other hand, the company has added some new equipment, including two new pickup trucks and a second sweeper. “It’s not that we’ve grown, but we’ve been able to maintain, and you need to keep up a perception,” says Carrillo. “You don’t want to go out with beat-up old trucks that are broken down where you can’t get to work. You’ve got to stay with the times.”
One of ESM’s critical services is to provide site monitoring on a weekly or biweekly basis to help clients stay in compliance with regulations. For that reason, Carrillo says his company has kept up with proper certifications.
“You can’t just open up a business and say you want to start doing this,” he says. “You’ve got to have the qualifications. You have to have the education. You need to have the experience.
“To do water sampling, we had to buy pH meters and turbidity meters. It’s required,” Carrillo says. “You get a half-inch of rain on a Risk Level 2 SWPPP site, and you’ve got to get out there and sample it. It’s our job to protect these clients. We’re fortunate to be here working in this business right now. A lot of my competitors are not in business anymore. We’re just out here to do the right thing.”
Focusing on Conservation
While economic factors play a role in the impact on erosion control businesses, another challenge facing companies is the need for water conservation.
For example, Cagwin & Dorward Landscape Contractors of Novato, CA, a full-service landscaping company whose services include erosion control and revegetation, has learned that adaptability is the key to survival. The company does business in a state that aims to reduce water consumption by 20% by 2020.
Many California municipalities are adopting a program called Cash for Grass, which offers residents a rebate for eliminating turf grass. This has reduced the market for hydroseeding new lawns.
Instead, property owners are turning to alternatives such as low-water-use, climate-appropriate plants; permeable hardscape; and artificial turf such as polyethylene and nylon. Companies such as Cagwin & Dorward are helping clients transform more conventional landscapes into more sustainable ones.
“Turf care is going to become less in the future because of all of the different legislations that have occurred,” says vice president Steve Glennon. “There’s a lot of focus on landscapes in particular, because I think it’s a fairly widely known fact most landscape contractors waste water. Essentially, we get paid to produce a green, lush landscape. So much of the landscape being watered with potable water is turf, and it has no function other than aesthetic value to the property.”
Cagwin & Dorward’s erosion control services have declined during the recession for the lack of new development. The company’s hydroseeding services are now being requested by developers and general contractors where erosion control is required to mitigate stormwater runoff issues.
As Chenoweth observes “What was once called erosion control is now basically stormwater management.”