By JOSEPH KELLARD
And when Cosmo Donato got back to Long Beach, where he has been a general contractor for 39 years, he had no work for August.
“People already booked for that month were canceling,” Donato recalled.
Since last year, as the housing crisis has deepened, Donato’s business has dropped 75 percent. While his situation is particularly acute, the drop in demand for contractors appears to be industry-wide.
Donato once did everything from building houses to renovating kitchens and bathrooms, 90 percent of it in Long Beach, but now he only does some improvements and small extensions. What he has mainly lost is his work force. Experienced, efficient laborers, he said, have been harder to
come by.
And at this point in his career, he can’t spend his time teaching. “If I have to teach you your job,” Donato said, “well, guess what, I don’t need you.”
With no debt, a two-family house that he rents, his children grown and his wife earning a second income, Donato said he
will survive.
“I kind of don’t care, because after 39 years I’m at a certain point in my life [that] I can do a couple of jobs a month and it doesn’t kill me,” he said.
Another contractor, Anthony Rector, had an experience similar to Donato’s, realizing that something was awry when no one called him after he did some estimates last spring. Rector, who specializes in high-end residential remodeling, had just completed what would prove to be his last major job in Long Beach, the Starboard Townhouses on East Broadway at Cleveland Avenue.
“They all sold quite well in late winter and early spring 2008,” Rector said. “After that, things on the South Shore have really quieted down.”
For Rector, business is the worst it’s been since he started his company, Refinements LTD, 21 years ago in Long Beach. “It’s like somebody shut off the light switch,” he said. About 90 percent of his business was on the South Shore, particularly Long Beach, Atlantic Beach and the Five Towns, but it has since shifted almost entirely to Manhattan.
Last summer, a few Manhattan-based proposals crossed Rector’s desk, and he has since learned that remodeling contractors are still in demand in the city. He is currently renovating a luxury residential loft in SoHo. “It’s kind of like our bailout,” Rector laughed. Despite the climbing unemployment rate, he has kept his six employees, and maintained their salaries.
So has Matt Henry, owner of HKH Construction, who focuses on residential remodeling. While Henry has suffered a 25 percent dip in business since last year, he has retained his entire staff. His dilemma, he said, has been figuring out how to price his projects in the recession, a less weighty concern when the housing bubble was inflating. Now, he said, contractors are much more willing to negotiate their prices.
Henry said he believes that many of the customers he has lost are those who went to their banks for home equity lines of credit, and that half of them are doing nothing with their homes right now. “They’re just sitting tight because they either don’t have the equity in the house or they just don’t want to do anything,” he said.
Homeowners in Long Beach, Henry said, are willing to spend a lot on renovations and even additions, rather than building new homes. “The thought is it’s still something appropriate to do at a time when money is probably safer being put into your home than a lot of other places,” he said.
Miriam Gold, vice president of Paul Gold Real Estate, said that in the current buyer’s market, more Long Beach homeowners are “dressing up” their houses to entice more buyers.
“They’re not doing big things, but they are getting contractors to do some painting and a few repairs they they’ve deferred and those types of things,” Gold said.
Even though homeowners may be renovating more, however, some suppliers still say they are feeling the effects of the housing crunch. Mike Nolan, owner of Center Cabinets, an Island Park company previously based in Long Beach, said his business has dropped some 52 percent since 2008. While people are still coming to his showroom, they are “afraid to spend their money,” Nolan said.
To adapt, Nolan has started to offer customers zero percent financing, and he is also throwing in some items for free. “A lot of people can’t get approved,” he said. “ ... We’ve been trying to hold the line on price increases, and actually we’ll lose a little profit — we’ll give a sink and do other different things to keep a customer going.”
Henry, too, is switching to previously untried incentives to attract more customers, including accepting credit cards. He will take the 3 percent hit for this service if it means getting customers who might otherwise put off their renovations.
“More people are less inclined to do things because they didn’t have the cash,” Henry said, “or in some cases they must do certain repairs, so now they can put it on their credit card.”
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JKellard@Liherald.coom or (516) 569-4000 ext. 213.
