For Some Contractors, Boom Expected After Quake Has Been Bust : Construction: Plenty of Valley buildings still need repairs and some firms are doing more business. But increased post-disaster activity doesn’t add up to instant cash for all.

Small repair and construction firms in the San Fernando Valley expected their businesses to pick up from a flow of insurance and aid money for earthquake repairs. But most contractors say they are still waiting for the hoped-for boom to reach them.

“I’ve done 50 (estimates), I’ve got a stack of them this high,� said Rick Koester, an Agua Dulce general contractor, jamming his hand at eye level in the air. And contracts? “I’ve gotten five or so since the earthquake,� he said.

Koester, whose company, Lorick Construction, employs seven people, looked busy installing rebar in a Northridge ditch last week. But the block wall he was building turned out to belong to his parents--Koester was doing them a good turn while waiting for jobs.

“It’s frustrating to me because I’m out there spinning my wheels, running around trying to give competitive estimates,� said Jeff Steele, owner of Reseda-based Artisan Concrete. “I would love to get to work.�

Steele, who has a dozen employees, said that since the quake, his revenues are even with last year. But he expects his profit will be slightly lower than last year due to an unusually high number of estimates he makes on potential jobs that don’t yield contracts.

Normally, Steele said, about half of his estimates result in jobs, but lately he seems to get hired only about 10% of the time. The situation is all the more disappointing given the 80-hour weeks he’s put in since January, he said.

Dee Zinke, executive officer of the Greater Los Angeles/Ventura chapter of the Building Industry Assn., said post-quake boomlet for repair businesses is far from a given. So much so, in fact, that the chapter recently offered a seminar to members on how to avoid going broke in the wake of a disaster.

“It’s easy to lose money,� Zinke explained. “For a long time we’ve had an estimating boom and not a lot of jobs.�

Zinke’s cautious view seems jarringly at odds with appearances.

Tour the suburban neighborhoods of the north Valley these days, and you will lose count of damaged buildings in need of fixing. Chimneys swathed in plastic, boarded-up windows and piles of crumbled masonry dot every block. Each morning, the Ventura Freeway is jammed with cement trucks and mud-caked pickups creeping into the Valley, and by mid-morning, you can hear jackhammers echoing through residential neighborhoods.

Clearly, for some companies this has led to new business.

For example, there’s Doug’s U-Rent, a Woodland Hills company that rents all types of construction equipment to contractors. Manager John Newland said his revenues are up about 60% from the same time last year. And over the past week, the company’s six employees have been busier than ever, he said. “Right off the bat we sent off all our generators. . . . Then it was jackhammers and compressors. It’s been steady ever since,� said Newland.

But increased activity following a disaster does not necessarily translate into instant cash for all construction businesses, said David Craven, marketing and sales director for the south Florida-based construction company Brookman-Fels. In the year after Hurricane Andrew, Brookman-Fels barely managed to break even, Craven said. Many smaller companies went under.

The reasons? Small companies that boosted payrolls in anticipation of more work found it hard to sustain themselves through long waits for federal aid and insurance money, he said. Those that gave free estimates quickly found themselves overwhelmed by doing estimates and not repairs.

Builders in the San Francisco area tell a similar story following the 1989 Loma Prieta quake. “People who were counting on this big boom for business were sorely disappointed,� said Gary Hambly, chief executive officer of the Building Industry Assn. of Northern California.

Construction companies here give a similar litany of post-disaster frustrations--material shortages, long waits, lots of a small jobs and few big ones. But some say that doesn’t fully explain a disappointing lack of business.

Becky Noma, manager of Abraham Painting of Northridge, said she is perplexed that revenues now are about equal with the same time last year. The company has done about 50 quake-related estimates, but has only landed a handful of contracts, she said. Howard Frank, owner of Chatsworth-based Rent a Bin, a company that rents storage containers to homes and businesses, reports no significant rise in revenues compared to the same time last year--just the usual spring cleaning rush.

“Everyone tells me the same thing--they are being held up by insurance adjusters, claim checks, FEMA, the SBA,� said Chuck Ganssle, owner of All-State Concrete Block Co. Inc. in Reseda. Ganssle, who has five employees, said his revenues have not increased since before the earthquake, and his expenses may be slightly higher because of all the free estimates he has done.

Part of the problem is that insurance checks, Federal Emergency Management Agency aid and federal Small Business Administration loans are still in the pipeline for many homeowners. But that may not be the whole story. State Farm Insurance spokesman Tom Cordova said his company has already settled about 60% of projected earthquake-related claims, and the SBA said it has issued more than 4,000 checks.

What may also play a role in the delay is a certain coyness about repairs from homeowners.

Clem Phillips, for example, seems content to live with his crumbled block wall at his Northridge home for a while. He has taken several repair bids, but they are all high, he said. Maybe he will hire somebody this summer, he mused, maybe not. As for his cracked plaster inside, he’ll probably fix that himself.

Mike Quiroga, owner of Mike’s Roofing Service of Van Nuys, said he is taken aback by the lack of urgency he detects in some would-be customers. “People say they are not going to do anything until summer,� he said. “Even with the heavy rains, even with plastic on their roof.� Quiroga’s business saw no increase in revenue right after the quake, but in the last week or so, demand has increased. He now estimates revenues are up 20% over the same time last year.

Despite frustrations, local small repair businesses may be well positioned to take advantage of any boom that comes. Few contractors have done much hiring, relying instead on overtime to do the jobs on hand. And newcomers are not swarming into the repair business. Applications for licensing examinations for contractors in every category are down.

In recent weeks, there are signs that the repair business may be turning a corner.

Building permits issued by the city of Los Angeles have surged. More permits were issued in March than in January and February combined. The estimated value of those building projects is expected to hit $238.6 million, of which about $71 million is directly related to earthquake repairs.

March’s surge isn’t big enough to be called a turnaround, because for the first three months of the year there has been only slight increase in the value of construction jobs compared to the same time last year, according to Los Angeles city building officials.

But some contractors see plenty of work.

“If you are not doing well, it’s your problem. . . . There’s more work than the local contractors can handle,� said Complete Concrete owner Josh Peaslee, who runs his five-year-old contracting business with five employees out of his Tarzana home.

Peaslee said he has been working from 4:30 a.m. to 8 p.m. almost every day since the quake, and his revenues so far this year have jumped by half compared to last year. True, a lot of his work is giving estimates, and a smaller percentage of those than usual lead to jobs. But he is still landing more contracts than before quake, and he’s certain that number will grow in coming months. So certain, in fact, that he and his wife are making plans to buy a new home.

Lyndol James, owner of Simi Valley-based Cave Man Masonry, is so confident about his business that his wife recently quit her salaried job to stay home with their 5-month-old baby.

“There’s no doubt about it,� he said. “There’s another two years of work out there.�