Special Report: Economic Spotlight

Imagine going full bore in 2006 with nearly 500 employees, and suddenly hitting the sharp decline in housing. From landscaping 700 houses a month at the peak, you’re down to 75 home sites a month, and your employees now number about 100. That’s the present situation faced by Al Luchterhand and Louie Polish Jr., co-owners of Sun City Landscapes in Las Vegas.

Used to be, company crews were working from 4 a.m. to 4 p.m. grading, shaping and landscaping yards for such major home builders as Pulte Homes and Astoria Homes. Now, Sun City has had to cut its fleet by more than half – and just counting its Caterpillar fleet alone (skid steers, backhoes and loaders) – the company is down from 43 to 21 machines.

“We have sold backhoes, skip loaders, end dumps, mini Bobcats, storage containers and trailers either at auction or to private buyers,” Luchterhand says. “We have also had the advantage in this economic downturn to return leased equipment and not renew any new leases.

If we have the need again we can go out and lease new equipment based on our workload.”

Work all the angles. The company is trying several approaches to keep its fleet busy. “We’ve learned you can’t be so focused on one thing,” Polish says. In the first part of this decade, the company was 85 percent production landscaping oriented. Now, it offers a complete menu of landscaping services – including park development, pools and water features. And in light of the economic stimulus bill, the two owners are eying local prevailing wage work.

Partner with your clients. Luchterhand says builders are asking for rebids every six months. “We look at it as an opportunity to value engineer these projects, and come up with ways to reduce everyone’s costs and yet still have an appealing yard,” he says. This includes vendors – Sun City, for example, used to have more than 30 skid steers, putting six to seven hours on them each work day, and requiring enhanced service support from their primary equipment dealer, Cashman Equipment. “We’re service oriented,” Polish says. “A ‘no’ is not involved in what we do, and so we require the same from our equipment suppliers.”

Focus on keeping your premium employees. “We’ve only got our A team left, so when we lose a person, it’s an ‘A’ person,” Luchterhand says. Hard, painful decisions have been made. Signs of the boom times – including a full workout facility and game tables – still exist in the office. “What we built in 18 years has been almost totally dismantled in a year and a half,” Polish comments.

Continue what makes sense for the future. Sun City signed on early for the Southern Nevada Water Authority’s Water Smart program, and has totally reversed its previous 1980s practice of turf installation. This water-miser emphasis is even earning the company some much-sought business these days, as it goes into older communities with large grass areas and offers a desertscape replacement.

Take a breath. According to Luchterhand, the company’s experience during the past two years hasn’t all been a hard time. “To tell you the truth,” he says, “it’s been kind of a break, since experiencing as much growth as we have can be bumpy. We were going so fast we didn’t have time to think. We just got things done.”

What’s the latest news? As of this writing in late April, Luchterhand says his business is finally showing encouraging signs of an upswing, probably due more to his own adjustments than a nationwide recovery. “One homebuilder we just picked up is selling due to the buyer they build for – starter homes for first-time homebuyers. We all have to look back at the early ’90s and see what was going into the houses being built. It was Formica counters, linoleum floors, no pot shelves, or popouts on the exterior. We call it down and dirty, quality homes at economic prices. People don’t care for the granite counters, tile floors or even drywall in their garages. They want an affordable place they can
call home.”

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