Though tales of nearly bankrupt developers and fleeing contractors are now almost commonplace, some Blaine County contractors say the picture isn't entirely bleak.
"There have been too many people saying how terrible things are," said Roger Lato, owner of the Lato Construction.
Lato has been in the valley doing construction for more than 30 years, and he said the industry has fallen and risen before. This latest fall is a big one, he said, but it's not going to drive him out of business.
"It's tight, but you can scratch things out and be OK," he said.
For Rob Hawkins, owner of Right Angle Construction, efficiency is key as competition rises and prices drop.
"My guys have always stressed efficiency and providing good service," he said. "Now we're getting even better at it."
The dark side of the new, super-competitive market is the sheer time it takes to bid for various projects, as well as the workers who are striking out on their own.
Josh Rand, owner of the formerly Bellevue-based Built 2 Last Construction company, which worked on several Hailey developments and projects at Sun Valley Resort, said he was driven out of the valley by competition.
"You have all these people that are on unemployment who will do the job for 40 or 50 percent less than they normally would have," Rand said. "Homeowners offer even less and pay cash. [Workers] take it, they're hungry, they have to feed their families."
Workers take the lower price in cash, Rand said, because then they can fail to report the income and remain on unemployment.
Rand said that he loves the valley and even ran for Bellevue City Council, but he had to move to California and lay off all 35 of his employees when the housing market went downhill. He said he would love to move back, but only if there's work.
The contractors left in the valley, however, say that they are managing to find enough projects to get by, especially contractors who deal with specialty or niche markets. Engelmann Inc., a contracting firm that specializes in custom homes, is doing well, said CEO Paula O'Meara.
"The work continues to come our way," O'Meara said.
New construction in the valley is down substantially, and Patrick Cox of Pella Windows said most of the projects he sees coming his way are remodels or retrofits. Many of these remodels are done with energy savings or increasing property values in mind.
Others concur with Cox.
"[Homeowners] might not be willing to upgrade their kitchen with granite countertops, but they are willing to get new insulation," said Tim Carter, owner of the eco-focused Idaho Mountain Builders.
Homeowners can't always be convinced to upgrade with the promise of energy savings. Hawkins said that although he and his employees try to push efficiency in retrofitting, it doesn't always work.
"That stuff costs money, so people aren't always willing to do it," he said.
Hawkins said that if homeowners had more incentive to improve, they might be more willing.
Luckily, incentive is forthcoming, in the form of a rebate program for homeowners and contractors who use energy-efficient materials in any additions, remodels or other projects.
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The program, called the Community Audit Retrofit Rebate Program, is sponsored by the cities of Sun Valley, Ketchum, Hailey, Bellevue and Fairfield, as well as Blaine and Camas counties. After Aug. 16, qualified applicants can receive up to $2,000, as long as they have conducted an energy audit and use eligible materials, such as EnergyStar appliances or furnaces with specific fuel ratings.
In addition to residential remodels and the custom homes Engelmann Inc. is bringing out of the ground, O'Meara said recent bond issues passed for building projects in Hailey and the Blaine County School District are helping local construction firms.
"It is creating jobs, it is creating stimulus in the area," she said. "It's our local money supporting these projects."
Lato said his firm relies on residential work, and that he's adapted to the economy by streamlining his business.
"All you can do is run a tighter ship," he said. "It's kind of a tough deal, because the cost of living isn't going down, but everyone in the construction industry is expected to take a lower wage."
Hawkins had to lay off his first employee a few months ago, and a project manager at Dembergh Construction who preferred to remain unnamed said the firm had cut 10 to 15 percent of its employees since last year.
Wages are one the few negotiable expenses in the industry, as the cost of materials has started to rise since its fall last year. Still, Lato said, compromising on costs is not always smart, as houses are essential.
"We're supplying a person's home, where they live," Lato said. "That's so important ... (and) it's baffling to me that people want to beat us down over that."
O'Meara said Engelmann has mostly adapted to the down market by diversifying early, before the housing boom went bust.
"We knew that the levels of construction could not be sustained," O'Meara said, so Engelmann acquired a security company that develops systems to protect the top-notch custom homes in which the firm specializes.
Carter said that Idaho Mountain Builders also diversified by branching into more environmentally friendly projects.
"Building had slowed down, and we were trying to think of what we could do, what the next trend was going to be," he said.
To that end, the building company created what they call the Home Performance System, which is a plan that homeowners can use to make existing homes more energy-efficient.
Homeowners who upgrade can apply for a federal tax credit as well as the municipal funds, and Cox said that the federal credit has made a difference.
"Half the jobs that came through my showroom this year are because of that energy tax credit," Cox said. "Without those programs, I wouldn't be doing much business at all."
Business is down, but contractors agree they're grateful any business exists, and that prospects may even be improving.
"We've seen a definite improvement in the number of projects this year," O'Meara said.
Lato has also noticed that the market has stopped sinking since last year and is essentially holding steady.
"If you look around, there are little things going on everywhere," Lato said. "We're doing OK. ... We're still working, which is important."
Above all, Carter said that the market still supports quality construction.
"What people want is a good product," he said. "People aren't always looking for the cheapest, they're looking for the best."
Katherine Wutz: kwutz@mtexpress.com
Rick Stark, project superintendent for Englemann Inc., reviews the plans for a new 13,600-square-foot home being built at Prospector Knowles in Sun Valley across from Dollar Mountain. CEO Paula O’Meara said the market for custom homes is down from a few years ago, but her firm is still starting new projects. Photo by Willy Cook
