Post-Quake Boom Seems Like a Bust for Some Firms : Construction: Small companies are doing plenty of bidding, but contracts are slow in coming for many. Delays in insurance payments and government aid are blamed.

For many small Southern California construction firms, the expected boom in work repairing damage from the January earthquake has failed to materialize.

“I’ve done 50 (estimates), I’ve got a stack of them this high,” Rick Koester, an Agua Dulce general contractor, said, jamming his hand against his eyebrow. And contracts? “I’ve gotten five or so since the earthquake.”

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

The experiences of Steele and Koester seem at odds with scenes of disrepair and apparent construction activity in areas hardest hit by the earthquake.

Take, for example, the suburban neighborhoods of the north San Fernando Valley. 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, the sound of jackhammers echoes through residential neighborhoods.

Clearly, some companies are busy.

Indeed, John Newland, manager of Doug’s U-Rent, said the Woodland Hills firm’s revenue is up 60% over the same period last year from increased demand to supply construction equipment to contractors.

“Right off the bat, we sent off all our generators. . . . Then it was jackhammers and compressors. It’s been steady ever since,” Newland said.

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Josh Peaslee, owner of Complete Concrete of Tarzana said he has been working from 4:30 a.m. to 8 p.m. almost every day since the quake, and revenue for the 5-year-old contracting business is 50% higher than in the same period 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 the quake, and he’s certain that number will grow in coming months.

But increased activity after a disaster does not necessarily translate into instant cash for all construction businesses, said David Craven, marketing and sales director for the Florida-based construction company Brookman-Fels. After Hurricane Andrew hit Florida in 1992, 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 doing estimates and not repairs, he added.

Builders in the San Francisco area tell a similar story about the aftermath of 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.

Dee Zinke, executive officer of the Greater Los Angeles/Ventura chapter of the Building Industry Assn., agreed that a post-quake boomlet for repair businesses is far from a given. In fact, 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 said. “For a long time we’ve had an estimating boom and not a lot of jobs.”

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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. Thus, while they may order lots of estimates, they’re in no position to sign contracts.

Other homeowners, even with checks in hand, appear to be in no hurry to get repairs done.

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 senses 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 said his revenue did not increase immediately after the quake, but in the last week or so, demand has risen. He now estimates revenue is up 20% over the same time last year.

Despite current frustrations, local small repair businesses may be well positioned to take advantage of any boom that comes. Newcomers are not swarming into the repair business. Applications for new contractor licenses are down in every category, according the Contractors State License Board.

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There are signs that the repair business may be headed for an upswing.

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.